10 February 2015

Orient express, China's grand plan for a New Silk Road

By Patrick Brown

Chinese Premier Li Keqiang visits the Greek port of Piraeus, where Chinese shipping giant Cosco controls two of the three container terminals. China also signalled last year it would buy Greek bonds in a show of support for the financially stricken nation that is at the eastern gateway to Europe.

"A whirlwind," "Win-win," "The new normal." China's slogans have clearly had a facelift since the time when the best on offer was "Socialism is good."

So has the country's foreign policy.

The latest catchphrases describe the extraordinary campaign to recreate and surpass the glory days of the Silk Road, the ancient trade route that linked East and West at the height of China's imperial power centuries ago.

They also explain some of the reasons why, in the past two years, Chinese investment in Canada has dropped from billions of dollars a year to next to none, and why no Chinese leader has visited Canada in close to five years.

Instead, they are spending their time and money in important places like Maldives, Kazakhstan and Serbia.

It's like the real estate business. The three most important factors are location, location and location, and Canada is now off the beaten track. 

Since coming to office two years ago, President Xi Jinping, who went to Maldives in September, and Premier Li Keqiang, who visited Kazakhstan and Serbia last month, have between them travelled to more than 50 countries.

Apart from the obligatory pilgrimages to summits with great powers, almost all the places they've visited have been linked to the grandiose master plan for the New Silk Road and the New Maritime Silk Road.

In the process, the traditional tools of Chinese diplomacy — offers of a panda here or a football stadium there — have given way to colossal sums of money, manpower and expertise for local infrastructure.

After decades of hurtling construction and development at home, China is now planning, funding, building, or helping to build, a vast network of roads, railways, tunnels, bridges, pipelines and ports across Asia and Europe.



China's proposed New Silk Road, a maritime and high-speed rail series of trade routes that could cost as much as $100 billion. (Reuters)

Chinese maps of the project show land routes snaking across Central Asia into Turkey and up through Europe as far as Rotterdam.

The sea route goes from southern China with waypoints in Southeast Asia, Sri Lanka, Maldives, India and Kenya, then on through the Suez Canal to join with land routes at a port in Greece.

On land and sea, spurs spread out like tentacles from the main route to places like Indonesia, Afghanistan, Iran and even Venice, a historical nod to the home of Marco Polo.
A very big number

It's impossible to calculate exactly how much money Beijing is putting into the overall plan known as the Silk Road Economic Belt or "One Road, One Belt" (a name that is a little less clunky in Chinese than in English) but it is a very big number.

The value of resource deals, memoranda of understanding (which are notoriously stronger in the promise than the execution), direct gifts, joint ventures, projects owned by Chinese state companies, and loans are all bandied about and sometimes lumped together.

Nevertheless, recent announcements of a $40-billion Silk Road Development Fund, along with $10 billion for railways and roads in Southeast Asia, $10 billion for the same in Central Europe, and more than $50 billion in recent deals in Central Asia, give an idea of the scale of the project.

Traders last travelled the old Silk Road between China and Europe 600 years ago with horses and camels hauling goods passed on from caravan to caravan along the way.

Last month, a freight train carrying 82 containers arrived in Madrid at the end of a 21-day journey from Yiwu, a manufacturing town south of Shanghai.

China, which leads the world in high-speed rail, hopes to push its existing network outwards so that the same journey will take two or three days in the years ahead.

The government says it is having talks about high-speed rail with no fewer than 28 countries.
The 'China dream'

All this could easily be dismissed as an absurdly grandiose pipedream were it not for the astonishing speed and scale of China's own transformation in recent years.

China has built vast and fast at home, but it has also done so with reckless disregard for environmental and social consequences, and for the rights of the pesky people who happen to be in the way.

That approach won't be as easy for a multinational project as grand as this, especially by a country regarded with such deep suspicion by many of the nations along the way.

China's increasingly aggressive posture at sea in recent years has stirred up long-standing maritime disputes with several countries now being offered multi-billion-dollar infrastructure deals.

They may not easily fall into line with proposals for an "economic co-operation area" stretching from Bali to the Baltic in which Beijing would inevitably have the greatest influence.

For example, Sri Lanka's new president, Maithripala Sirisena, who last week won a surprise victory over the autocratic Mahinda Rajapaksa, campaigned partly on opposition to Rajapaksa's closeness to China.

China's Xi Jinping met former Sri Lankan president Mahinda Rajapaksa in September to discuss Beijing's $1.4-billion port investment in Colombo, part of the proposed maritime Silk Road to connect China with Europe. (The Associated Press)

Sirisena's election manifesto warned that "the land that the white man took over by means of military strength is now being obtained by foreigners by paying ransom to a handful of persons." It was alluding in particular to the $1.4-billion port that China is building for the Sri Lankan capital, Colombo.

Similar democratic potholes in this New Silk Road could open up in Greece, where another Chinese port project, in Piraeus, is an issue in the presidential election there.

On the one hand, China's high-handed control of the project is being seen by some as an insult to Greek pride and sovereignty. On the other, Chinese expertise and funding for the port, and associated rail and road works, are considered vital to saving the Greek economy from collapse.

The new silk road, if it is to be created will have to overcome countless local political problems, international rivalries and probably even wars. (The route veers through Afghanistan and Iraq.)

It has become a tradition for Chinese leaders to stamp a hallmark on their presidency with a simple phrase.

Jiang Zemin opted for an incomprehensible theory called "The Three Represents." Hu Jintao chose 'Harmonious society," while the current President Xi Jinping spoke of "The China dream" when he took power two years ago.

It's becoming increasingly clear that his dream involves much more than just China, and that it is much more ambitious than anyone imagined.


The original journey: A woman views a full-scale replica cave from the eighth century in "Dunhuang: Buddhist Art at the Gateway of the Silk Road," at the China Institute, in New York. (The Associated Press)

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