China’s New Silk Road

Here’s the scoop on the development of China’s New Silk Road

Cargo trains link China, Germany, June, 2016: A cargo train linking Germany and northwest China’s Xinjiang Uygur Autonomous Region began operation on Saturday, local authorities said. It takes ten days for the train to reach Germany’s industrial city of Duisburg from Xinjiang’s regional capital Urumqi over a distance of 8,000 km, during which it goes through Kazakhstan, Russia and Poland, said Xu Yongxin, general manager of the company that undertook the project. The outbound trains transport Xinjiang specialties such as chemical products, tomato sauce and textiles, while the inbound trains bring back food, furniture, mechanical and electrical products, and health products. It is a cargo train route with the shortest distance between China and Europe, which is at least 2,000 km shorter than other similar China-Europe cargo train routes and saves two to three days in time.

In Odyssey for Chinese, Greece Sells Its Fabled Port of Piraeus [Foreign Policy] With the sale, China’s state-owned COSCO aims to turn a once-sleepy port into the “dragon’s head” of OBOR: China’s New Silk Road.

China-Silk-Road Map8

China-Silk-Road Map

Beijing’s ambitions to build a modern-day “Silk Road” connecting China, Central Asia, and Europe took a big step forward Friday when Chinese state-owned shipping giant COSCO finally sealed a deal to purchase the Greek Port of Piraeus, south of Athens.

For COSCO and for Beijing, it’s a billion-dollar conclusion to a seven-year saga. COSCO, formally known as the China Ocean Shipping (Group) Co., took over operations at one part of the Port of Piraeus in 2009, and had long wanted to take ownership of the whole port, one of the biggest in the Mediterranean. But the port’s privatization was put on hold for a year because Greece’s left-wing leadership bitterly opposed earlier plans to do so by the previous government. On Friday, COSCO agreed to acquire control of the port and to spend hundreds of millions of dollars more to continue upgrading and modernizing Piraeus.

In classical Greece, the “long walls” connecting Athens to the Port of Piraeus were the city’s lifeline, protecting it from hostile armies and ensuring Athens’ regional supremacy. Today, Piraeus could again be a lifeline for Greece, helping attract billions in foreign investment and turning a backwater into a global hub. Read more on Foreign Policy.

Report: China Europe and the Maritime Silk Road Download

The aim of this report is to assess how the Chinese involvement in ports along the Asia-Europe maritime corridor – from the South China Sea to the Mediterranean Sea – is relevant for the European Union. The Chinese government is currently developing an ambitious programme of maritime infrastructure construction along the main Asia-Europe shipping route. China’s initiative for a so-called ’21st Century Maritime Silk Road’ is aimed at port development in South-East Asia, around the Indian Ocean and in the eastern Mediterranean region. The Chinese leadership publicly presented its initiative for a 21st Century Maritime Silk Road in October 2013. Earlier that year China had already launched its Silk Road Economic Belt initiative, which is aimed at infrastructure cooperation in a zone that stretches from Xinjiang (the north-western part of China) to the Baltic Sea. The Chinese government uses the term ‘One Belt, One Road’ to refer to the combination of these two initiatives. Chinese investment in large infrastructure projects constitutes the basis of One Belt, One Road. These projects are financed, constructed, supplied and sometimes operated by Chinese firms that are either state-owned or that otherwise have close relations with the Chinese government.

Map China New Silk Road-EAU

Map China New Silk Road-EAU

The developments described in this report are significant for the European Union. First, China is gradually becoming more influential economically and diplomatically – and eventually geostrategically – in regions close to Europe. Stronger investment and trade relations between China and countries in Africa, the Middle East and Central Asia are increasing China’s stake in regional affairs, as well as the need for these countries to maintain friendly relations with Beijing. For the time being, this process is hardly visible, since China is careful in such regions to keep a low profile in the military and security domain. Second, the Chinese government has an increased ability to influence which routes the trade between China and the EU flows. While this is not a matter of Beijing being able to switch between trade channels on an ad-hoc basis, the Chinese government has a growing leverage over how trajectories develop during the course of several years. The port of Piraeus is a good example:

China’s decision to develop this Greek port has been decisive in creating a new trade link between Central Europe and Asia via Greece and the Balkans. This, in turn, affects intra-EU relations, since it helps the Eastern European economies to move away from their peripheral role within the EU. At the same time, the Chinese infrastructure strategy provides an opportunity to redefine and deepen EU-China relations. Third, in the long term it is likely that transport and supply chain routes involving Asia and Africa will increasingly bypass Europe.

While China will strengthen its already central role in terms of logistics and transportation, Europe will at the same time lose much of the centrality that it long held in these areas. On the other hand, China’s engagement can help economic development in Europe’s neighbourhood, which contributes to stability and can help the EU’s own economic growth.

China’s new initiatives, as discussed in this report, will accelerate the growth of its influence in the maritime domain as well as in Asia, Africa and Europe more broadly. How this affects European interests depends in part on Europe’s response. A proactive approach to closely monitoring and working with China and local actors seems to be the best way to preserve a European role. Such engagement would also allow Europe to support and benefit from economic development in the sectors and regions affected by China’s infrastructure strategy. Download the full report here. 

If any significant portion of this ambitious vision is accomplished, it will alter the logistics of commerce and cultural intercourse between three-fourths of humanity.  It will facilitate multiple forms of communication over an expanse even greater than that ruled by the Great Khan.  The 13th and 14th century Pax Mongolica was — till now — the largest contiguous economic zone in history.  The Mongols used force to unite China, Central Asia, Russia, and much of Western Asia in a single area with multinational governance and no significant barriers to trade, travel, and cultural exchange.  But China’s integration with the lands to its west and south is to rely on peacefully negotiated commerce, trade, investment, and construction, not military coercion or conquest.  And it will leave Westphalian notions of sovereignty intact. Read more from Ambassador Charles Freeman..

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