The “New Silk Road”
The “New Silk Road”
Although a great number of people still have some terrible memory of the Cold War in the second half of the 20th century, a new cold war has been slowly emerging. This time, there is no nuclear standoff, but there have been many economic conflicts between China/Russia and the U.S.
It is undeniable that, in an environment where China has an excess foreign-currency reserve and no place to spend it while many European countries are facing an economic recession, these unprecedented conflicts have serious consequences for both China and Europe. In 2013, China proposed the “New Silk Road,” a global economic cooperation plan that focuses on building two transcontinental economic belts encompassing many countries in the Middle East, South Asia, Central Asia, East Africa, and Europe. Simply put, it is a plan for which China, Russia, India, and about 50 other countries invested capital in the Asian Infrastructure Investment Bank (AIIB), which will be in charge of distributing funds for infrastructure development across the New Silk Road, which is designed to connect Asia to Europe. The project is expected to facilitate the flow of massive capital and shipments from Asia to Europe and vice versa. That is, this may be a way to facilitate the growth of the European economy while taking advantage of Asian capital.
The economic belt will have two parts: the land route and the sea route. The land route uses trains as the main transport medium and starts at Xi’an in China to Pakistan’s free trade zone in Gwadar, which was created by Pakistan and AIIB. The route then stops in Iran and Kazakhstan, followed by Turkey, Belarus, Russia, and other European countries. It is shocking to see Belarus being a crucial stop of the land route before passing Russia, and there is a reason behind this. Ukraine was originally a priority concern of the Chinese government during the selection of potential stops to create a free trade zone along the land route. The Chinese government is trying to help Ukraine and its collapsing economy because Ukraine offered China much help in a variety of ways in the past but now finds itself with an unstable economy. Russia, in contrast to initial expectations, has sided with China in this initiative.
With this large-scale economic cooperation, maritime transport has become an integral part of the economic belt because its advantage in long-range shipments. For example, cargo ships do not require new roads or rails are more fuel-efficient than trains or trucks. In addition, cargo ships can carry a large volume of cargo. It is also hard to deny that land transport has its advantages. From China’s perspective, building a transcontinental rail system in the first stage would solve its problem with minorities by providing millions of job opportunities for minority groups in the western area of China. This can help stabilize the western region of China by fostering an area that is hard to penetrate for terrorist organizations, simply because minority groups would be satisfied with the project and thus would prefer prosperity to anarchy. Despite this issue, the land route provides a great opportunity for the Chinese government to promote its high-speed railway system to the rest of the world, thereby further stimulating its domestic market. The Chinese government expects to achieve these two goals simultaneously through the land route.
In sum, the New Silk Road remains an attractive initiative for both Europe and Asia. Although the old Silk Road has long disappeared, its spirit is expected to live on in the form of a new economic initiative based on regional as well as global cooperation. It is not yet clear whether this initiative can help save the European economy while facilitating the continued economic development of China, but it is sure to be recorded as a representative example of a global initiative designed to strengthen the global economy while fostering greater social and income equality.
Zou Shaoshi