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Thursday, October 20, 2016

Silk road 2.0: China offers to the world an ambitious strategy

At the beginning of September in the Chinese Hangzhou are waiting for the leaders of “Big twenty” – among them Putin, Merkel, Obama, Erdogan. Well, the host of the summit will be the President of the PRC XI Jinping. The formal theme of the meeting of heads of state and government will be the Construction of an innovative, healthy, interconnected and inclusive world economy.” That is very common with extended Beijing three years ago the strategy for the construction of a new “silk road” that would connect the East and West. Returning from China, the journalist “MK” has tried to understand the pros and cons of the Chinese initiative.

photo: Andrew Conflict

The Gate Of Heavenly Peace (Tiananmen).

In the footsteps of Marco Polo

I think not so many outside of China the people who heard about the city of Dunhuang, in Gansu province. And what to say in Chinese standards is a very small settlement, home to about 180 thousand people. But it is downright Stakhanovite methods, accelerated pace was built exhibition complex, which has in the fall is going to take the exposure. The provincial capital boasts a modern theater with 3D and IMAX. And those who are lucky enough to attend the pageant Dunhuang Celebration will get the experience of a lifetime from this combination of Opera, ballet, holographic and laser show.

…I poured seven pots, and buried in the hot sand, trying to climb to the top of the tall dune. Issued at the foot of the bright orange Shoe covers have long lost their shoes crammed so much sand that it looks like his feet are on the weight? pounder. It’s kind of a tourist attraction, but I curse myself for having decided to climb to seemingly unreachable top.

And then the helpful imagination of the historian makes me think about the travelers and traders of the distant past that went by caravan through this region. Under the same scorching sun, for the same hot sand, feeling the same thirst, but not having a nearby air-conditioned bus, and overhead the circling rescue helicopter. These thoughts gave strength – and soon I’m standing upstairs, looking at the seemingly endless Sands and a green somewhere in the bottom of a tiny oasis of a piece of vegetation from lake Crescent the Crescent.

photo: Andrew Conflict
Correspondent “MK” with colleagues conquers sand dunes.

Yes, all these sand dunes surrounding Dunhuang, wandering on camels with tourists on their backs – that alone the show should recall those distant times, when the town served as a gateway to China on the Silk road.

Say, been here and Marco Polo himself. And through this region into China originated from other countries not only various goods. Here, civilizations have met and culture. It is believed that through Dunhuang in the Chinese land came Buddhism. The memory of this store is an amazing mogao grottoes is a cave city, where you can see ancient Buddhist sculptures and frescoes.

On passing through Dunhuang Silk road talked a lot in the past Beijing activities, where I arrived at the kind invitation of the chief of the Chinese newspaper “Renmin Zhibao”. And dedicated to these activities was the strategy of “One belt and one road”.

photo: Andrew Conflict
At a media forum dedicated to the strategy of “One belt and one road” in Beijing gathered hundreds of journalists from around the world.

In the fall of 2013, Chinese President XI Jinping went on a tour of Central Asian countries in the course of these visits was announced, the concept of “one belt and one road”. It was about the creation of an “Economic belt of the silk road and Maritime silk road of XXI century”. The ambitious project covers a large part of Eurasia, linking developing and developed countries. The ancient “silk road” has breathed new life. Instead of camels and horses, the goods are transported by trains, planes and ships. But it is not only in the transport message. The idea is to create a convenient and smart environment for trade. And not only for trade…

“Economic zone of silk road” involves the creation of three economic corridors of Eurasia. North is expected to pave from China via Central Asia and Russia to Europe. Central – from China through Central and Western Asia to the Persian Gulf and the Mediterranean. And South must lead from China through Southeast Asia to South Asia and the Indian ocean region.

photo: Andrew Conflict
China offers the world to build a new “Silk road”.

The project “Maritime silk road of XXI century” includes the creation of two Maritime routes. One of them leads from the coast of China in the South China sea in the South Pacific region. The other should connect the coastal regions of China and Europe through the South China sea and the Indian ocean.

Sounds grandiose. But how will it look in practice?

The globalization of Chinese

– First of all, this is not a project, and the initiative of the Chinese side – notes about the “One belt one road” orientalist, an expert on China, Professor Aleksey MASLOV. – There is a big difference. The project is something that spelled out the points, at certain stages. In this case we are talking about the initiative. China in the expert statements it is recognized that changes this initiative along the way. Looking at how she reacts to the world. What you can see in this initiative? First: this is the new globalization in Chinese. Second, China wants to control the key infrastructure and transport routes. The problem lies in the fact that China is the decline in production, falling GDP. And although many say now that the GDP is still in positive territory, but we must understand that GDP growth is significantly lower. The country’s growing social unrest, because people used to get rich, and thus they have reduced personal income. Discontent and large corporations. And the new “silk road” – one of the ways to allocate money from the state pocket to large corporations (primarily construction, rail, aircraft) to reduce some level of dissatisfaction. In this case, China is not too different from Russia. What China wants? The silk road involves a lot of projections. Usually talking about the economic zone of the silk road – that is, in terms of investment. But this is not the only dimension. China speaks to the fiscal dimension (is a Bank cooperation), the infrastructure dimension (joint road). That is a very broad initiative.

How does it work? China concludes the relevant agreements on the country’s accession to the initiative. Such contracts around the world signed more than 30. After the conclusion of such a Treaty China starts to produce a lot of money in investments. Russia has no such agreement was concluded. And speaks about pairing with the Chinese initiative. And accompanied not only Russia as the Eurasian economic community. This is a more flexible position. The Russian position is very simple: “the silk road” is a Chinese project, we can’t join him, but unable to cooperate with him on issues of interest to us. Here we are trying to defend their economic independence. But many countries, primarily in Central Asia, Eastern and Central Europe joined the project. Which can lead to the loss of economic independence.

Recently XI Jinping made his first visit to Prague and the Czech Republic stated that it is a reliable partner of China’s “silk road”. And immediately received investments for the construction of expensive, about $2 billion, for the Czechs quite a serious amount.

Interested China and the larger countries – e.g. the UK. And in Beijing have long considered Britain as an entrance gate to the EU. But after the “Breccia” Britain has become more vulnerable to China’s target, because it is not associated with the need to approve a decision through the economic Council of the EU. And China for 2015 has produced more than 20 major acquisitions in Britain. Silk road is primarily a replacement of the national business. Moreover, China – unlike the US – does not export any ideology. This is pure business. Therefore, many countries fall for it because they do not require nor recognize, say, the greatness of China or Confucian values. It’s only business. China to invest requires a sufficiently wide domination. This partly explains the fact that China is not so heavily invested in Russia. Over the past year, according to official data, foreign direct investments amounted to slightly less than a billion dollars.

photo: Andrew Conflict
Meeting foreign journalists with a member of the Politburo and its standing Committee Li Yunshan.

– What advantages do you see in joining the “One belt one road”?

– The advantages of very simple: China brings money into the country. And can stir the economy. Gives new jobs. Ready to bring your technology. In Africa China, for example, brings the technology of high-speed Railways. And in Britain, the formula of cooperation is this: the UK provides its engineering and its industrial designers, China gives money and manpower.

Plus, China is quite actively allocates not only investments, but also long-term loans at low interest rates. That’s all right. But China is not a “good uncle”, instead he gets the shares over the companies included in the shareholders of the banks or ports, China bought Greek port of Piraeus). Small, it would seem that investment can come together in the end in a single Chinese network. China in the framework of the “silk road” seeks to facilitate international trade rules, reduction of trade go, the establishment of special economic zones (including away from China – for example, in Central Europe). For China this is very beneficial, because it facilitates the access of Chinese goods to the markets.

– What can specifically be expressed “conjugate” of Russia with the Chinese strategy?

– There is a whole set of projects from the Russian side. This infrastructure and construction companies. And not only in the far East, but in South Federal district. We invite China to participate more actively in the territories of priority development (TOR). While the investment back is small, but the Torah provides unique opportunities for taxation, for the creation of enterprises and as a result, it is very profitable. The problem sometimes is that Russia suffers from “gigantism”, wants to start big, big projects. However, many Chinese businessmen of an average hand are afraid to invest. And you have to start with small projects – for example, selhozhim that will not give billions of dollars of income, but to teach Chinese business is not afraid of Russia. So today “pairing” is more of a political rather than an economic slogan. But this year, especially after Putin’s visit, quietly began to slip toward implementation of these projects.

photo: Andrew Conflict
Media forum in Beijing was organized by the largest newspaper in China “people’s Daily”.

It should be a two-way street

Chief researcher, Institute of Far Eastern studies, Vladimir PETROVSKY has a more optimistic view of the extended Beijing’s strategy.

In General, this mehanizacija (our Chinese friends avoid talking about it as a project) it is interesting for Russia and the Russian economy, – the expert believes. Is a very large and promising opportunity for co-development of the Russian and Chinese economies. In fact, we are talking not only about the development of transport and logistics routes, but along these routes will be a joint venture, and a lot more. This is a very good opportunity to accelerate the improvement of the gigantic expanses of the Eurasian continent. But it’s the only way that either will be implemented or not. It depends on how seriously Russia would react to that offer Chinese partners. This depends on the possibilities of strategic planning. That is, the Chinese propose participation in this initiative various countries. And those countries who take this seriously (e.g., Kazakhstan), where we are talking about tens and hundreds of projects. In Kazakhstan there is a program of infrastructure construction “Nurly Zhol” (“Bright path”), which is written entirely in order to meet the economic initiative of the “silk road”. So there we are talking about big contracts and multiple projects. The Russian side has yet to define for itself priorities of the participation in this initiative. It is appropriate to say that now the negotiation on this subject on two tracks. On the one hand, was a document which Putin and XI Jinping signed in may last year – a statement pair of Eurasian integration and the economic belt of the silk road. On the other hand, the Ministry of economic development is negotiating with the Chinese: preparing to sign major agreements on trade and economic cooperation, which will not be less in value than the strategic agreement between Russia and the EU. The ultimate goal of seeing the establishment of a free trade zone. The implementation of these plans depends on what priorities will be elected to the Russian side. New silk road has several conditional routes. The so-called Northern route provides that will involve the possibility of Transsib, BAM, of course, in an updated form. Compared to all the others, this branch of the silk road the most payback. The Chinese, of course, are very hard negotiators, they are just do not promise. The idea is that if there is some economically beneficial opportunity, it can be implemented. Our Chinese partners are interested in the features and the Northern sea route. We have often in the press that the Chinese allowed their routes by Russia. This is absolutely not true, there are negotiations, many of the positions specified. We are talking about mutually beneficial things that will help the development of the Russian economy.

photo: Andrew Conflict
A string of camels among the sand in the vicinity of Dunhuang (Gansu province) are reminded of the Great Silk road.

– “Slippery” the place of the initiative “One belt and one road” referred to concerns in some countries about the fact that China could deprive them of a certain proportion of economic sovereignty…

– Indeed, there are concerns. But I would like to highlight two points. On the one hand, it is important to understand that the Chinese do not propose a project of economic integration. This is not the creation of some economic organizations, led by China. It’s more like the international economic regime, when the participating countries were independent sovereign, but in harmony with each other. Decisions are made independently, no dictatorship there originally. And on the other hand, of course, the Russian side should be concerned by the fact that the connection to this initiative, Russia and its Eurasian Union partners do not become simply a conduit for Chinese goods. After all, the Eurasian Union was created in order to make the economies of its member countries competitive. So it should be a two-way street. Yes, the Chinese economy powerful, export-oriented. Naturally, China will seek to use the implementation of their initiatives in order to increase the export of their goods. Russia and its partners in the EEU must remember.

Overall, along with the existing risks, I see a very large opportunity, associated with an extended Jinping initiative. This is a long term initiative. If you manage to implement what the Chinese say, it will take more than a decade. This is a very complex, unique in the world politics and economy experiment. In many countries the elites accustomed to thinking in the framework of the electoral cycle from one election to another. And then a strategic project that China throws the world challenge (in a good way). And if Russia will guard its own interests, it may remove from participation in this great benefit.

“It’s not the Marshall plan

I must admit that the Chinese side does does not exaggerated. Experts and politicians, which had to meet in Beijing, acknowledge that problems exist. As well as recognize the existence of concerns other countries, the Chinese large-scale plans.

I was able to attend a meeting with one of the leaders of the Communist party of China, Politburo member of CPC Central Committee and its standing Committee Li Yunshan, who is also mentioned that the media can come across the statement: “Your strategy is a “Marshall plan”. You want to create their spheres of influence. Or, want to achieve dominance in some regions. Or want to challenge the world order”. “I think this is all a misunderstanding,” said Li Yunshan: “We want the world has become more open to world trade was more than fair… Three years we are already implementing this concept. We invest $ 4 trillion to promote regional development. We created the Asian infrastructure investment Bank… the Basic principle of sharing and mutual benefit. Our initiative pushes forward globalization, but not stopping her, not go against it.”

photo: Andrew Conflict
Beijing. The Gate Of Heavenly Peace.

Today some may blame China in that he is not too well developed, has a lot of problems, but it is investing heavily to help other countries, – says senior researcher of the Institute of world Economics and politics Chinese Academy of social Sciences Xue Li. Our principle consists in joint discussion, joint construction and shared use. However, it is not always fully possible to adhere to this principle… In the process of implementing cooperation of China in some extent, shows other countries what to do. And in some countries there are concerns that China will turn into their “province”. China should just give advice and not to impose their will on others, should respect the traditions and aspirations of those countries, which assists…

The disadvantages associated with the implementation of the strategy of “One belt and one road”, Dr. Xue Li took the desire as soon as possible to achieve success, and in fact this strategy represents a long-term plan.

– “One belt and one road” will benefit the economy and culture of China, enhance the international image of China, as well as demonstrate its international responsibility as a regional power. The strategy will also be beneficial in various ways the countries of the “silk road”, especially for their infrastructure and manufacturing industries. It will strengthen links between these countries.

photo: Andrew Conflict
The mogao caves – one of the oldest in China Buddhist temples.

Speaking of shortcomings, it should be noted that the silk road countries” to be wary of increasing themselves from Chinese influence and growth of heavy economic dependence on China. There are concerns that the “One belt and one road” will be misconstrued as grants that will be harmed the environment and the traditional culture of these countries that will weaken its influence in the region major regional powers.

– What do you think about Russia’s role in the strategy of “one belt one road”?

– Thanks to the “One belt one road” diplomacy neighborhood as a whole will exceed that of diplomacy, where the United States was the core of China’s foreign policy for more than three decades. In the complex diplomacy of the neighbourhood Russia as the only system of strategic partner of cooperation will become the most important partner. Russia and China will benefit not only from strategic cooperation in international politics, defense industry, energy sector but also in agriculture, light industry, manufacturing industry, communications industry, infrastructural construction, etc. – if Russia will be able to overcome their concerns that the Chinese presence in Russia may serve as a long term threat to its national, territorial and economic security. For example, in contrast to Kazakhstan, Myanmar, Laos, Vietnam, Russia and doubts about the construction of roads and bridges between the two countries, reflecting the lack of trust in Russia to bilateral cooperation in these fields. I think this is an obstacle for bilateral relations.

photo: Andrew Conflict
Near the mogao caves (Gansu province, Dunhuang).

– The strategy of “One belt one road” is often compared with the famous American “Marshall plan”. Do you agree with this comparison?

– Agree that there’s a kind of similarity between them from the point of origin. And “One belt and one road”, and “Marshall Plan” come from economic giant with a lot of money and focused on a relatively weak economy. They both give the benefits of their own internal economies by transferring excess capacity and internationalization of their currencies. But the Marshall plan was designed for a short period (1947-1951), focusing on helping Western Europe – developed region, and served as the economic weapon of the cold war, being economically constrained. While the “One belt, one road” long-term (at least ten years), mainly concentrated in developing countries (mainly on the Eurasian continent, especially in neighboring China. It is economically inclusive strategy, which welcomes the accession of any country – even the EU, even Australia, even the United States…

photo: Andrew Conflict
Work on the construction of the exhibition complex in Dunhuang.

* * *

For me, this trip was the first acquaintance with China. And I saw not so many: Beijing, Lanzhou, Dunhuang. As one senior Chinese figure, it’s only a few sheets, for which it is difficult to judge about the tree. And to understand something about China, enough to see the capital and from the provinces. Anyway, seen enough, to feel a sense of respect for what he managed to do Chinese in a few decades of reforms.

Met in Beijing Bulgarian journalist told me that he first visited in the eighties: the country is changing with great speed, no comparison between what she was then, today’s China, rushing to the leaders of the regional and global scale. And the fact that it is in China, born the initiative “One belt and one road”, that speaks volumes.

Yes, no doubt business is business. And its main goal is obviously profit. No matter what political, financial or other, not measured in dollars, rubles or yuan. And of course, China is aimed at getting the most profit. But the fact that this country puts forward ambitious initiative, this is not only envy. This is not only fear. This is to learn. And it needs to operate – and because it is our neighbor. And because it’s our partner. And because it is necessary also to look for opportunities to benefit.

photo: Andrew Conflict
The Great Wall Of China


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