On 7 September 2013, China’s President Xi Jinping delivered a speech at Kazakhstan’s Nazarbayev University that bore the potential to be one of the greatest speeches of our time. This speech was titled ‘Promote People-to-People Friendship and Create a Better Future’ and was designed to introduce, for the first time to a public audience, the full scope of China’s New Silk Road project. The details of the project, subsequently labelled the Belt and Road Initiative (BRI), were outlined later—the harbours in the sea route (the Road) and the different arms of the land route (the Belt) that would connect China and Europe. The routes of energy pipelines (for oil and gas) and a network of highways and logistic hubs have been further outlined since then. The idea and scope of this huge infrastructure project bear the potential of paramount importance not only in respect of the legacy of the Xi administration but with the possibility to alter the playground of global economics and geopolitics. This project was first made public in a speech in Kazakhstan one week before the Meeting of the Council of Heads of Member States of the Shanghai Cooperation Organisation (SCO). The timing of President Xi’s speech was no coincidence. Kazakhstan, where he delivered his speech, is a key component of the land route of the ‘Belt and Road Initiative’ (BRI). And the Shanghai Cooperation Organisation, the multilateral organisation that brings together the member states China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and since 2017 also India and Pakistan, is the political framework to establish the required settings for a project with a dimension like that of the BRI.
Later in 2013, Xi presented his vision for the sea route of the BRI at a meeting of the Association of South East Asian Nations (ASEAN) in Jakarta, Indonesia. Again, the decision to announce the sea route in Jakarta and within the framework of an ASEAN meeting was deliberately chosen. Jakarta is an important harbour along the sea route and ASEAN is the political entity for arrangements and agreements in the South China Sea.
The Belt and Road Initiative is as much an infrastructure project as a foreign policy concept. On the one hand, it comprises concrete and visible measures—roads, railroads, power stations, bridges, and logistic hubs. On the other hand, it is a political vision for deepened (economic) cooperation and a means to increase China’s access to the European Single Market—a market with a combined population of more the 500 million and a total GDP of over US$20 trillion, or US$40,000 per capita. The potential of the BRI lies in bridging the fast-growing new superpower China, an export-oriented producer of consumer goods for the wealthy European consumers, in one direction and an energy-consuming China, reliant on imports of gas and oil from the resource-rich Russia and Central Asian countries, in the other direction.
To understand the success of the BRI (so far), especially the success of the land route, the Belt, one has to understand the success of the Shanghai Cooperation Organisation (SCO). To understand the success of the SCO, one has to understand the interests and motivations of its key players.
Belt and Road: The Historic Dimension
The ancient Silk Road, the predecessor of today’s Belt and Road Initiative, was a trade road between China and the West (read Rome). It was a network of trade routes mainly in Central Asia and became operational during the Han Dynasty (206–220 CE). The similarity in the location of the route and the character of the exchange (both goods and ideas) between the ancient Silk Road and the infrastructure project of our days has inspired politicians and entrepreneurs along the route.
The goods that were mainly traded in the past were silk from China and gold and silver from Rome. After the decline of the Roman Empire (the stabilising hegemon in Central Asia back then), the ancient Silk Road became unsafe and lost momentum, but it experienced a revival in the thirteenth and fourteenth centuries (and led to the famous writings of one of its travellers—the Venetian Marco Polo).
The old route started at Xi’an and stretched for 6400 kilometres through Central Asia to the Mediterranean Sea (in fact, it was rather a track for caravans of camels than a paved road) where goods were shipped further. Besides goods, ideas, techniques, and religions travelled the ancient Silk Road as well as diseases such as the Black Death pandemic in the mid-fourteenth century.
As obvious as the differences between the ancient Silk Road and the modern Belt and Road Initiative are, so are their similarities: the huge economies of China and the West are potentially complementary—an increase of trade might foster the growth of both. The exchange of ideas, techniques, culture, and cuisine might find a reciprocal benevolent reception on both sides of the trade route, spur innovation, and improve the daily life and leisure activities. This aspect should not be underrated, since the sustainable success of the BRI will not only be judged in economic terms but in respect of its image as well. The more countries and common people participate in some way and experience an advantage because of the BRI, the more political support the project will receive. The ancient Silk Road required a protector, a security provider, and after the decline of the Roman Empire, the trade along the route came to a standstill. The same applies for today’s situation in parts of Central Asia—without a resilient security architecture or a powerful single protector (possibly China) the success of the Belt and Road Initiative remains questionable.
Belt and Road: The Economic Dimension
The economic potential of the Belt and Road Initiative shall not be fantasised in absolute numbers about the future amount of trade in dollars. Rather, the potential of the BRI as a game changer for the economies along its routes is interesting. According to the World Bank, the percentage of the population that lives below the defined poverty line (i.e., US$1.90 a day) is 25 per cent in Kenya, 23 per cent in Uzbekistan, and 21 per cent in Laos. If the BRI develops the economic potential of the BRI and if the planned investments are made and related infrastructure projects built, the positive spill-over effects can beneficially influence the development of economies along the route.
Especially the economies of Central Asia, which are located middle and centre of the planned Belt, expect to benefit from the increased trade along the routes. One important aspect of the BRI is the huge amount of direct (Chinese) investment in infrastructure projects in the transit countries of the BRI. The Asian Development Bank (ADP) estimates the total amount of investment required in infrastructure projects in Asia to be about US$26 trillion.1
This is just an estimation and only time will tell how much the various countries will actually gain from the BRI. But it is a hint at the economic potential of the BRI, looking at the effects only the preliminary work for this huge project have had on some countries. A good example for this is Russia, since the improvement of China-Russia relations was fundamental for the deepening of most political and economic relations of China with Central Asian countries.
In the mid-1990s, the trade volume between China and Russia was less than two per cent of Russia’s total trade. After 2000 and as a result of the improved cooperation, especially in the sector of natural resources, the amount of trade increased significantly. Russia exported oil and gas to the thriving and energy-hungry Chinese economy, and in return, China exported manufactured goods such as clothing and telecommunication and electrical equipment to Russia. In 2018, Russia became the main supplier of oil as well as gas for China. In numbers of 2017: Russia exported goods to China worth US$39.1 billion and imported Chinese goods in the amount of US$43.8 billion, thus making China the biggest source of Russian imports (20 per cent of the total) and most important destination for Russian exports (11 per cent of the total).2
The increase of Chinese-Russian trade was both a facilitating means to establish trustful political cooperation and an expression of the improving political relations.
Belt and Road: The Political Dimension
Besides its potential to foster the relations between its transit countries the BRI is also a project that knots together its participants in the political dimension. The many years of preparatory work to set the stage on the political level for this infrastructure project have resulted in a substantial deepening of relations. As the next chapter will show, the political situation in the 1990s, after the collapse of the Soviet Union, was not predestined for mutually beneficial relations between China, Russia, and the Central Asian states. The ‘Stans’ (Kazakhstan, Uzbekistan, Tajikistan, and Kyrgyzstan) were freshly independent from the Soviet Union and eager to develop alternative relationships in the political, economic, and security (military) realms—relations alternative to Russia. Additionally, the countries were conflicted over border disputes mainly with China, and China and Russia (besides border disputes) were suspicious about the other’s objectives in Central Asia. How this unfavourable situation has been improved and how the BRI was prepared on the political level is a fascinating story of recent history.
Belt and Road: The Security Dimension
Similar to the political dimension, the improvement of the security situation in Central Asia was a precondition for the realisation of the BRI as was the cooperation in the framework of this infrastructure project beneficial for the security situation in Central Asia. The unsecure borders of Central Asia in the 1990s, the unresolved border conflicts, were the first issue to be addressed before a deepening of cooperation in the political, security, and economic dimensions would have been possible. The strengthened cooperation in regard to non-traditional security threats (e.g., terrorism, trafficking, extremism) had an effect as confidence-building measures as well. The joint border controls and sharing of intelligence led to higher transparency, better understanding of the various states’ security objectives, and the decrease of mistrust between Russia, China, and the Central Asian states. In the long run, the increased security situation was on various levels a precondition for the realisation of the BRI.
Belt and Road: The Stations on the Travel (Ports and Railway Hubs)
The Belt and Road Initiative consists, fundamentally, of a land route and a sea route. The sea route (labelled the ‘21st Century Maritime Silk Road’ or the Road) connects the harbours on China’s east coast with Europe. The sea route spans through the South China Sea and the Indian Ocean, and passes the Suez Canal to the Mediterranean Sea. Along this sea route exist a number of strategically important harbours (and additional harbours are planned) to support trade and to link economies and markets. The important harbours (coined ‘String of Pearls’ in several publications) are Jakarta in Indonesia, Hambantota in Sri Lanka (under construction), Malé on the Maldives (under construction), Gwadar in Pakistan, and Mombasa in Kenya (under construction), and the ports of Piraeus in Greece and Venetia in Italy (somehow a reminiscence to the ancient Silk Road traveller Marco Polo). There exists an alternative sea route, heading from China’s east coast harbours to the north, passing Russia’s northern coast and via the Arctic Ocean connecting with Europe. This northern route is often referred to as the ‘Polar Silk Road’ but it lacks the number of supportive harbours and is inferior in regard to the economic opportunities compared to the aforementioned sea route via the South China Sea and Indian Ocean.
Nonetheless, the Polar Silk Road possesses a strategic value given the unstable political situation in the South China Sea (due to unresolved territorial claims) and the potential of a blockade of the Malacca Strait (also known as China’s ‘Malacca Dilemma’).
In this book, the prequel for the realisation of the land route of the BRI through Central Asia is told since this part of the BRI is already a reality. Additionally, the story of how the many obstacles in the political and security realms to realise BRI have been overcome in Central Asia is enlightening and is an explanation for China’s optimism in respect of the future development of the BRI.
The current routes in overview:
‘China’s Belt and Road Initiative’—The Sankei Shimbun/JAPAN Forward (2018)
The land route (labelled as the ‘Silk Road Economic Belt’ or the ‘Belt’) connects China via Kazakhstan, Russia, Belarus, and Poland with Germany and Western Europe. The railroad connects China’s harbour cities (e.g., Shanghai) with Chongqing to Urumqi in China’s western Xinjiang region. Important logistic hubs on the route to Europe are Astana (Kazakhstan), Kasan and Moscow (Russia), Minsk (Belarus), and Warsaw (Poland) before the train reaches its destination in Duisburg (Germany). There exists an additional southern railway route of the Belt, with a turn at Urumqi to Tashkent (Uzbekistan) and via Tehran (Iran), Istanbul (Turkey), Sofia (Bulgaria), and Budapest (Hungary) to Germany. But this railway route is in large parts yet to be constructed and given the unstable security situation in various areas of this route and the number of transit countries, the northern railway route (which is already operational) is the realistic Belt.
At this moment, the Belt, as well as the Belt and Road Initiative in general, is a developing vision, a political strategy with infrastructural and economic components. Only the future will tell to what degree the great plan will be realised and how many of the various possible routes on land and at sea will become operational. The BRI possesses great potential but also faces serious obstacles. First of all, the realisation of this geopolitically major project depends on the continued economic strength and political will of the main driver behind it—China. The potential in the economic as well as political realm of this project is paramount but speculations about the future terms of trade and so on have been discussed enough. This book is about the current state of the Belt and its prequel. It analyses the ground-laying work, China’s efforts in the 1990s and 2000s that opened doors and prepared the ground for the developments we are now witnessing.
Belt and Road: The Prequel
On 31 August 2012, a new railroad connection called YuXinOu was officially put into operation. The Chongqing-Xinjiang-Europe International Railway crosses 11,179 kilometres from its origin in the Chinese city of Chongqing to its destination in Duisburg, Germany. The train passes through China, Kazakhstan, Russia, Belarus, and Poland before arriving in Germany. The journey takes on average 16 days for the distance and is thus 20 days lesser than a ship would need from China’s eastern coast to Germany. Time is money. The World Bank has developed a formula to figure the ...