Beijing Hits Speed Bumps Along the New Silk Road

Discussion in 'China' started by LETHALFORCE, May 13, 2016.

  1. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    Beijing Hits Speed Bumps Along the New Silk Road

    Three years ago, Xi Jinping began touting China’s plans for a “New Silk Road,” a revival of the ancient trade network that started in the capital of Chang’an (present day Xi’an) and played a major role in developing the civilizations of China, Persia, the Indian subcontinent, Arabia, and Europe. The proposed blueprint will connect more than 60 countries, lending the planned trade network potential to cover even more ground than the fabled Silk Road that inspired it—that is, if the plan isn’t eclipsed by its massive ambition.

    Collectively known as the One Belt, One Road initiative (OBOR), it is comprised of two main routes, each with various tendrils of resource infrastructure, and several interconnecting corridors. The northern Silk Road Economic Belt will connect Beijing to Poland via Central Asia, the Middle East, and Russia. The southern Maritime Silk Road will begin in Fujian, trace the coasts of Southeast Asia, India, and the Horn of Africa, before winding into the Red and Mediterranean Seas to end in Italy; this route will also include a separate corridor heading southeast along Indonesia and to Australia, following a recent deal with Sydney. China has already announced $1 trillion worth of future investments, and the State Council estimated the entire project’s price-tag to be $8 trillion if implemented perfectly to Xi’s vision. Last year alone, Chinese firms signed almost 4,000 contracts, valuing $92.6 billion, with global partners from more than 60 nations. The OBOR has been called “[possibly] the most significant economic initiative in the world today.”

    Last December, the Mercator Institute for China Studies published a detailed infographic map of the OBOR, and Rudolf Moritz outlined the strategic economic, political, and global power goals inherent in the plan:

    From an economic perspective, China strives that the development of new trade routes, markets and energy sources will result in growth impulses and at the same time reduce dependencies. Projects linked to the OBOR are to once again fill the order books of Chinese SOEs which are presently suffering from overcapacities. Furthermore, with the expansion of the Eurasian transport infrastructure Beijing aims to lay the foundations for China-centred production networks, for instance with Chinese companies relocating production to South-East Asia.

    Politically speaking, the Chinese leadership hopes that the OBOR initiative stabilises Beijing’s western Provinces [see prior CDT coverage of instability in Xinjiang and Tibet], as well as the neighbouring trouble spots, like Pakistan or Afghanistan. As China finances most infrastructure projects Beijing is also able to increase its political influence [see also CDT coverage of Beijing’s increasing involvement in the Middle East]. Many countries along the Silk Roads depend on Chinese infrastructure investments.

    The overarching goal is to be an active part in the establishment of a multipolar world-order. China seeks to play a constructive role in the reform the international system. The OBOR-Initiative is intended to be the foundation of a new type of international relations. The Chinese leadership speaks of the establishment of a “community of common destiny”. Core elements are more connectivity in Eurasia, “win-win-cooperation”, “mutual progress and prosperity” as well as upholding the UN principle of non-interference in the internal affairs of other states. [Source]

    The ambitious project has already run into some problems on all three fronts. On the economic: a financial assessment from The Economist Intelligence Unit (last updated in 2015) suggests significant risk for many countries likely to be included—and expected to invest—in the plan. On the political: in Pakistan, where a $46 billion link is under construction, security concerns abound, and some are skeptical the project will ever be finished. As for the overarching challenge to the global order: Washington last year took measures to dissuade allies from signing on to the China-proposed Asian Infrastructure Investment Bank (AIIB)—the main finance source for the OBOR, and another of China’s challenges to the global status quo. (At China-US Focus, Charhar Institute research fellow Zhao Minghao outlines American anxiety about Beijing’s ambitions, and argues that Washington shouldn’t panic regarding OBOR plans and other Chinese international development efforts.)

    At the South China Morning Post early this month, political scientist Robert Bianchi wrote on the many roadblocks facing the successful implementation of the OBOR, a plan that is “starting to look more like a gamble than a strategy”:

    The timing of China’s great leap outward could hardly be worse, given the turmoil currently sweeping Eurasia, the Middle East and most of the Islamic world. China and other great powers are pursuing new markets and allies at each other’s expense. This competition is encouraging resource wars and proxy wars that weaken all participants and unleash a chain-reaction of revolutionary movements fuelled by ethnic and religious hatreds.

    […] China will have great difficulty convincing other countries that it can become a world-class mediator as long as it rejects mediation of its own international disputes. By pressing untenable territorial demands in the South China Sea, Beijing is not only alienating key neighbours controlling the straits of Malacca and Makassar, but it is also stoking an arms race across the Pacific and Indian oceans – jeopardising already vulnerable maritime routes it cannot defend.

    China’s protracted feud with Turkey over the fate of Uygur refugees from Xinjiang (新疆) has proved equally self-defeating. Trying to prevent Turkey from resettling Chinese Muslims [see prior CDT coverage of the would-be Uyghur refugees, and subsequent protests of Xinjiang policy in Turkey] has played into the hands of terrorists looking for new recruits in Syria. Just when it seemed that Chinese diplomats had managed to persuade Pakistan to expel Uygur fighters along its frontier with Afghanistan, Beijing’s quarrels with Ankara began feeding terrorist routes that circle back to China’s own troubled borders.

    Inside China, opinions about the New Silk Road are increasingly coloured by economic slowdown and political repression. When the government first announced the projects in 2013, they were greeted with a mixture of indifference and bemusement. Now, the commentary has become more openly critical. A growing stream of writers – including important military, party and scholarly figures – are questioning the wisdom of the policies. […] [Source]

    The SCMP early this year reported on concerns from the U.N. Office on Drugs and Crime that OBOR deals could be exploited by criminals due to inadequate cross-border safeguards. On the heel of SCMP reports highlighting concerns, China strategist Andrew Leung last week argued that OBOR partner countries’ potential gains are well worth the risks. Also from the SCMP:

    […] The rationale is global connectivity, which defines the 21st century. It is part and parcel of what the World Economic Forum calls the Fourth Industrial Revolution. China is a central hub for the world’s production, supply, logistics and value chain. “One Belt, One Road” will deepen China’s infrastructural, economic, institutional and cultural connectivity with key parts of the globe. Not only will this enhance China’s global rapport and influence, it will also help counter exposure to geopolitical risks inherent in America’s “Asia rebalancing”, and China’s own energy security challenge and other imponderables in the South China Sea.

    One Belt, One Road” doesn’t translate into offloading surplus capacity in commodities such as steel and coal; it involves exporting excess capital to invest in productive infrastructure across the globe.

    Projected investments are estimated to benefit 4.4 billion people in 65 countries. The total size, according to some estimates, could be more than 12 times America’s Marshall Plan to aid post-second-world-war Western Europe, in comparable money-of-the-day terms.

    […] All these opportunities come at a time of rapid internationalisation of the renminbi, including currency swaps, trade-financing deals and offshore bond issuance. The currency has been included in the IMF’s basket of reserve currencies. Many banks and financial institutions across the globe are salivating for a greater slice of the action. [Source]

    However, Wendy Wu last week reported on how economic slowdown—and specifically, troubles with RMB internationalization—are also posing problems for Xi’s OBOR. Wu also noted issues with China’s national network to fund the plan.

    Despite the impressive investment figures, there are concerns both within and outside the Chinese government that the initiative may have been “too hasty, too broad, too ambitious and without sufficient preparations for unexpected contingencies,” said Christopher Johnson, a senior researcher with the Centre for Strategic and International Studies in Washington, in a research report.

    In addition, steps taken by Chinese regulators to defend the yuan and to stem capital outflows after the currency’s sharp depreciation late last year had raised the cost of currency settlement for Chinese firms conducted overseas businesses, [professor] Chu [Yin] said.

    […] Almost every province and some cities in China have set up funds or unveiled projects to dovetail with “One Belt, One Road”, but there was no agency like Japan’s Ministry of Economy, Trade and Industry to coordinate overseas investment, an economist at a think tank in Jakarta said.

    “The ministries do not share information. Each goes its own way. Without proper communication with local people, it is easy to fuel fears of neocolonialism and speculation about China’s real intentions,” the economist said. [Source]

    The Economic Times reports further on concerns related to economic slowdown, and notes suspicion from regional strongholds about how China’s plans may affect their interests:

    China is pushing its initiatives in Kazakhstan and other central Asian countries that have traditionally been strongholds of Russia.

    Speculation is also rife that Russia is getting worried over China’s increasing presence there as Astana, Kazakhstani capital, wants to use Beijing’s economic strengths to cut its dependence on Moscow, the report said.

    Meanwhile, in Southeast Asia, Beijing is challenging the presence of Japan, which has enjoyed strong economic dominance in the region for over three decades. [Source]

    As analysts and media commentators warn of the uphill battle facing the planned trade route revival, English-language state media has been championing the plan. Beijing has also made the cultural legacy of the ancient Silk Road a primary part of its promotion strategy. At The Hindu, Atul Aneja writes about the “soft power infrastructure” of the New Silk Road, reporting on the upcoming First Silk Road Expo which will be held in the ancient Silk Road city of Dunhuang:

    In September, thousands will descend in Dunhuang for the first Silk Road International Cultural Expo, whose mascot would be the [ancient Silk Road Buddhist site] Mogao grottoes. Organisers say that 72 countries have been invited to participate in the mega-event, which draws inspiration from China’s traditional engagement with a diverse set of people and cultures along the Silk Road.

    The hosting of the event is not accidental. On the contrary, many see it as a strategic exercise of soft-power, to help blunt accusations that Beijing is pursuing self-centered regional dominance, in tune with its economic rise.

    […] The message of inclusivity, anchored in a harmonious tradition, as a norm of international conduct, resonates strongly among officials of the Gansu province, of which, Dunhuang is a part. “The Silk Road has a shared legacy, for not only did it involve China, but many other countries including India, Russia, and Italy,” says E. Jun, the director of the Gansu Provincial Museum in Lanzhou, the capital of Gansu.

    The exhibits at the museum also include replicas of grottoes from Tianti Shan and Maiji Shan, powerfully echoing the intensity of India’s Buddhist-connect with China along a broad geographical band-width.

    The scale of the cultural infrastructure being established in Dunhuang is stunning. A legion of yellow cranes are operating round-the-clock as workers in blue uniforms, race against time to complete three main buildings, including the main convention center, by July, well ahead of the expo. […] [Source]

    New Delhi has expressed reservations with the OBOR initiative. For more on Indian unease, see a March article from Scroll. For more on hang-ups towards the realization of Xi’s massive plan, see “Xi’s Silk Road Dream for China Hits a Speed-Bump in Thailand” from Bloomberg.

    http://chinadigitaltimes.net/2016/05/oborsilk-road-title-tk/
     
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  3. amoy

    amoy Senior Member Senior Member

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    Why China's Hualing Group Revived An Old Soviet Factory To Restore An Ailing Economy In Georgia

     
  4. amoy

    amoy Senior Member Senior Member

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    China, Greece eye further Belt and Road cooperation via Piraeus port


    [​IMG]

    BEIJING, July 5 (Xinhua) -- China and Greece vowed Tuesday to well implement the Piraeus port project and make it an important support for their bilateral cooperation on the Belt and Road Initiative.

    The pledge came as Chinese President Xi Jinping met with Greek Prime Minister Alexis Tsipras at the Great Hall of the People.

    "China hopes to work with Greece to build the port into the biggest transshipment port of containers in the Mediterranean, the bridgehead of land-ocean transportation, and a support for Belt and Road Initiative cooperation to mobilize the two countries' cooperation in broader areas," Xi told Tsipras.

    Tsipras said Greece is ready to integrate its development strategy with China's Belt and Road Initiative, and play its role as a hub between the west and the east in areas such as energy and transportation.


    COSCO Shipping's investment in Piraeus port multi-win for China, Greece, Europe


    [​IMG]
    (from L to R) China COSCO Shipping's subsidiary Piraeus Container Terminal (PCT) CEO Fu Chengqiu, captain of COSCO SHIPPING PANAMA Jude Sebastian Rodrigues, Panama Canal Administrator Jorge Luis Quijano and Vice President of COSCO Container Lines Europe Weng Lin pose for a photo at Piraeus port, Greece, June 11, 2016. COSCO SHIPPING PANAMA, the vessel that was selected to make the first historic transit through the expanded Panama Canal later this June, berthed at Piraeus port and left Greece on Saturday with the best wishes of Panama Canal Authority officials and China COSCO Shipping Corporation Limited top managers for the landmark sail. (Xinhua/Marios Lolos)

    China COSCO Shipping's landmark investment in Piraeus port is a multi-win for China, Greece and Europe, a prominent Greek Shipping Finance Consultant told Xinhua in a recent interview here as Greece's largest port is about to change hands this summer.

    George Xiradakis, Managing Director of Piraeus-based XRTC Business Consultants, has deep knowledge of Greece's thriving maritime industry as well as commercial operations and over the past two decades has played a key role in building bridges between Greece and China by facilitating the financing of Greek shipping companies by Chinese banks.

    At the closing of Posidonia, a major worldwide biannual shipping exhibition, which was held in Athens from June 6 to 10, he talked to Xinhua about the significance of shipping for the global economy, the secret of Greek ship owner's success story and the prospects of Sino-Greek collaboration on board and ashore, in particular following the acquisition of the majority stake in Piraeus Port Authority (PPA) by China COSCO Shipping.
     
  5. sorcerer

    sorcerer Senior Member Senior Member

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    Redrawing New Silk Road: China 'to Shift Its Focus to Russia, India

    Politics 17:14 27.08.2016Get short URL Ekaterina Blinova 63927331 It's time to re-draw New Silk Road routes given security threats emerging in the Middle East and Central Asia, as well as a looming economic crisis in the West, geostrategic analyst Mathew Maavak told Sputnik.

    While the BRICS bold infrastructural projects aimed at creating a unified trade space in Eurasia have begun to take shape, Russia, India and China need to focus their attention on emerging security and economic challenges, Mathew Maavak, geostrategic analyst and doctoral candidate in Security Foresight at Universiti Teknologi Malaysia (UTM) believes.

    Trouble Brewing for New Silk Road Project
    "The primary threat comes from Islamic states and regions that form a contiguous crescent of instability from Afghanistan-Pakistan (AfPak) to the southern expanses of the Caucasus to the Middle East and North Africa (MENA), as well as a narrow spur to Bosnia and Kosovo. Religious fundamentalism and anarchy in MENA is rising unfettered by the year. There is no light at the end of the tunnel here for the foreseeable future," Maavak told Sputnik


    "Not so coincidentally, many of these nations are allied to the West — the same West that is continually antagonizing Russia along its western borders, particularly in Ukraine," the analyst remarked. According to Maavak, "prior lack of coordination" between the RIC (Russia, India and China) nations has led to many arterial chokepoints being concentrated in these high risk regions. Given the threat posed by al-Qaeda and other Islamic extremist groups "it will be myopic to spend hundreds of billions in infrastructure in Central Asia," he believes. On the other hand, Iran may play a balancing role in the Middle East region, the geostrategic analyst added.

    Iran may play a balancing role here. The newly-opened Chabahar port, built with Indian assistance, provides a viable port of call for a revived maritime silk route in the Indian Ocean. It all depends on the Iranian leadership and whether it desires some form of limited security accommodation with the RIC nations. Otherwise, Iran might smolder with the rest of the Middle East," he stressed.

    [​IMG]

    This map shows the breadth and scale of China's plans for 'new silk roads', including extensive transport and logistical links by land and sea. © chinadialogue.net This map shows the breadth and scale of China's plans for 'new silk roads', including extensive transport and logistical links by land and sea.

    Redirecting Trade Routes Through Safe Regions How could major Eurasian powers tackle the problem? First and foremost, Russia, China, Iran "should spread their arterial trade risks across geographically safe regions, and avoid undue reliance on Central Asia as a transit or economic corridor," the analyst explained.

    "To ensure geo-economic autarky, the RIC nations should prioritize trade routes within their borders — to the extent possible. The safest trade routes in the near-future would look something like the China-Mongolia-Russia Economic Corridor. Southeast Asia can also reap great rewards from the RIC nations. After all, the entire region was literally forged by the DNAs of both China and India since time immemorial," Maavak underscored.


    "Southeast Asia traditionally provided excellent returns on investments. India itself is hungry for new infrastructure with Prime Minister Narendra Modi never missing a chance to promote his 'Make in India' program," he continued. "Perhaps, the RIC nations along with Malaysia and Thailand can also revive the Kra Canal project, in tandem with upgrades and planned connections to the Kunming-Singapore railway network.


    China is grappling with excess steel and cement output, and these surpluses could be put to good use by building regional trade arteries of the future," he stressed. According to the geostrategic analyst, the New Silk Road "rebalancing" may help Central Asian states to maintain long-term neutrality.


    With the New Silk Road's routes redrawn and risks diminished, Central Asia will see that that its economic future and prosperity lies immediately to the north, east, west and south of the region.

    Could Eastern Eurasia's Nations Form Self-Sustaining Ecosystem? Commenting on Western journalists' assumption that "the ultimate prize in the Silk Road plan" lies in Europe, Maavak called attention to the fact that not everything is rosy in the West's garden. "Where does one start to describe this ticking time bomb? The US debt clock is breaching multiple records by the minute. Around 43 million young Americans are saddled with $1.3 trillion in student loan debt.


    That is almost equivalent to the entire GDP of India (2013)," the geostrategic analyst told Sputnik. "Things are not looking good in Europe either. Deutsche Bank now poses the greatest risk to the global financial system, with its derivatives exposure worth $72.8 trillion in 2013. That is equivalent to the entire global GDP. JP Morgan's exposure is reportedly more modest, at around $70 trillion. The current economic paradigm is perched on a giant house of cards," he noted. "Therefore, it is pointless to build bridges and trade networks to a region facing socio-economic disintegration on a scale that may dwarf anything seen since the 1930s," Maavak suggested.


    At the same time the East now has an unbeatable advantage over the West, the geostrategic analyst added. "I had written how Greater Eurasia now forms a self-sustaining ecosystem. For the first time in modern history, the East can survive without the West — albeit perhaps at a sub-par level — but the West cannot function for a single day without the East. Virtually every nut, bolt and washer is produced in the East. If our economies collapse, it will deprive the West of every hook, line and sinker. And the plumbing tape too! Even their underwear is manufactured in this region," Maavak elaborated.


    Eurasia's Hotspots and Zbigniew Brzezinski's 'Arc of Crisis'


    According to the analyst, there is no coincidence that the "crescent of instability" has currently engulfed the north and northeast of the African continent, the Middle East, the Central Asia region and beyond. Back in the 1970s, then President Carter's security advisor Zbigniew Brzezinski promoted the idea of the "Arc of Crisis" stretching from the Indian subcontinent in the east to the Horn of Africa in the west — with the Middle East as its central core. The Brzezinski doctrine targeted nation-states of the region which he regarded as a potential bulwark against the USSR and its allies. In his 1998 interview with Le Nouvel Observateur Brzezinski acknowledged that the US had weaponized radical Islamism in the region against the Soviet Union and secular regimes.

    Following the collapse of the USSR, Brzezinski wrote in his book "The Grand Chessboard" that the key to preserving the US-led unipolar world order was to prevent the rise of any competitors in Eurasia.

    Interestingly enough, a strikingly similar concept was recently voiced by George Friedman, the founder and chairman of the private intelligence and geopolitical forecasting corporation, Stratfor. During his speech at the Chicago Council on Global Affairs in February 2015 Friedman admitted that though "the United States cannot occupy Eurasia," it can throw its geopolitical rivals off balance to prevent their rise. Washington does "have the ability to support various contending powers [in Eurasia], so that they will concentrate on themselves, with political support, some economic support, military support and advisors," Friedman explained.


    Is there possibility that the US will try to complicate the Russo-Sino-Indian infrastructural project in Eurasia? "Without a shadow of doubt!" Maavak asserted. "The West's economic clout is waning rapidly but it wants to take the East down with it. Playing second fiddle to Eurasia is not an option for Washington," he underscored.

    Read more: http://sputniknews.com/politics/20160827/1044693862/china-russia-india-silk-road.html
     
  6. sorcerer

    sorcerer Senior Member Senior Member

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    Unhappy China Scraps Xi Jinping’s Visit To Nepal

    In what is being seen as a setback to bilateral relations between the two countries, Chinese President Xi Jinping, who was expected to visit Nepal in October, has cancelled the trip.
    This was conveyed to Nepalese Foreign Secretary Shankar Bairagi by the Chinese ambassador to Nepal Wu Chuntai during a meeting two days ago.

    The decision, incidentally, comes at a time when Nepalese Prime Minister Pushpa Kamal Dahal, also known as Prachanda, is preparing to visit India for a three-day trip starting September 15. Prime Minister Narendra Modi had last month extended an invitation to Prachanda to visit India at the earliest.

    Sources told The Indian Express that the Chinese side expressed disappointment with Nepal over a host of issues. According to sources, the Chinese are displeased with Nepal’s apparent lack of preparedness and commitment to joining its One Belt, One Road project — a framework that proposes connectivity and cooperation between China and the rest of Eurasia.

    The Chinese are also learnt to be unhappy over the Nepalese side “not implementing the agreements and understandings” reached between the two countries during former Nepal prime minister K P Oli’s visit to Beijing in March.

    http://indianexpress.com/article/wo...l-nepal-visit-disappointed-prachanda-3017649/
     

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