China and the 21st Century New Maritime Silk Road

0
1104
views

Author: Péter Klemensits

One of the major elements of the One Belt, One Road initiative launched by China in 2013 is the concept of the 21st Century Maritime Silk Road. The aim of this mega project is to revolutionize deep-sea trade from Southeast Asia through Africa to Europe, and to put the participating countries on the track of economic development with the help of the infrastructural developments along the coastline. 

In the autumn of 2013 China furnished another proof of its intensifying global role when it launched the One Road, One Belt project, with an aim as ambitious as to revive the traditions of the old Silk Road. Beijing committed itself to build and upgrade transport networks following the traces of the one-time caravan routes connecting Europe and Asia, and, naturally, to boost the regions concerned economically.  Basically, we can talk about a long-term international development scheme managed (funded) by China, which also satisfies the geostrategic goals of Beijing by linking the remote regions with major trade routes.

The One Belt, One Road initiative includes two mega projects: one of them is the Silk Road Economic Belt, and the other is the 21st Century Maritime Silk Road. The former links China with Central Asia, the Middle East and Europe on land, while the latter unites the major maritime trade routes of Africa, Europe and Oceania as well as South and Southeast Asia. The two schemes are inseparable, and the aim is their parallel implementation.[1] Although the significance of high-speed railways and motorways is unquestionable, maritime transport still plays a primary role regarding the volumes of transport. Therefore, in a global sense, the Maritime Silk Road has an even greater significance than the “economic belt” encompassing continents.

Collaboration for Mutual Prosperity?

The world could first hear about the plan of the Maritime Silk Road early October, 2013 in a speech which was delivered in the Indonesian Parliament by Xi Jinping, the President of China.  The head of the Chinese state committed himself to the necessity of building a modern maritime infrastructure and developing transport routes, primarily between China and the ASEAN states.[2] Since Southeast Asia had already been considered as the centre of long-distant trade, this region plays an especially important role in the project for China.

The venue and time of the announcement was not a coincidence, either. The Chinese government had launched the One Belt, One Road project just a few weeks earlier, of which, in addition to the continental one, the maritime Silk Road forms an organic part, since the two schemes mutually complete each other. And of all the ASEAN countries, it was Jakarta which showed the greatest enthusiasm toward the Chinese plans, since modernising the maritime infrastructure of the island state is one of the most important political goals of Indonesian President Joko Widodo “Jokowi”.[3]

According to China’s National Development and Reform Commission, the One Belt, One Road initiative is in line with the 5 principles of the UN: mutual respect, mutual nonaggression, mutual non-interference, equality and mutual benefit, and peaceful coexistence.[4] Consequently, the new Maritime Silk Road – similarly to continental projects – is expected to extend beyond “mere” infrastructural developments funded by China (for example, constructing ports and shipyards). Its real aim is to promote regional collaboration, financial integration, free trade and scientific cooperation. Naturally, the largest merchant nation of the world did not forget about financial conditions, either. The planned investments will be funded by the Asian Infrastructure Investment Bank and the Maritime Silk Road Bank.  In the case of the former institution, China provided half of its equity of US$100 billion, and as for the latter one, its entire equity of US$16 billion was provided by the state. In addition, the Chinese government deposited US$40 billion for the Silk Road Fund.[5]

According to Professor Yang Baoyun at the University of Beijing, “just like the historical route hundreds of years ago, the new Maritime Silk Road will bring tangible benefits to neighbours along the route, and will be a new driving force for the prosperity of the entire East Asian region.”[6]

Legacy of the Glorious Past

China’s attachment to the past and the remembrance of ancient times resonates throughout the One Belt, One Road scheme. But how did the Maritime Silk Road look like centuries ago?

In geographical terms, we can talk about two main routes: one of them connected China and the Korean Peninsula, and the other crossed the South Chinese Sea along the shores of South and Southeast Asia as far as the Persian Gulf. Maritime routes were already used several thousand years ago, well before the continental routes evolved.  In China, greater attention has been paid to sea trade since the Han dynasty (209 BC – 8 AD), and since the 7th century, when the role of the Arabs intensified, maritime routes wee preferred for security and financial reasons.[7]  During the 15th century, the voyages of Admiral Zheng He symbolised China as the maritime great power; Chinese sailors got to the coast of Africa, promoting the extension of political-economic relationships. Regarding their significance, these enterprises may be considered as the precursors of today’s concepts.[8]

For centuries, the Maritime Silk Road enabled the peaceful interaction between different cultures and civilisations, contributing to the development of long-distance trade as well as ensuring the creation of a new international economic and political system, in which China’s leading role was indisputable.[9] The concept of the 21st Century Maritime Silk Road – building on the successes of the past – is attempting to emphasise the positive effects of globalisation, and argues for mutual benefits, peaceful collaboration and the sustainable development of the maritime world.

A Geostrategic Game

According to the Chinese government, the sole objective of the new Maritime Silk Road and the entire One Belt, One Road initiative is of economic nature, namely “win-win cooperation”, to ensure common development and prosperity, furthermore, to promote economic and cultural integration between China and the states involved. In fact, there is much more than that, since there are serious diplomatic, economic and strategic considerations in the background.[10]

Indisputably, the development of trade, the reduction of costs, and the assurance of the safety of trade routes are equally important for China as well as its partners. From the viewpoint of internal affairs, the slowdown of Chinese economy and its planned restructuring demand the opening of new markets, therefore major foreign investments (such as the construction of ports) are vital for Chinese giant companies. In addition, developing countries may be the newest market outlets of Chinese import.[11] Although the “help” from China means several benefits for these countries, at the same time, Beijing may establish its economic and, where appropriate, political dominance in the region.

But the Maritime Silk Road has great significance also in a diplomatic sense. It is not a coincidence that lately it has become the decisive element of Chinese foreign policy. Southeast Asian countries have been considered as the most important potential partners from the beginning, since the scheme primarily aims at their appeasement, against the recent aggressive foreign and defence policy of China.[12] Although China says that infrastructural investments do not imply political constraints, the concentration of interests is obvious. In the case of ASEAN countries, we should not forget a greater strategic goal: reinforcing China’s influence in the region in the field of both economy and politics enjoys priority, due to the rivalry between China and the United States. Certain South and Southeast Asian countries (Pakistan, Sri Lanka, Malaysia, Cambodia) are committed beyond doubt; with them the objective is to ensure long-term cooperation.[13]

In respect of geostrategy, the objective of the Maritime Silk Road project is to guarantee Beijing’s control over the most important sea trade routes and uninterrupted import of raw materials.[14] In this, the specific ports have particular significance. In November, 2015, China established its first foreign naval base in Djibouti, which provides great help in the military operations against piracy off the cost of East Africa. Some analysts see chiefly military ambitions in the background of the Maritime Silk Road, which can be best summarised by the “string of pearls” theory. Its main point is that in accordance with China’s strategic interest, China will establish permanent naval bases from the Middle East to China, like a string of pearls.[15] However, the way events are developing currently does not support the relevance of the theory; military considerations do not feature in the Silk Role project, and, for the present, the emphasis is on enhancing economic interests.[16]

Route on the Sea, Route Overland

In recent years, China has tried to do everything it could to obtain the approval of foreign countries for the implementation of the scheme. In 2014, the Maritime Silk Road, and in 2015, its joint creation was the central theme of the China-ASEAN Expo. The foreign travels of the leaders of the states also fit into this pattern.[17] On the whole, most of the countries concerned reacted positively to the Chinese initiative. Until today, more than 50 states and organisation, including the European Union and ASEAN, have reassured China of their support. According to the original plans, the main branch of the Maritime Silk Road leaves from Kanton and then goes along the Asian shores; its main stops are Kuantan, Jakarta, Colombo and Calcutta, and via Mombasa, on the Red Sea and the Mediterranean Sea, it reaches Europe, where the destination is Athens.[18]  The other branch passes Southeast Asia and then continues toward Pacific islands. Naturally we can hardly speak of concrete routes, because – apart from current investments – the political position of the countries concerned has not been clarified yet.

However, there is one great difference between the Silk Road Economic Belt and the Maritime Silk Road:  the routes outlined by the Maritime Silk Road have been operating with full capacity for a long time, thus developments would limit to the construction of new ports, and would aim at increasing the volume of trade through them. On the continent, roads and railways, at best, exist, but the construction of railway lines is still pending at most places.[19] We should not forget that the continental and maritime component of One Belt, One Road are closely related, during which the priority is the construction of ports, and the construction of railways into the mainland only comes second.

“Building” The Maritime Silk Road

After China, the second most important region of the Maritime Silk road is Southeast Asia. The Malacca Straits and Singapore are of strategic significance, but due to the power of the city state, Chinese influence may be considered minimal here. That is the reason why China mainly tried to engage Malaysia and Indonesia in the investments. Under the agreement, China will implement infrastructural investments of a value of almost US$2 billion in the port of Kuantan, located of the eastern shore of the Malaysian Peninsula.[20] Some concepts even consider connecting the Thai Gulf and the Andaman Sea with a canal realistic. There is even greater harmony between Indonesia and China: according to President Jokowi’s concept, Indonesia wishes to become a kind of “coastal axis” between the Pacific and the Indian Sea, and Chinese plans are completely adapted to this idea. For China it is enormous business, since Jakarta wants to build nearly 30 ports all over the country in the near future, mainly with the help of Chinese companies.[21]

In order to decrease the dependency from the Malacca Straits, China is also interested in the cooperation with Myanmar. The parties have agreed upon the construction of a deep-sea port and an industrial park in Kyaukphyu.[22] Negotiations on a new port have been ongoing for years in Bangladesh, but no agreement has been reached yet, despite all China’s endeavours.[23]

In South Asia, the main partners are Sri Lanka, the Maldives and Pakistan. Sri Lanka welcomed the “Colombo Port City” project of US$1.4 billion two years ago, which would mean a 20 billion dollar Chinese investment during 20 years in the future, due to the port in Hambantota and the new quarter to be constructed around it. Although the process was slowed down by the change of government in Sri Lanka, the investment has been given the green light.[24] During Xi Jinping’ visit in 2014, the Maldives committed themselves since a contract on constructing a bridge linking the capital and Hulhule Island was concluded, in addition to developing the airport and the road network.[25]

Pakistan has a central position China’s One Belt, One road initiative. Although the China-Pakistan Economic Corridor – concentrating on the development of the road network – may primarily be regarded as an organic part of the Silk Road Economic Belt, it also means an important link with the new Maritime Silk Road. Pursuant to an agreement made last year, China will implement developments of US$1.6 billion in the port of Gwadar, partly providing an alternative to the trade routes crossing Southeast Asia.[26]

Initially, China also expected India to take part in the Maritime Silk Road, since Manmohan Singh’s government supported the concept from the very start. The new Prime Minister, Narendra Modi, – and his stonewalling tactics – however, made it obvious for everyone last summer that India was not enthusiastic about the idea at all.[27] In fact, the Indian government believes that the Chinese expansion violates their own geostrategic interests, because it decreases their influence in the surrounding regions (Sri Lanka, Bangladesh, the Maldives), and it would give China an advantage in the rivalry between the two major powers.

Destinations: Africa and Europe

The next strategically significant station of the new Maritime Silk Road is the coast of Africa. Senegal, Tanzania, Djibouti, Gabon, Mozambique and Ghana are all included in the Chinese investment plans. Like other regions, the development of ports, roads and railways are closely connected here as well. China’s enhancing economic presence on the continent may lay the foundation of Africa’s long-term development. At the end of 2015, China obtained the 10 billion US$ project aiming at the development of the Bagamoyo port in Tanzania, which is one of the greatest investments on the continent. If the plan succeeds, Bagamoyo will be the largest port in Africa, ensuring connections with several East African countries.[28] In Djibouti, renting a naval base for US$100 million per annum serves military as well as economic purposes but first and foremost, it is dedicated to guarantee the safety of the Maritime Silk Road.[29]  In Mozambique, China has undertaken development projects of a value of US$1.4 billion, of which the upgrading of the port in Maputo also forms a part.[30] In Ghana, a new port will be built at Atuabo for US$600 million by Chinese companies.[31]

Egypt – due to the significance of the Suez Canal – is also participating in the Maritime Silk Road. The Chinese are primarily interested in upgrading the port of Port Said and increasing the capacity of the canal. The destination of the Silk Road in Europe can be found in the port of Piraeus in Greece. Last summer, the Chinese company, Cosco purchased the majority of the shares of the port, and committed itself to significant developments. The total value of the business reached €1.5 billion.[32]  Piraeus, however, like Africa, cannot be regarded the end of One Belt, One Road, since it main role is to create a link between the remote parts of the European mainland through the high-speed railways to be built.

With the Silk Road into the Future?

The One Belt, One Road initiative, and the new Maritime Silk Road therein, is considered an exceptional enterprise from several aspects and unprecedented in history. The ambitious plan – providing proof of China’s growing global role – mainly focuses on the interests of the wold’s most populated country, but promises profit to all participants in the long term. The new Maritime Silk Road will certainly open a new chapter in the history of sea trade, since it places the system of regional diplomatic and economic cooperation onto a new basis. Beijing was right to recognise that in the globalised world only such multilateral solutions are appropriate which allows cooperation and cultural interaction between distant regions. To the countries of Europe, Africa, South and Southeast Asia, the 21st Century new Maritime Silk Road means an enormous opportunity, but a lot must be done in order to take it; or, using the metaphor of Wang Yi, Chinese Minister of Foreign Affairs, in order not to play the joint “symphony” out of tune.[33]

[1] SCOTT, Richard: China’s Maritime Silk Road project advances. In: Hellenic Shipping News, 12 July, 2016 http://www.hellenicshippingnews.com/chinas-maritime-silk-road-project-advances/ (02.08.2016)

[2] ROELL, Peter: China’s Maritime Silk Road – An Ambitious Undertaking. In: ISPSW Strategy Series, Issue

No. 423, May 2016, 3. http://www.css.ethz.ch/content/dam/ethz/special-interest/gess/cis/center-for-securities-studies/resources/docs/423_Roell_SLOC.pdf (02.08.2016)

[3] DUQUENNOY, Antoine – ZIELONKA, Robert: Bridging Asia and Europe Through Maritime Connectivity. European Institute for Asian Studies, Brussels, March, 2015 http://www.eias.org/wp-content/uploads/2016/02/Bridging_Asia_Europe_2015.pdf (02.08.2016)

[4] Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road. Issued by the National Development and Reform Commission,  Ministry of Foreign Affairs, and Ministry of Commerce of the People’s Republic of China, with State Council authorization, March 2015, II. Principles http://en.ndrc.gov.cn/newsrelease/201503/t20150330_669367.html (02.08.2016)

[5] FOO, Sheryl: China-ASEAN Maritime Silk Road: A Path Towards Mutual Benefits or China’s Free Ride into ASEAN? Asia-Latam Connection, December 27, 2015 http://www.asia-latam.org/in-the-news/2015/12/27/china-asean-maritime-silk-road-a-path-towards-mutual-benefits-or-chinas-free-ride-into-asean (02.08.2016)

[6] JIAO, Wu – YUNBI, Zhang: Xi in call for building of new ‘maritime silk road. ChinaDaily USA, 2013. 10. 04. http://usa.chinadaily.com.cn/china/2013-10/04/content_17008940.htm (02.08.2016)

[7] IFTIKHAR, Mohid – ABBASI, Faizullah: A Comparative View of the Ancient and the 21st Century Maritime Silk Road. Center for International Maritime Security (CIMSEC), March 3, 2016 http://cimsec.org/ancient-land-and-the-maritime-silk-road/22660 (02.08.2016)

[8] SCOTT

[9] IFTIKHAR – ABBASI

[10] YALE, William: China’s Maritime Silk Road Gamble. In: The Diplomat, April 22, 2015 http://thediplomat.com/2015/04/chinas-maritime-silk-road-gamble/ (02.08.2016)

[11] SCOTT

[12] See for example the Chinese land reclamation in the South China Sea.

[13] YALE

[14] MORGAN, Clemens: The Maritime Silk Road and the PLA. A paper for China as a “Maritime Power” Conference, July 28-29, 2015, Arlington https://www.cna.org/cna_files/pdf/maritime-silk-road.pdf (03.08.2016)

[15] BO, Zhou: The String of Pearls and the Maritime Silk Road. China & US Focus, February 11, 2014 http://www.chinausfocus.com/foreign-policy/the-string-of-pearls-and-the-maritime-silk-road/ (02.08.2016)

[16] VAN DER PUTTEN, Frans-Paul – MEIJNDERS, Minke: China, Europe and the Maritime Silk Road. Clingendael report, March 2015, 33. https://www.clingendael.nl/sites/default/files/China%20Europe%20and%20the%20Maritime%20Silk%20Road.pdf (03.08.2016)

[17] TIEZZI, Shannon: China Pushes ‘Maritime Silk Road’ in South, Southeast Asia. In: The Diplomat,  September 17, 2014 http://thediplomat.com/2014/09/china-pushes-maritime-silk-road-in-south-southeast-asia/ (03.08.2016)

[18] DUQUENNOY – ZIELONKA

[19] VAN DER PUTTEN – MEIJNDERS: 28

[20] TIEZZI, Shannon: The Maritime Silk Road Vs. The String of Pearls. In: The Diplomat, February 13, 2014 http://thediplomat.com/2014/02/the-maritime-silk-road-vs-the-string-of-pearls/ (03.08.2016)

[21] VAN DER PUTTEN – MEIJNDERS: 30.

[22] TIEZZI, Shannon: Chinese Company Wins Contract for Deep Sea Port in Myanmar. In: The Diplomat, January 01, 2016 http://thediplomat.com/2016/01/chinese-company-wins-contract-for-deep-sea-port-in-myanmar/ (03.08.2016)

[23] The possible  ports included Chittagong, Sonadia, Matarbari and Payra.

[24] TIEZZI: Shannon: China’s $1.4 Billion Port City in Sri Lanka Gets the Green Light. In: The Diplomat,  March 12, 2016 http://thediplomat.com/2016/03/chinas-1-4-billion-port-city-in-sri-lanka-gets-the-green-light/ (03.08.2016)

[25] ONDAATJIE, Anusha: China’s Maritime Silk Road Is Sri Lanka’s Boon as Xi Visits. Bloomberg, September 16, 2014 http://www.bloomberg.com/news/articles/2014-09-15/china-maritime-silk-road-proves-boon-for-sri-lanka-as-xi-arrives#media-1 (03.08.2016)

[26] CHANG, Lyu: Chinese firm to develop SEZ in Gwadar. ChinaDaily USA, 2015. 11. 12.

http://usa.chinadaily.com.cn/epaper/2015-11/12/content_22441296.htm (03.08.2016)

[27]  Narendra Modi changed India’s attitude towards Maritime Silk Road: China Daily. In: The Economic Times, July 04, 2016 http://economictimes.indiatimes.com/news/politics-and-nation/narendra-modi-changed-indias-attitude-towards-maritime-silk-road-chinese-daily/articleshow/53042664.cms  (03.08.2016)

[28] LÉAUTIER, Frannie A. – SCHAEFER, Michael – SHEN, Wei: The Port of Bagamoyo: A Test for China’s New Maritime Silk Road in Africa. In: The Diplomat, December 01, 2015 http://thediplomat.com/2015/12/the-port-of-bagamoyo-a-test-for-chinas-new-maritime-silk-road-in-africa/ (03.08.2016)

[29] KLEVEN, Anthony: Is China’s Maritime Silk Road A Military Strategy? In: The Diplomat, December 08, 2015 http://thediplomat.com/2015/12/is-chinas-maritime-silk-road-a-military-strategy/ (03.08.2016)

[30] China funds reconstruction of fishing port in Mozambique. Macauhub, September 11, 2014 http://www.macauhub.com.mo/en/2014/09/11/china-funds-reconstruction-of-fishing-port-in-mozambique/ (03.08.2016)

[31] Chinese firm wins $600m port construction contract in Ghana. ChinaDaily, 2015. 04. 09. http://www.chinadaily.com.cn/world/2015-04/09/content_20037004.htm (03.08.2016)

[32] BARNARD, Bruce: Greece, China Cosco finally seal Piraeus port sale. JOC.com, July 05, 2016 https://www.joc.com/port-news/european-ports/port-piraeus/greece-cosco-china-finally-seal-piraeus-port-sale_20160705.html (03.08.2016)

[33] DUQUENNOY – ZIELONKA

LEAVE A REPLY

Please enter your comment!
Please enter your name here