China’s New Silk Road Diplomacy, Heading towards a reality through Belt & Road Initiative (BRI)

“If you want to get rich, build a road first.” — Chinese Proverb

China’s New Silk Road (NSR) diplomacy came up with its revolutionary idea of Belt and Road Initiative (BRI). It aims at refurbishing the conventional relations of Old Silk Road under “Silk Road Spirit” into the new narratives of NSR i.e. pipelines, roads, railways and maritime linkages like ports.

The notion of New Silk Road (NSR) revolves around the implementation of the idea of economic cooperation in contemporary world politics. The historical genesis of the NSR is linked to the idea of Old Silk Road that was a political, social, economic and cultural link between the states having diverse cultural backgrounds. The multifaceted values of NSR, in this way, attempt to restore the traditional values in today’s international political scene.

In 2013, China’s President Xi Jinping came up with the idea of “Silk Road Economic Belt,” which later got the name Belt and Road Initiative (BRI). The BRI, in effect, is the Chinese acquisitions in 68 countries officially linked to President Xi Jinping’s signature foreign policy. It provides a visionary blueprint for even global economic development in the new world order.

The BRI offers a modern-day solution that fosters inclusive growth and development in the 21st century. It refers to connectivity through two ways: (i) the land-based “Silk Road Economic Belt,” and (ii) the seagoing “21st Century Maritime Silk Road”.

Connectivity is the main theme under which the BRI projects are being initiated and carried out. Beijing has, in this context, started building six main economic corridors: (I (Bangladesh-China-India-Myanmar Economic Corridor (BCIMEC); (ii) China-Mongolia-Russia Economic Corridor (CMREC); (iii) New Eurasian Land Bridge (NELB); (iv) China-Central Asia-West Asia Economic Corridor (CCWAEC); (v) China-Indochina Peninsula Economic Corridor (CICPEC); and China-Pakistan Economic Corridor (CPEC).

Among the abovementioned corridors, the CPEC has got the status of flagship project on which the governments of Pakistan and China are working vigorously. Owing to China’s investment-friendly philosophy, CPEC, with its accumulative investment of over $60 billion for Pakistan, is only one branch of the ‘investment tree’ of nearly one trillion dollars. Fortunately, this came as the privileged bounty for Pakistan due to the latter’s geostrategic location and time-tested, all-weather Pak-China friendship.

CPEC is a bilateral agreement that creates connectivity from Kashgar in China to Gwadar in Pakistan. It covers a total area of 2,934 kilometres and involves the construction of railways, bridges and roads besides many other projects. This game-changer project is the culmination of almost a decade of research and planning done by Beijing and Islamabad, and is expected to be completed by 2018.

During the recent years, the Chinese government has taken some landmark decisions in launching some bold ventures (other than these corridors) within China and around the world. For instance, in September 2016, Chinese government announced its largest private provincial-level investment firm of $2.4 billion in Guangdong province, aiming to jumpstart a faltering local economy known for its entrepreneurial spirit.

This is not the only step taken to furbish the local industry; in May 2016, the government announced also to develop its domestic infrastructure, especially in central and western China by allocating huge financial resources for new projects of the Silk Road.

In continuance of the above initiative, President Xi on 19th September 2017, while talking to the representatives from the comprehensive management of public security sector across the country in Beijing also stressed that “better social governance would better solve various social problems.” He told the representatives to “make social governance more systematic, rational, intelligent and in accordance with the rule of law.”

Very recently, Russia and China have ramped up their 2013 agreement regarding the construction of supply pipelines. Under this agreement, the Russian state oil giant Rosneft will supply China National Petroleum Corporation (CNPC) – parent of PetroChina – with 28.3 million tonnes of oil via the Skovorodino-Mohe pipeline in 2018, while the remaining 1.7 million tonnes of ESPO Blend will be loaded via the Kozmino port. To facilitate that, PetroChina has designated three refineries in northeast China as the main receivers of Russian oil.

In 2013, China revved up strategic relations with its western neighbours, especially the Central Asian Republics (CARs) on behalf of the Silk Road endeavour in order to further its objectives. According to Congressional Research Service, by March 2014 the Chinese government had signed agreements worth $30 billion with Turkmenistan, Uzbekistan, and Kyrgyzstan for increasing trade and to develop East-West transportation links.

In July 2017, China and Kazakhstan inked agreements worth $160 million during the Kazakh-Chinese Agriculture Investment Forum. The Forum was held as part of a two-day visit to the Kazakh capital by Chinese Minister of Agriculture Han Changfu at the invitation of the Kazakh Agriculture Ministry. In addition, the two countries also agreed to strengthen cooperation in transferring advanced technologies and innovations.

China is interested not only in this region but also in faraway lands. For instance, China became one of the largest creditors to Venezuela, in May 2016, pursuing its maritime Silk Road objectives by establishing about $50 billion investment to improve the conditions of an oil-for-loans deal. Similarly, investment of $1.4 billion to revamp “mini-city” on Colombo Port city, Sri Lanka is having the same stakes in mind.

China’s economic expansion, especially toward western and southern countries i.e. Central and South Asia, would most likely open up immense opportunities for the two regions. This would further lead to a web of connectivity with the Middle East, Africa and Europe through the Arabian and the Mediterranean seas.

China-Europe cooperation is also on an upward trajectory of exploring new horizons. A dedicated forum for cooperation with Central and Eastern Europe (CEE) countries has been around now for several years. This forum was created in April 2012 with ’16+1′ framework and constitutes a platform of sixteen countries from Europe, which would bring heads of state together annually to strengthen dialogue and cooperation between China and the CEE region.

A report by The Hague Center for Strategic Studies titled “A Road to Riches or a Road to Ruin? The Geo-economic Implications of China’s New Silk Road,” indicates that in November 2016, during a summit of the ’16+1′ framework, China launched a €10 billion investment fund to finance projects in the CEE region. China’s interest in the CEE region could be seen as a medium through which it can influence the European Union (EU). This influence manifests itself primarily in the form of initiatives which aim to persuade the CEE countries to adopt favourable policies vis-à-vis China.

Hungary is also considered the “European pillar” of the BRI because it has been taking part very actively in this initiative. Hungry is not only a participant of the BRI but also a strong supporter of China-Europe cooperation.

‘Hungary’s Minister for Foreign Affairs and Trade, Péter Szijjártó, claims that his country has been successful in building a strong cooperation with China in recent years. According to him, “We are the No. 1 country in Central Europe when it comes to exports to China and we are the No. 1 country in Central Europe when it comes to investments from China.” Up until 2015, Hungary received almost 80 percent of all Chinese investment in the region.

Other than this initiative, Georgia and China had been already working on the platform of BRI. Tbilisi Silk Road Forum, which took place on 15-16 October 2015, indicates China’s interest in Eurasia and its quest of maintaining a platform by establishing strategic relations with Georgia in order to enhance transport, energy and trade, as well as and people-to-people contacts through its traditional way of East-West connectivity.

Poland’s Amber Road has been having significant achievements on economic and cultural exchanges within Europe as well as creating linkages with the Chinese civilizations. In 2015, BRI also took a bold step to re-establish its Old Silk Road linkages with the emerging economy of Warsaw. In 2015, bilateral trade between Beijing and Warsaw was about $17.1 billion; by reaching this graph, China has become the largest trading partner of Poland.

On the pattern of Old Silk Road, new mode of connectivity has started. The first cargo train entered through crossing the old Silk Road linkages in September 2016 in Afghanistan from China. Last year remained significant in this regard as the new rail lines linked China with Iran, Turkey and the Western Europe. Two rail links to Iran are now in operation. The first train departed for Tehran on September 6, 2017 from Yinchuan, reducing travel time to only 15 days, which makes half as long as sea transport. No wonder, China is also gaining influence here through BRI strategy.

In present global politics, economic relationship among states is the order of the day. The economic significance of the Shanghai Cooperation Organization (SCO) is undeniable owing to its links with the Eurasian region that possesses a large proportion of the world’s oil and gas reserves. The SCO and BRI, both previews of Chinese Silk Road diplomacy, act as two terminologies which belong to one country: “China”. China’s significance in this regard in global affairs is beyond question. The idea of BRI will have symbiotic relationship with the SCO as well.

In concrete terms, the Belt and Road initiative is an immensely ambitious development campaign through which China wants to boost trade and stimulate economic growth across Asia and beyond.

In conclusion, one can predict the Chinese NSR heading towards a reality. In the near future, the NSR could only be possible through cooperation among different countries of diverse regions. The idea of connectivity for the stakeholders of different corridors is an economic opportunity which possesses lucrative benefits for them and this is what makes the BRI a framework of win-win cooperation.

Projects underway under Belt and Road Initiative

Following are the projects now underway under the Belt and Road Initiative (BRI).

China-Belarus Industrial Park

China-Belarus Industrial Park Development Company was established on August 27, 2012 and the groundbreaking ceremony was held in Minsk on June 19, 2014. Occupying an area of 91.5 square kilometres, this industrial park will be the largest one China has built overseas, with the highest concentration of high-tech businesses. Strategically situated, it connects the Eurasian Economic Union countries and the European Union members, offering easy access to international and transcontinental highways and railways.

Gwadar Port Free Zone

The free zone will be modelled after the Shekou Industrial Zone in Shenzhen, China, comprising a port, an industrial park and residential and business areas. The Pakistani government will grant tax exemptions to the zone, together with a land lease on preferential terms.

Colombo Port City

It relies on public-private partnerships for funding. The Port City will involve a combined floor area of over 5.3 million square metres, with an initial direct investment of $1.4 billion. It is expected to attract further development investment of 13 billion dollars, and create 83,000 long-term jobs.

China Railway Express to Europe

Also called the “Belt and Road on rail,” it helps boost connectivity between China and the rest of Eurasia. In addition to offering freight transport solutions, it contributes to flows of global investment, resources, technology and skilled personnel, and facilitates global cross-sector collaboration.

Jakarta-Bandung Railway

The rail link is expected to stimulate growth in such sectors as metallurgy, manufacturing, infrastructure, power generation and logistics, create jobs and promote structural transformation in Indonesia.

China-Laos Railway

This planned line is China’ s first overseas railway project to provide a direct link to China’ s internal rail network, and the second such project – after the Jakarta-Bandung rail link in Indonesia – to be built with Chinese technology and equipment to meet Chinese standards. It will also be an important section of the pan-Asia railway network.

China-Thailand Railway

The China-Thailand railway will be Thailand’s first standard-gauge railway to be jointly built by China and Thailand. Its planned length is 900 kilometres.

Mombasa-Nairobi Railway

The 471-kilometre-long Mombasa-Nairobi stretch is the first section of a planned East Africa railway network. Freight trains will run at 80 kilometres per hour and be able to carry 25 million tonnes a year. Connecting Nairobi, the capital city of Kenya, with Mombasa, the largest port in East Africa, this will be the first rail link conforming to Chinese standards ever built outside of China. It will also be the first new rail line in Kenya in a century.

Addis Ababa-Adama Expressway

The Addis Ababa-Adama expressway is the first expressway in Ethiopia and East Africa. The road was built with financing support from the Chinese government and using Chinese technology and standards.

Karot Hydropower Project

The project is being developed on a build-operate-transfer basis. Started at the end of 2015, it is scheduled to be operational by 2020. After completion, it will be operated by the construction contractor for 30 years, after which the ownership will be transferred to the Pakistani government at no cost.

With an investment of 1.65 billion dollars, the power station will have an installed capacity of 720MW and an average annual output of 3.2GWh.