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China’s Triple Wins: The New Silk Roads

I recently came across an interesting article by Financial Times, China’s Great Game: Road to a New Empire. It describes China’s new Silk Road program – “a modern version of the ancient trade route,” and how it has become China’s signature foreign policy initiative under President Xi Jinping.

NewSilkRoadThe New Silk Road program consists two routes, known as “One Belt, One Road” (see the map). The land route is called “the Silk Road Economic Belt,” linking central Asia, Russia and Europe. The sea route has an odd name: “the 21st Century Maritime Silk Road,” and goes through the western Pacific and the Indian Ocean. Thus, “One Belt, One Road.”

If successful, the New Silk Roads could be the largest economic development scheme on the face of the earth. The Financial Times article compares it to the US-led Marshall Plan after WWII:

If the sum total of China’s commitments are taken at face value, the new Silk Road is set to become the largest programme of economic diplomacy since the US-led Marshall Plan for postwar reconstruction in Europe, covering dozens of countries with a total population of over 3bn people.

Indeed, if successful, the New Silk Road program will be triple wins for China.

First and foremost, after decades of rapid growth, China is seeking new investment and trade opportunities beyond its borders. Trade between China and the five central Asian states — Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan — has grown rapidly in recent years, hitting $50 billion in 2013.

China now wants to build the roads and pipelines into these countries to smooth trade access and secure more resources. The infrastructure projects will help absorb the country’s overcapacity in steel and construction, and counter its economic slowdown back home.

Second, western China has traditionally been troubled by tensions between Uighurs, a Muslim ethnic minority, and China’s Han majority. Xinjiang province, “sitting on some of China’s largest energy reserves and crucial to the Silk Road project,” has had many serious outbreaks of violence in recent years.

Beijing hopes that economic development will pacify the riots in the region. The New Silk Road program could be Beijing’s silver bullet to solve the ethnic conflicts in the region and prevent Xinjiang from breaking away to become a renegade state – as some “separatists” have sought to do in the past.

Lastly, like the Marshall Plan, the New Silk Roads will help boost China’s soft power and establish greater influence in Asia. “Economic development, as strategists in Beijing argue, will remove the appeal of radical Islam in China and Pakistan, Afghanistan and central Asia.” As the U.S. is bogged down by wars in Afghanistan, Iraq, and now in Syria, China will play the “good guy” who promises to bring economic prosperity to the region.

The New Silk Roads already have momentum. Earlier last year, Beijing announced $46 billion in investment in a planned China-Pakistan economic corridor, ending at the Arabian Sea port of Gwadar. And in April, Beijing announced plans to “inject $62 billion of its foreign exchange reserves into the three state-owned policy banks that will finance the expansion of the new Silk Road.”

Of course there are many unknowns and uncertainties. But it has become clear that China has the plans as well as the means to carry out such gigantic projects!

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