Mark Collins – China’s New Silk Road and Eurasia: Russia Watch Out

Further to this June 2015 post,

The Bear, the Dragon and Eurasia

President Putin would do well to be worried about the long-term geopolitical/economic implications on China’s long march west by land.  First a map:


silkroad.jpg

And now a major story in the LA Times:

China looks to economic future with its New Silk Road plan

From his office on a bend of the Rhine River, freight terminal boss Bernd Putens can see — and hear — the early stirrings of what China calls the New Silk Road.

The clang-clang of forklifts echoes through his building as 42 containers of cargo are unloaded at the Duisburg Intermodal Terminal, part of the world’s largest inland port.

The containers have just arrived on a train from Changsha, China, filled with electronics and other consumer goods, and will return carrying Land Rovers and other European products.

They represent a bold effort by Chinese leader Xi Jinping to extend his country’s economic and political clout.

Until four years ago, there was no regular rail service linking China and Germany, and for good reason.

The tracks existed, but at nearly 7,000 miles, the distance is longer than a round trip between Los Angeles and Boston, and trains must switch gauges — a laborious, time-consuming process — as they pass from China into Kazakhstan, Russia, Belarus and Poland. Trains are twice as fast as sea shipment yet twice as expensive, so rail makes sense only for high-value products or goods with short shelf lives.

…China believes the time is nigh for a modern Silk Road. Leaders in Beijing envision a 21st century version of the path trod by the likes of Marco Polo, starting with locomotives but quickly expanding to encompass roads, pipelines and other infrastructure.

By physically linking itself more tightly with Europe, the Middle East and Central Asia, China is aiming to create new markets as growth slows at home while deepening Beijing’s influence across Asia and as far away as the Middle East and Europe.

The effort is at the center of Xi’s signature political and economic policy initiative, called the Silk Road Economic Belt and 21st Century Maritime Silk Road.

For two years, Xi has been talking up the sweeping strategy — known collectively as One Belt, One Road, or OBOR — on his frequent trips abroad, while lining up financing plans at home and enlisting the participation of state-run and private companies…

China’s government has set up a $40-billion fund to promote private investment in One Belt, One Road initiatives and is encouraging state-run banks to make loans for projects including power plants, ports, pipelines and railways — to be built overseas, in many cases, by Chinese companies. The Bank of China has announced plans to fund $120 billion of those projects from 2015 to 2019…

In January, the China-led Asian Infrastructure Investment Bank  officially opened its doors, and the multinational institution is expected to finance tens of billions of dollars’ worth of projects that fall under the One Belt, One Road umbrella [website here for the bank–‘when in opposition the (Canadian) Liberals made it clear that it was “a lost opportunity” for Canada not to have joined the…Bank as a founding member‘].

Chinese firms, eager to avail themselves of government financial incentives and align themselves with a key Communist Party priority, are scrambling to get on board and show they’re embracing One Belt, One Road.

Although massive ground-up infrastructure projects will take years to come to fruition, the ripple effects of the strategy are already being felt in places like Duisburg…

Much more follows.  Plus lots more here on “One Belt, One Road”.

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

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