June 23, 2015, by Editor
The Silk Road Economic Belt and Its Discontents
Written by Ivaylo Gatev.
On 18 November 2014, an international freight train left the Yiwu railway container centre in China’s eastern Zhejiang province and began a 13,000km journey to the west. The train crossed China’s western border at the Alataw pass in Xinjiang province and made its way through Kazakhstan, Russia, Belarus, Poland, Germany and France before arriving at its final destination in the Spanish capital of Madrid. It took the train twenty days to deliver its cargo, comprising 1,400 tons of stationery, craft products and Christmas toys and decorations – a journey time which is two weeks faster than travelling the equivalent by sea. The containers returned to Yiwu along the same route several weeks later loaded with cured ham, olive oil, wine and other merchandise from Spain, completing what has been described as the world’s longest train journey.
This new two-way rail route is the latest in a series of proliferating rail links between China and Western Europe. Whereas in the past, virtually all container traffic between China and the European Union was by sea, a growing, albeit still small, share of that freight is now shifted by land. The volume of railway cargo is expected to reach 50,000 containers by the end of 2015.
In the last few years as many as five Chinese cities have established direct-rail freight services to Europe passing through Central Eurasia, including the city of Zhengzhou in China’s Henan province, which since 2013 has operated a regular freight train service to Hamburg, Germany, for the transport of a variety of industrial goods that arrive in Zhengzhou from different parts in China. The city of Chongqing in west China has, since 2011, dispatched Hewlett-Packard block trains to Duisburg in Germany. Chengdu in Sichuan province, Wuhan in China’s central Hubei province, and the eastern port city of Lianyungang, also operate direct rail services to Europe via Kazakhstan and Russia. The Yiwu-Madrid rail link opened yet another overland corridor for the transport of goods and commodities across Eurasia and was hailed as the modern version of the ancient Silk Road that once connected imperial China with Europe and the Middle East.
China’s revival of the Silk Road in the form of transcontinental freight trains addresses particular economic and security concerns. China has specific reasons for promoting the development of a land bridge across Eurasia, reasons concerning the desire to develop the country’s interior – not least the Xinjiang Uygur Autonomous Region. By promoting railway links with Europe, China hopes to turn some of its central and western cities into logistical and industrial hubs capable of competing alongside its more developed coastal areas for investment. So strong is the desire for hinterland development that some provincial governments are prepared to heavily subsidise their freight train services to Europe.
Investing in overland transport infrastructure will also help China to stay commercially competitive in the long run, by facing off competition from Southeast Asia which is better positioned to take advantage of maritime trade with Europe. Decreasing dependency on international sea lanes controlled by an increasingly belligerent United States is another tactical advantage offered by the revived Silk Road.
At the same time, the China-Europe freight trains have become an important element in the vision to build a Silk Road Economic Belt and a 21st Century Maritime Silk Road. The twin strategies, known collectively as the Belt and Road Initiative, were announced in 2013 by the new leadership in Beijing determined to play a greater role in the global economy. A clear formulation of the aims of this initiative can be found in the document Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road issued in March 2015 by the National Development and Reform Commission, the Ministry of Foreign Affairs, and the Ministry of Commerce of the People’s Republic of China.
The document represents an action plan or a blueprint for a tous-azimuts engagement with many, though by no means all, of China’s closest and more distant neighbours, with a view to increasing connectivity and exchange along a network of sea and land ports and hubs. The Initiative prioritises the building of a new Eurasian Land Bridge, “connecting the vibrant East Asia economic circle at one end and the developed European economic circle at the other.” This will be achieved through setting up of “all-dimensional, multi-tiered and composite connectivity networks” in the field of not only transport, but also energy and telecommunications. The Road and Belt Initiative contains a notion of a shared future, anchored in the historical reality of the ancient Silk Road.
The authors of this action plan go to great lengths to emphasise the inclusive nature and mutually beneficial outcomes of the project. While differences between Beijing’s Silk Road Economic Belt and the Eurasian Economic Union between Russia, Kazakhstan, Belarus and Armenia appear to have been patched up at the highest level, resolution may prove to be more difficult in the case of the European Union. This is because the Economic Belt is predicated as much on the successful interconnection of transport infrastructure as on the mutual recognition of technical and industrial standards.
Unlike the Silk Road of yesteryear, the new Eurasian transport corridor negotiates different national, technological and administrative spaces. These spaces present obstacles in the form of different railway track gauges, electric current frequencies, accounting procedures, and systems of customs clearance and control that can be as formidable as the harsh climatic conditions prevailing in the Eurasian heartland. Building a land bridge across Eurasia requires concerted political will and coordination of activity necessary to overcome the challenges associated with establishing connectivity between the East Asian, former Soviet and European transport systems.
This is where the Silk Road Economic Belt comes to loggerheads with the EU. Since the breakup of the Soviet Union more than twenty years ago, Brussels has been working to reorganise, as far as possible, the region’s transport sector away from its post-Soviet model of development, and simultaneously fold it with the physical, regulatory and institutional networks centred on the EU. Through initiatives like Transport Corridor Europe-Caucasus-Central Asia (TRACECA), the EU has been trying to set the rules of the game by advancing its transport legislation on the states of East Europe, South Caucasus and Central Asia.
Beijing’s Silk Road Economic Belt challenges these rules, because it promotes interoperability and mutual recognition of national regulations and standards rather than harmonisation and approximation with EU transport law. Instead of the selective or even wholesale transfer of the EU acquis in a range of transport and customs-related legislative areas envisaged by TRACECA, the Chinese initiative upholds national standards in the countries along the Economic Belt. In that sense, the initiative works at cross-purposes with what the EU is trying to achieve in the post-Soviet space.
The Economic Belt Initiative poses an even more fundamental challenge to EU objectives in Central Eurasia. For more than twenty years, Brussels has engaged the successor states of the USSR in projects of market reform based on a model of neoliberal governance. Through policies like Eastern Enlargement and the Eastern Neighbourhood Policy, Brussels succeeded in closing off any alternatives to the EU-centred system of supranational economic and political order.
The Beijing initiative calls that order into question. It declares, “respect [for] the paths and modes of development chosen by different countries.” With an emphasis on sovereignty, it offers an alternative to market liberalisation and supranational governance. According to the action plan, the Silk Road will be advanced by institutions such as the Asian Infrastructure Investment Bank, the BRICS New Development Bank, the Silk Road Fund, the China-Eurasia Economic Cooperation Fund, and the Shanghai Cooperation Organisation Interbank Association. These bodies act as a counterpoint to Western-dominated institutions such as the European Bank for Reconstruction and Development and the Asian Development Bank, which are active in the region.
For the de-industrialised and de-populated East European states that joined the EU a decade ago, as well as those states further east who recently signed Association Agreements with the EU, the Silk Road Economic Belt Initiative would be a much needed source of economic revitalisation. These states have everything to gain from Chinese investment in their shrunken economies. Despite these potential benefits and for the reasons outlined above, it is doubtful to say the least that they will be allowed to participate in any meaningful way in the Economic Belt Initiative.
The revived Silk Road is off to a good start, but may well face challenges in the future. However, for now, the Chinese freight trains continue to shuttle across the Eurasian steppe.