February 06, 2018

Are Europe and Turkey on board with China’s New Silk Road initiative?

http://www.hurriyetdailynews.com/opinion/salih-isik-bora/are-europe-and-turkey-on-board-with-chinas-new-silk-road-initiative-126887

By SALİH IŞIK BORA

 

Last month, French President Emmanuel Macron started his trip to China from the city of Xian. Macron is known for his apt use of symbolism and his choice of the historic Silk Road city was no different. This has to do with the Belt and Road Initiative, the central piece of President Xi Jinping’s mandate, a project aiming to connect the Eurasian supercontinent through infrastructure projects estimated to be worth up to $4 trillion by the Economist.

The narrative surrounding the Belt and Road Initiative places it in a relation of continuity with the Ancient Silk Road, which lost its prominence when Europeans discovered sea routes to Asia. Currently, trade between China and Europe overwhelmingly takes place through sea routes and few land options exist. The Belt and Road Initiative is set to bring the Silk Road back. Both British Prime Minister Theresa May and Macron put the Belt and Road Initiative at the center of their visits to China last month.

The initiative also occupied a prominent place at this year’s World Economic Forum in Davos, which took place last week. In May 2017, Turkish President Recep Tayyip Erdoğan and Russian President Vladimir Putin were present at the Belt and Road Initiative summit in Beijing while several other countries involved in the project such as Pakistan, Iran and Central Asian republics have been on board for a few years.

On the other hand, the increase in attention from European business people and political leaders is relatively new. This is certainly linked to the current state of affairs in the United States. Just like last year, the key theme of the Davos summit was the rising political threat against globalization. Most speeches, including the opening one by Indian Prime Minister Narendra Modi, addressed the issue. Obviously no direct reference was made but the elephant in the room was the United States under President Donald Trump. Both the Transpacific and Transatlantic trade partnership plans died when Trump came to power. In sharp contrast, the Chinese leadership has successfully embraced a pro-globalization discourse and the Middle Kingdom emerged as an even more crucial player in global trade than it previously was.

Similar to what happened with climate change after the withdrawal of the United States from the Paris talks, global trade has become a subject in which the new key country is China. European countries have come to the realization that perhaps their most important outside relationship will become the one with China.

Still, one should stress that several worries about the initiative are also expressed. Notably, Macron said “the Silk Road should not be one-way,” implicitly referring to the high tariff barriers of the Chinese market for all products apart from raw materials. In addition, the political economies of China and Europe are still quite incompatible, with the latter not even formally recognizing the former as a market economy. Trade is always a matter of delicate negotiation and China is currently conducting it with European countries within the framework of the Belt and Road Initiative.

It is hard to put this better than the way Siemens CEO Joe Kaeser did recently: “The China One Belt, One Road is going to be the new [World Trade Organization] WTO — like it or not.”

Surprisingly, the Belt and Road Initiative has still not really been brought to the fore as a central issue yet. However, the extent to which it may transform the world is obvious to keen observers. Indeed, many projects currently underway in Turkey - such as the tunnel under the Bosphorus and the Kars-Tblisi-Baku railway line - have something to do with the Belt and Road Initiative and Turkey’s ambition to become a central hub within the newly emerging Eurasian trade network.

Silk RoadChinaXi JinpingEurasiatradeeconomy

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