May 25, 2018

Silk Road Headlines

Silk Road Headlines

23 May 2018

Source: Louis Vest/flickr

 An important theme in this week's Silk Road Headlines is choice. As the Arab proverb goes: "Choose your neighbour before your house and your companion before the road."

A policy paper of King's College London states there is a paradigm shift in geopolitics. The paper delves into the added value of the United Kingdom as a strategic ally and it positions the UK as a vital partner for technological developments. Also, it highlights its financial hub and emphasizes the role of internationalizing the RMB. The paper also subtly displays the sensitive balancing act of the UK: finding new alliances between two superpowers, China and the United States. Yet, the paper leaves critical information out, mainly on the current partnerships of the UK. For example, the AIIB-membership of the UK remains unmentioned, as well as the long-lasting cultural and historical relationship with the US, of which the UK benefitted from the Marshall plan. Lastly, it does not dwell on Brexit, i.e. the necessity of looking for partnerships with superpowers [The Belt and Road Initiative: defining China's Grand Strategy and how it relates to the UK and China].

Japan and China are competing with each other on infrastructural projects within their region, e.g. Indonesia and Thailand. Chinese consortia are undercutting Japan by offering lower prices for realizing projects and offering shorter, albeit unrealistic, time-scales. This modus operandi provides the necessary challenges for the projects it has to deliver. Nonetheless, Japan is extending an olive branch in order to team up with Chinese consortia with projects within Asia, and possibly Africa. This cooperation might provide synergy and eventually more harmony within their difficult relationship [The China-Japan Infrastructure Nexus: Competition or Collaboration].

Africa on the other hand has set a building block for accelerating continental integration. The first step was taken on March 21st, 2018 in Kigali, Rwanda. The African continental Free Trade Area (AfCFTA) was signed and will be ratified in due time. This trade area provides not only exporting opportunities (infrastructure) for BRI, but also facilitates investments in digital connectivity between African states, e.g. implementing 'cloud computing' in Africa. Thus, making the AfCFTA a suitable free trade partner for the BRI [A Digital Free Trade Agreement for Africa's Silk Road].

A free trade agreement with the Eurasian Economic Union (EAEU) enables China to transport its goods across the Eurasian landmass (+ 6,000 km) duty free, up to the borders of the European Union. The EAEU consists of Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia, thus connecting the borders of China and the EU. Such an agreement has a lucrative side-effect for China to tap into an ancillary market with approximately 180 million people and a GDP of $4 trillion [Russia's Eurasian Economic Union Free Trade Agreement with Beijing Brings Chinese Goods to the EU Border]. The agreement would also facilitate more trains to Antwerp or any other destination in Western-Europe [Belt and Road landmarks as first direct freight train arrives in Antwerp from China].

The BRI receives a lot of critique and is doubted for its opaqueness, (difficult) governance and especially (high) debt-risk. Yet, China acts swift and independently, while other actors are reacting and grasping the strategy behind every move. In short, China takes its time to pick its own cherries and shares them when necessary. The consequences of realpolitik China is facing can be summed up by an old Chinese proverb: “One should be just as careful in choosing one’s pleasures as in avoiding calamities.”

Ali Cikmazkara

This week's Silk Road Headlines

New ‘Silk Road’ Brings Challenges And Opportunities For Biodiversity Conservation [Eurasia Review]

Belt And Road Initiative Enhances Pakistan’s Maritime Security, Decreases Likelihoods Of War Between India And Pakistan [Eurasia Review]

Opinion: Bonding with China [The Statesman]

Russia’s Eurasian Economic Union Free Trade Agreement With Beijing Brings Chinese Goods To The EU Border [Silk Road Briefing]

A Digital Free Trade Agreement for Africa’s Silk Road [Silk Road Briefing]

The China-Japan Infrastructure Nexus: Competition or Collaboration? [The Diplomat]

The clouds gathering around China's Belt and Road [Nikkei Asian Review]

Belt and Road landmark as first direct freight train arrives in Antwerp from China[Seatrade Maritime News]

The Role of Investors in Promoting Sustainable Infrastructure Under the Belt and Road Initiative [Chatham House]

The Belt & Road Initiative: Defining China’s Grand Strategy And How It Relates To The UK & China [King’s College London, Policy Paper Series issue 7]