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Two Roads, But One Destination?

Feb 24 , 2014
  • Shao Yuqun

    Director, Center for American Studies, SIIS

When visiting India in July 2011, former US State Secretary Hilary Clinton proposed the “New Silk Road Initiative”, an idea conceived to promote regional economic cooperation in South and Central Asia. During his visit to Kazakhstan in September 2013, Chinese President Xi Jinping suggested creation of a “Silk Road Economic Belt”, a new concept used to encourage innovative cooperation between relevant countries. Historically, the “Silk Road” referred to the land passageway that connected business and trade flows between Asian, African and European countries. It also bridged political, economic and cultural exchanges between the East and the West. Interestingly enough, during this new decade of the 21st century, both China and the United States have headlined their ideas about regional economic cooperation under the same name – Silk Road. While the names may bear similarities, the strategic intents and specific contents covered therein must be widely different between the two countries. Then, what are these differences? And will they lead to the same and one destination? 

Beyond doubt, the strategic intents of the US and the Chinese Silk Road initiatives are totally different from each other. Immediately after the disintegration of the Soviet Union, and the subsequent end of the Cold War, the United States came up with a Silk Road initiative designed to free the newly independent Central Asian countries from Russian and Iranian influences, and bring them onto the path of freedom and democracy. At the same time, the United States hoped to serve its own purpose: diversification of its energy imports by making good use of the oil and gas resources newly discovered in the Caspian Sea region. To facilitate its military pullout from Afghanistan and to prevent its strategic interests in central and southern Asia from being jeopardized by deterioration of the security situation in Afganstian, the United States came up with an updated version of its Silk Road initiative in 2011, hoping to turn Afghanistan into the pivot of closer economic cooperation between Central and Southern Asian countries. According to estimates, from the start of the Afghanistan War until 2011, the United States offered Afghanistan a total of US$18.8 billion aids, , an amount bigger than its aids to any other country during the same periodHeavy consumption and massive aid from the United States and its allies created a ‘war economy’ in Afghanistan, and distorted the country’s economic growth model, with 97 percent of Afghanistan’s GDP coming from international consumption. According to World Bank’s calculations, Afghanistan will hardly be able to keep its current economic growth  after 2014, because the pullout of US and NATO forces will directly cut its annual economic growth rate by 2-3 percent. After 2014, consumption by US and the allied forces in Afghanistan will contract drastically, and the US and international aids to this Central Asian country will also plummet sharply, exposing its economy to the risk of collapse. Given the lack of endogenous power in the Afghanistan economy, and the uncertainties from its political and security situation, the United States hopes to form a trade gateway connecting Central Asia and South Asia via Afghanistan, through implementation of its New Silk Road Initiative, thus helping Afghanistan secure energy supply, create more job opportunities, and open new markets for its products. 

Apart from this core strategic intent, the US is also attempting, to strengthen its strategic partnership with India, prevent monopoly of Central Asian affairs by Russia and China, and guard against Iran’s intervention in Afghanistan, through its New Silk Road Initiative. 

Meanwhile, the idea about the “Silk Road Economic Belt” proposed by Chinese President Xi Jinping has a strategic goal with both domestic and international significance.From an international perspective, the Silk Road Economic Belt, along with the new Maritime Silk Road, the China-Pakistan Economic Corridor, and the Bangladesh-China-India-Burma Economic Corridor, constitutes a part of China’s general intent to fortify periphery diplomacy and strengthen friendly ties, particularly with its western neighbors.. China needs a peaceful and stable neighboring environment for its all-round economic and social development. But due to the sheer number of countries along its borders, and the development of a complicated strategic environment , China has run into unprecedented challenges in its periphery diplomacy as its national strength grows rapidly. At its first national conference on periphery diplomacy in October 2013, President Xi Jinping highlighted China’s basic principles on periphery diplomacy, which encompassgood-neighborliness, peace and security, and mutual prosperity, stressing that China would remain close, sincere, kind-hearted and tolerant to all its neighbors. Through implementation and development of the Silk Road Economic Belt, China can share its economic achievements with its neighbors, and promote mutual benefit and common prosperity through close and honest cooperation, thus fulfilling its responsibility and performing its duty as a leading regional power. 

Also, the security situation in central and southern Asia will become highly uncertain after the US pullout from Afghanistan in 2014. This will give the ‘three forces’ new soil to grow, adversely affect regional economic development, jeopardize political and social stability in western China, and pose new challenges to the economic ‘go-out’ strategy being pursued by western Chinese regions. Given these factors, the Silk Road Economic Belt initiative’s promotion of regional economic cooperation is  great news to all countries in this region. Since economic development also helps to improve regional security situation, implementation of the initiative will be of positive significance to stabilization of the regional security situation.

From the domestic perspective, the initiative is an obvious part of the strategic blueprint drawn up by China’s new leadership for opening the Chinese economy to the outside world. Over the past three decades since it started the drive of reform and opening-up, China favored an eastward thrust of its economic opening-up, focusing efforts on development of economic and trade ties mainly with the US and European countries. However, with the contraction of the US and the European markets resulting from the global economic crisis, the tightening of its economic and trade relations and energy cooperation with Middle East, central and southern Asian countries, and the pressing need of economic development in its western part, China has come to escalate westward opening-up of its economy on its agenda.For instance, the New Eurasian Land Bridge from  Lianyungang Port to Amsterdam runs through 47 cities in 17 countries, with rich resources lying all over the route. If this Bridge is turned into a passageway that is less costly in logistics and much greater in efficiency than marine routes, Chinese enterprises will enjoy a smoother sailing during their ‘go-global’ voyage, and the country’s western regions will get a new gateway with new acting point for its westward economic opening-up. Since Xi’s proposal of the Silk Road Economic Belt, Xinjiang, Shaanxi, Qinghai and some other provinces and regions have all rushed into action, following each other to work out strategic programs and action plans.On December 14, 2013, the State Development and Reform Commission and the Ministry of Foreign Affairs co-sponsored a forum on the development of the Silk Road Economic Belt and the Marine Silk Road. It was decided at the forum that the Silk Road Economic Belt would cover Shaanxi Province, Gansu Province, Qinghai Province, Ningxia Hui Autonomous Region, Xinjiang Uyghur Autonomous Region, Chongqing Municipality, Sichuan Province, Yunnan Province, and Guangxi Zhuang Autonomous Region. Finalization of the geographical coverage of the Silk Road Economic Belt has once again confirmed China’s goal on promoting the opening-up of its western regions.    

The items of regional economic cooperation covered in the New Silk Road Initiative include four parts: first, acceleration of infrastructure development (including mainly road construction in Afghanistan, railway network development in Afghanistan and its neighboring countries, and regional power grids development); second, lowering of trade barriers and promotion of regional trade contacts; third, construction of the Turkmenistan-Afghanistan-Pakistan-India natural gas pipeline; fourth promotion of water resource sharing. Currently, there have been encouraging progress in the construction of trans-national railways, but no big headway has been made in other fields of infrastructure development.Lots of factors are to blame for the slow progress, particularly making Afghanistan as the pivot of the drive. Due to instability of the security situation in this Central Asian country, no substantial progress can be achieved in many projects. Also, since the U.S. is essentially concerned with facilitating its military pullout from Afghanistan, instead of promoting regional economic cooperation in central or southern Asia, the United States is reluctant to devote any substantial effort to the latter end. For example, few high-ranking officials from the Obama Administration have visited Central Asia since its re-election, a phenomenon that has incurred criticism even from US scholars.      

The Silk Road Economic Belt initiative, meanwhile, is still at the stage of finalization. Viewed from its current evolution, the chief measures under contemplation mainly include creation of an extensive transportation and logistics passageway, promotion of trade and investment facilitation by removing  bottlenecks strangling regional economic development, acceleration of financial cooperation, establishment of an energy club, and installation of a grain cooperation mechanism. According to its design by the Chinese Academy of Social Sciences, the Silk Road Economic Belt will run along three lines: the northern line dominated by the Eurasian Bridge, the middle line composed of mainly oil and gas pipelines, and the Southern line featuring mainly trans-national highways.

A comparison of the New Silk Road Initiative and the Silk Road Economic Belt reveals that for all the difference of their geographical coverage, the two do come to meet each other somewhere, namely, in Central Asia. They differ from each other in terms of strategic targets, but still, they do share some similar goals, such as improvement of the regional security situation by economic means including acceleration of infrastructure development and subsequent promotion of economic cooperation and trade contact. Specifically speaking, the two initiatives opt for different projects; but generally speaking, they go in the same and one direction: acceleration of regional economic cooperation. Under such circumstances, the two countries should include their respective initiative in their policy dialogues on Southern and Central Asian strategies, and continue their policy communication to find a new point of cooperation and pool efforts for the development of the regional economy. 

Shao Yuqun is the Director of Center for American Studies, Shanghai Institutes for International Studies.

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