Business
Augusto Soto
March 6, 2016
© Photo: Public domain

Xi Jinping’s recent visits to Saudi Arabia, Egypt and Iran and his upcoming visit to the Czech Republic in March remind us of more challenges for the «One Belt, One Road» (OBOR) policy now than when it was announced in 2013.

At first glance, all countries on Xi’s most recent agenda are part of a grand business diplomacy approach. The first three are clearly under geopolitical tensions and security threats defined by several pundits as issues of main global concern for the year 2016. These real and unfathomable factors might affect the Silk Road Economic Belt and the 21st Century Maritime Silk Road (another reference for OBOR) in a crucial year for the project.

More clouds than last year

In recent months more doubts emerged about the initiative.

First, factors such as a rather pessimistic economic outlook (including the very doubt about EU’s cohesion), China’s economic adjustment (called «new normal» in China, and «slowdown» by influential analysts abroad), and perceptions of insecurity in China’s neighbouring Central Asia and South East Asia seem to be principle elements bound to affect the initial steps of OBOR.

Final communiqué of the G20 meeting in Shanghai released on February 27, declared that «downside risks and vulnerabilities have risen, against the backdrop of volatile capital flows, a large drop in commodity prices, escalated geopolitical tensions, the shock of a potential UK exit from the European Union and a large and increasing number of refugees in some regions».

Second. More than ever it is necessary to keep in mind the fact that most of the countries (developed or underdeveloped) seeking to participate in OBOR, unlike Beijing lack strategy and long-term planning. At most they plan for a period of one presidential term. Thus, for several states the task to interconnect with China in a responsible long-term way is relatively constrained.

Third. Furthermore, the Chinese initiative is not comparable to a Chinese Marshall Plan as it is wrongly and cyclically referred to. Post World War II Europe, with dozens of countries in shambles, was an obvious field for action and reconstruction (Cold War motivations aside), and so it was the reconstruction in Eurasia and in Asia itself. In addition, unlike the Marshall Plan, Chinese OBOR envisages multiple investors triggering subsequent new investments, Chinese and foreigner. Unlike the former, it is non-ideological, but in view of the number of actors (more than 60 states), more complex to oversee.

The fourth consideration is transnational corruption, which does not seem to diminish in the last year. Will OBOR mega-projects have a chance to develop free from wrongdoers? OBOR will need a special concerted international effort in which Interpol, Shanghai Cooperation Organization’s appropriate body and Europol could jointly contribute by monitoring the projects. We should bear in mind that when acting at national levels, corrupt individuals and criminal networks (in any country) have so far shown capacities of stealing astronomical sums of money. Even the countries and regions with low criminal rates (plus various international banks, companies and institutions) show an alarming number of such cases.

And yet OBOR has a special backing plus additional potential

Certainly there are powerful assets on China’s side.

First. It is true that, historically speaking, ancient China has excelled in mega-construction plans such as the Great Wall and the Grand Canal and that most recently the country is building unparalleled colossal infrastructure. A figure recently disclosed shows that in using cement (the core element of infrastructure projects) China used more of it between 2011 and 2013 than the US did during the entire 20th Century. The new superpower has unique experience and industrial capacity.

Second. OBOR’s initiative comes from the president Xi Jinping, who is the strongest Chinese president in decades and a world leader who is constantly involved in visiting every continent to explain OBOR and sign related agreements in transportation infrastructure building, investment and trade facilitation, financial cooperation and cultural exchange.

One should remember that in October 2013 Xi announced OBOR and a few months later, in March 2014 delivered a speech at UNESCO headquarters (for the first time visited by a Chinese president). In it, he stressed the importance of inter-civilizational exchange facilitated by historic Silk Road routes and contacts as the underlying foundations for modern understanding and cooperation.

Third. OBOR reverberates in Chinese society through the mass media and élite circles. Several cosmopolitan Chinese intellectuals are discussing OBOR’s ins and outs from different perspectives. The China Europe International Business School (CEIBS) in Shanghai has organized colloquia and specific speeches about the new Silk Road but so far not the impressive meetings the initiative deserves, something like First China Europe Pudong Forum dedicated to the concept of Eurasia that was held at the very CEIBS twelve years ago.

Fourth. Actually what is missing is a new communication level consisting of China’s most powerful entrepreneurs. Tycoons such as Wang Jianlin, Jack Ma, Huang Nubo, among others, could specifically highlight OBOR’s significance in the multiple fora and panels they attend abroad. In addition, Wang, from his multimedia conglomerate (including a Hollywood film studio) could make meaningful contributions by disseminating business opportunities and understanding with potential partners along the Silk Road.

As a matter of fact, China’s prestige is at stake and this is an extraordinary asset of OBOR. Thus, the price for retreating, not to mention the hypothetical withdrawing of OBOR policy is not an option. It is about both a mammoth task of self-imposed strategic patience test for a new superpower mixed up with the concept of «national face», a distinct trait of Chinese culture.

Security is likely to go one step forward

On the other side is the realm of geopolitical raw reality. The question right now is what do we mean exactly when we say that the biggest economic superpower in history is eager to develop infrastructure and promote connectivity in Eurasia including the Great Middle East and Eastern Africa in a geostrategic setting showing signs of unpredictability and fragmentation?

In this context there is a space where China, the EU and Russia could jointly cooperate with the constructive actors of the Middle East in a bold exercise of pragmatism with a dose of risk.

Europe seems vulnerable to terrorism originating both from highly organized groups like ISIS as well as «lone wolfs». It is important to consider the threat of hyper-terrorism, as recently explained by France’s Prime Minister Manuel Valls. And also constantly reassess Beijing’s role and options in the Middle East, which amid increasing attacks on Chinese citizens abroad, is gaining importance for Europeans half-paralyzed by the refugee crisis mixed with the very threat of terrorism.

In fact, Beijing (over these years engaged in developing a common Eurasian defense architecture with Moscow and post-Soviet States) is showing an increasing willingness to cooperate with the EU on international security, which by definition entails some crucial geographic points of the planned grand infrastructure. And all this is happening before the great bulk of OBOR mammoth infrastructure is being set. The Silk Road is clearly in flux.

The views of individual contributors do not necessarily represent those of the Strategic Culture Foundation.
No Way Back for Re-Emerging Silk Road in Flux

Xi Jinping’s recent visits to Saudi Arabia, Egypt and Iran and his upcoming visit to the Czech Republic in March remind us of more challenges for the «One Belt, One Road» (OBOR) policy now than when it was announced in 2013.

At first glance, all countries on Xi’s most recent agenda are part of a grand business diplomacy approach. The first three are clearly under geopolitical tensions and security threats defined by several pundits as issues of main global concern for the year 2016. These real and unfathomable factors might affect the Silk Road Economic Belt and the 21st Century Maritime Silk Road (another reference for OBOR) in a crucial year for the project.

More clouds than last year

In recent months more doubts emerged about the initiative.

First, factors such as a rather pessimistic economic outlook (including the very doubt about EU’s cohesion), China’s economic adjustment (called «new normal» in China, and «slowdown» by influential analysts abroad), and perceptions of insecurity in China’s neighbouring Central Asia and South East Asia seem to be principle elements bound to affect the initial steps of OBOR.

Final communiqué of the G20 meeting in Shanghai released on February 27, declared that «downside risks and vulnerabilities have risen, against the backdrop of volatile capital flows, a large drop in commodity prices, escalated geopolitical tensions, the shock of a potential UK exit from the European Union and a large and increasing number of refugees in some regions».

Second. More than ever it is necessary to keep in mind the fact that most of the countries (developed or underdeveloped) seeking to participate in OBOR, unlike Beijing lack strategy and long-term planning. At most they plan for a period of one presidential term. Thus, for several states the task to interconnect with China in a responsible long-term way is relatively constrained.

Third. Furthermore, the Chinese initiative is not comparable to a Chinese Marshall Plan as it is wrongly and cyclically referred to. Post World War II Europe, with dozens of countries in shambles, was an obvious field for action and reconstruction (Cold War motivations aside), and so it was the reconstruction in Eurasia and in Asia itself. In addition, unlike the Marshall Plan, Chinese OBOR envisages multiple investors triggering subsequent new investments, Chinese and foreigner. Unlike the former, it is non-ideological, but in view of the number of actors (more than 60 states), more complex to oversee.

The fourth consideration is transnational corruption, which does not seem to diminish in the last year. Will OBOR mega-projects have a chance to develop free from wrongdoers? OBOR will need a special concerted international effort in which Interpol, Shanghai Cooperation Organization’s appropriate body and Europol could jointly contribute by monitoring the projects. We should bear in mind that when acting at national levels, corrupt individuals and criminal networks (in any country) have so far shown capacities of stealing astronomical sums of money. Even the countries and regions with low criminal rates (plus various international banks, companies and institutions) show an alarming number of such cases.

And yet OBOR has a special backing plus additional potential

Certainly there are powerful assets on China’s side.

First. It is true that, historically speaking, ancient China has excelled in mega-construction plans such as the Great Wall and the Grand Canal and that most recently the country is building unparalleled colossal infrastructure. A figure recently disclosed shows that in using cement (the core element of infrastructure projects) China used more of it between 2011 and 2013 than the US did during the entire 20th Century. The new superpower has unique experience and industrial capacity.

Second. OBOR’s initiative comes from the president Xi Jinping, who is the strongest Chinese president in decades and a world leader who is constantly involved in visiting every continent to explain OBOR and sign related agreements in transportation infrastructure building, investment and trade facilitation, financial cooperation and cultural exchange.

One should remember that in October 2013 Xi announced OBOR and a few months later, in March 2014 delivered a speech at UNESCO headquarters (for the first time visited by a Chinese president). In it, he stressed the importance of inter-civilizational exchange facilitated by historic Silk Road routes and contacts as the underlying foundations for modern understanding and cooperation.

Third. OBOR reverberates in Chinese society through the mass media and élite circles. Several cosmopolitan Chinese intellectuals are discussing OBOR’s ins and outs from different perspectives. The China Europe International Business School (CEIBS) in Shanghai has organized colloquia and specific speeches about the new Silk Road but so far not the impressive meetings the initiative deserves, something like First China Europe Pudong Forum dedicated to the concept of Eurasia that was held at the very CEIBS twelve years ago.

Fourth. Actually what is missing is a new communication level consisting of China’s most powerful entrepreneurs. Tycoons such as Wang Jianlin, Jack Ma, Huang Nubo, among others, could specifically highlight OBOR’s significance in the multiple fora and panels they attend abroad. In addition, Wang, from his multimedia conglomerate (including a Hollywood film studio) could make meaningful contributions by disseminating business opportunities and understanding with potential partners along the Silk Road.

As a matter of fact, China’s prestige is at stake and this is an extraordinary asset of OBOR. Thus, the price for retreating, not to mention the hypothetical withdrawing of OBOR policy is not an option. It is about both a mammoth task of self-imposed strategic patience test for a new superpower mixed up with the concept of «national face», a distinct trait of Chinese culture.

Security is likely to go one step forward

On the other side is the realm of geopolitical raw reality. The question right now is what do we mean exactly when we say that the biggest economic superpower in history is eager to develop infrastructure and promote connectivity in Eurasia including the Great Middle East and Eastern Africa in a geostrategic setting showing signs of unpredictability and fragmentation?

In this context there is a space where China, the EU and Russia could jointly cooperate with the constructive actors of the Middle East in a bold exercise of pragmatism with a dose of risk.

Europe seems vulnerable to terrorism originating both from highly organized groups like ISIS as well as «lone wolfs». It is important to consider the threat of hyper-terrorism, as recently explained by France’s Prime Minister Manuel Valls. And also constantly reassess Beijing’s role and options in the Middle East, which amid increasing attacks on Chinese citizens abroad, is gaining importance for Europeans half-paralyzed by the refugee crisis mixed with the very threat of terrorism.

In fact, Beijing (over these years engaged in developing a common Eurasian defense architecture with Moscow and post-Soviet States) is showing an increasing willingness to cooperate with the EU on international security, which by definition entails some crucial geographic points of the planned grand infrastructure. And all this is happening before the great bulk of OBOR mammoth infrastructure is being set. The Silk Road is clearly in flux.