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Beijing Setting The Pace Of Silk Globalization

Tuesday, May 16, 2017 - 04:34

Precisely one year after his inauguration as President of the PRC, Xi Jinping made a tour across the Central Asian republics. Having concluded multi-million dollar agreements with all countries of the region, the Chinese leadership firmly tied Central Asia to the PRC. Then, in September 2013, the proud representative of the fifth generation of Chinese leaders, Comrade Xi chose Astana for putting forward a strategic initiative on the formation of the Economic Belt along the Silk Road.

 

Since then, heated discussions have unfolded in all corners of the world regarding the new Chinese initiative. Conceived as a program project of Xi Jinping, the Silk Road Economic Belt (SREB) dramatically enlarged its scale within a few months. Realizing that the PRC initiative came in the spirit almost to all the subjects in Eurasia, the Chinese political strategists developed the idea, which resulted in the emergence of a comprehensive strategy involving two routes: the land route (the Economic Belt of the Silk Road), and the Sea Route of the Silk Road of the 21st century. Later, Beijing came up with a proper name for this grandiose initiative: One Belt, One Road. Thus, based on the ideas and developments of some Chinese experts (including Professor Wang Xi Ci of Beijing University), the idea of reviving the transport arteries along the route of the ancient Silk Road acquired a new appearance. Most importantly, this idea has received a powerful economic impulse in the form of multi-billion investments from the PRC budget.

 

Since September 2013, the Chinese authorities have made great efforts to advance their initiative. Through propaganda and promises of a prospective economic boom, Beijing has managed to make the SREB project attractive to such key players as the states of Central Asia, Russia, Iran, Turkey, and the EU countries. In spring 2015, there began the process of the so-called conjugation of the Chinese SREB initiative with the already active integration processes of the EEU.

 

It must be admitted that the Chinese initiative has become popular partly for objective reasons. The initiative contains favorable conditions and prospects. According to the speech Xi Jinping delivered in Astana in September 2013, the primary goal of the Chinese initiative is to gradually reduce and then completely eliminate trade and investment barriers between the project participants. According to the Chinese side, this measure is necessary for realization of the trade and investment potential of the participating countries. In addition, the project primarily envisages strengthening multilateral cooperation in the financial sector, ensuring uninterrupted monetary circulation, and harmonizing the monetary systems of the member countries. When solving this problem, plans are afoot to create a network of regional financial development organizations, and to optimize the financial flows.

 

Speaking at the Nazarbayev University, Xi Jinping primarily noted the achievements of the deep mutually beneficial relations between the countries of the Central Asian region and China. In a rather delicate manner characteristic of Chinese philosophers, the Chinese leader noted the profound significance of the thread that had been binding the said countries since ancient times.

 

Of course, like any external project, the Chinese initiative has its own pitfalls. It is necessary to understand that the SREB is designed to expand the chances of the Chinese economy and meets the interests of China in the first place. However, in spite of the noted challenges and risks contained in the “One Belt, One Road” strategy, the Chinese initiative offers great prospects to its participants. It would be foolish to ignore this or to refuse from such marvelous prospects! In particular, the internal discussions among Chinese experts show a number of promising directions for the organic inclusion of Kazakhstan in the Chinese project “Silk Road Economic Belt” with maximum benefits and minimal risks.

 

Understanding these processes, Kazakhstan, like many other actors, decided to participate in the project from the very beginning. In order to use the advantages of the SREB project in accordance with national development programs, Astana has decided to coordinate it with the national program “Nurly Jol.” In this regard, the parties have already achieved certain results. Over the two years of the joint implementation of “Nurly Jol” and the SREB project, Kazakhstan and China have managed to reach an agreement on some new areas of cooperation. In particular, these include the project on the transfer of production facilities from the territory of China to the territory of Kazakhstan. Four projects have already been implemented, another 46 projects are at the planning and implementation stages.

 

Worth noting, almost four years have passed since the announcement of the Silk Road Initiative. However, no official documents, concepts or programs have been developed yet. One exception is the Road Map for the “One Belt, One Road” strategy, which was presented at the Boaos Forum in March 2015. Despite its name, this document neither contains specifics nor provides answers to the most important questions: How will the Chinese initiative be implemented? What will be its mechanisms?

 

In May 2017, the Chinese authorities intend to hold a grand forum “One Belt, One Road.” In general, two large-scale events will be held in China this May, with the participation of the world leaders. The first event is the Silk Road Summit (also called the One Belt One Road Summit). It will gather all world leaders, heads of international organizations, representatives of NGOs and international media in order to discuss the Chinese initiative “One Belt One Road.” The second event is the annual summit of the BRICS countries, which will be held in the Chinese city of Xiamen.

 

Last week, Hong Kong's “South China Morning Post” (SCMP) reported that Russian President Vladimir Putin would be one of the honored guests at the two summits. According to the publication notes, Russia and China have often acted as a united front in the global arena on the issues such as the Syrian crisis, the Iranian nuclear program, and the North Korean nuclear threat. In addition, since Xi Jinping's assumption of office in 2013, Putin has had meetings with him more often than with any other leader, which marks a trend towards the strengthening of the Russian-Chinese bilateral relations. In any case, China and Russia have indeed become much closer. In the course of the upcoming events, the parties may sign new breakthrough agreements, especially in the investment sphere.

 

In general, the Chinese authorities are rapidly expanding their global influence. Judging by the theses expressed by Xi Jinping at the recent Davos forum, it is obvious that China is ready to take on a greater burden of global leadership, albeit with the reservation that China is a power with Chinese characteristics. The Chinese leader recalled the role his country played in the global economy. In the period 1950-2016, China financed over 5,000 international aid projects for more than 400 billion yuan. And it does not intend to stop at this. In this respect, the initiative “Belt – Road” really becomes a solution to the geopolitical aspect of the Sino-centric world through a long-term strategy of two ways: terrestrial and maritime.

 

Proceeding from what has been said, the plans of the Chinese leadership to convene the first Silk Road Summit fully prove Beijing's aspiration to play a more active role at the global level, as well as its desire to become a global leader and power. The Beijing summit is likely to become a bright even similar to the G20 summits, Davos meetings, etc., where the global agenda is discussed and decided. After all, today China is one of the largest engines of the world economy. In the economic sphere, Beijing already has several instruments of global and regional influence. It controls an international financial institution established a year ago: namely, the Asian Bank for Infrastructure Investments. The ABIA has a total capital of $100 billion. In 2016, it financed projects in the amount of $1.7 billion, which exceeded the forecast figure by $200 million. Competing with the never-implemented Trans-Pacific Partnership, Beijing has pushed forward the idea of a free trade zone with the APEC countries. The Silk Road Fund with a capital of $40 billion was established to finance the SREB project.

 

As reported by the Chinese state media, in addition to Vladimir Putin, the leaders of more than 40 countries will take part in the May Silk Road Forum. As reported, the invitations were sent to the leaders of the countries of Asia, Europe, Africa and Latin America.

 

So far, nothing has been reported about the agenda of the upcoming summit. However, it is already clear that the event will be a platform for discussing the most urgent issues related to the further development of the world economy. It's gratifying that such an important forum involving the leaders of the world powers will discuss the further prospects for the revival of new transport arteries of the ancient Silk Road, which will mainly run through the territory of our Central Asian countries.



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