Chinese President Xi Jinping at a news conference that marked the end of the Belt and Road Forum in Beijing, China May 15, 2017.  Photo: Reuters
Chinese President Xi Jinping at a news conference that marked the end of the Belt and Road Forum in Beijing, China May 15, 2017. Photo: Reuters

President Xi Jinping used the two-day New Silk Road international forum in Beijing to establish China as the flagship of a new, benign trade-focussed world order. This was, said Xi, a “new model of win-win and cooperation” that will prevail over gunboat diplomacy.

At the start of the conference, China’s state broadcaster Xinhua made clear that the initiative — officially first called One Belt, One Road (OBOR) and now Belt and Road (BRI) — was not “neocolonialism by stealth.”

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“China needs no puppet states,” said Xinhua, while essentially repeating what Xi delivered in his keynote delivery.

“China is willing to share its development experience with the rest of the world” said Xi, “but we will not intervene in other nations’ internal affairs, export our social system and development model, nor force others to accept them.”

The Forum communiqué – a summary of the main points developed in Xi’s keynote speech – reported that the nations represented in Beijing had pledged to promote “practical cooperation on roads, railways, ports, maritime and inland water transport, aviation, energy pipeline, electricity and telecommunications”.

Big business too was represented and, reportedly, is enthusiastic.

Alibaba’s Jack Ma, so committed to advancing an electronic World Trade Platform, spoke to Chinese media at the Forum and hailed BRI’s “inclusion of young people, women, smaller enterprises and developing countries.”

On the final day of the forum, Beijing even engineered a sort of New Silk Road United Nations, in the form of a Leaders Roundtable, with the microphones open equally to all. The event was a nifty illustration of how Xi wants the world to see this initiative.

“The primary intention and the highest goal of the ‘Belt and Road Initiative’ is to allow each member to jointly address global economic challenges, find new growth opportunities and drivers, achieve a win-win situation and keep moving toward a community with joint destiny,” said Xi.

Xi went onto offer exhortations for Ming dynasty navigation master Admiral Zheng He – as a “friendly emissary” – before delivering a metaphor for the new world trade order that he had just outlined.

“Wild swan geese,” he said of the large, rare and wild bird found in Asia but not in Europe, “are able to fly far and safely through winds and storms because they move in flocks and help each other as a team.”

Ride a wild swan

The New Silk Roads are bound to find turbulence ahead. At the forum, the German Minister for Economics and Energy, Brigitte Zypries, threatened not to sign the final communiqué if it did not contain firm guarantees for free tenders – as in no favoritism for Chinese companies – related to further OBOR/BRI projects.

But, in terms of railroad building/expansion/exploitation, can anyone compete with China?

Freight train convoys now regularly depart from eastern and central China, traversing the Central Asian steppes and clocking thousands of kilometers in 17 days before arriving in London, Madrid, Duisburg or Lyon. They depart loaded with household goods, clothes and spare parts and return with chemical products, wines and baby products.

That’s twice as fast as seaborne trade, even though a freight train carries less than 100 containers compared to up to 20,000 in a cargo ship. What really matters though is that this is only the first stage of a future high-speed rail network from eastern China to Europe via Central Asia.

Public-private partnerships will also be part of the expansion. For instance, the first branch of the Iron Silk Road, a railway from Chongqing to Duisburg, was actually instigated six years ago not by Beijing policy but by Silicon Valley giant Hewlett-Packard to ship millions of notebook computers to Europe by train.

But now China’s policy is advancing fast across Europe. At the forum Eastern Europe was heavily represented and the region has been helped by a fund set up three years ago to initially invest US$10 billion euros.

Three silk roads stretching from China to Southeast Asia Europe and Africa, Jan 2017.
Three silk roads stretching from China to Southeast Asia Europe and Africa, Jan 2017.

Last year, China Everbright bought Tirana’s airport in Albania. China Exim Bank is financing highway construction in Macedonia and Montenegro. In 2014, China Road and Bridge Corporation built a bridge over the Danube in Belgrade, the so-called “bridge of Sino-Serbian friendship” that was mostly financed by China Exim Bank.

Then there’s the high-speed rail line between Athens and Budapest, via Macedonia and Belgrade. The crucial Budapest-Belgrade stretch – still held up by EU red tape – should finally be operational this year.

Geoeconomics, once again, is pushing geopolitics. By investing in a corridor from the Aegean Sea to central Europe, Beijing will be actively boosting trade out of the famous Greek port of Pireus that actually has been under Chinese control since 2010.

And now the battle for soft power

Zhou Wenzhong, secretary-general of China’s high level regional affairs forums, the Boao Forum for Asia, bills the New Silk Roads as “China’s answer to globalization.” But is it actually more than that? Is it actually the new world vision? And one that is composed of so many multiple and constantly moving parts, that to date it has been difficult to define.

Xi used the Forum to try to clarify the concept but the reality is, on-the-ground conditions and circumstances will define the different strategies in the future. These will include, for each project, nation-by-nation policy and financing coordinations that have the power to move the initiative beyond a infrastructure boom.

The forum has already made it clear how significant players are jostling for position. There is already a looming competition tussle between Hong Kong and London as to who will be the privileged source of financing. While Hong Kong remains the number one offshore yuan trade settlement center in the world, Britain’s Chancellor, Philip Hammond, emphasized that London remains the world’s financial centre, unmatched to deliver on the New Silk Roads “internationally bankable” needs.

The flight of the swan geese is already on. The next big question is how emphatically the New Silk Roads will rewrite the rules of the global trade game without upsetting ultra-sensitive players such as India. But that’s where soft power chips in.

Beijing’s swan geese will now work to seduce the Global South into an irresistible partnership that transcends mere commerce.

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