Editorial Today – Silk Road revival plans

Historical background of Silk Road The Silk Road was a network of trade routes, formally established during the Han Dynasty. It reached its height during the Tang Dynasty.

Objective of reviving this route Economic and strategic

About one road one belt project It has two components

Conceptual Frameworkk The Belt and Road Initiative aims to connect Asia, Europe and Africa along five routes.

Closely related networks CPEC and BCIM

Funding for the project Silk Road Infrastructure Fund, Asian Infra Investment Bank and New Development Bank.

Strategic Implications Countering Pivot to Asia

Implications for India Positive and Negative.

Recent Initiative China is digging deep into its cultural roots to anchor a seamless revival of the ancient Silk Road.

Conclusion

 

Historical background of Silk Road

• The Silk Road was a network of trade routes, formally established during the Han Dynasty. The road originated from Chang’an (now Xian) in the east and ended in the Mediterranean in the west, linking China with the Roman Empire.
• As China’s silk was the major trade product, German geographer Ferdinand von Richthofen coined it the Silk Road in 1877. It was not just one road but rather a series of major trade routes that helped build trade and cultural ties between China, India, Persia, Arabia, Greece, Rome and Mediterranean countries.
• It reached its height during the Tang Dynasty, but declined in the Yuan dynasty, established by the Mongol Empire, as political powers along the route became more fragmented. The Silk Road ceased to be a shipping route for silk around 1453 with the rise of the Ottoman Empire, whose rulers opposed the West.

 

Objective of reviving this route

• In just 30 years, China has developed from a poor inward-looking agricultural country to a global manufacturing powerhouse. Its model of investing and producing at home and exporting to developed markets has elevated it to the world’s second-largest economy after the USA.
• Now faced with a slowing economy at home, China’s leadership is looking for new channels to sustain its appetite for growth at a time when developing neighbours are experiencing rapidly rising demand.
• Moreover there is no equitable development in china. Coastal areas are developed but interior regions are poorly developed. As a result social tension arises. This also leads to frustration against the government and demand for democracy there. To curb this china needs to develop inland regions, mostly western part of china.
• Because of this China’s exports driven economy requires new market as because of global slowdown demand from developed market is not much there.
• Other objective is to secure lane for raw material and counter the influence of US. Also China wants to secure Strait of Malacca region as piracy is the problem in this region but China’s almost 80 per cent trade pass from this region.
• It wants to get access in Bay of Bengal region to encircle India.

 

About one road one belt project

It has two components

• Silk Road Economic Belt is the land-based component.
• Maritime silk road is the ocean based component

 

Conceptual Framework

• The Belt and Road Initiative aims to connect Asia, Europe and Africa along five routes. The Silk Road Economic Belt focusses on: (1) linking China to Europe through Central Asia and Russia; (2) connecting China with the Middle East through Central Asia; and (3) bringing together China and Southeast Asia, South Asia and the Indian Ocean. The 21st Century Maritime Silk Road, meanwhile, focusses on using Chinese coastal ports to: (4) link China with Europe through the South China Sea and Indian Ocean; and (5) connect China with the South Pacific Ocean through the South China Sea.
• Focussing on the above five routes, the Belt and Road will take advantage of international transport routes as well as core cities and key ports to further strengthen collaboration and build six international economic co-operation corridors. These have been identified as the New Eurasia Land Bridge, China-Mongolia-Russia, China-Central Asia-West Asia, China-Indochina Peninsula, China-Pakistan, and Bangladesh-China-India-Myanmar.

 

 

Closely related networks

• The China Pakistan Economic Corridor (CPEC) and the Bangladesh-China-India-Myanmar (BCIM) Economic Corridor are officially classified as “closely related to the Belt and Road Initiative”.
• The CPEC in particular is often regarded as the link between China’s maritime and overland Silk Road, with the port of Gwadar forming the crux of the CPEC project.

 

Funding for the project

One Belt, One Road’s vast scale has elevated it to high-profile status given China’s financial resources. But even China’s deep pockets have limits, with the country’s total debt to GDP at 250%. Three financial institutions have been set up to support its development, which have met some resistance in the West given they provide alternatives to the World Bank, IMF and ADB.

Silk Road Infrastructure Fund

Launched in February 2014, the China-led US$40bn Silk Road Infrastructure Fund invests in One Belt, One Road infrastructure projects. The fund is capitalised mainly by China’s forex reserves and is intended to be managed like China’s sovereign wealth fund.

Asian Infra Investment Bank

Founded in October 2014, the AIIB aspires to be a global development bank with 21 Asian member countries (China, India, Thailand, Malaysia, Singapore, the Philippines, Pakistan, Bangladesh, Brunei, Cambodia, Kazakhstan, Kuwait, Laos, Myanmar, Mongolia, Nepal, Oman, Qatar, Sri Lanka, Uzbekistan and Vietnam), with registered capital of US$100bn.

New Development Bank

The NDB is a BRICS multilateral development bank established on 15 July 2014, by Brazil, Russia, India, China and South Africa. The bank was seeded with US$50bn initial capital, with the intention to increase capital to US$100bn. The bank will be headquartered in Shanghai. Each country will have one vote and no country will have veto power.

 

Strategic Implications

This initiative could shift the center of geo-economic power towards Eurasia instead of Asia-Pacific region which is dominated by US and its allies undermining their “Asia Pivot” strategy seen by Beijing as part of a China-containment policy.

 

Implications for India

Positive

• China is also willing to link the ‘Belt and Road’ initiatives with India’s ‘Spice Route’ and ‘Mausam’ projects. The ‘Mausam’ project envisages the re-establishment of India’s ancient maritime routes with its traditional trade partners along the Indian Ocean. The ‘Spice Route of India’, visualises the India-centered linkup of historic sea routes in Asia, Europe and Africa.
• The participation in the Silk Road project and increased Chinese investment in infrastructure projects in India will ease the massive trade deficit.
• India could also get access to various routes and thus trade would increase.

Note:-  Project Mausam

• It is inspired by India’s historical role as the focal point for trade in the Indian Ocean. In pre-modern times, sailors used seasonal monsoons (mausam, मौसम means weather or season in many South Asian languages) to swiftly journey across the Indian Ocean. This trip usually involved starting from one of the edges of the ocean, around today’s Indonesia or east Africa, sailing to India, stopping, and allowing another crew to wait for another monsoon to sail to the other edge of the Indian Ocean, as different monsoon winds blew in different directions at different times of the year. Crews would frequently winter for months in India or at one of the edges of the ocean waiting for another season of monsoons. This allowed for significant cultural exchanges as diverse people from different places would often spend months at a time living in foreign countries (Islam is said to have entered Indonesia in this manner).

 

• Project Mausam would allow India to reestablish its ties with its ancient trade partners and re-establish an “Indian Ocean world” along the littoral of the Indian Ocean. This world would stretch from east Africa, along the Arabian Peninsula, past southern Iran to the major countries of South Asia and thence to Sri Lanka and Southeast Asia.

Negative

• China’s influence on Indian neighbours like Bangladesh, Nepal, Myanmar and Bhutan will increase.
• It will augment the Chinese intention of encircling India through string of pearls. Moreover China would get direct access to Arabian sea through Pakistan which mainly passes through Pakistan occupied Kashmir. Thus this route will provide easy logistic to Chinese and Pakistan army in case of war.

 

Recent Initiative

• China is digging deep into its cultural roots to anchor a seamless revival of the ancient Silk Road, in tune with a growing domestic focus on tapping the achievements of its past.
• In September, thousands will descend in Dunhuan for the first Silk Road International Cultural Expo, whose mascot would be the Mogao grottos. Organisers say that 72 countries have been invited to participate in the mega event, which draws inspiration from China’s traditional engagement with a diverse set of people and cultures along the Silk Road.
• (Mogao caves has intricately painted walls and statues depict the life and thought of Buddha, and much more, are an icon of the vigorous cultural cross-currents that, for centuries, energised ties between India and China, through a branch of the ancient Silk Road)
• Analysts say that by leveraging culture, the Chinese wish to send a message to the world that the One Belt One Road (OBOR) connectivity project, is an extension of China’s peaceful engagement of Asia and Europe that ran for over a millennia along the Silk Road super-highway.

 

Conclusion

• Given the foregoing analysis, India will need to take a hard look at the pros and cons of supporting such a proposal. The dilemma for India is that a number of SAARC countries have already approved the Chinese proposal. Can India afford to be an outlier? If India has to go along what are its strategic options, can India together with Japan and ASEAN offer a countervailing regional initiative in which Japan, South Korea, Indonesia, Vietnam and other ASEAN countries could be partners. Speed with which China is selling the concept India has to act fast otherwise it will be drawn into the MSR on Chinese terms.
• Best course for India is to follow two pronged strategy – deepen its economic linkages and draw China into major infrastructural investments; second hedge on MSR, in any case it will be long drawn process, invest in immediate neighbourhood exactly in those capacities which China is planning and leverage these to draw out neighbours such as Bangladesh, Myanmar and Sri Lanka among other to India. MSR is a serious Chinese proposal; India cannot take a diffident stand but needs to pro actively shape the discourse.