Nowadays the Belt and Road Initiative (B&R Initiative) is a large-scale initiative which forms a new paradigm of economic and geostrategic development. More than 60 countries with a general population of 4.4 billion intend to participate in the implementation of this strategy. It constantly attracts new followers. Over $ 1 billion US dollars has been already invested in the project.
The new realisation of the Great Silk Road has no clear geographical framework. Beijing supports open doors policy in this project, as it was stated in the report by the State Council of the Peoples Republic of China “Great Perspectives and Practical Realization of the Belt and Road Initiative in the 21st century”.
Main directions of the B&R Initiative:
It is planned to create seven “zones”:
• Transport and Logistics
• Science and Technology
The main characteristics of several “zones” are described below, with focus to the transport and logistics.
Transport and logistics zone
“In order to become rich – we must first build roads”. This old saying is often used by Chinese experts who discuss the main directions of the Belt & Road Initiative strategy.
The high-speed rail network, which connects all provincial centers in China excites the whole world. Its length exceeds 19 000 kms, which is 60% of the total length of the railways in the world.
The second most important in the Road & Belt Initiative strategy is the energy zone. A significant shortage of energy resources is peculiar for most of the Eurasia territory. That is why there is te need to create new generating capacities everywhere. Such projects are available and the applicable financial resources will make them feasible. The emphasis is supposed to be on the “green energy”.
The most radical proposal is to create a unified energy system for the B&R countries. It is a network of interconnected gas and oil pipelines, and electricity networks to cover the whole territory of Eurasia and join the forces of both producers and consumers.
A more rapid effect can produce the formation of the tourist zone of the B&R. In 2015, more than 100 million Chinese tourists travelled abroad. They spent over 150 billion dollars travel money. Russia is entering a highly competitive Chinese tourist market with a significant movement in this direction. Serious progress has been made in 2013-2014, during the years of tourist exchange between the two countries.
A special place in the B&R Initiative Strategy in reserved for the science and technology zone. The B&R Initiative Strategy consistently plans closer scientific and technological cooperation. Recently, the Chinese Prime Minister Li Keqiang said that this can be done “only by close cooperation in the innovation sphere.” Recently China has overtaken many advanced countries by a number of indicators in the field of scientific and technological progress. The first step is the planned creation of a Russian-Chinese High-Tech Park “Silk Road” on the basis of Skolkovo. The Innovation Center will house research departments of leading Chinese companies.
Specifics of participation of particular countries in the B&R Initiative
First of all, the strategy of the B&R Initiative received unconditional support in Central Asia, especially in Kazakhstan and Kirgiz Republic. That is why Xi Jinping has chosen these countries to promote the initiative.
Almost all other CIS countries supported the strategy. It is planned that not only for the countries of Central Asia, but the Caucasus countries as well: Armenia, Azerbaijan, Georgia, Abkhazia, South Ossetia will participate. The B&R Initiative strategy attracts European countries as well.
Partnership between the EAEU and the B&R Initiative
On May 8th 2015 the Russian Federation and the People’s Republic of China signed the Joint Statement on cooperation between the Eurasian Economic Union and the Road & Belt Initiative. However, the actual structure of the EAEU started to work on January 1, 2015 and has not yet gained the necessary tempo of work. With limited financial resources, EAEU does not have sufficient weight to implement the projects.
Major projects Announced High-speed railway Moscow-Beijing
One of the top priority projects is the construction of the high-speed railway Moscow – Kazan, with the expansion to the South and the East (Beijing and the Pacific Ocean), and to the West (Rotterdam and the Atlantic Ocean). It is planned that in 2016 high-speed railway from China will reach the border with Kazakhstan. If from Kazan it will be routed through Kazakhstan, then in fact it will essentially limit transportation on the Trans-Siberian and the Baikal-Amur Railway, and this is not beneficial for the Russian side. If it will be pointed through the territory of Siberia, then Kazakhstan will be left unreasonably aside. Most experts believe that the most appropriate is to construct the road in both directions at the same time.
Arctic zone of the Silk Road
The Arctic zone of the Silk Road is one of the most serious and large-scale projects proposed by Russia in the B&R strategy. The Arctic region of Russia currently provides 90% of the Russian nickel and cobalt production, 60% of copper, 96% of platinum-group metals, 80% of gas and 60% of oil and has a great potential for development of new deposits. Chinese companies already actively participate in Arctic projects. One of the largest Chinese companies CNPC joined the “Yamal LNG” project with a share of 20%.
Financial and banking security of the B&R Initiative
The creation of a solid financial base testifies that the intentions to implement the B&R Initiative strategy are serious. In a short period of time (2014- 2015) three powerful financial institutions were created: the Silk Road Foundation, the Asian Infrastructure Investment Bank (AIIB) and adjacent the New Development Bank (NDB), formerly referred to as the BRICS Development Bank.
The Silk Road Foundation will play the leading role in these processes. China invested into this Foundation some $40 billion US dollars. On June 29th 2015 in Beijing representatives of 57 countries signed an agreement establishing the AIIB. It was announced that the financing of the first projects for the Bank will begin in the third quarter of 2016.
Although the NDB does not directly declare its participation in the R&B Initiative strategy, but the leading bank participants – China, Russia and India, will undoubtedly promote their projects.
This concerns as well the other shareholders of the Bank – Brazil and South Africa, which at the same time were among the founders of the AIIB.
Currently, there is no clear implementation plan of the B&R initiative. The initiators study the reaction of potential partners, analyze the proposed projects, and carry out a large number of conferences, meetings, and round tables. Most likely, this strategy is being developed through trial and error. The points of view of the partners and the participants of the strategy influence this development.
text by Vladimir Remyga
WWW.OCAMAGAZINE.COM #23 AUTUMN 2016