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Brussels and Beijing have a strategic interest in joining forces which is demonstrated by the multi-billion euro investment commitment from China to Juncker’s European Fund.

Dr. Janja Agustin examines the discourse about China’s new silk road in Europe.

 

China’s foreign policy is becoming more “self-directed and forward-looking in trying to cultivate greater influence” which in longer term means “that the People’s Republic seeks not to overturn the existing international order[1] by replacing America as world system leader but rather to make the existing order[2] “fairer,” “more equitable,” and more “rational” (Leverett and Binging 2016, 130). According to the narrative (in Fallon 2014, 182) of the Chinese president Xi Jinping, ‘‘The lion that is China has awoken, but it is a peaceful, amiable and civilized lion.’’ However, while according to Leverett and Binging (2016, 110) “the West has long-term interests that would be well served by the new Silk Road’s success”, Holslag (2017, 46) points out that “as China’s market share grows spectacularly in countries along the New Silk Road, key European member states have both lost market shares and even seen their exports shrink in absolute terms”.

The motivations and drivers of China’s One Belt, One Road[3] (OBOR) initiative are mostly of an economic[4] or geopolitical nature; the “Chinese government described OBOR as the third stage of China’s opening up after the development of Special Economic Zones from 1980 and the country’s accession to the World Trade Organization (WTO) in 2001” (Barisitz and Radzyner 2017a, 9). Meanwhile, the EU is interested in Asia as “a strategic region within which to realise its Lisbon competitiveness agenda by winning ‘minds and markets” (Dang 2013, 108). The gap between China’s approach and implementation of its grand strategy and the response of Europe is quite astonishing. It seems, Europe is publicly thinking of Asia in rather soft-power terms. For instance, in 1996, the Asia-Europe Meetings (ASEM) have been set up and were “initially conceived as an informal dialogue between Asian and European leaders to enable the EU to engage dynamic and rising Asian countries on political and economic issues” (Dang 2013, 107). Casarini (2016, 95) explains that “What is urgently needed in Europe is a comprehensive response to China’s new initiative, with the focus not only on the economy and trade, but also on the monetary and financial aspects of the Belt and Road, including discussion of the political and security implications of Beijing’s inroads into Europe and its neighbourhood”.

On the other hand, China’s OBOR directly competes with US-driven trade agreements (Lo 2015, 55). The results of the ‘Great Game’ in Central Asia are mixed as global superpowers are cooperating[5] in numerous joint ventures building toward the New Silk Road in the region. Orazgaliyev (2017, 21) provides some examples, “the U.S. companies collaborated with Russia in order to build the CPC [Caspian Pipeline Consortium] pipeline” and “Azerbaijan chose the partnership with the U.S. and the European Union and approved the BTC [Baku-Tbilisi-Ceyhan, the South Caucasus Pipelines]” while “Kazakhstan and Turkmenistan moved to negotiate pipeline connections with China and India”. The other theatre demanding attention is the Balkans region. As Simonovski and Unsal (2016, 140) point out, the “South Stream” agreement that signed between Russia and the Balkan countries and the benefits of the New Silk Road through high speed train line between Athens-Skopje-Belgrade and Budapest under the auspices of China” are decisions of the Balkan countries the US could deem “treasonous”.  Between the Caspian region and the EU, there are also the non-EU Eastern European countries. Nazarko et al. (2017, 1212) point out that “From the perspective of Eastern Europe, the competition is not always beneficial. The elimination of one country from the NSR [New Silk Road] may have an adverse effect on its economy. In addition, the countries of Eastern Europe should be interested not only in obtaining the status of a transit country in the NSR but in the increase of international trade turnover, mainly exports”.

However, as Leavy (2018, 36) explains: “At a time when the United States appears to be turning inwards and the European Union seems to be increasingly at odds with itself, only China now seems able and eager to take on such a visionary and ambitious role in the global economy in the 21st century”. Fallon (2015, 146) adds: “At a time when the U.S.’s own Silk Road initiative receives paltry funding, when it retreats from the Middle East, including Afghanistan, and when financial resources are scarce, including caps on defense spending, the United States will have to reassess its position. It will need to devise a clearer, more pro-active stance, and use its economic, diplomatic and security levers in a more efficient way. It will have to work together with China where possible, but also propose suitable alternatives to Chinese initiatives”.

As Lo (2015, 71) rightly concludes, the “real question is not whether China can be contained, but through which channels it will exercise its influence as a new international player”. One shouldn’t forget that China is building this New Silk Road to primarily serve its own development,[6] foster its own economic growth as well as “strengthen its energy security” (Wang 2016, 73) with benefits for others as sort of collateral.[7] Casarini is optimistic, acknowledging that Brussels and Beijing have “a strategic interest in joining forces” which is demonstrated “by the multibillion euro investment commitment from China to Juncker’s European Fund” (2016, 106). This faith in the benevolence of China is not shared by Simonovski and Unsal (2016, 151) who believe the EU must not forget the role of the Balkan region and Turkey, and “should show more agility and determination in terms of strategic interests, primarily for its internal stability and security”. Barisitz and Radzyner (2017b) even believe that “the EU will need to work together with SEE [South East Europe] and China to effectively use SEE’s potential in a way to fulfil common interests and deepen EU-China relations”. Either way, the EU will indeed have to shape and pursue a more active strategy if it is to maximise the economic benefits of the New Silk Road while maintaining unity among members, peace and stability in its neighbourhood and favourable relations with other players on the OBOR routes. So far, it seems Europe has been playing merely the role of the favourite grand-uncle. China is waiting for no one.

 Notes:

[1] Xi Jinping in Leavy (2018, 34): “We must build the Silk Road Economic Belt and the 21st Century Maritime Silk Road, creating a new regional order.”

[2] As Lo (2015, 54) puts it: “Politically, Beijing is using the OBOR project to secure foreign trade relationships in response to some major trade pacts that have excluded China.”

[3] The New Silk Road or the One Road, One Belt initiative is in fact composed of two tiers (Barisitz and Radzyner 2017a, 9): the Silk Road Economic Belt (a Eurasian overland trading network linking China and Europe and modelled on its ancient prototype) and the 21st Century Maritime Silk Road (a complementary seaborne trading network).

[4] According to Lo (2015, 54), “rather than a means of reviving China’s excess investment, it is a medium-term step to help rebalance China’s economy via consumption-led growth”.

[5] Samokhvalov (2016, 92) warns that “despite all formal declaration about Russian–Chinese cooperation, there is obvious tension between the core of Eurasian regional project and its periphery”. Leavy (2018, 38) explains that “over the last decade China has replaced Russia “as the leading economic presence” in the region.” Wang adds that China (2016, 74) “has taken a more assertive posture so that it can influence the international order”.

[6] As Holslag (2017, 58) explains, “a closer look at documents, plans and programmes prepared by different Chinese government departments reveals that the New Silk Road serves a strategy of offensive mercantilism”.

[7] OBOR is definitely good for China; a study by Li et al. (2018, 1) showed that the “intercontinental railways have a positive effect on China’s exports to its trading partners in Central Asia and Europe, especially concerning exports of manufactured goods, machinery and transport equipment and miscellaneous manufactured articles”.

 

References

Barisitz, Stephan and Alice Radzyner. 2017a. The New Silk Road, part I: a stocktaking and economic assessment. In Focus on European Economic Integration, available at: https://www.oenb.at/dam/jcr:48e8ae7a-e2c7-4a2b-af4a-a9cc22c0fbee/03_Barisitz_feei_3_17.pdf

Barisitz, Stephan and Alice Radzyner. 2017b. The New Silk Road, part II: implications for Europe. In Focus on European Economic Integration, available at: https://www.oenb.at/dam/jcr:0d930f75-fc97-41c4-9ea4-cfd05e6a09c5/feei_2017_q4__screen_TheNewSilkRoad_part_II_-_implications_for_Europe.pdf

Casarini, Nicola. 2016. When All Roads Lead to Beijing. Assessing China’s New Silk Road and its Implications for Europe. In The International Spectator, 51(4): 95-108.

Dang, Que Anh. 2013. ASEM – the modern Silk Road: travelling ideas for education reforms and partnerships between Asia and Europe. In Comparative Education, 49(1): 107-19.

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Fallon, Theresa. 2015. The New Silk Road: Xi Jinping’s Grand Strategy for Eurasia. In American Foreign Policy Interests, 37: 140-7.

Holslag, Jonathan. 2017. How China’s New Silk Road Threatens European Trade. In The International Spectator, 52(1): 46-60.

Leavy, Brian. 2018. China’s “New Silk Road” initiative – implications for competitors and partners, near and far. In Strategy & Leadership, 46(2): 34-40.

Leverett, Flynt and Wu Bingbing. 2016. The New Silk Road and China’s Evolving Grand Strategy. In The China Journal, 77: 110-32.

Li, Yuan, Kierstin Bolton and Theo Westphal. 2018. The effect of the New Silk Road railways on aggregate trade volumes between China and Europe. In Journal of Chinese Economic and Business Studies, available at: https://doi.org/10.1080/14765284.2018.1453720

Lo, Chi. 2015. China’s Silk Road Strategy. In The International Economy, available at: http://www.international-economy.com/TIE_F15_Lo.pdf

Nazarko, Joanicjusz, Katarzyna Czerewacz-Filipowicz and Katarzyna Anna Kuźmicz. 2017. Comparative analysis of the Eastern European countries as participants of the new silk road. In Journal of Business Economics and Management, 18(6): 1212-27.

Orazgaliyev, Serik. 2017. Competition for pipeline export routes in the Caspian region: The new Great Game or the new Silk Road? In Cambridge Journal of Eurasian Studies, available at: https://doi.org/10.22261/5B75G8

Samokhvalov, Vsevolod. 2016. The new Eurasia: post-Soviet space between Russia, Europe and China. In European Politics and Society, 17(1): 82-96.

Simonovski, Ivica and Zeynep Ece Unsal. 2016. Balkan Region – Battleground for a Clash of the Centers of Power in a Creation of a New World Order. In Balkan Social Science Review, 8: 139-53.

Wang, Zhi. 2016. China’s New Silk Road Strategy and Foreign Policy Toward Central Asia. In Southeast Review of Asian Studies, 38: 69-77.