Everyone has heard about the rise of China but few of us realize its magnitude. Zhong guo, the “central country”, as Chinas calls itself, was one of the centers of civilization before the Modern era. It was not only the dominant East Asian power in the cultural sphere, but also wielded the greatest economic and trade power, thanks to the famous Silk Road, an extensive network of commerce linking it with the Middle East and Europe.
After a long period of hibernation, the sleeping giant is now regaining its original status. The comeback of the 5,000-year-old civilization with 1.3 billion people has become even more potent since 2013, when China’s president Xi Jinping announced the launch of a China-led ‘New Silk Road’ (NSR). Together with the Asian Infrastructure Investment Bank (AIIB), the New Silk Road is the flagship project of the current Chinese leadership. In a daring scheme it seeks to revive the ancient Silk Road both on the land and on the sea, and ultimately to better connect China with the European market while fostering its influence in the transit countries.
In barely two years the New Silk Road initiative has captured news headlines and the imaginations of policy-makers around the world. The policy has been labelled as the “most ambitious yet in China’s era of reform”, that is since the economic opening under Deng Xiaoping in the 1980s.
It owes its genesis to staggering Chinese surpluses in both financial and resource terms. China’s coffers boast 4 trillion US$ in foreign currency reserves and surpluses of building materials. At the same time, domestic growth is nose-diving and will probably end up being around 6% this year, compared to two-digit numbers only a few years ago. The NSR is thus also a scheme to fuel growth in China’s close and intermediate neighbourhood to the benefit of Chinese construction companies and banks. At the same time it is part of a grander strategy of reasserting itself as the regional hegemon challenging US influence in its backyard.
China’s strategy to empire-building through infrastructure has triggered many questions regarding its impact on the world balance of power. To paraphrase Singapore’s former state leader, Lee Kuan Yew, this impact is so big that we need to create a new balance in which China is not just another big player, but the biggest player in the geopolitical game.
The main line of debate is whether the New Silk Road will be a challenge or an opportunity. On the one hand, it poses a significant geostrategic challenge, as there is political mismatch between China and all the countries involved. For instance, the unexpected change of presidency in Sri Lanka jeopardized the investment deals made between China and the previous administration. However, on the other hand, these investment projects and regional trade agreements have the potential to bring economic growth and stability to Central Asia, a shared interest with both the US and the EU.
The question remains to what extent the West will be able and will want to cooperate with this new China-led initiative. China’s influence will only continue to grow, and the field is already packed, especially in Central Asia and the shared neighbourhood of Russia and the EU. One thing is certain: the New Silk Road has the potential both to challenge how other powers perceive China and to transform the global order in general.
Elena MORENO & Michael WISLOCKI