Beijing $40 billion offer to revive the historic Silk Road

[Raphael]

Beijing $40 billion offer to revive the historic Silk Road, starts Central-Asia geostrategic competition

Beijing says it will spend $40 billion to revive the historic Silk Road and connect China with Central Asia, the Middle East and Europe. Chinese President Xi Jinping said the ambitious project is designed to "break the connectivity bottleneck" in Asia.


The "Silk Road Economic Belt" initiative, announced by Xi Jinping in 2013, is designed to allow capabilities of Chinese state-controlled construction companies to further expand its already booming trade with central Asia and Europe by diversification of Chinese trade routes, lowering transportation costs, opening up new markets, and an expansion of the Chinese sphere of influence beyond Asia. It will also secure the supply of Uranium and rare metals from Central Asia.


The land route will begin in Xi'an, in central China, before stretching to the border with Kazakhstan. The Silk Road, then heads southwest to Iran before passing through Iraq, Syria and Turkey. The new Silk Road, then crosses the Bosphorus and heads through Europe, traversing Bulgaria, Romania, the Czech Republic, Germany and Rotterdam in the Netherlands – from which the path runs south to Venice where it converges with the planned maritime route.

The Chinese Silk Road plans, however, compete with other Central Asian strategies, especially the Russia-initiated the Eurasian Economic Union and the U.S.-initiated New Silk Road Initiative.

Russia has permanent interests in Central Asia, Putin's political project to pull former Soviet republics of Central Asia into the Kremlin's orbit via the Eurasian Customs Union with Belarus and Kazakhstan, which were later joined by Kyrgyzstan and Tajikistan. Russia is trying to extend its traditional soft power in the region, project its military might as well as facilitating Central Asia's hydroelectric revolution.

The United States is promoting the New Silk Road Initiative, that would reduce delivery time and costs, bolster much-needed trade relations between Central Asia and Afghanistan with India as well as provide needed balance in the region, helping avoid a Chinese monopoly.

However the strained US-Russia relations, growing Russia-China understanding, stagnation of Russia's economy, US capability to offer much fewer resources, compared to the increasing financial clout of China, might decide the issue in favor of china.

 

[cirr]

China to establish $40 bln Silk Road infrastructure fund

Sat Nov 8, 2014 8:00am EST

Nov 8 (Reuters) - China will contribute $40 billion to set up a Silk Road infrastructure fund to boost connectivity across Asia, President Xi Jinping announced on Saturday, the latest Chinese project to spread the largesse of its own economic growth.

China has dangled financial and trade incentives before, mostly to Central Asia but also to countries in South Asia, backing efforts to resurrect the old Silk Road trading route that once carried treasures between China and the Mediterranean.

The fund will be for investing in infrastructure, resources and industrial and financial cooperation, among other projects, Xi said, according to Xinhua.

The goal of the fund is to "break the connectivity bottleneck" in Asia, state media quoted Xi as saying during a meeting in Beijing with leaders from Bangladesh, Cambodia, Laos, Mongolia, Myanmar, Pakistan and Tajikistan.

The Silk Road Fund will be "open" and welcome investors from Asia and beyond to "actively" take part in the project, Xi was cited as saying, ahead of a separate summit of the Asia Pacific Economic Cooperation (APEC) grouping, also being held in the Chinese capital.

It was not immediately clear precisely how the fund would work, when it would start operations or where it would be based, though in all likelihood it would be China.

But Xinhua said it would focus on China's Silk Road Economic Belt and the 21st Century Maritime Silk Road initiative, which aim to build roads, railways, ports and airports across Central Asia and South Asia.

"Such a framework accommodates the needs of various countries and covers both land and sea-related projects," Xi said, adding China is ready to welcome its neighbours "to get on board the train of China's development."



TRAINING PLACES

China will also provide neighboring countries with 20,000 places for training "connectivity professionals" over the next five years, Xi said.

China has sought to address fears in the region - and globally - that its bounding economic growth will inevitably bring about a more assertive, muscular diplomatic and military approach to issues such as territorial disputes.

One of the ways it has done this is to offer large loans to places like Southeast Asia and Africa, to show that China is a benign growing power only interested in helping others escape poverty in the way it has itself over the past three decades.

Last month, Xi unveiled the $50 billion China-backed Asian Infrastructure Investment Bank, seen as a challenge to the World Bank and Asian Development Bank, both multilateral lenders that count Washington and its allies as their biggest financial backers.

China has sought to allay concerns that its new bank aims to undermine the World Bank and Asian Development Bank, saying it wants to learn from their experience and that there are more than enough projects around for all the lenders to fund. (Reporting by Paul Carsten and Ben Blanchard; Editing by Jeremy Laurence and Ian Geoghegan)

 

[kyle Chiang]

A good and long-termed strategy to promote international economic cooperation, it need solid actions to resolve differences and generalize consensus.

 

[-SINAN-]

passing through Iraq, Syria and Turkey.

Iraq and Syria ???

Are you going to strike a deal with ISIS ? Maybe Chinese officials are unaware but those countries are highly unstable and will remain unstable.