Monday, Sep 22, 2014Monday, Sep 22, 2014
Opinion
 
John Wong, For The Straits Times

Reviving the ancient Silk Road: China's new economic diplomacy

China seeks to mollify the concerns of its neighbours with a different approach.

Published on Jul 9, 2014 12:11 PM
 
-- ST ILLUSTRATION: MANNY FRANCISCO

Chinese President Xi Jinping has promised to transform China through a national rejuvenation in order to realise his "Chinese dream". Thus, domestically, China is stepping up reforms to sustain further economic growth so as to eventually achieve a xiaokang (moderately affluent) society by 2020.

Externally, China strives to create a favourable international environment conducive to the country's continuing development.

For this, China is intent on cultivating a "good-neighbourly foreign policy" with countries on its periphery, and closer political and economic relations with countries afar, based on cooperation and mutual benefit.

Mr Xi's domestic economic and social development targets look sufficiently realistic and achievable. According to recent International Monetary Fund estimates, China's total gross domestic product (GDP) in purchasing power parity terms will reach the level of the United States by the end of this year. China's main challenges, however, are external.

For many years now, China has been actively promoting the idea that it is engaged in a "peaceful rise". But the message has not been wholeheartedly embraced by all its neighbours. The lack of enthusiasm is partly due to a lack of trust and partly due to outstanding bilateral tensions with certain Asian states. China's rapid rise and vast scale is so formidable that it is inevitably considered disruptive to the existing regional order.

This is despite the fact that China's sustained economic growth has already carried significant beneficial spillover effects to the region.

Today, China's economic expansion operates as an engine of growth for most Asian economies. China is already their leading trade partner and increasingly also an important source of foreign direct investment.

Even so, China's growing geo-economic dominance has not translated into concomitant geo-political influence.

Any move by China to define a new role for itself in the world, not to say restore its historically "rightful place", would immediately alarm its neighbours. Even an attempt to seek greater geo-political space, commensurate with its rising economic power, is interpreted as being "too assertive".

New Silk Road diplomacy

BOTH Mr Xi and Premier Li Keqiang are acutely aware of China's fundamental foreign policy dilemma. Soon after they took power, they mounted many new diplomatic initiatives, including the much publicised revival of the ancient Silk Road.

Mr Xi, in his speech at Kazakhstan's Nazarbayev University last September, called for a revival of the Silk Road by establishing the "Silk Road Economic Belt". He also advocated the construction of a new "Maritime Silk Road of the 21st century" when he was addressing the Indonesian Parliament on Oct 4. And Mr Li repeated the message at the 16th Asean-China Summit in Brunei on Oct 10.

China hopes that a 21st century Silk Road will eventually bring about a new political and economic landscape linking Asia to Europe that would give the country space to effect its "peaceful rise" while growing in geo-political influence.

Geographically, historically and economically, China was pivotal to the establishment of the Silk Road. The ancient Silk Road actually comprised two parts: the Overland Silk Road and the Maritime Silk Road, with the former being more established and better known. Both originated in China, which clearly occupied a central strategic location. The Overland Silk Road stretched over 10,000km from China's Xi'an (the old capital Chang'an) to Europe, eventually reaching Rome. The Maritime Silk Road started from China's south-east coastal regions, traversing a vast expanse of oceans and seas through the South China Sea to India and West Asia.

Historically, the Overland Silk Road can be traced back to the Han Dynasty around 200BC, when China's most famous pioneer envoy, Zhang Qian, made two diplomatic missions on behalf of Emperor Han Wudi to China's Far West or Xiyi. Zhang started from Chang'an and crossed the Hexi Corridor, Tarim Basin, and various states and tribes in Central Asia until he reached Da Yuezhi and some outposts of the Roman Empire. Zhang's epic journeys thus opened up this historic Silk Road. In his wake, commercial activities and cultural exchange thrived along the route.

In a way, the Overland Silk Road was truly a remarkable transcontinental link for commercial activities, and cultural and religious interaction before the advent of modern communications and transportation. Historically, it was an impressive feat in terms of developing connectivity through Euro-Asia. Indeed, it was through the Silk Road that China's three great ancient inventions - the compass, printing and gun powder - were transmitted to Europe.

The Maritime Silk Road also originated in China. It started as the Chinese people ventured out to South-east Asia, traditionally called Nanyang (or South Seas) by the Chinese. By the Song Dynasty (960-1280), Imperial China had established tributary relations with many states in Nanyang. The tribute-bearing missions were, as observed by eminent Harvard historian John K. Fairbank, actually a convenient "cloak for trade".

In fact, China already operated a lot of maritime activities along the China coast and in Nanyang well before Admiral Zheng He's expeditions (1405-1433). Subsequently, China's burgeoning relations with Nanyang were further boosted by successive waves of Chinese emigration, particularly in the 19th century.

Economically, China was also critical to the ancient Silk Road, because the Chinese economy was historically not only larger but also relatively more developed than the tiny states along the trade routes. According to historical GDP data compiled by the noted economist Angus Maddison, China, although a pre-industrial society, was for centuries the world's largest economy. And it remained so until the early 19th century.

China had the technology to produce high-quality silk and fine porcelain that were in high demand in less-developed neighbouring countries. In short, the Chinese Empire provided a viable economic base to sustain the old Silk Road for centuries.

But what is really remarkable about the Silk Road is not how long it lasted in the absence of a well-established institutional framework and international order. Instead, it is the fact that, by and large, it remained a peaceful means of inter-state commercial activity and inter-ethnic cultural exchange. The ancient Silk Road did not lead to wars and strife, much less colonialism and imperialism. This was in part because the Chinese Empire was historically a benign power. Throughout the centuries, it did not seek territorial expansion or domination beyond its Great Wall. It was only in the 19th century that China annexed Xinjiang and Tibet, initially as defence buffers.

This is in sharp contrast to the conduct of subsequent Western powers, which actively sought to control and colonise the countries or territories along their trade routes. Such is the underlying message that Mr Xi put forward in his new Silk Road diplomacy.

The Silk Road economic belt

CHINA is clearly using its strong economic muscles to promote its diplomacy. Beijing is in the process of drawing up ambitious plans for developing the Silk Road Economic Belt - the idea of "one economic belt for one road". Eventually these economic belts could join up to create a potentially powerful economic grouping of three billion people. It could even serve as a new platform for regional and inter-regional cooperation.

China has no doubt got the necessary economic cards to play. It is already a leading trade partner of many Central Asian states that are potentially involved.

China is also eyeing the natural resources, such as minerals, oil and gas, from countries such as Turkmenistan and Uzbekistan. There is sufficient economic complementarity between China and the other states in the proposed economic belt.

Leveraging economics for politics

CHINA'S new Silk Road diplomacy may be well-intentioned. After all, it is being promoted in the spirit of peace, cooperation and equality. But Beijing's underlying motives are also quite clear. China is essentially leveraging its geo-economic power in order to achieve larger geo-political objectives.

However, the geo-political landscape of the proposed new Silk Road is far from clear. It may also not be smooth-going for China. In the case of the Overland Silk Road, China's efforts run the risk of creating suspicion and conflict with Russia. Many Central Asian states fall into Russia's traditional sphere of influence.

As for the Maritime Silk Road, China's immediate diplomatic challenge is obviously how to untangle its deep-rooted territorial disputes with neighbours such as Japan, Vietnam and the Philippines.

All this suggests that China will need to devote a lot of its diplomatic resources if the new Silk Road is to take off. Even more crucial, China needs a lot of soft power. But because its ideology is so different from the rest of the world, this latter factor is not in plentiful supply.

stopinion@sph.com.sg

The writer is a professorial fellow at the East Asian Institute, National University of Singapore.