China, GCC set to walk the new ‘Silk Road’

China, GCC set to walk the new ‘Silk Road’

ON Jan. 17, China’s President Xi Jinping and Foreign Minister Wang Yi told a visiting high-level delegation from the Gulf Cooperation Council (GCC) that China wanted to work with the GCC to promote the building of the new Silk Road economic belt across Asia and Europe. The Silk Road initiatives also included reviving the Maritime Silk Road to connect the Pacific, the Indian Ocean and the Atlantic, which are likely to meet in the Middle East, according to Chinese officials.
GCC countries have welcomed the Chinese initiatives and some of them have already announced that they would actively participate in the construction of the new Silk Road economic belt and the Maritime Silk Road.
The GCC enthusiasm for the Silk Road partnership with China fits in perfectly with the historical role the Arabian Peninsula and the Gulf played in connecting Asia, Africa and Europe. Ancient Arabian merchants nearly monopolized that role for centuries, until European powers wrested it from them in the 16th century.
I noticed during my visits to Beijing with GCC delegations in November 2013 and January 2014 how much importance China is attaching to the new initiatives, which is being promoted with great fanfare at both the official and popular levels.
On Jan. 16, the day before the GCC meetings with Chinese officials, it was announced in Urumqi that the Xinjiang Uyghur Autonomous Region will build itself as the transport, financial and logistics center of the land-based Silk Road economic belt in 2014. Nur Bekri, the governor of Xinjiang, a region in northwest China with a Muslim majority, said that the region will keep opening up to Central Asia and Europe and grasp the opportunity to boost the Silk Road economic belt. “Silk Road Economic Belt” agreements were signed with 24 cities from eight countries along the Silk Road in November 2013 alone, to promote greater cooperation, development and prosperity among the countries, according to the governor.
By virtue of those agreements, Xinjiang will promote the establishment of a free trade zone with countries along the route and strengthen multilateral cooperation on agriculture, energy, tourism and culture. At the same time, Xinjiang will keep opening up to the domestic market, and prepare for the transfer of industries from the east region to the west, according to Bekri.
Chinese President Xi Jinping first proposed the idea of the Silk Rod economic belt in September 2013, during his visit to several Central Asian countries, counting on the cultural and commercial revival of the old Silk Road, which historically linked China with those countries as well with the Middle East and Europe, as a way of strengthening China’s political and economic ties with Central Asia.
Land included in the new Silk Road covers about twenty Asian and European countries with a population of three billion people and spread over an area of 50 million square kilometers rich in energy, mining, tourism, cultural and agricultural resources.
During the past decade, China has already changed its approach to Central Asia and the Gulf countries, giving them center stage after many years of neglect, mainly because of their energy and mineral resources. China’s new focus on Asia has led to cultivating good relations with the newly independent former Soviet republics that bordered its western province of Xinjiang, home to several Turkic groups such as the Uyghur, Uzbeks and Kazaks.
In the third quarter of 2013 alone, China announced investments totaling over $100 billion in Central Asian counties President Xi Jinping visited in September, including Turkmenistan, Kazakhstan, Uzbekistan and Kyrgyzstan.
According to Chinese and western press reports, the largest agreements were related to energy infrastructure projects. For example, China and Kazakhstan signed 22 agreements worth a combined total of $30 billion. They included a $5 billion deal for the China National Petroleum Corporation to acquire an 8 percent stake in the Kashagan Oil & Gas field.
In Uzbekistan, China signed 31 deals worth $15.5 billion. The two countries agreed to build another oil pipeline, taking the total to four. And China is already funding the construction of an Uzbek-Chinese cross-border railway line. China concluded $7.6 billion-worth of deals in Turkmenistan, including the construction of a new pipeline. In Kyrgyzstan China signed eight agreements worth $5 billion, the largest of which was a $1.4 billion loan to build a new gas pipeline, according to those reports.
China also signed 36 co-operation agreements with an aggregate value of $1.5 billion with Belarus. This included a soft loan from China’s state-owned development bank, Exim, to construct Belarus’s first nuclear power plant.
The initiatives could usher in a new economic and political alliance between China and the rest of Asia, including the Middle East. While many countries have welcomed the new initiatives, including GCC states, Turkey and the United States, China needs to do more to explain its vision about the nature of cooperation it seeks with its prospective partners in bringing the new Silk Road(s) to reality.
For one thing, China has been criticized over the past decade by some observers for the way it managed its extensive energy and infrastructure investments and soft loans in Africa (and elsewhere), accusing it of paying little heed to the needs of host countries. Nevertheless, by and large Africans still maintain a positive attitude toward China, compared to the way they still view the West. China still bills itself as a Third World country, championing the cause of developing countries. But rhetoric and solidarity are not enough to build effective Silk Road partnerships.
To maintain that goodwill that developing nations maintain toward China and to keep the positive spirit with which the new Silk Road initiatives have been received, the implementation of those initiatives has to be carried out in a new, more collaborative manner than the trend of Chinese companies has been in the past. GCC countries in particular would like to have a more active role in shaping that proposed partnership, rather than being mere recipients of Chinese investments and products.
The GCC-China Strategic Dialogue, which was launched in 2010, has developed the right tools and as such provides the right rubric under which to craft agreements regarding the new Silk Road, in both its land and maritime components.
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