Xi's ambitious new Silk Road

Xi's ambitious new Silk Road
Xi Jinping (left) shake hands with Kyrgyz President Almazbek Atambayev during their meeting in Bishkek.

BEIJING - China's leaders have over the years called for a revival of the ancient Silk Road trading route, but President Xi Jinping is aiming to take it to a higher level.

He proposed a "Silk Road" economic belt between China and Central Asian countries during a visit to the region last week. It will be home to "close to three billion people and represent the biggest market in the world with unparalleled potential".

Mr Xi's vision - sketched out in a Sept 7 speech he made in Kazakhstan to outline his Central Asia policy - marks the first time that Beijing has officially proposed a Silk Road economic belt.

China began calling for a new Silk Road in the early 1990s. The idea has resurfaced in recent years as economic ties with Central Asian states improved. But what Mr Xi has in mind goes beyond merely expanding trade with Central Asia, a region which encompasses essentially five former Soviet republics - Uzbekistan, Turkmenistan, Kyrgyzstan, Kazakhstan and Tajikistan.

His vision is far greater: to restore the 11,000km lucrative trading route linking Asia and Europe that began during the Han Dynasty in the 2nd century BC and lasted more than a millennium.

Analysts cite several reasons behind Mr Xi's ambitious goal and list potential investment and collaboration opportunities for countries like Singapore, if it succeeds.

First, China's new leaders are seeking new growth stimulus as they restructure the economy, which is showing strain after three decades of rapid expansion.

Thus, China increasingly sees the unrealised domestic demand in its less developed central and western areas, such as the Xinjiang region bordering several Central Asian states, as a potential elixir for weaning the economy off the export-reliant model and onto a consumption-led path.

"Improving trade links with Central Asia will offer new markets to the western regions, which could in turn lead to higher incomes and domestic demand," economist Shen Jiru of the Chinese Academy of Social Sciences told The Straits Times.

Second, China's rocky relations with South-east Asian nations Vietnam and the Philippines over competing territorial claims in the South China Sea are believed to be giving impetus to its Central Asian endeavours as well.

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