Xi's ambitious new Silk Road

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.

A viable trading route through Central Asia could reduce China's reliance on the South China Sea and the Malacca Strait should maritime disputes boil over, added Professor Shen.

Observers cite as another reason the United States' pivot to the Asia-Pacific region. Closer defence cooperation between the US and its Asian allies and partners is said to have prompted China's outreach efforts in Central Asia.

Yet another reason is simmering ethnic tension in Xinjiang, a longstanding issue. To Mr Xi and other leaders, the situation in the restive region has a better chance of improving through closer links with Central Asia.

Shanghai-based analyst Yang Cheng of the East China Normal University said Mr Xi's proposal reflected China's desire to share the fruits of its growth with developing countries, thereby burnishing its international image.

So, is the vision an achievable dream or a desert mirage?

Some observers like Prof Shen are optimistic, citing progress in political ties and economic cooperation in the past 20 years.

Official figures showed that total trade volume between China and Central Asia jumped last year to US$46 billion (S$58 billion), or 100 times the figure in 1992 when China forged diplomatic relations with the region's five nations.

Sino-Central Asian ties are also stronger now and institutionalised in the Shanghai Cooperation Organisation, comprising China, Russia, Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan.

But challenges abound. The 21st Century Business Herald noted in a Sept 10 editorial that the Silk Road passes through politically unstable and war-torn areas.

"Today, land transport continues to be fraught with difficulties. For instance, land-based transportation of goods is not as advanced as shipping. Customs clearance is complicated as goods need to pass through several countries," it added.

This explains why Mr Xi in his speech urged China and Central Asian states to "accelerate policy communication, improve road connectivity, promote unimpeded trade, enhance monetary circulation and enhance understanding".

Still, Prof Yang believes the economic belt could succeed if countries can shed old mindsets and "use imagination and patience" to work together. He added that efforts to develop the belt could lead to better infrastructure such as railway, highway and aviation links which could benefit other countries like Singapore.

Prof Shen said China's Central Asia plans could be one reason why Prime Minister Lee Hsien Loong made his first-ever visit to Xinjiang during his China trip last month. "Better links between China and Central Asia would open up new markets for ASEAN and Singapore, which may be able to send their products to Central Asia and even Europe in a shorter time than (through) shipping," he said.


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