China Is Building a New Silk Road to Europe, And It’s Leaving America Behind
by Pepe Escobar, Mother Jones featured image/TheWealthWatchman.com November 18, 2014: it’s a day that should live forever in history. On that day, in the city of Yiwu in China’s Zhejiang province, 300 kilometers south of Shanghai, the first train carrying 82 containers of export goods weighing more than 1,000 tons left a massive warehouse complex heading for Madrid. It arrived on December 9th. Welcome to the new trans-Eurasia choo-choo train. At over 13,000 kilometers, it will regularly traverse the longest freight train route in the world, 40% farther than the legendary Trans-Siberian Railway. Its cargo will cross China from East to West, then Kazakhstan, Russia, Belarus, Poland, Germany, France, and finally Spain. You may not have the faintest idea where Yiwu is, but businessmen plying their trades across Eurasia, especially from the Arab world, are already hooked on the city “where amazing happens!” We’re talking about the largest wholesale center for small-sized consumer goods—from clothes to toys—possibly anywhere on Earth. The Yiwu-Madrid route across Eurasia represents the beginning of a set of game-changing developments. It will be an efficient logistics channel of incredible length. It will represent geopolitics with a human touch, knitting together small traders and huge markets across a vast landmass. It’s already a graphic example of Eurasian integration on the go. And most of all, it’s the first building block on China’s “New Silk Road,” conceivably the project of the new century and undoubtedly the greatest trade story in the world for the next decade.
Go west, young Han. One day, if everything happens according to plan (and according to the dreams of China’s leaders), all this will be yours—via high-speed rail, no less. The trip from China to Europe will be a two-day affair, not the 21 days of the present moment. In fact, as that freight train left Yiwu, the D8602 bullet train was leaving Urumqi in Xinjiang Province, heading for Hami in China’s far west. That’s the first high-speed railway built in Xinjiang, and more like it will be coming soon across China at what is likely to prove dizzying speed.
Today, 90% of the global container trade still travels by ocean, and that’s what Beijing plans to change. Its embryonic, still relatively slow New Silk Road represents its first breakthrough in what is bound to be an overland trans-continental container trade revolution. And with it will go a basket of future “win-win” deals, including lower transportation costs, the expansion of Chinese construction companies ever further into the Central Asian “stans,” as well as into Europe, an easier and faster way to move uranium and rare metals from Central Asia elsewhere, and the opening of myriad new markets harboring hundreds of millions of people. So if Washington is intent on “pivoting to Asia,” China has its own plan in mind. Think of it as a pirouette to Europe across Eurasia. Defecting to the East? The speed with which all of this is happening is staggering. Chinese President Xi Jinping launched the New Silk Road Economic Belt in Astana, Kazakhstan, in September 2013. One month later, while in Indonesia’s capital, Jakarta, he announced a twenty-first-century Maritime Silk Road. Beijing defines the overall concept behind its planning as “one road and one belt,” when what it’s actually thinking about is a boggling maze of prospective roads, rail lines, sea lanes, and belts. We’re talking about a national strategy that aims to draw on the historical aura of the ancient Silk Road, which bridged and connected civilizations, east and west, while creating the basis for a vast set of interlocked pan-Eurasian economic cooperation zones. Already the Chinese leadership has green-lighted a $40 billion infrastructure fund, overseen by the China Development Bank, to build roads, high-speed rail lines, and energy pipelines in assorted Chinese provinces. The fund will sooner or later expand to cover projects in South Asia, Southeast Asia, the Middle East, and parts of Europe. But Central Asia is the key immediate target. Chinese companies will be investing in, and bidding for contracts in, dozens of countries along those planned silk roads. After three decades of development while sucking up foreign investment at breakneck speed, China’s strategy is now to let its own capital flow to its neighbors. It’s already clinched $30 billion in contracts with Kazakhstan and $15 billion with Uzbekistan. It has provided Turkmenistan with $8 billion in loans and a billion more has gone to Tajikistan.
In 2013, relations with Kyrgyzstan were upgraded to what the Chinese term “strategic level.” China is already the largest trading partner for all of them except Uzbekistan and, though the former Central Asian socialist republics of the Soviet Union are still tied to Russia’s network of energy pipelines, China is at work there, too, creating its own version of Pipelineistan, including a new gas pipeline to Turkmenistan, with more to come.
The competition among Chinese provinces for much of this business and the infrastructure that goes with it will be fierce. Xinjiang is already being reconfigured by Beijing as a key hub in its new Eurasian network. In early November 2014, Guangdong—the “factory of the world”—hosted the first international expo for the country’s Maritime Silk Road and representatives of no less than 42 countries attended the party. President Xi himself is now enthusiastically selling his home province, Shaanxi, which once harbored the start of the historic Silk Road in Xian, as a twenty-first-century transportation hub. He’s made his New Silk Road pitch for it to, among others, Tajikistan, the Maldives, Sri Lanka, India, and Afghanistan.
Just like the historic Silk Road, the new one has to be thought of in the plural. Imagine it as a future branching maze of roads, rail lines, and pipelines. A key stretch is going to run through Central Asia, Iran, and Turkey, with Istanbul as a crossroads site. Iran and Central Asia are already actively promoting their own connections to it. Another key stretch will follow the Trans-Siberian Railway with Moscow as a key node. Once that trans-Siberian high-speed rail remix is completed, travel time between Beijing and Moscow will plunge from the current six and a half days to only 33 hours. In the end, Rotterdam, Duisburg, and Berlin could all be nodes on this future “highway” and German business execs are enthusiastic about the prospect.