Rob Franksdad

Following the political shift to protectionism and nationalism, globalization has taken a toll on its seemingly unstoppable growth. In the past two years, parliamentary changes in developed economies (most notably the United States and the United Kingdom) have created a sense of withdrawal from certain affairs. These strategic movements are not only based on political motives, but also relying upon economic rationales. Deglobalization, as our editor Omar Osman termed it, no longer seems like a myth, but now an astounding reality. To regain the status of being an economic (and political) powerhouse, China is making its inroads to revitalize its position as the most wealthy kingdom of the world, the status that the Chinese people have achieved in the past. This time, Beijing hopes to recreate what carried them there: the Silk Road. The past success of the Silk Road, on multiple occasions, have made them aware of the economic benefits of building a common platform for commercial trading. Now, the Chinese Government attempts to strengthen their capabilities by creating a similar platform, albeit this time by railways.

As written in history….

The Silk Road, as you might have inferred, traced back to the days that the most popular trading items were silk-made products. Although it was initially used for military scouting, its main purposes proved to be largely unsuccessful. However, its related records and writings about the route, especially on potential commerciality, encouraged many Chinese entrepreneurs at the time to depart from their hometown and looked for new potential customers and markets. Their skilled handcrafting techniques on silk products were so impressive that at one time, their customers were willing to barter an equivalence in weight for gold and silk products. As suggested by historical records, their reputation for well-developed expertise on silk products echoed as far as the Persian and the Roman Empire to the West.

Different monarchies had been largely impactful to the development of the Silk Road. After the collapse of Han Dynasty in 220, the Silk Road became inactive. It was later resurged again thanks to the emergence of the Tang Dynasty in the 7th century, where the monarchy conquered the western region of modern-day China and reopened its doors to the outside world for trading. Not only economic benefits were shared amongst traders, but cultural elements and religions were also exchanged. This period also witnessed the first adoption of maritime Silk Road, where maritime presences of China could be seen all over Eurasia territories. It remained operating for 300 years before the fall of the Tang Dynasty. During this time, Persian businessmen slowly mastered the Chinese handcrafting techniques, thereby creating their own silk exports to the (Eastern) Roman Empire without having to transact via China. The rise of Mongol Empire in the 13th century encouraged another revival of the Silk Road, but its fragmentation of the kingdom only decades later concluded the trading flows between European and Asian continent until the colonial times.

The Iron Silk Road

In order to promote transnational corporations following the Second World War, the United Nations decided to initiate an intercontinental project that was expected to boost international cooperation between Eurasian countries. The Trans-Asian Highway was firstly studied to create a railway connection between Singapore and Turkey, but further proposals also suggested the potential extension of the railways to continental Europe and Africa. However, the project was permanently postponed due to conflicting political interests between countries during the entire Cold War period.

The discussion for the continuation of the project resumed in late 20th century but only minimal progress was made. The breakthrough came in as formal agreements were agreed between 24 Asian countries in 2006, with China at the forefront. The reluctance from investing in railways of other Asian countries (either in terms of railway expansion or quality upgrade) has allowed China to be the pioneering agent of this agreement. Reports showed that China successfully built 5,000 miles of high-speed railways in 2012 in the mainland and is en route to expand it by 6 times by the end of this decade. To put this in perspective, the coverage of Chinese domestic high-speed railways in 2020 will be more than the rest of the world, combined. However, their external and outreach influence to other regions is probably what the Chinese authorities is currently wishing for. In the promise of their commitment to the international agreement, they are also actively involved in the financial investment of multiple Eurasian railway projects. In recent years, China has been far more prominent in bidding for the right of ownership to build these intercontinental routes, with some assistance offered by Turkey as well.

Of course, by establishing their existence on these projects, China is going to gain more control over the region. However, little do we know what the implications are of this strategy. For a start, it is important to know that China is currently sharing borders (if Tibet is also taken into account) with other 17 countries, most globally. By effectively exposing themselves to these countries, China will have at least a say (and currently is) on trading and other political issues. Building railways connecting them with other new markets, such as landlocked countries in South/Southeastern Asia gets them to surmounted market control. Yet the benefits do not stop there, and the Chinese authorities understand that. If you managed to look into some Asian history, you would see that the fight for natural resources has been occasionally highlighted. Building extended railways would basically be equivalent to more access for natural oil and gas along the Central Asian countries, of course, for freighting purpose. As European consumers are the end-consumers of gas and oil (and obviously the demand is insane), it should come to no surprise that the Chinese businesses would be the direct beneficiaries of its central policies.

The new Iron Silk Road, however, featured a significant difference with the commercial trading route that was used centuries ago. This time, China wanted to build railways that traverse through territories of Russia, which includes routes passing through Moscow and St. Petersburg. The incremental steps to the northern direction have sent a clear signal to Russia that China is willing to shake hands with Russia for mutual interests. While China currently holds the upper hand in terms of economic strength, Russia has always kept its Western foes stay alerted. This strategic alignment between Russia and China, with its potential in terms of natural resources ownership, will change the landscape of future global affairs – mounting even more pressure on a disintegrating European Union and a crumbling United States.

Since the breakout of the global financial crisis, China has gradually become the most important geopolitical partner as its consequences have been remarkably less compared to developed economies. As such, the domestic government has been actively looking for alternatives to continue improving the standards of living of the people. It might portray themselves as a self-functioning domestic market, but the sole production of domestic goods will not satisfy the unrelenting ambitions of China. Therefore, their establishment in other territories is detrimental to its long-term strategy of economic sustainability. To maintain political instability, Beijing must continue its “harmonious society” strategy within mainland Chinese communities, which is possible by means of economic prosperity. There’s no doubt that the development of the Iron Silk Road will serve wonderfully in their favour to be both politically stable and economically powerful in the long run.