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Globalization with Chinese characteristics

Will the "One Belt - One Way" initiative become an international integration project?

Globalization with Chinese characteristics
Photo: shutterstock.com

Alexander Isayev

Leading researcher, Deputy Head of the Center for the Study and Forecasting of Russian-Chinese Relations, IFES RAS
The first high-level international forum on cooperation within the framework of the Silk Road Economic Belt initiative, which has been called "One Belt - One Road" for short, ended in Beijing. It was attended by the heads of states and governments of 29 states, officials from dozens of other countries of the world, heads of the International Monetary Fund, the World Bank, businessmen, financiers, a total of more than 200 participants. Judging by the results of the forum, meetings within the framework of this initiative may well become regular.

The opening of the forum demonstrated that Beijing tried to organize the ceremony so that Russia was represented at the forum as the second most important player in the framework of the Chinese initiative. The speech of the Russian president, who delivered his welcoming speech immediately after the statement of President Xi Jinping, underscored Russia's importance for the PRC in the implementation of its plans.

In the capital of China, it was stated that China and Russia today play the role of a ballast system, which gives stability to the ship of economic interaction in Eurasia. It is worth recalling in this connection that in 2015, Russia and China signed a declaration on the interface between the EurAsEC development and the One-Way-One-Way initiative, and began discussing the practical details of cooperation. The international meeting in Beijing showed that the integration of the Chinese initiative with the development of the Eurasian Economic Community can become a reality, it remains only to define the roles and consolidate them for each participant in the process.

Be that as it may, today the Chinese initiative is positioned as a multilateral strategy in the vast Eurasian geographic and economic space. By now, the Belt and Road Initiative has become practical. An investment, financial and production infrastructure has been created in China. Including in the form of the Silk Road Fund, the Asian Infrastructure Investment Bank (AIIB) and other institutions with impressive financial capabilities. The financial potential of the project after the Forum will increase, as announced, by $ 14,5 billion. In addition, commercial banks in the PRC are planning to provide special loans in the amount of $ 55,1 billion to support practical interaction with various countries.

Experts emphasize two key areas of this initiative: the economic belt of the Silk Road, that is, land transport and trade routes through Central Asia and Russia to Europe, as well as to the south of the Middle East region, and the maritime Silk Road through Southeast Asia to the South Pacific Ocean. , and across the Indian Ocean to the Middle East and southern Europe. The strategic goal is to stimulate further economic development of the PRC, especially its western regions.

At first, this initiative looked like a purely economic one, and later political issues occupied a very prominent place in it. Now we are talking about ensuring peace, security, cooperation and economic prosperity of all countries involved in the implementation of this program.

In other words, to date, the initiative of the “economic belt of the silk road” is becoming an important component of the Chinese understanding of globalization, in which the economy is adjacent to politics, when Chinese interests are taken into account, as well as the interests of the member countries of the Shanghai Cooperation Organization. Now, in truth, it inevitably arises the assumption that the place and role of the SCO in the new conditions can be defined in a new way.

At the forum, China announced that it is promoting the idea of ​​economic globalization. In this context, the Belt and Road Initiative is becoming one of the most important elements of economic globalization on the Eurasian continent, and, according to its authors, should contribute to improving the international economic order. The main content of "One Belt, One Road", as the leading Chinese media reported these days, is "the coordination of political guidelines, the unification of transport infrastructures, the liberalization of trade, the interaction and interconnection of financial spheres, the spiritual rapprochement of peoples." Of course, the goal is very noble, and its implementation, if possible, will lead to serious shifts in the political and economic map of the world. Moreover, both Russia and China proceed from the fact that the future belongs to integration - the revival of protectionism and the desire for individual or group leadership will create insurmountable obstacles to economic progress.

It is very important that a lot is already being done. The China-led initiative and the EurAsEC formation program initiated by Russia, Kazakhstan, Belarus create stable conditions for co-development, and the involvement of other countries in this process, gives rise to new opportunities for the construction of infrastructure-logistics routes, free trade zones, free circulation of goods and services on a giant geographical Space from Lisbon to Vladivostok.

The first practical steps inspire optimism. With Kazakhstan, China is implementing or actively discussing 54 joint projects. In the integration processes, other SCO countries, European states are involved. New transport routes for the supply of Chinese goods to Europe are already being implemented, and vice versa: for example, according to the Xinhua News Agency, since the beginning of the year, 1000 freight trains with Chinese goods have been sent to Europe from China by all routes (more such routes), that on 160 Percent more than last year. The trains stopped coming back from European countries empty; Back they are carrying Spanish wine, Polish milk, Belarusian oil, German cars and other goods. China's high interest in such a form of cooperation will become more understandable if we recall that four years after the launch of the one-way-one-way initiative, the volume of China's trade with countries along the Great Silk Road was more than $ 3 trillion. The volume of Chinese investment in these states for this period exceeded $ 50 billion, there were created 56 zones of trade and economic cooperation.

At the same time, India's refusal to take part in the Beijing forum also raises concern. Indian representatives were present among the participants of the forum, but Delhi was represented not at the state, but at the expert level. New Delhi seems to be feeling hurt, as one of the most important elements of China's economic program is the project to create a China-Pakistan economic corridor. It implies the economic activity of the PRC and Pakistan in the Gilgit-Baltistan region. This region is part of Kashmir, which is a disputed territory for India and Pakistan. Foreign experts believe that China, which is extremely sensitive to territorial issues, made a big mistake when it did not take into account India's opinion in such a delicate area as the territorial conflict with Pakistan, and thus created a reason for distrust of its initiative on the part of the largest player from number of emerging economies and one of the leading BRICS members. Moreover, India is among the contenders for the title of the world's third economy; it is believed that it may well take this place by 2030.

It seems that at the upcoming SCO summit on June 7-8 in Astana, and then at the BRICS summit in China in autumn this year, serious attention will be paid to these contradictions, although it will hardly be possible to overcome them in one or two meetings. Nevertheless, experts pin their hopes on the fact that Sino-Indian relations are in a phase of pragmatic development. Since 2008, China has been India's main trading partner. In 2015, trade between the two countries amounted to almost $ 72 billion, with the value of Chinese exports to that country estimated at $ 63 billion.

Now a little bit about Russian-Chinese cooperation in the framework of the One-Belt-One Way Initiative.

Perhaps, one of the most notable trends of modern economic cooperation between Russia and China today is cooperation in the transport sector. This is confirmed by the practical actions of the two countries in the field of laying new routes, and the construction of infrastructure and logistics corridors in both the east and the west of the Russian Federation.

Recently, the largest multipurpose logistics operator in the post-Soviet space, JSC Russian Railways Logistics, began delivering goods to China on a regular basis. The first container train from the logistics center of Russian Railways in the Kaluga Region went through the Zabaikalsk-Manchuria border crossing to the Chinese port of Dalian on April 5. Since May 4, these shipments have entered a regular phase - once every two weeks. The organizers of the route believe that among the potential export goods from Russia to China are food, agricultural products and other non-raw materials. According to ITAR-TASS, the route is operated jointly by Russian Railways, Transcontainer, Freight Village Vorsino and the Chinese company Sinotrans.

In parallel, transcontinental routes are being formed from East to West. There are several of them. In May-June, according to officials, the first trial rail transit of goods from China to Europe via Lithuania is expected. The cargo will go through the territories of Kazakhstan, Russia, Belarus, then through the Lithuanian border station Sheshtokai to Poland and Europe. Cargo transportation along this route became possible thanks to an agreement signed by the United Transport and Logistics Company, established by the railways of Russia, Belarus and Kazakhstan, with the Lithuanian Railways company (Lietuvos gelezinkeliai). By the end of 2017, run 20 trains along the new transport corridor.

Multimodal container transportation is being experimentally implemented from Western Europe through Latvia, Belarus, Russia, Kazakhstan further to China, to the city of Kashgar. The route will pass through Riga, from here to Kashgar about 7 kilometers, and the freight train will overcome it according to the schedule in 400 days. In other words, in this direction, China is interested in creating an integrated Eurasian economic space in the European direction, which corresponds to the economic interests of both this group of countries and China itself.

Modern transport and logistics strategy sometimes takes quite unexpected turns. A transport corridor has opened for the delivery of goods from Northeast China through the Far Eastern Russian territory to ... southern China. Due to the extremely busy port of Dalian, this route turned out to be economically profitable for Chinese commodity producers, and it seems that it will develop. The new route once again drew attention to the need to develop infrastructure in the Russian Far East.

The Ministry for the Development of the Russian Federation is convinced that the realization of the benefits associated with the geographical proximity of Russia and China should be based on infrastructure. According to the head of the ministry, Oleksandr Galushka, in addition to the Blagoveshchensk-Heihe bridge and the Nizhneleninskoe-Tongjiang railway bridge under construction, it is necessary to build the Poltavka-Dunnin bridge.

There is another very large project, which you just can't pass by. We are talking about the Meridian automobile artery, which should connect the PRC and Western Europe, and which will also pass through the territory of Russia. Currently, the Asian Infrastructure Investment Bank is discussing the issue of allocating funding for this project. This is, in fact, a transcontinental project. The length of the "Meridian", according to Rosavtodor, is 8445 km, it will pass through the territories of China, Kazakhstan, Russia, Belarus to the EU countries. Moreover, its Russian section will be about 2000 km. It is planned that the traffic on the road will be four-lane, and its construction, if negotiations on financing are successful, could be completed in 2020.

Undoubtedly, such diverse, complex and multi-directional cooperation in the transport sector makes participants in this cooperation think about effective management of this process. This is another problem to be solved.

The interaction between Russia and China in the transport, logistics and infrastructure sphere is not the main one in solving the docking of the EAEU and the Chinese initiative. Moreover, in the opinion of Russian practical departments, it is a question of identifying and developing those economic areas in which joint economic activities of our countries are possible. Today, more and more people are talking about such areas as energy, trade, and industrial cooperation. So far, the first steps have been taken, and the results, if any, we will see in a few years.

The Silk Road Economic Belt strategy is still under development. This initiative, unlike the EurAsEC, has not yet become an integration project, but there is potential for this. Until now, China has concentrated on realizing its country's trade and economic interests, which is understandable and logical, but the further it goes, the more it will have to take into account the interests of other countries. And it seems that he is beginning to do this, declaring that he alone will not pull out such a project, it must become international. Nevertheless, there is an opinion in the expert community of China that the EurAsEC and the One Belt - One Road initiative are completely different projects. Therefore, according to the supporters of this idea, China should build a new "silk road" and "economic belt" on a bilateral basis, not with the entire Eurasian Economic Union, but with its individual participants.   

The first steps along the uncharted road, as you know, are not easy. But from a fragile seedling planted with a caring hand, as you know, a strong tree grows.

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