21st Century Maritime Silk Road

Saturday, 25 October 2014 00:00 - - {{hitsCtrl.values.hits}}

The two-day historical visit of the Chinese President Xi Jinping and First Lady Peng Liyuan who arrived in the island on 16 September ended with a new milestone, further strengthening Sri Lanka-China relationship. A number of MOUs were signed between the two nations on development of infrastructure related to various aspects. The visit of the Chinese President to Sri Lanka was a part of his official tour to South Asian countries. The main objective of this tour as opined by political analysts and professionals was to share cooperation and seek support from Sri Lanka and Maldives to elevate initiatives of the Chinese 21st Century Maritime Silk Road. The support and cooperation of both countries would be very essential as they are situated in strategic locations in the Indian Ocean.

The famous Silk Road

The famous Silk Road crossed from China to Asia, Africa and Europe as the main vehicle of trade, commerce and communication for 1,000 years even beyond the Christian era. This famous Silk Road became the main tool to exchange cultural, political, military, economic, religious, and artistic values among Asian and European countries. It was a two route way, one from China to Europe via Central Asia through land and the other was an important maritime route from China to Middle East and Egypt through Sri Lanka, Thailand India, Malacca, etc. The name of the route became highly famous as Silk Road since China’s main product of export was silk. All neighbouring nations around the Silk Route were fortunate to have strengthened their political, social and economic relationship among them. The role played by China was so constructive and advantageous since the route originated from China. The Silk Road became so important internationally that diplomats, navigators, travellers and traders et al used it for their business and political objectives.

New Silk Road

Chinese President Xi Jinping launched the concept of New Silk Road with the objective to rebuild and strengthen China’s relationship with countries situated across the ancient Silk Road and to share the benefits of the new concept with these countries. This relationship covers wider area such as economic, trade, political and social, etc., complied with modern scenario. The Chinese 21st Century Silk Road concept was introduced to the world in the mid part of 2013. This new Silk Road concept was initiated into two ways as per the routes spread on the ancient Silk Road. The first one was the initiatives under the name of Silk Road Economic Belt concept which applied to the route spread through land from China to Europe via Central Asia. The first time this Silk Road Economic Belt was introduced during the visit of Chinese President to Kazakhstan in 2013. In his speech delivered by Chinese President at the University of Nazarbayev announced the concept of Silk Road Economic Belt and its importance to enhance the relationship with Central Asia. The President of Kazakhstan expressed his support for the implementation of Silk Road Economic Belt. The second one was the 21st Century Maritime Silk Road concept introduced for the maritime route which spread the sea routes of the ancient Maritime Silk Road. The idea of establishment of the 21st Century Maritime Silk Road was initially announced by the Chinese President Xi Jinping in his speech delivered to the Indonesian Parliament on 2 October 2013 during his visit to Indonesia. Later the Chinese Premier Li Keqiang at the 6th China ASEAN Summit announced the importance of the revival of Silk Road to adopt for the needs and wants of the modern world and sought the ASEAN support for the implementation of New Silk Road Concept. The reason behind was most of the area of Maritime Silk Route is covered in ASEAN region and nearly $ 100 billion investment and $ 400 billion trade generated with China, as a powerful international organisation.

Highest national priority

The concept of the Silk Road Economic Belt and 21st Century Maritime Silk Road was included by China in China’s 2013 Annual Report on Government Task to accelerate speedy implementation. China has given highest national priority to implement this 21st Century Maritime Silk Road with promotional steps taken in all aspects. This is clearly evident by the frequent visits of the Chinese leadership overseas. Chinese President Xi Jinping visited 20 countries and Prime Minister Li Keqiang visited 10 countries after announcing the new Silk Road concept. China is now organising various trade fairs under the name 21st Century Maritime Silk Road to promote it. The theme of the 11th China ASIAN Expo Exhibition concluded last September was “jointly building the 21st Century Maritime Silk Road”. In addition the Guangdong Modern International Exhibition Centre organises the China-Guangdong 21st Century Maritime Silk Road International Expo inviting to take benefits from the business opportunities available in China. It is essential to consider how this Silk Route concept is important to China. 200 km of the littoral area is inhabited by 40% of Chinese population. In addition 70% of Chinese GDP, 84% of direct foreign investment and exports trade are generated through this coastal area. Nearly 85% of imports to China are transported along the Maritime Silk Route, including 85% of the energy imports. Coastal development was a priority area of the economic reforms of Deng Xiaoping in 1992. Under these reforms, China established special economic zones in coastal provinces, opened new coastal cities and eastern comprehensive development zones. The boats and ship building is a leading industry in China. Over five years through 2013, the ship building industry in China has been growing at an annual rate of 9.9% to $ 79.1 billion. On the other hand, approximately one-third of the maritime route of the world is covered by this Silk Route, which is an important area in global politics. Even in ancient times, world powers took great interest in this maritime area. Going back to recent records, it proved that there was a proposal to declare the area as a peace zone. Similarly there is nearly a population of three billion people in the area and 25% of the world economy is covered by Asia. The most notable fact is the oil and gas, fishery products and other resources that have been found in this region. In view of the above, it is evident that the maritime sector plays a significant role in Chinese international politics and economy.

Importance of Sri Lanka

It is necessary to look into the importance of Sri Lanka in the 21st Maritime Silk Road concept. Since ancient times, Sri Lanka has been an important maritime hub through a major sea route. It is naturally located so strategically that all ships from East to West and Africa and East and Africa and West to East sailed through the Sri Lankan waters. It is evident that all seven voyages of Zheng He (1371-1433), who was a mariner, explorer and diplomat of China, used the ancient Silk Road to Middle East through Sri Lanka. It is believed that the arrivals of Chinese trade vessels called ‘sampan’ landed at Hambantota ancient harbour, caused the transformation of the name from Sampantota to Hambantota. All diplomats, traders, and other professionals sailed to Sri Lanka through this ancient marine Silk Road. Presently Trincomalee Harbour, which is the third largest port in the world, is being developed as a resource hub for marine science and explorations. The development of Colombo Harbour is projected to be upgraded to the 10th rank from 20th rank at the international level. The lucrative importance of constructing Hambantota New Harbour is the natural location at the tip of the south of Sri Lanka and the large number of vessels sailing through the area. On account of the development of maritime activities in Sri Lanka and its convenient locations, it is valued as being extensively important to the initiatives of the 21st Century Maritime Silk Road of China.

Sri Lanka-China relationship

The relationship between Sri Lanka and China continues beyond the Christian era; the diplomatic relationship was established in 1957, this relationship was elevated to peak point under the Presidency of Mahinda Rajapaksa. The leaders of two countries made several visits to each other and had cordial discussions on cooperation and diplomatic relations. Today China is not only the leading investor in Sri Lanka, but also the number one importer and has the fifth largest tourist arrivals to Sri Lanka. It is a well-known fact that China became Sri Lanka’s largest lender in recent years, providing more than $ 6 billion for construction of ports, airports, highways, new towns, towers, theatres, etc. The President of China during his recent visit to Sri Lanka launched the reclamation of land for the artificial port city in Colombo as part of his agenda. This is the single largest project in Sri Lanka to attract $ 5 billion investment. This will be initiated with a $ 1.4 billion loan from China. This will improve step by step with Colombo Port development. China also granted financial assistance of more than $ 1.3 billion to coal power plant which is located in the littoral area. This environment paves an avenue for Sri Lanka to play an active role in the new Silk Road concept as expected by China. China believes that the Colombo Port City will be a main hub on the maritime Silk Road and position itself as the preferred global tourism destination in Asia.

New Silk Road diplomacy

Chinese new Silk Road diplomacy has drawn different views from the world. Some professionals opine that this concept came to light with the fall of Soviet Union. China took immediate steps to develop the relationship with the Central Asian countries which became independent from the former Soviet Union. The ancient Silk Road from China to Europe passed through these lands of Central Asia and the Silk Road Economic Belt was established as a result of these changes. Another view is the investment made by China largely for the development of ports in Asian countries to facilitate the Maritime Silk Road concept. Investment made in ports in Gwadar in Pakistan, Colombo and Hambantota in Sri Lanka and the bridge over the sea from the Male City to the airport in Maldives is a visible indication of its attempt to favourably implement the 21st Century Silk Road. According to a recent IMF press release, China has, for the first time, become the world’s largest economy with $17.6 trillion compared to USA’s $17.4 trillion, putting USA in second place for the first time in 142 years.

Chinese control

The sea ports are important as a trade hub. But there is a likelihood of getting involved in issues such as smuggling, illegal fishing, sea disputes, human traffic and various other conflicts. Therefore, some political analysts observe that this concept opens opportunities to China to control the entire maritime activities and also provide possibilities to maintain its economic powers. Even though countries like Sri Lanka, Pakistan, Maldives and Cambodia support the New Silk Road, other Asian giants such as India, Japan and some other ASEAN countries are not committed to favouring the new Silk Road concept as the new trend might be a challenge to their maritime and economic activities. Although Japan, India and South Korea do not favour the New Silk Road initiatives, they never openly oppose this concept, the reason being the ongoing negotiations on the Free Trade Agreement with India and also China, Japan and Korea joint feasibility plan to create a free trade area. These four countries cover nearly $ 1000 billion trade and creation of a free trade area would be a challenge to other global economic giants.

Sri Lankan stance

The Sri Lanka Government under the leadership of President Mahinda Rajapaksa has displayed Sri Lanka’s fullest cooperation and support for the Chinese initiatives on the 21st Century Silk Road. In this international political environment and given Sri Lanka’s willingness to support this new Chinese concept, Sri Lanka should take every effort to achieve the maximum benefit in the economic, political, cultural and social fields. It behooves the Sri Lankan Government to open avenues of opportunities to more investment in export-oriented projects and new technology transfers. On the other hand, steps should be taken to implement the proposed Free Trade Agreement within a very short period and develop strategies to minimise the unfavourable trade balance with China. Sri Lanka should make use of this opportunity to further gain Chinese support to protect Sri Lanka’s interests in the international political arena. The new version of the Silk Road should promote a more accurate understating of the history enjoyed by the nations across the Silk Road and reveal more economic and social opportunities to each other. The spirit of better understanding and modern transcontinental transport and communication should be the foundation to further enhance cooperation in all aspects. The international community wishes for the wellbeing of mankind through the implementation of the New Silk Road concept. (The writer is the retired former Head of Corporate Affairs and Communications – Sri Lanka Export Development Board and Ex-Director of the Sri Lanka Trade Centre in Maldives. He can be reached via [email protected].)