Why don't Americans do OBOR

Working papers

The OBOR (“one belt, one road”) Silk Road initiative launched by Chinese President Xi Jinping presents itself as a gigantic infrastructure network on land and at sea that is intended to bring Eurasia and Africa closer together, while being flexible, inclusive and oriented towards cooperation. In addition to secure access to resources, the initiative is also intended to help China open up new export markets, especially in Southern and Eastern Europe and Africa. If you take a closer look, however, much remains vague up to now; the exact geographical scope is deliberately kept open. This also ensures that the sovereignty of interpretation remains with Beijing. China is striving for a comprehensive network to strengthen the connectivity of this large economic area, but reserves the right, with its economic and financial weight, to align the threads of the spider's web with its economic and political needs.

The Silk Road Initiative and Europe

In the direction of Europe, Beijing is primarily concerned with expanding the transport infrastructure by land via Central Asia and Russia, by sea through the Indian Ocean and the Suez Canal. A branch to Africa is to connect Africa's transport infrastructure, which is being built with Chinese help, to the Eurasian belt. In Europe, China can build on existing transport connections such as the rail link from China to Duisburg, Europe's largest inland port. The freight train route from Yiwu in China (near Shanghai) to Madrid is the longest in the world at almost 13,000 km. In addition, China has established an institutionalized cooperation with 16 countries in Central and Eastern Europe, including 11 EU members, which aims to identify joint projects in the field of business and cultural exchange. The results of this G16 + 1 cooperation include the rapid rail connection from Belgrade to Budapest and the branch of the freight connection from Yiwu to Riga. In Poland, too, China is actively involved in the expansion of the transport infrastructure. What is striking about all of these projects is that China not only brings capital and material, but also its own workforce. With the bid to privatize the port of Piraeus as a free port, China has secured logistical access to the EU market.

Targeted company acquisitions in Europe are also intended to align the transport infrastructure with the needs of the Chinese economy. The world's largest Chinese rail vehicle group, CRRC, is trying to get the Czech rail manufacturer Skoda Transportation. In autumn 2016, a group of Chinese investors acquired the traditional Bochumer Verein, a leading manufacturer of railway wheel sets.

Connectivity and Stability

With its investments in the Eurasian region and in Africa, China would also like to create a political stability along the new Silk Road that works in its favor. At the same time, it promotes a geostrategic counterweight to the interests of its big rival, the USA. They were very irritated when important European countries, besides Germany also France and Great Britain, decided to join the new, Beijing-inspired Asian infrastructure investment bank AIIB.

The Chinese initiative is deliberately multi-pronged. The desired infrastructure network in Eurasia and to Africa should offer a high degree of flexibility in terms of transport logistics in relation to possible disruptions, such as possible blockade attempts by the USA. At the same time, the network is intended to strengthen China's resilience to increasingly protectionist trends in world trade. This can be an advantage if the demonization of China by the new American President Trump should be heading towards a trade war between the USA and China and China has to reckon with massive obstacles in its most important export market. However, the Eurasian infrastructure network is still too rudimentary to offer Beijing adequate protection. On the other hand, it cannot be ruled out that Trump will jump on the initiative as part of a larger deal with Beijing, the US will participate in the AIIB and US companies will for their part invest in the expansion of the transport, communication and energy infrastructure in the Eurasian region. The USA, which is the most advanced in terms of digitization, offers complementary opportunities to Beijing's investments, and at the same time Washington would keep a foot in the door for the further integration of Eurasia.

China has long tried to lend stability to its strategic connectivity concerns through a beneficial network of solid bilateral relationships. In the Middle East, Beijing has good relations with the two regional powers, Iran and Saudi Arabia, which are competing for supremacy, which were further strengthened by President Xi Jinping's visit to both countries at the beginning of last year. Beijing's role in the nuclear deal with Iran should not be underestimated. China also convinced the Iranian leadership of the economic advantages of the deal with its own offers of help.

The strategic partnership with Russia bears above all on the common interests in the area of ​​the United Nations; the large economic projects, however, have not yet got off to a good start in view of the unanswered questions, particularly about financing. Relations with the Central Asian states, where China is now the largest foreign investor, are close. The Kazakhstan and Uzbekistan oil and gas pipelines are a central element of the Chinese Silk Road project. The Shanghai Cooperation Organization (SCO) is now also used by Beijing as a stabilizing factor for the Silk Road network.

Occasionally, however, China also has to accept setbacks: After considerable protests in the population, the Kazakh government felt compelled to withdraw a planned land law reform that would have given China the opportunity to acquire larger land in Kazakhstan. In Kyrgyzstan, too, there are repeated attacks on Chinese infrastructure projects and Chinese personnel, for example through a bomb attack on the Chinese embassy in August 2016. Recently, farmers in Sri Lanka demonstrated against the surrender of land to Chinese investors at the port of Hambantota built by China South of the island. This is where the Sri Lankan government fell into the credit trap: it can only alleviate the interest burden from investments pre-financed by China by making further concessions to Beijing.

China traditionally maintains the closest relations with Pakistan; the Sino-Pakistani economic corridor is a central element of the Silk Road initiative. But even in Pakistan, attacks on Chinese personnel in large infrastructure projects are inevitable. The expansion of the port of Gwadar and the transport links through Balochistan suffer repeatedly from attacks on Chinese workers and the infrastructure by Balochist separatists. The connection through Pakistan is perhaps the most vulnerable link of the Silk Road initiative to terrorist attacks, but on the other hand it could also contribute to greater stability in the region: Given Islamabad's great dependence on Beijing, China is in a position to exert considerable influence on the Pakistani government. It has no interest in the Kashmiri conflict between India and Pakistan, which has just flared up again, escalating. China does not want any change in the status quo in Kashmir and is much closer to the Indian position here than the position of Pakistan.

During his visit to Egypt in January 2016, President Xi Jinping pledged Chinese investments of US $ 15 billion for development and infrastructure projects. In the run-up to the expansion of the Suez Canal, China had already invested heavily in the expansion of the container terminal in Port Said, and it is intensively involved in building an industrial zone at the southern exit of the canal, which for Beijing is the most important sea connection to Europe.

The seaward “Silk Road” is accompanied by major port projects along the so-called string of pearls in the Indian Ocean, which lead from Myanmar and Thailand via Bangladesh and Sri Lanka as well as the Pakistani port of Gwadar to the Suez Canal and find their European terminus in the port of Piraeus. The future Chinese naval base in Djibouti serves to secure this corridor, as does China's active participation in the EU naval operation Atalanta to fight pirates in the Horn of Africa. In addition, Djibouti is intended to ensure the protection and safety of Chinese personnel working in Africa. Djibouti is also the gateway to the African branch of the “New Silk Road”, which is currently being built. In autumn 2016, the railway line built by China to Addis Ababa in Ethiopia was opened. From there, connections to the East African network and Chinese infrastructure projects in southern Africa are planned, in the medium term to Nigeria.

Beijing's commitment to the peace missions of the United Nations also serves the Chinese interest in stable conditions along the Silk Road Belt and in the protection of Chinese personnel and Chinese companies. China is now the largest contributor of troops among the permanent members of the Security Council; In Africa alone, China is striving for stability through active participation in seven of the nine African UN peace missions.

In the Indian Ocean, the Chinese initiative is also proving to be a counterweight to India's strategic interests. The string of pearls thesis assumes Beijing intends to gain control of the sea routes in the Indian Ocean. That may also be intended in the long term. First of all, however, China is concerned with making a contribution to continuously high economic growth by securing important supply routes and thus securing the internal stability of China in the long term. The infrastructure projects also put the still high Chinese foreign exchange reserves to good use, which would otherwise be of little strategic value. The Chinese navy would not yet be able to ensure effective control over the sea routes in the Indian Ocean, not to mention to even come close to countering American dominance in Asia / Pacific.

Need for a common European response

From a European perspective, the motives for the Chinese Silk Road initiative are easily understandable. It is obvious that what will soon be the largest economic power in the world is global and has a very significant interest in stable trade and access to resources. In this respect, the expansion of the connections to Europe and Africa primarily serves China's economic interests in the long-term maintenance and further expansion of its export markets - and this especially since the most important market, the USA, is navigating difficult waters. Europe basically shares the Chinese interest in a stable environment for Eurasian trade. In Africa, too, the common interest in stabilizing the continent can be the starting point for selective cooperation with China. At the EU-China summit in Brussels in June 2015, the EU launched a joint connectivity platform with Beijing. The aim here is to coordinate the interests of both sides in the expansion of the infrastructure. Where the Chinese plans run counter to European connectivity interests, it is necessary to counter them. However, this requires a uniform, coordinated approach on the European side. If the large EU member states are increasingly succumbing to the Chinese tendency towards bilateralism, this applies all the more to the institutionalized cooperation of the smaller Central and Eastern European states within the framework of the 16 + 1 process. Dependencies threaten to develop here, which make a uniform EU approach increasingly difficult.

Common EU standards and norms must not be thrown overboard in investment projects with Chinese partners; The projects must also not run counter to harmonized overall planning, for example for the European transport network. European requirements for occupational safety must be taken into account as well as the rules for a Europe-wide tendering of projects. Where the interests of the EU and China coincide and synergies can be used, however, Europe should open up to the Chinese offer, especially since China is inclined to make substantial contributions to financing.

Thomas Wrießnig is Vice President of the Federal Academy for Security Policy.
The author gives his personal opinion.

Copyright: Federal Academy for Security Policy | ISSN 2366-0805 page 1/4