China’s Belt and Road Initiative (BRI) was the keynote topic at the Berlin-held German Logistics Congress’ Award Ceremony gala event on 23 OCT 19. The Chairman of the German Federal Logistics Association, Prof. Thomas Wimmer, welcomed the Ambassador of the People's Republic of China in Germany, S. E. Wu Ken, on stage at the Berlin Arena, together with Erich Staake, CEO of inland port Duisport, to discuss the opportunities and prospects offered by the new Silk Road, China’s Belt and Road Initiative.
Most probably the largest and most expensive undertaking ever in the world, the BRI is already in its sixth year, and currently up to 35 trains travel the 11,000 km stretch reaching from the Duisburg harbor along the iron Silk Road via Poland, Russia, and Kazakhstan to the Chinese cities of Chongqing, Wuhan und Yiwu, saving 30% of the time it would take to go by sea, and at just one fifth of the cost of air cargo. Over 17,000 trains have run to date, of which 40% were between China and Germany. The panel was asked about the potentials and risks of this massive infrastructure project, which encompasses two main routes: the northern “Silk Road Economic Belt” running from China via Central Asia, Iran, Turkey, the Russian capital of Moscow, to Central and Western Europe, and the southern “Maritime Silk Road” linking China’s sea trade with South East Asia, the Middle East, East Africa and Europe.
Unilateralism and protectionism are a serious threat to world peace
After opening his address with a look back at the 2,100 year history of the Silk Road and its key historical importance in East-West trade and positive intercultural relations, Mr. Wu Ken criticized the recent U.S. American trade war activities in his speech, though he did not at any point explicitly state any names: “Unilateralism and protectionism seriously threaten peace and stability in the world, and no country can be spared. The right answer is to launch even greater supra-regional cooperation, at even higher levels and on even more levels.”
The BRI was born of a desire to form an open world economy and worldwide relations based on partnership: “When President Xi Jinping presented the initiative for international cooperation on the construction of a New Silk Road in 2013, he aimed to improve connectivity and deepen pragmatic cooperation, in order to work hand in hand to meet the risks and challenges of humanity and to promote joint development for mutual benefit.”
An impressive first six years
The figures Mr. Wu Ken quoted underline the tremendous scale of this project. More than 160 countries and international organizations (including the involvement of the United Nations, the G20 and APEC), have signed a total of 195 intergovernmental agreements with China. China's total trade volume with the BRI countries amounts to 6 trillion US dollars, with more than 90 billion US dollars being directly invested into cooperation projects in the participating countries. Amongst them, the creation of 82 industrial parks generating over $2 billion in tax revenues for their host countries as well as around 300,000 new jobs. He stated better living conditions for the local populations, better business climates and increasing development opportunities as results to illustrate the positive effect the BRI is having on world economic growth, going on to point out “According to a World Bank report, once all of BRI's transport projects have been completed, transport times for the neighboring countries will be reduced by 12%, trade will grow by 2.8% to 9.7%, and 7.6 million people will be freed from extreme poverty. These successes have shown that BRI has its origins in China, but its positive impact is felt throughout the world.”
"Cooperation for mutual benefit"
Certainly, a look at Germany’s economic development with China illustrates these positive effects. Mr. Wu Ken stated “relations between China and Germany are being further expanded and have now reached an unprecedented breadth, depth and intensity. […] In 2018, the bilateral trade volume between China and Germany amounted to around 200 billion euros, and for 43 years Germany maintained its position as China's largest trading partner in Europe, while China has risen to become Germany's largest trading partner worldwide over the past three years. Since China has initiated a new series of reform and opening measures, German companies such as BASF, BMW and Allianz have been among the first beneficiaries” and recalled President Xi’s request for “high-quality joint expansion of the New Silk Road.” This is to be based on three aspects:
1) Joint definition of the rules whereby Germany and Europe are to play a key role,
2) opening up third markets in line with the “golden rule of BRI, which is: Discuss, shape and profit”, (here Mr. Wu pointed to benefits German companies are already enjoying thanks to the BRI, stating the Port of Duisburg’s active involvement in the establishment of a Chinese-Belarusian industrial park as an example), and yet
3) promoting ecological development: the desire to build a “green Silk Road”, adhering to the concepts of openness, ecology and honesty.
Silk Road or Slip Road?
China has been the world’s largest exporter since 2009 already and is currently not only the world’s largest importer but also the largest donor of development finance – thus well on its way to becoming the global Number One within the next decade.
Overall, the BRI affects 69% of the world’s population and 51% of world GDP (according to the Baker McKenzie Belt Road 2017 Report) and is without doubt a success in many aspects. Stronger economic powers such as Germany can reap the benefits, but how do things look in less economically and politically stable countries? Countries such as Greece, Hungary, Italy, Serbia, who have received Chinese loans for BRI infrastructure projects? Monies that will require repaying at some point, and that create dependencies on China going beyond finance to politics, since those countries will be less inclined to criticize their sponsors, thus possibly leading to rifts within the European Union on matters of human rights, for example, or even going as far as affecting the access of potential EU members.
Mr. Wu Ken closed his speech with the words “The world is at a crossroads and faces a choice. Do we want walls or bridges? Multilateralism or unilateralism? The joint development of a New Silk Road stands for the support of an open world economy and worldwide relations based on partnership. For our part, we hope that even more countries and companies, including Germany of course, will participate in the initiative.” While the plea for mutual advantage was clearly stated, the question remains open as to how equal that mutual advantage can be when one hand very clearly controls the purse-strings.
Brigitte Gledhill / Heiner Siegmund
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