China’s Two Silk Roads Initiative: What It Means for Southeast Asia

Introduction

In 2013, Chinese President Xi Jinping announced a pair of initiatives that aims to restructure the economy and geopolitics of Eurasia. The Silk Road Economic Belt announced by Xi Jinping in September 2013 during a tour of Central Asian neighbours is a programme to build land transportation corridors that connect China to Europe and all other major Eurasian subregions, including Indochina, South Asia, and Southwest Asia.¹ Then in October 2013, Xi visited Indonesia and announced the 21st Century Maritime Silk Road, which is a port development initiative to broaden Chinese trade channels targetting the maritime regions of Southeast Asia, South Asia, the Middle East, East Africa, and the Mediterranean. Xi Jinping’s two Silk Road programmes are a package called the “One Belt — One Road” [yidai-yilu] initiative.²

Both Xi Jinping and Premier Li Keqiang spent great effort in the year 2014 launching concrete measures to advance the silk roads agenda of Eurasian connectivity and regional cooperation. They hope to build a comprehensive trans-Eurasian network of economic corridors that could sustain China’s economic growth and strengthen China’s political leverage for decades to come. The consequence would be to draw the countries of Eurasia into China’s economic orbit to form what Xi Jinping calls a “community of shared destiny”. Members’ fortunes would rise as China’s own rise continued. A culturally and politically diverse but economically integrated division of labour harmoniously organized by China’s trade and financial interests is what China promises. If this vision is fully realized, China’s silk roads vision will help realize “the great rejuvenation of the Chinese nation” and the “China Dream” of a wealthy society grounded on Chinese values.

It should be noted that this yidai — yilu agenda is a work in progress rather than a fully drawn up master plan. That is, as previous Chinese leaders have done, Xi Jinping is providing a grand strategic vision or agenda for China. The Chinese Communist Party and government must work to realize this agenda to the best of their ability. So, for the rest of Xi Jinping’s years in power — expected to last until 2022 — we will hear about the two Silk Roads at every meeting that Xi Jinping or Li Keqiang attends in Europe, Africa, the Middle East and Asia.

The Year of the Silk Roads

Even the briefest summary of high-profile Chinese initiatives that advanced the Silk Roads agenda in 2014 amounts to a long list. Premier Li Keqiang made five overseas tours that highlighted this agenda. In May, Li made a four-nation African tour. In Kenya, he signed a US$3.8 billion agreement to use Chinese high-speed railway technology to connect Nairobi to Mombasa, the largest port in East Africa.

In June, he visited Greece to discuss purchase of both the Greek port Thessaloniki and the Greek state-owned railway. He also negotiated to purchase full ownership of the massive new Piraeus Container Terminal, which is already half-owned and managed by Chinese state-owned shipping giant COSCO.³ In all, Li signed new deals with Greece valued at US$5 billion.

In October, Li visited Germany, Russia, and Italy, and attended the Asia-Europe Summit (ASEM). China and Germany’s signed agreements on bilateral trade, mutual investment and technological cooperation are valued at US$18.1 billion; in Russia, Li Keqiang witnessed the signing of thirty-nine bilateral cooperation agreements and contracts, including a high-speed rail project connecting Moscow and Kazan via the Volga River (to be extended through Kazakhstan to Beijing by 2018 providing another trans-Eurasian rail link from China to Western Europe via Moscow), worth US$10 billion; in Italy, he witnessed Chinese and Italian corporations signing more than ten agreements totaling more than US$10 billion.⁴

In November, Li went to Myanmar to attend the annual ASEAN Summit meetings. During his visit, China signed US$8 billion in agreements with Myanmar and pledged US$10 billion for China-ASEAN infrastructure investment.

In December, Li visited Kazakhstan, Serbia, and Thailand. In Kazakhstan Li...