AmazingXinjiang.com

–composed by Samuel Taylor Coleridge after awaking from an opium-induced dream; completed in 1797, published in 1816.

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Those who have seen the rather sexually risqué Netflix TV series entitled Marco Polo (https://en.wikipedia.org/wiki/Marco_Polo_(TV_series) are well aware of the ancient Silk Road.  Crossing the deserts, oases, steppes and mountain passes of Central Asia, it first brought the commercial splendors of the then wealthiest nation in the world, China, to what was a very backward Europe.

When the Venetian merchants, young Marco and his father and uncle, arrived at the imperial court of the Mongol Emperor of the Yuan Dynasty,  Kublai Khan, in the thirteenth century, they helped initiate a Western fascination with the exotic East that continues to this very day.  They also triggered an almost insatiable thirst for Asian products, well beyond tea and silk, which continues unabated, as seen on today’s Walmart shelves.

 The search also soon began for an alternative maritime route to the East, presumed to be safer than the often treacherous overland Silk Road.  This quest drove Columbus and other explorers in the Age of Discovery to first set sail.  Subsequently, nineteenth century imperial adventures,  twentieth century wars, and then Cold War divisions all severed the old Silk Road trade route completely.  But now, at last, there is movement to revive the ancient commercial link between the dynamic economies of Asia and the consumer markets of Europe.  A China which is again rising is at the forefront, not surprisingly, while an inward-looking, increasingly isolationist United States lags far behind.

On  Monday, September 26th, The Silk Road Summit: The First Annual Conference: Exploring Business, Trade and Investment Opportunities on the New Silk Road was convened in the Capitol Visitors Center in the morning and the Ronald Reagan Building’s International Trade Center in the afternoon.  Organized by the Eurasia Center, it was heavy on Chinese participation, including by the PRC Embassy’s Head of the Economic Section, Counselor Li Bin.  However, U.S. official participation noticeably trailed behind.

It was the very last speaker of the day, Dr. Gal Luft, senior adviser, U.S. Energy Security Council, who addressed head on the issue of Chinese involvement in the revival of the Silk Road and American neglect.  The author of “China’s Infrastructure Play:  Why Washington Should Accept the New Silk Road,” Luft argued forcefully that Washington has neglected “the biggest human development project in world history.”  By retreating from involvement, Washington has left China “in the driver’s seat” with regard to Silk Road infrastructure and other projects.  Luft also noted U.S. over-regulation and excessive attention to environmental concerns with regard to foreign investment, threatening to condemn 2.5 billion people in Asia and Africa to “eternal poverty.”   Beijing has no such restrictions or qualms as it offers the promise of lifting the people of the Silk Road up “little by little.”

Luft also faulted the current U.S. leadership for getting into a recent losing battle with China over the founding of  the Asia Infrastructure Investment Bank (AIIB) which Beijing plans to use to provide seed money for Silk Road infrastructure projects.  AIIB was officially launched in May with an announcement of investment in two Silk Road infrastructure projects. (http://www.voanews.com/a/china-launches-asia-investment-bank-with-two-silk-road-projects-/3338589.html)

Xi Jinping stated in June, during a trip to Uzbekistan, that  “Chinese companies invested nearly $15 billion in countries participating in Beijing’s new Silk Road initiative last year.”  He also confirmed that China “has dedicated $40 billion to a Silk Road Fund.”  (http://www.reuters.com/article/us-uzbekistan-china-idUSKCN0Z90C9).  A Chinese business representative at the conference noted that China, with its 30 years of infrastructure development in airports, ports, highways, speed rail, as well as in the technology sector, can serve as an example and make constructive contributions by investing in the various countries involved in Silk Road development (from Central and South Asia to Eastern Europe.)  And the Beijing-initiated Shanghai Cooperation Organization (SCO), which held its most recent annual summit in Tashkent, Uzbekistan in June, is also deeply involved in the promotion of Silk Road projects.

It was pointed out by others on the same panel as Luft that the Silk Road is definitely where the future global trade action will be.  Two-thirds of the world’s population live along the routes of the Silk Road and the world’s second (China), third (Japan) and soon to be fourth (India) largest economies are in the vicinity.  Both the world’s most populous nation (China) and the world’s fastest growing large economy (India) are part of the old Marco Polo trade routes.  Of the world’s ten busiest sea ports, nine are in Asia, with Shanghai ranking first and Singapore second.  With 90 percent of global trade transported by shipping, this is quite significant. This also helps to explain Beijing’s recent fixation on exercising sovereign control over shipping lanes in the East China and South China Seas.

Still, Xi Jinping’s”seminal foreign policy initiative, “One Belt, One Road” (OBOR), has faced some bumps in that road.  (And the whole “One Belt, One Road” reference is somewhat confusing to Westerners: the “belt” portion refers to the old Silk Road land routes and the “road” portion refers to the sea lanes.  Yet for Westerners, the word “road” definitely confers the concept of an overland route NOT one over water.)   Sections of the old Silk Road routes, especially those transiting the Middle East, are racked by internecine warfare and terrorist attacks.  Portions of South Asia, like Afghanistan, are faring equally badly and the old sea routes of the Silk Road have been increasingly caught up in maritime disputes.  Also, revenue was expected to be generated by the fact that three-quarters of the globe’s energy resources are found along the Silk Road.  However, the recent historic lows of raw commodity prices have presented another challenge, threatening the viability of some projects.  Xi, thus, in order to jump-start his pet OBOR project, took to the road in recent months, visiting several countries in Central Asia and Eastern Europe. (http://time.com/4457044/xi-jinping-one-belt-one-road-obor-south-china-sea-economic-trade-business/)  In that regard, Luft noted that “Beijing would like some U.S. involvement in the Silk Road due to the need for large amounts of capital investment.”

The conference, however, pointed to some very impressive projects which are being considered and implemented:

The TAPI (Turmenistan-Afghanistan-Pakistan-India) natural gas pipeline to move energy north to south from the Caspian Sea area to the (fastest growing in Asia) Indian economy. A brave concept, given the warfare going on in Afghanistan and the political turmoil in Pakistan.  It makes the American hesitancy over the implementation of the Keystone Pipeline look rather squeamish.

The Turkmenistan-Uzbekistan-Tajikistan-Afghanistan-Pakistan (TUTAP) electricity project was also discussed as an example of the interconnection of energy resources However the protests sparked by a possible change in the routing of the electricity were not mentioned at the conference.  (https://www.afghanistan-analysts.org/power-to-the-people-2-the-tutap-protests/)

The Central Asia Regional Economic Cooperation (CAREC) Program, which is a partnership of 10 countries (Afghanistan, Azerbaijan, People’s Republic of China, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan), supported by 6 multilateral institutions, working together to promote development through cooperation, leading to accelerated growth and poverty reduction. (https://www.adb.org/countries/subregional-programs/carec)

AGT: The US Energy Association’s Azerbaijan-Georgia-Turkey Power Bridge Project (AGT) was mentioned as a means of addressing Turkey’s electric grid congestion.

Not to be neglected, an economic officer from the Embassy of the Russian Federation provided input as to Moscow’s possible role on the Silk Road.  He pointed to joint Russian-Chinese projects to develop and extract energy from Siberia and the Russian Far East.  He looked to the “development of an energy corridor in the Russian Far East.”  He noted that as far as rail transport of commercial products produced in China and other countries to Europe is concerned, the northern Russian rail line provided the advantages of the Siberian Express as well as the fact that cargo can travel thousands of miles without the delays caused by international border-crossings.  The Russian official also noted port development being carried out both in the Russian Far East and in the Baltic ports to facilitate the movement of Silk Road-related trade and cargo.

And, finally, there is always the issue of corruption when dealing with large projects in the developing world.  A World Bank representative raised the corruption issue, noting that 30 percent of funds provided for Silk Road maritime projects, according to a study, end up being siphoned off due to “corruption, fraud and collusion.”  He said that this will require continued extensive monitoring as projects go forward.

Quite a thorough and thought-provoking conference.  But while the conference sponsors advertised the likely appearance of Members of the House and Senate, as well as  high-ranking State Department officials, they were all no-shows.  Americans seem preoccupied during this rather silly political season in isolating themselves not only from the Silk Road but from the larger tempests which threaten to engulf the world.  As the Chinese seek to finance a natural gas pipeline THROUGH THE HIMALAYAS AND AFGHANISTAN we seek to build a wall to seal us off from the challenges of twenty-first century globalization.  But like the old codgers who rejected the”horseless carriage” over a century ago, these efforts seem doomed to failure.  As China leads, America recedes.

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