Saturday, 7 January 2017

The New Silk Road 新絲綢之路


Mapping The New Silk Road

A huge shift in trade and relations could be under way across Eurasia and China's New Silk Road policy is at the heart of it.

As a historical reference point, the Silk Road continues to resonate, long after the trade route serve ant economic purpose.

For Europe it evokes the slow sway of camel trains across parched landscapes and the flow of exotic goods into the continent. And in China, it brings to mind the touchstones of its imperial history and its connection to the outside world.

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China Said to Plan $16.3 Billion Fund for ‘New Silk Road’

China plans a $16.3 billion fund to finance construction of infrastructure linking its markets to three continents as President Xi Jinping pushes forward with his plans to revive the centuries-old Silk Road trading route.

The fund, overseen by Chinese policy banks, will be used to build and expand railways, roads and pipelines in Chinese provinces that are part of the strategy to facilitate trade over land and shipping routes, according to government officials who participated in drafting the plan.

More policies will be rolled out soon to encourage Chinese lenders to finance infrastructure in countries along the route connecting China to Europe, the officials said. They asked not to be identified as they weren’t authorized to speak publicly about the plans. Chinese companies will also be urged to invest in the countries and bid for contracts, the officials said.

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Mapping China's New Silk Road Initiative
Former Sri Lankan President Mahinda Rajapaksa, right, with Chinese President Xi Jinping during their meeting in Colombo, Sri Lanka, on Sept.16, 2014. Xi was visiting countries in South Asia to seek closer relations and support for his vision of a modern maritime "Silk Road", a sea route connecting China with Europe. (AP Photo/Eranga Jayawardena)

When China’s president Xi Jinping laid out his plans to establish a “New Silk Road” across Central Asia in 2013, he was doing more than invoking China’s distant past. Instead, he was sketching out a new direction for Chinese trade and investment, one that aims not only to improve China’s links with Europe, but also to facilitate China’s macroeconomic priorities and its integration in the global economy.

However, such a bold, long-term plan will face challenges, and those challenges will be commercial, economic and political.

First of all, although a focus on expanding trade along the proposed routes into Europe might seem like a “win-win” for all those involved, from the perspective of business, the benefits are not as clear cut. A senior source from the Asian freight industry thinks the direct benefits of better rail links between China and Europe would “probably not be much” because “you’re looking at a difference of 14 days into Europe as opposed to four to six weeks by sea. So it really depends what sort of commodity you’re moving, what value it has and how time sensitive it is.”

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Silk Road Vision Takes Shape

The Silk Road network took new steps towards development today as it was confirmed by Turkmenistan’s president, Gurbanguly Berdimuhamedov, that the first section of the Turkmenistan-Afghanistan-Tajikistan (TAT) railway has been commissioned, reported CCTV news.

TAT will provide opportunities for countries in Europe, Asia and the Pacific, according to Berdimuhamedov, who was joined by Afghanistan’s president, Mohammad Ashraf Ghani, at an opening ceremony on November 28, 2016, to mark the occasion. Ghani claims that the new railway will revive the Silk Road and will turn into an important transport corridor to Europe, the Pacific and Asia.

Silk Road network relations also improved recently when Pakistani officials welcomed the first large shipment of Chinese goods through its port of Gwadar, a deep-water port that is a gateway of the China-Pakistan Economic Corridor (CPEC), which encompasses roads and energy plans.

related:
Technical Paper: China’s One Belt Road
China Silk Road Secures $100bn Subsidy
China in Silk-Road Policy Drive
China in $40 billion maritime plan
China in Silk Road-Suez Canal Grab
New Silk Road Connects London
Tag "one belt one road"

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Kuwait turns Silk Road into a massive causeway
The oil-rich emirate is eager to inject life into the uninhabited Subbiya region on its northern tip that has been chosen as the location for Silk City

Kuwait is building one of the world´s longest causeways to its remote north where it will pump billions into "Silk City", aiming to revive the ancient Silk Road trade route.

The plan is to reinvigorate the ancient Silk Road trade route by establishing a major free trade zone linking the Gulf to central Asia and Europe.


The 36-kilometre (22-mile) bridge, three-quarters of it over water, will cut the driving time between Kuwait City and Subbiya to 20-25 minutes from 90 minutes now.

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Trains Are The New Pandas: The Story Behind The New China-UK Rail Line
London becomes the 15th European city to be linked into the emerging trans-Eurasian rail network (Photo by VCG/VCG via Getty Images)

A 200-container block train pulled out from the West Railway Station of Yiwu, in China’s coastal Zhejiang province, on Monday, January 2nd. Its destination was not nearby Shanghai, Beijing, or even the booming city of Chengdu in the west, but Barking — as in the London borough. This train, laden with clothes, bags, and household items, will make the 12,000 kilometer journey in 16 days, and symbolically usher in a new stage in China-UK trade relations.

This new rail route, which will traverse Kazakhstan, a part of Russia, Belarus, and the EU before entering the UK via the Channel Tunnel, is part of a rapidly growing network that now consists of 39 rail lines, which directly connect 16 cities in China with 15 cities in Europe.

What is now a paradigm-shifting international trade network, arose from humble beginnings in Chongqing in 2012. Ronald Kleijwegt, the director of the logistics team at HP, began looking for a better way to ship the electronics and components that his company was manufacturing in central China to Europe in the late 2000s. By 2012, he had the kinks worked out and began offering the first regular direct China-Europe rail service, which linked Chongqing with Duisburg in Germany. From this point, a veritable network rapidly began arising, with new lines connecting cities like Chengdu, Suzhou, Lianyungang, Wuhan, Xiamen, Zhengzhou, and Yiwu with Lodz, Warsaw, Madrid, Hamburg, and Lyon.

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New Silk Road's impact on shipping will be limited
China's ambitious plans to create a modern-day Silk Road by way of building roads and railways abroad are unlikely to change the face of global shipping. This means Spore's position as a key hub port, in turn, will be little affected as well. FOTO: ST FILE

China made further headway in its drive to connect with the rest of the world by high-speed rail when it launched its 1st rail freight service to Britain on Sunday.

China Railway Corporation announced on Monday that the train, carrying clothes, bags & other items, departed from Yiwu in the eastern Zhejiang province, said a Bloomberg report. It will travel more than 12,000km over 18 days - passing through places such as Kazakhstan, Russia and Germany - before arriving in London.

London is the 15th European city to now have direct trains from China as part of President Xi Jinping's "One Belt, One Road" initiative, which is aimed at boosting trade ties with markets across Asia, Africa, the Middle East and Europe.

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'China freight train' in first trip to Barking
The first freight train from China arrived in Hamburg in August 2013 after a 15 day journey

China has launched a direct rail freight service to London, as part of its drive to develop trade and investment ties with Europe.

China Railway already runs services between China and other European cities, including Madrid and Hamburg. The train will take about two weeks to cover the 12,000 mile journey and is carrying a cargo of clothes, bags and other household items.

It has the advantage of being cheaper than air freight and faster than sea.

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China rail to London boosts One Belt, One Road
The One Belt, One Road initiative runs through Iran as well [Xinhua]

Keeping in tandem with President Xi Jinping’s One Belt, One Road economic growth strategy, China this week expanded its pan-European railway destinations when a train left Yiwu West station in the eastern Zhejiang province headed for Barking Station in London.

The train’s trek will cover some 11,800 kilometers as it crosses through a number of countries, such as Kazakhstan into Russia, Poland, and Germany before crossing the underwater English Channel rail in France.

China’s One Belt, One Road initiative aims to create a modern Silk Road Economic Belt and a 21st Century Maritime Silk Road to boost trade and extend its global influence.

The ancient Silk Road connected China and Europe from around 100 B.C.

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The New Silk Road: China Launches Beijing-London Freight Train Route
A general view of the first China Railway Express, a new railway line from China to Europe during the inauguration by visiting Chinese President Xi Jinping in Warsar, Poland, on the sideline of the International Forum on the New Silk Road, Monday, 20 June 2016. The visit is intended to boost China's infrastructure investments in Europe, and opening China's market to Poland's foods. (AP Photo/Czarek Sokolowski)

On Sunday, the Chinese government launched a rail freight service between China and London. This is the first direct rail link between China and Great Britain. The route of the service will traverse from Beijing, across Asia and Europe, before terminating in London.

The route is actually not new at all. It is part of the old Silk Road, which commenced in 200 BC, through which Chinese silk caravans carried wears to Europe and Africa. The trail provided much wealth and prestige for the Chinese Empire of the day.

Now, Beijing is aiming to resurrect this historic trade route by using rail power. The journey is as much an engineering challenge as a logistical problem. Freight must swap trains along the way, as railway gauges vary between the connecting countries. In its 18-day journey, freight will span 7,456 miles of railways, crossing Kazakhstan, Russia, Belarus, Poland, Germany, Belgium, France and the UK.

related:
5 Upheavals To Expect Along The New Silk Road In 2017
Mapping China's New Silk Road Initiative
Europe Finally Wakes Up To The New Silk Road, And This Could Be Big
Europe, Too, Is Building New Cities Along The 'New Silk Road'
Why The China-Europe 'Silk Road' Rail Network Is Growing Fast
China Is Moving Mountains For The New Silk Road - Literally
Countries Building The New Silk Road - What They're Winning In The Process
How Those China-Europe 'Silk Road' Trains First Began

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China launches freight train to Britain
The train is part of an initiative by Chinese leader Xi Jinping

China launched its first freight train to London on Sunday, according to the China Railway Corporation.

The train will travel from Yiwu West Railway Station in Zhejiang Province, Eastern China to Barking, London, taking 18 days to travel over 7,400 miles.

The route runs through Kazakhstan, Russia, Belarus, Poland, Germany, Belgium and France, before arriving in London. The UK is the eighth country to be added to the China-Europe service, and London is the 15th city.

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China launches first freight train to BRITAIN: Service carrying clothing and bags will travel 7,456 miles and reach London after 18 days

The first freight train from China to London set off on Sunday on a journey that will cover a staggering 7,456 miles.

It departed from Yiwu railway station in Zhejiang Province, China, and will arrive in Barking, London, having been trundling along for 18 days. Its route will snake through Kazakhstan, Russia, Belarus, Poland, Germany, Belgium, France and finally Britain.

The service is being run by the China Railway Corporation. Britain is the eighth country to be added to its list of destinations, with London its 15th city.

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China launches new freight train that will travel over 12,000 kilometers from Yiwu to London

Looking to go to London for cheap? Well, now you can stowaway on a freight train that travels over 12,000 kilometers from the manufacturing hub of Yiwu in eastern Zhejiang province all the way to the British capital. Just make sure to bring some water with you because the trip takes about 18 days.

The first freight train from Yiwu to London was launched on Sunday. It will bring China closer to its ultimate goal of being able to go everywhere in the world by train, along with promoting international trade and cooperation.

Yiwu is home to a multitude of factories that produce everything from the clothes you are wearing to the Christmas decorations you put on your tree. Trains departing from Yiwu West Railway Station will pass through Kazakhstan, Russia, Belarus, Poland, Germany, Belgium and France before finally arriving in London.

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Port of Singapore risks being disintermediated by China’s freight train to London

The first freight train from China to London set off on new year’s day on an epic journey which will cover a staggering 7,456 miles, before returning to Yiwu afterwards. The return journey from London Barking Railway Station to Yiwu Railway Station takes 21 days.

According to American Journal of Transportation, the freight train is operated by Yiwu Timex Industrial Investment Co Ltd and has been running services to Madrid (Spain) via Duisburg (Germany) for over a year.

Brunel Project Cargo which is the UK partner of the new China rail service said that it believes this is going to change the way a lot of forwarders and shippers view their imports and exports for China – particularly with air freight.

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New China-UK rail link to 'revolutionize' freight movement

China launched its first freight service to the United Kingdom on New Year's day, according to the China Railway Corporation.

The service runs from the Chinese city of Yiwu, in the country's eastern Zhejiang province, to Barking in London. The journey lasts for an average of 18 days and more than 12,000 kilometers, according to a Chinese government website.

The route will "revolutionize the way freight is moved from China," Mike White, director of its U.K.-based arm, Brunel Shipping, told CNBC via telephone. He explained that freight transport by sea from China to the U.K. can take twice the time of the new rail link. Also, it offers the potential for "huge savings" on existing air routes.

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China launches freight-train line to London as part of bid to increase trade ties with Europe
A 2014 shot of the first freight train from China to Madrid, Spain. The Asian country is launching a similar cargo train to London

China started a freight train to London as part of President Xi Jinping’s efforts to strengthen trade ties with Europe, according to state-owned China Railway Corp. The train departed Yiwu in eastern Zhejiang province on Jan. 1 and will cover more than 12,000 kilometers in about 18 days before reaching the British city, China Railway Corp. said in a statement on its website on Monday. The freighter, carrying garments, bags and suitcases among other items, will pass through Kazakhstan, Russia, Belarus, Poland, Germany, Belgium and France. Xinhua reported the service earlier.

While the train can carry about 200 containers, versus 20,000 on a large cargo vessel, the trip takes about half as long as a 30-day sailing between East Asia and northern Europe. That will make rail a competitive option when maritime shipments are held up or miss the booked departure, especially compared with airfreight, which costs twice as much, according to Michael White, operations director at Brunel Shipping, the U.K. booking agent for the service.

London is the 15th city in Europe to be added to China’s freight train services to the continent as Xi seeks to reinforce commercial links with markets across Asia, Africa, the Middle East and Europe. In 2013, Xi unveiled his so-called Belt-and-Road initiative, making transport lines the centrepiece of his efforts to create a modern Silk Road.

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The New Silk Route: Freight train from China to Barking launched


A new freight rail route connecting Yiwu West Railway Station in Zhejiang Province with Barking in London has been launched by China Railway.

The route, which has been dubbed the New Silk Route by the Chinese government, will take around 18 days to travel over 7,400 miles carrying a cargo of clothes, bags and other household items.

China Railway already runs services between China and other European cities, including Madrid and Hamburg. The rail line has the advantage of being cheaper than air freight and faster than sea.

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How Those China-Europe 'Silk Road' Trains First Began
A China-Europe Trans-Eurasia train pulling into Khorgos Gateway on the China/ Kazakhstan border. Image: Khorgos Gateway

Direct cargo trains between China and Europe are no longer a logistical novelty but are a core strategy for many companies to get products across Eurasia in less than half the time it takes to ship by sea for less than half the cost of air. Over 1,700 trains have now crossed this continental expanse in as little as 10.5 days, with upwards of 35 routes in operation between dozens of cities in China, Europe, and the Middle East.

However, not long ago this logistical option didn’t exist. Extreme long-distance rail transport needed to be revived, and the man who helped kick-start this process perhaps more than anyone else was HP’s director of global logistics, Ronald Kleijwegt.

“This has been my baby, more or less, organizing this trans-Eurasia rail,” Ronald said to begin our interview. “Actually, where it started was just before HP, because I joined HP in March 2009. Before that I worked for Hon Hai Foxconn, where I was responsible for logistics strategy. At that time, Terry Gou, who's the founder and chairman of Hon Hai Foxconn, was already looking for possibilities to move production to inland China as part of the Go West strategy. Originally, he looked at another province, more in the north, and because of that he asked me if I could look for possibilities to use rail to CIS and Europe. It was more based on the experience and history of the Trans-Siberia rail connection, which historically routed from Vladivostok on the east coast of Russia all the way to Moscow. And he said, ‘Can we not connect right through the Trans-Siberia routes and then go further in?’ And that's how I started.”

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Hungary becomes first European country to join China's Silk Road project

Chinese Foreign Minister Wang Yi and Hungarian Foreign Minister Peter Szijjarto on Saturday signed a cooperation agreement for China's "One Belt, One Road" project, initiated to develop trade and transport infrastructure across Asia and Europe.

Hungary hopes to strengthen the two countries' relationship and speed up the construction of the Hungarian-Serbian railway, which China has helped to finance and build.

Szijjarto told reporters that "Cooperation between the two countries has never been as good or as effective as now" and that Hungary seeks to become the regional hub for China's activities in Europe.

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The Countries Building The New Silk Road -- And What They're Winning In The Process
A peddler and beggar in front of a propaganda poster for the Silk Road Economic Belt in Urumqi, in China's far western Xinjiang region. Image: Wade Shepard

When the Soviet Union fell the political and economic landscape of central Eurasia shattered into a melee of disconnected, dysfunctional shards as 14 new countries suddenly emerged in tandem with a pronounced political and economic vacuum. Whereas the Soviets, to varying degrees of success, organized the various realms under their control according to specific industrial and agricultural specialties — i.e. Georgia would build heavy machinery, Kazakhstan would produce wine, Azerbaijan would provide oil, etc. — and bolstered infrastructural and economic development along these respective designations, each post-Soviet state was suddenly left to rebuild its entire economy virtually from the ground up.

However, almost as soon as the Soviet Union disintegrated, the countries of Central Asia and the Caucasus began looking for ways to reconnect again. Inspiration for the future was soon taken straight from the pages of history. During the days of what had retroactively been dubbed the Silk Road the countries of Central Asia acted as land bridge, connecting the booming markets of China with those in Europe. Ancient Silk Road cities like Xi’an, Samarkand, Merv, Aleppo, and Baghdad all acted as major transshipment and manufacturing centers, where middlemen would relay wares between all points of the Eurasian landmass. While there is certainly a large amount of romance attached to this simplified rendering of history, this rendering is serving as a functional road map as to how the region is moving forward and developing today.

Eurasia, as a contiguous continent stretching from the west of Europe to the eastern coast of China, is rapidly being drawn together into a massive market covering over 60 countries, 60% of the world’s population, 75% of energy resources, and 30% of GDP. Many plans have been brought forth by multiple regional players to guide this endeavor — the most dynamic of which is China’s multi-trillion dollar Belt and Road initiative — but the end goal of them all is the same: to create “win-win” solutions where all parties benefit by pursuing the similar goal of infrastructural development and economic integration.

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What South Korea Thinks of China's 'Belt and Road'

If the 21st century ultimately fulfills its predicted destiny as the “Pacific Century,” future historians will mark 2013 as the watershed year in which the gravity of world power began to tilt toward the Asia-Pacific, and perhaps 2017 as the decisive year of the shift. In 2013, two major economic strategies to strengthen regional cohesion and global connectivity were announced: China’s massive “One Belt, One Road” (OBOR) and South Korea’s “Eurasia Initiative” (EAI). While the former has clearly overshadowed the latter, the relatively tiny South Korea’s aspirations may ultimately hold the key to the success or failure of China’s grand vision because of the pivotal role North Korea plays in the destiny of both countries.

The genesis of both OBOR and the EAI is geography, from which the region’s strategic impetuses flow. As the Western world’s attention has increasingly tilted eastward, manifested in part by the U.S. “Pivot to Asia,” China, in contrast, has turned westward, as well as to its north and south. Not to be outdone, other regional powers have also readjusted their strategic compasses: Russia’s attention is increasingly turning south and east through its “Eastern Dream”; India is turning north and east through its “Act East” strategy; and Japan is turning to its west and south with its “Free and Open Indo-Pacific Strategy.”

These geographic readjustments of strategic priorities are in great part a reaction to the U.S.-centric regional architecture based on the “hub-and-spoke” alliance system that has dominated the region since World War II. OBOR is China’s attempt to build an alternative regional architecture to support its own geopolitical objectives, first and foremost challenging U.S. leadership in the region and ultimately globally. OBOR also serves China’s nearer-term priority of reinforcing its own domestic stability by promoting security in extra-territorial regional neighbors through its economic and political influence.

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A brilliant plan - One Belt, One Road

In just 30 years, China has developed from a poor inward-looking agricultural country to a global manufacturing powerhouse. Its model of investing and producing at home and exporting to developed markets has elevated it to the world’s second-largest economy after the USA.

Now faced with a slowing economy at home, China’s leadership is looking for new channels to sustain its appetite for growth at a time when developing neighbours are experiencing rapidly rising demand. At the heart of One Belt, One Road lies the creation of an economic land belt that includes countries on the original Silk Road through Central Asia, West Asia, the Middle East and Europe, as well as a maritime road that links China’s port facilities with the African coast, pushing up through the Suez Canal into the Mediterranean.

The project aims to redirect the country’s domestic overcapacity and capital for regional infrastructure development to improve trade and relations with Asean, Central Asian and European countries.

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China's Huge 'One Belt, One Road' Initiative Is Sweeping Central Asia

Having overbuilt in many domestic industries—such as coal, cement and even solar panels—the Chinese government is redirecting its capital abroad. The aim is to reduce excessive industrial capacity at home while increasing financial returns. U.S. policymakers ought to be watching this very closely.

One of Beijing’s most ambitious foreign economic development initiatives aims to recreate the legendary Silk Road. Nicknamed One Belt One Road (OBOR), the project wields plenty of financial muscle. It launched in February 2014 with $40 billion—mostly drawn from Beijing’s bountiful foreign exchange reserves.

Since then, OBOR has begun attracting other foreign investors. Singapore’s state-owned development board has agreed to partner with China Construction Bank, committing about $22 billion to finance OBOR projects. International pension funds, insurance companies, sovereign wealth funds and private equity funds have also thrown in on OBOR projects in search of higher financial returns. Chinese infrastructure investment projects now span the globe.

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Modern-day Silk Road Effort Could Challenge US Influence in Asia, Africa, Mideast

China's "one belt and one road" initiative could usher in a new era that sees China as the undisputed geopolitical powerhouse in the region, experts say.

The initiative will establish new routes linking Asia, Europe and Africa. It has two parts — a new "Silk Road economic belt" linking China to Europe that cuts through mountainous regions in Central Asia; and the "maritime Silk Road" that links China's port facilities with the African coast and than pushes up through the Suez Canal into the Mediterranean Sea.

Chinese President Xi Jinping revealed during a speech at the Boao Forum on March 28 in Hainan, China, that China intends to push forward on the initiative that many are comparing to the ancient Silk Road.
"The idea of one belt and one road is based mainly on the economy, but has political and strategic components and implications," said Zhuang Jianzhong, vice director of Shanghai Jiao Tong University's Center for National Strategy Studies. "It aims for the joint development, common prosperity and for energy security, too."
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Thailand Proposes $20bn Silk-Road-Canal

A new canal situated in Southern Thailand called the Kra Canal could be included as part of China’s Maritime Silk Road plan.

According to World Maritime News, a feasibility study of the new canal has already been conducted and shows that the 26-metre-deep and less-than-100-kilometre-long waterway would cost around US$20bn.

Upon completion, the canal is to offer a route that will allow ships to avoid sailing through the Malacca Strait, a region that is expected to become heavily congested in the next ten years. The canal is also anticipated to save up to 48 hours for shipping companies transiting routes between Asia and Europe.

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China Launch World-First Shipping Route

China has launched the first shipping route to connect the Middle East and the Beibu Gulf, south China's Guangxi Zhuang Autonomous Region, which comprises the ports of Qinzhou, Beihai and Fangchenggang, according to Chinese state news agency Xinhua.

The Iranian container ship ‘Perarin’ arrived at Qinzhou Port on January 27, 2016 to deliver 978 containers from several countries along the Maritime Silk Road. The Maritime Silk Road was proposed by China to boost foreign trading in and around the Indian Ocean and as a way to boost trading relationships.

It was previously reported that Li Keqiang, Premier of the State Council of the People's Republic of China had struck a deal with Malaysia as part of its Maritime Silk Road plan. The deal aims to boost business relations between China’s Lianyungang Port and Malaysia’s Port Klang.

related:
New Silk Road Connects London
China in Multi-Billion Dollar Silk Road Drive
Thailand Proposes $20bn Silk-Road-Canal
China in $40 billion maritime plan
China in Silk-Road Policy Drive

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Belt and Road Initiative -- idea from China but belongs to whole world

The Belt and Road (yidaiyilu) Initiative has become the most popular public goods and platform for international cooperation with the brightest prospects in the world amid rising protectionism and unilateralism, Chinese Foreign Minister Wang Yi said on the sideline of the recently concluded China's two sessions.

Proposed in 2013 by Chinese President Xi Jinping, the initiative has witnessed continuous expansion of its "friend circle", and yield tangible benefits for countries along its routes.

It will provide unprecedented opportunities for the economic and social development of countries involved, as "it is the way leading to the community of shared future for mankind," said Gerrishon K. Ikiara, a senior lecturer at the University of Nairobi.

related: China's official Belt and Road portal goes online

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China’s Belt and Road plan ‘open’ to all nations

Officials reiterated on April 16 that the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives will be “open” to all nations and are not limited by geography.

The commitment was made by top government officials at a briefing for foreign diplomats and company representatives held jointly by the International Department of the Communist Party of China Central Committee and the National Development and Reform Commission, the nation’s economic planner.

“The initiatives are open to all and countries that are interested in the initiatives can participate in them. What China has offered is only the vision,” said Ou Xiaoli, deputy director-general of the Department of Western Region Development at the NDRC.

related: FROM INITIATIVE TO REALITY

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China's Strategy for a New Global Financial Order

In late 2013, Chinese premier Xi Jinping announced a pair of new development and trade initiatives for China and the surrounding region: the “Silk Road Economic Belt” and the “Twenty-First-Century Maritime Silk Road,” together known as One Belt, One Road (OBOR).

Along with the Asian Infrastructure Investment Bank (AIIB), the OBOR policies represent an ambitious spatial expansion of Chinese state capitalism, driven by an excess of industrial production capacity, as well as by emerging financial capital interests. The Chinese government has publicly stressed the lessons of the 1930s overcapacity crisis in the West that precipitated the Second World War, and promoted these new initiatives in the name of “peaceful development.”

Nevertheless, the turn to OBOR suggests a regional scenario broadly similar to that in Europe between the end of the nineteenth century and the years before the First World War, when strong nations jostled one another for industrial and military dominance.

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The Silk Road Economic Belt and the 21st-century Maritime Silk Road

The Silk Road Economic Belt and the 21st-century Maritime Silk Road (Chinese: 丝绸之路经济带和21世纪海上丝绸之路), also known as The Belt and Road (abbreviated B&R), One Belt, One Road (Chinese: 一带一路; pinyin: Yídài yílù; abbreviated OBOR) or the Belt and Road Initiative is a development strategy and framework, proposed by People's Republic of China that focuses on connectivity and cooperation among countries primarily in Eurasia, which consists of two main components, the land-based "Silk Road Economic Belt" (SREB) and oceangoing "Maritime Silk Road" (MSR). The strategy underlines China's push to take a bigger role in global affairs, and its need to export China's production capacity in areas of overproduction such as steel manufacturing. It was unveiled by Chinese leader Xi Jinping in September and October 2013 in announcements revealing the SREB and MSR, respectively.

Silk Road Economic Belt - When Chinese President Xi Jinping visited Central Asia and Southeast Asia in September and October of 2013, he raised the initiative of jointly building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road . Essentially, the 'belt' includes countries situated on the original Silk Road through Central Asia, West Asia, the Middle East, and Europe. The initiative calls for the integration of the region into a cohesive economic area through building infrastructure, increasing cultural exchanges, and broadening trade. Apart from this zone, which is largely analogous to the historical Silk Road, another area that is said to be included in the extension of this 'belt' is South Asia and Southeast Asia. Many of the countries that are part of this 'belt' are also members of the China-led Asian Infrastructure Investment Bank (AIIB).

Maritime Silk Road - The Maritime Silk Road, also known as the "21st Century Maritime Silk Road" (21世纪海上丝绸之路) is a complementary initiative aimed at investing and fostering collaboration in Southeast Asia, Oceania, and North Africa, through several contiguous bodies of water – the South China Sea, the South Pacific Ocean, and the wider Indian Ocean area. The Maritime Silk Road initiative was first proposed by Xi Jinping during a speech to the Indonesian Parliament in October 2013. Like its sister initiative the Silk Road Economic Belt, most countries in this area have joined the China-led Asian Infrastructure Investment Bank.

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Singapore as a 21st century maritime silk road

With China being an important trading partner, the Singapore Business Federation (SBF) courts more Chinese companies to choose the Lion City as a modern trade route.

SBF is leading a business mission in the 13th China-ASEAN Expo (CAEXPO) in Guangxi, China where it is promoting the city-state as a hub for the 21st century maritime silk road and modern connectivity.

“Guangxi is an increasingly important regional gateway between China and ASEAN. It is in close proximity to ASEAN countries and forms an important node connecting the Silk Road Economic Belt and the 21st century Maritime Silk Road. Through this mission, we hope to help businesses better understand and participate in the “One Belt, One Road” initiative, and showcase Singapore’s strengths as a modern connectivity hub to investors from China and the region,” said S S Teo, chairman of SBF.

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Reports from the Silk Road

In his separate visits to Kazakhstan and Indonesia in September and October 2013, President Xi Jinping called for joint development of an "Economic Belt along the Silk Road" and a "Maritime Silk Road of the 21st Century".

The "Belt" and the "Road" are two major initiatives that China has made to deepen reform and opening-up and advance its neighborhood diplomacy. They have been written into the documents of the Third Plenum of the 18th CPC Central Committee, the Meeting on Neighborhood Diplomacy and the Central Economic Work Conference, and have been enthusiastically received both at home and abroad.

GT reporters were invited to China's Shaanxi, Gansu and Xinjiang, Kazakhstan and Uzbekistan from May 21 to June 7 to learn about the Silk Road and the people who live along it.

related:
An eye on Xinjiang
China to strengthen media cooperation along Silk Road Economic Belt
Revisiting the Silk Road
19 cities to develop Silk Road tourism
Maritime Silk Road to bring closer China-Maldives ties
Turkey in bid to revive tourism along historical Silk Road


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Silk Road
Silk Road trading routes during the 1st century AD

The Silk Road or Silk Route was an ancient network of trade routes that for centuries were central to cultural interaction through regions of the Asian continent connecting the East and West from China to the Mediterranean Sea. While the term is of modern coinage, the Silk Road derives its name from the lucrative trade in Chinese silk carried out along its length, beginning during the Han dynasty (207 BCE – 220 CE). The Han dynasty expanded Central Asian sections of the trade routes around 114 BCE, largely through missions and explorations of the Chinese imperial envoy, Zhang Qian. The Chinese took great interest in the safety of their trade products and extended the Great Wall of China to ensure the protection of the trade route.

Trade on the Silk Road played a significant role in the development of the civilizations of China, the Subcontinent, Persia, Europe, the Horn of Africa and Arabia, opening long-distance political and economic relations between the civilizations. Though silk was certainly the major trade item exported from China, many other goods were traded, and religions, syncretic philosophies, and various technologies, as well as diseases, most notably plague, also spread along the Silk Routes. In addition to economic trade, the Silk Road was a route for cultural trade among the civilizations along its network. The main traders during antiquity included the Chinese, Arabs, Turks, Indians, Persians, Somalis, Greeks, Syrians, Romans, Georgians, Armenians, Bactrians, and (from the 5th to the 8th century) the Sogdians.

In June 2014 UNESCO designated the Chang'an-Tianshan corridor of the Silk Road as a World Heritage Site.

related: Eurasian Land Bridge

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China's 'one belt, one road' takes to space
A rocket carries two satellites for the Beidou system

China's dream of building a 21st-century Silk Road spanning half the planet was already ambitious. That was before outer space became part of the vision.

Countries along Beijing's flagship Silk Road Economic Belt and 21st-century Maritime Silk Road, better known as "One Belt, One Road", will be among the 1st in line to plug into China's new satellite-navigation services, according to a government policy paper on the country's space programme released Tuesday.

That means people from East Africa to the South Pacific will have access to the Chinese Beidou-2 satellite network, Beijing's answer to the US Global Positioning System, by 2018, with the satellites providing the digital glue for the roads, railways, ports & industrial parks China intends to build on terra firma.

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WHAT BELT AND ROAD SNUB MEANS FOR SINGAPORE’S TIES WITH CHINA
Not invited: Singaporean Prime Minister Lee Hsien Loong. Photo: AFP
Not invited Singaporean Prime Minister Lee Hsien Loong Photo: AFP

China’s decision not to invite Singapore’s Prime Minister Lee Hsien Loong to last weekend’s Belt and Road Forum highlights the still-strained ties between the two countries, observers say, though officials in the Lion City have tried to shrug off talk of any diplomatic rift.

Of the 10 Association of Southeast Asian Nations (Asean) members, only three countries were not represented by their heads of government at the high-level summit in Beijing: Singapore, Thailand and Brunei. Twenty-nine national leaders and the representatives of 28 other countries attended the two-day meeting to discuss the China-led initiative to rebuild the ancient Silk Road trade route through a network of new ports, railways and roads.

The Singapore delegation was led by national development minister Lawrence Wong. In an interview with travelling Singaporean media, Wong revealed that the invitations were decided by China. It was the first official acknowledgement that Lee was not invited.

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China Snub Sees Singapore Miss Out on Belt-Road Billions
China’s plan for a maritime “Silk Road” to Europe is helping channel funds to Southeast Asia for roads, railways and ports. But amid the deals bonanza, one country risks missing out

Despite strong historical and cultural ties to China, the tiny state of Singapore has found itself in Beijing’s crosshairs, in part for its stance over territorial disputes in the South China Sea. As other Southeast Asian leaders lined up to meet President Xi Jinping at a summit in Beijing this week for his Belt-and-Road Initiative, Singapore was represented by National Development Minister Lawrence Wong.


China views Singapore as being less supportive of Xi’s plan because unlike other countries that announced their leaders would attend without requiring a formal invitation, Singapore sought an invite, according to people familiar with the matter. They asked not to be identified because of the sensitivity of the information.
“The cooler political relationship between Singapore and China could have ripple effects which influence economic and trade relations,” said Lu Jianren, a researcher at the China-Asean Research Institute at China’s Guangxi University. “Singapore has been less proactive to work with China while many leaders in the region showed greater enthusiasm that they want Beijing to be more involved in Southeast Asian growth.”

China’s Ministry of Foreign Affairs didn’t immediately respond to a request for comment. “I wouldn’t say we have major problems; we’ve had some issues and some incidents,” Singaporean Prime Minister Lee Hsien Loong has said of China, in an interview aired by the BBC in March.

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What China’s snub of Singapore means

But while nearly half of the 57 countries were not represented by their heads of government, foreign policy experts said Lee’s absence was conspicuous as it provided clues on the extent of the fallout following a protracted diplomatic spat between the two countries over the past year.

Xue Li, a senior research fellow at the Chinese Academy of Social Sciences think tank, said China’s decision not to invite the Singaporean leader reflected a growing belief in Beijing that the Lion City sought only economic benefits from China, while “relying on the US for security”.

“China is gradually recognising this and therefore doesn’t really care if the Singapore PM attended or not,” Xue said.

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Singapore May Miss Out on Belt-Road Billions
China Snub Means Singapore May Miss Out on Belt-Road Billions

China’s plan for a maritime “Silk Road” to Europe is helping channel funds to Southeast Asia for roads, railways and ports.

But amid the deals bonanza, one country risks missing out. Despite strong historical and cultural ties to China, the tiny state of Singapore has found itself in Beijing’s crosshairs, in part for its stance over territorial disputes in the South China Sea.

As other Southeast Asian leaders lined up to meet President Xi Jinping at a summit in Beijing this week for his Belt-and-Road Initiative, Singapore was represented by National Development Minister Lawrence Wong. China views Singapore as being less supportive of Xi’s plan.

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How China snubbed Singapore at the Belt and Road summit

Among the 29 Heads of State who converged on Beijing for the Belt and Road Summit earlier this week were leaders of seven of the ten ASEAN states. One leader was noticeably missing: Singapore’s Prime Minister Lee Hsien Loong.

Various observers have noted this absence, including Hugh White, who suggested it was no co-incidence that, like others - Japan, India, Australia and ‘most western countries’ - who had not sent their national leaders to Beijing, Singapore was aligned with the US and uneasy about China’s rise – ‘or perceived to be so’.

However, it has since emerged that Singapore was never given the choice. China had not invited Singapore’s prime minister in the first place.

This is surprising, especially as Singapore has been one of the biggest advocates of the Belt and Road Initiative (BRI). While many other states were initially hesitant in signing up to BRI, including some of its ASEAN neighbours, Singapore’s support has been unequivocal from the beginning. Many high-level co-operation talks between China and Singapore on the subject have taken place, with both sides warmly welcoming cooperation on BRI.


In light of this past co-operation, Beijing’s snub is significant. It is fair to conclude that, if China continues to freeze out Singapore, there could be significant implications on at least three levels:

  • What it might mean for Sino-Singapore relations
  • Implications for other middle powers
  • Implications for China’s role in the world

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The PM wasn’t invited to Beijing

IT DIDN’T escape notice that Prime Minister Lee Hsien Loong wasn’t at the biggest diplomatic event held in China over the weekend. The guest list was filled with luminaries including his counterparts in the Philippines, Malaysia and Indonesia. There were in all 29 heads of state or government. Singapore was represented instead by Minister Lawrence Wong.
Asked why the PM Lee wasn’t there, he said that the invitation was decided by the Chinese.
So on Sunday, PM Lee was giving out flowers to his Ang Mo Kio constituents on the occasion of Mother’s Day, rather than hobnobbing with other leaders over what seemed to be the most ambitious economic project in recent time.

His absence in Beijing is intriguing and only serves to raise questions about whether Singapore and China had papered over their differences since the seizure of Singapore Armed Forces vehicles by Hong Kong authorities in November last year. Or are the Chinese still pissed off at Singapore’s lack of empathy over its position on the South China Sea?

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PM Lee’s absence in B&R forum in Beijing – is China still throwing a tantrum?

The reply by Minister of National Development, Lawrence Wong, was a curious and perhaps a telling one.

When asked by reporters on Tuesday why Prime Minister Lee Hsien Loong was not attending the Belt and Road forum in Beijing, Mr Wong said “the invitation was decided by the Chinese”, according to the Straits TimesMr Wong did not seem to have elaborated on his answer.

PM Lee’s absence has not gone unnoticed, given how several leaders from Asean countries were among the 29 heads of states who apparently were invited and attended the forum which ran from 14-15 May. Considering that the forum was also an important one, for China especially, the fact that PM Lee was not there is quite curious. After all, Singapore and China share, at least according to official statements, “deep ties’.

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Prime Minister Lee Hsien Loong not invited
The Philippines’ Rodrigo Duterte, Indonesia’s Joko Widodo and Malaysia’s Najib Razak in a photo shared on Najib’s Twitter account. Photo: Twitter

According to China state media South China Morning Post (SCMP), the China central government has confirmed that Lee Hsien Loong was deliberately left out of the invitation at the Belt and Road forum.

Of the 10 ASEAN countries, Singapore Prime Minister’s absence is painfully conspicuous because Singapore is supposed to take over the ASEAN Chairmanship next year (2018).

When interviewed by a foreign media why he was not invited to the China meeting, Lee Hsien Loong gave an awkward silence.

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South China Morning Post SCMP 19 hrs
Why wasn't Singapore's PM Lee Hsien Loong invited to China's Belt and Road Summit?

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China's Belt and Road project could bring opportunities and challenges to S'pore: Minister Lawrence Wong

When asked why Singapore Prime Minister Lee Hsien Loong did not attend the Belt & Road Forum, which was attended by 29 heads of state & government, including many from South-east Asia, Mr Wong said the invitation was decided by the Chinese.

He noted that the focus of the forum was on outbound investments, & in getting Chinese investments abroad and encouraging Chinese companies to go overseas.

"We don't have any specific projects as of now that may be part of this Belt & Road (initiative) in terms of infrastructure," he said.

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New Silk Road to be 'project of the century'
China's president says the plan to build a modern-day Silk Road will be the 'project of the century'.
China's president says the country's multibillion dollar plan to build a modern-day Silk Road will be the 'project of the century'

The 'Belt and Road initiative' - as it is slightly awkwardly titled - is intended to recreate the trading routes of old overland and sea through central Asia, to Europe and beyond, with massive investment in infrastructure along the way.

The ambitious plans span at least 65 countries, including more than 60 per cent of the world's population, and 30 per cent of global GDP.

The estimated $US900b ($A1.2 trillion) cost would make it one of the most expensive development projects ever attempted, and many times the size of the US Marshall Plan to rebuild Europe after the Second World War.

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Singapore Stumbles on China's Road
China Frictions May See Singapore Miss Out on Belt-Road Billions

Despite strong historical and cultural ties to China, the tiny state of Singapore has found itself in Beijing’s crosshairs, in part for its stance over territorial disputes in the South China Sea. As other Southeast Asian leaders lined up to meet President Xi Jinping at a summit in Beijing this week for his Belt-and-Road Initiative, Singapore was represented by National Development Minister Lawrence Wong.

China views Singapore as being less supportive of Xi’s plan because unlike other countries that announced their leaders would attend without requiring a formal invitation, Singapore sought an invite, according to people familiar with the matter. They asked not to be identified because of the sensitivity of the information.
“The cooler political relationship between Singapore and China could have ripple effects which influence economic and trade relations,” said Lu Jianren, a researcher at the China-Asean Research Institute at China’s Guangxi University. “Singapore has been less proactive to work with China while many leaders in the region showed greater enthusiasm that they want Beijing to be more involved in Southeast Asian growth.”
China’s Ministry of Foreign Affairs didn’t immediately respond to a request for comment. “I wouldn’t say we have major problems; we’ve had some issues and some incidents,” Singaporean Prime Minister Lee Hsien Loong has said of China, in an interview aired by the BBC in March.

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Singapore And The Trans-Pacific Partnership (TPP)
Embracing, Leaning & Tilting towards China

Regional Comprehensive Economic Partnership (RCEP)
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The Little Red Dot and the Red Dragon
Singapore China G-to-G Projects