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Business Last Updated: Jul 19, 2014 - 9:38:00 AM


China Focuses on its Maritime Silk Road
By John C. K. Daly, Silk Road Reporters July 17, 2014
Jul 19, 2014 - 9:36:39 AM

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Beginning in Guangzhou, the MSR eventually spanned the Indian Ocean before turning northwards to countries situated around the Persian Gulf. Chinese exports consisted primarily of silk, china and tea, with imported merchandise including spices, flowers and grasses. Up until the Tang Dynasty Anshi rebellions, which broke out in 755 AD, the MSR was viewed as a secondary alternative to the terrestrial Silk Road, but as nomadic turmoil increasingly enveloped Central Asia, trade along the Maritime Silk Road boomed as those on its overland counterpart steadily declined. The MSR flourished until the Ming and Qing Dynasties banned maritime trade, contributing to massive decline in its use.

As the overland Silk Road is slowly being revived in the form of modern Eurasian railroads and roads, so is the MSR, as espoused by Chinese President Xi Jinping during an Oct. 4. 2013 speech to the Indonesian Parliament, where he advocated the construction of a new “Maritime Silk Road of the 21st century.” Lest anyone miss the point, Chinese Premier Li Keqiang repeated the message at the 16th Association of Southeast Asian Nations (ASEAN)-China Summit in Brunei six days later.

The MSR is the nautical counterpart of the “Silk Road Economic Belt,” which Xi proposed during a Sept. 7, 2013 speech at Kazakhstan’s Nazarbayev University. After noting that nations along the Silk Road have a 3 billion population and a market that is “unparalleled” both in scale and potential, Xi remarked that the countries in the economic zone should endeavor to improve traffic connectivity so as to open strategic regional thoroughfares from the Pacific to the Baltic by developing a transportation network that interconnects Eastern, Central, Western and Southern Asia.

As envisaged, the MSR would go transit the Malacca Strait to India, Kenya and then north around the Horn of Africa, entering the Red Sea and using the Suez Canal to enter the Mediterranean before meeting the land-based Silk Road in Venice via the Adriatic. In Jan. Xi pitched the MSR to a senior delegation from the Gulf Cooperation Council countries.

Two months ago, a report in the China Securities Journal provided concrete details of the proposed MSR, noting that a “priority” of the Indian Ocean-based initiative was “port construction” and free trade zones, along with “infrastructure construction of countries along the route, including ports of Pakistan, Sri Lanka and Bangladesh,” with China hoping to “coordinate customs, quality supervision, e-commerce and other agencies to facilitate the scheme.”

The MSR will build on current Chinese Indian Ocean port initiatives. China is already involved in port projects in Gwadar, Pakistan; Hambantota, Sri Lanka and Chittagong in Bangladesh.

And China is providing funding for aspects of the MSR. Speaking last Oct. in Brunei Premier Li announced the establishment of the China-ASEAN Maritime Cooperation Fund with $484 million allocated by China for sponsoring ASEAN maritime cooperation projects. On May 19 the city government of Fuzhou, capital of East China’s Fujian province, signed an agreement with the China Africa Development Fund (CAD Fund) and the Fujian branch of the China Development Bank jointly to establish a $1.6 billion fund support MSR projects.

The MSR initiative, which will deepen Chinese economic and maritime links with both Southeast Asia and Indian Ocean Region (IOR) countries, is perceived as assuaging regional anxieties about China’s growing military and naval presence amid a number of disputes. China maintains that its MSR investment in regional Indian Ocean maritime infrastructure is solely economic, maintaining that the initiative will bring economic benefits to host countries. Chinese Foreign Ministry spokesman Hua Chunying stated that China’s Silk Road proposals are designed to “integrate all the existing cooperation, especially that in the field of connectivity with neighboring and regional countries and enabling everyone to share development opportunities.”

A number of China’s maritime neighbors are not so sure of Beijing’s benign intentions. Beneath the carefully crafted rhetoric is the fact that China has contested claims to large areas in the South China Sea, embroiling it in territorial disputes with several south-east Asian countries. While on June 20 Premier Li said that China is committed to settling maritime disputes through dialogues and negotiations, on the basis of respecting historical facts and international law and pledging to build a “sea of peace” with other countries, China’s disputes with the Philippines, Taiwan, Vietnam, Malaysia and Brunei over the Spratly islands’ 750 islands, islets, atolls and cays remains unresolved.

Other maritime disputes include China occupying some of the Paracel Islands also claimed by Vietnam and Taiwan, while both China and Taiwan both continue to reject Japan’s claims to the uninhabited islands of Senkaku-shoto (Diaoyu Tai) and Japan’s unilaterally declared equidistance line in the East China Sea.

China’s rising naval policy predates the current administration as Xi’s predecessor, Hu Jintao, emphasized the concept of Beijing’s “maritime destiny,” placing it at the center of China’s 21st century strategic thinking, overseeing a dramatic expansion of the PLA Navy. Hu’s naval assertions unsettled China’s neighbors, from Japan to India through the ten ASEAN member state, increasing maritime tensions in Asian waters.

India is the pivotal state for the MSR’s implementation, torn as it is between working together with China on maritime issues even as one of its long-standing foreign policy goals remains of limiting Beijing’s influence in the Indian Ocean. While India and China have no unresolved maritime disputes, Chinese companies have been barred from participation in India’s maritime infrastructure projects due to security concerns and China has yet to resolve questions regarding the sovereignty of India’s Arunachal Pradesh, most of which is claimed by Beijing.

Despite Indian concerns China can be expected to promote the MSR concept, receiving a warm reception from a number of IOR countries, particularly the small island states who are constrained due to lack of expertise and finances. But for the MSR to succeed China must dispel its policy of intimidation of smaller countries with which China has territorial and maritime disputes, which creates suspicion of Chinese intentions, causing those countries to look to the United States for support. Unless China addresses its maritime disputes with Vietnam, the Philippines, Malaysia and Indonesia, Southeast Asia may prove well an intractable obstacle to Chinese efforts to develop a Maritime Silk Road to India, Africa and into Europe.


Source:Ocnus.net 2014

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