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MASTER TALK: Ex-Italian PM on "The New Silk Road"
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Ex-Italian PM on "The New Silk Road"

By Richard Cook


BT 201507 07 Master talk Nankai AlmaFormer Italian Prime Minister Romano Prodi was in Tianjin to share his view about the concept of the 'New Silk Road'. Visiting Tainjin and Nankai University, Mr. Prodi was here to promote further dialogue between Europe and China, following a string of successful trade deals last year. Nonetheless, he had picked a sticky topic to talk about. Until only recently, did international relations scholars and economists start to put their finger on what these words actually mean. Plausibility and practicality are some significant issues that surround the troubled concept. President Xi Jinping stated two months ago, "China should adopt big country diplomacy", coinciding with calls for regional principles, framework and cooperation priorities when addressing the New Silk Road, Belt and Road Initiative". However, it provides a vague idea on trade and regional diplomatic design by Beijing.


Despite media perceptions following the recent APEC summit and calls for the development of a multilateral agreement on the Free Trade Area of the Asia-Pacific (FTAAP), China notably favours bilateral linkages over multilateral. A given example of this is the 339 free trade agreements in use with the ASEAN+6 bloc, most of which are bilateral. Termed the "noodle bowl", why is China displaying public remarks for a multilateral development with its New Silk Road project but sitting back on bilateralism?


BT 201507 08 Master talk China Pak CorridorMr Prodi remarked that, bilateral diplomatic dialogue is favourable to China's geopolitical and economic position. It facilitates a regional bandwagon, for the states expected to be involved in the project, as well as a backyard market for Chinese economic expansion. In terms of economic and geopolitical leverage, this is strategy "gold".


He went on to state, "cases for bandwagoning and forum shopping have raised the eyebrows of many scholars because of the New Silk Road bilateral talk"."Global factors, as well as regional ones, mean that countries wishing to be involved are somewhat nominally dependent on bilateral Chinese trade. For the countries mentioned in the New Silk Road concept, their biggest trading partner is China". Thus, it is clear to see the status quo is favourable to China.

BT 201507 10 Master talk HL01Yet what is amiss about the New Silk Road? Mr. Prodi was quick to point out the potential pros of a New Silk Road that would span from China to Europe, citing the potential importance that his own nation could play in this vast trade network. However, he then rebuffed some remarks when three major geopolitical concerns were addressed. If we look at the map we can see these are three pretty large obstacles.


Let's begin with the northern route, passing through Russia. Ultimately this is not entirely impossible as it correlates with developing Chinese economic interests in Central Asia and the ties with Russia. The problem emerges following the EU sanctions and withering diplomatic dialogue. Mr. Prodi boldly stated that in this topic area, "the EU really needs to think for itself and less about the American position". Recanting this theme, he noted that a northern Silk Road route could offer economic incentives to mend diplomatic problems between the EU and Russia.


The Southern land route is of greater concern. Diplomatic stand-offs are frequent between the West and Iran. With the US-Iranian nuclear deal headlining recently we can see immediate problems for stable trade through this area. Even more significantly we need only follow the route a little further west to see an even larger issue, that being ISIL. How can a secure trade route be established here? It can't!


BT 201507 11 Master talk HL02Mr. Prodi agreed that the more plausible and conceivable strategy is the Maritime Silk Road. Although already in use, China and participant states wish to expand trade operations drastically. Already underway, are naval trade infrastructure developments in Sri Lanka and Kenya. On top of this, dialogue with India has become a priority. Other correlations point to the South China Sea and activity there. China's reclamation here points to her strategic capability reach focusing on the vastly important Straits of Malacca. This narrow stretch hosts 60,000 trade vessels every year. Of these ships over 20,000 are oil tankers. Of these oil tankers, 75 percent - 90 percent are destined for China, meaning China's energy security is critically tied to the strait. To bring this into scope, considering the steep cost of establishing new shipping routes, coincidently the development of the Maritime Silk Road route slots perfectly into China's socio-economic needs.


The Straits of Malacca, as well as other areas on the route are subjected to frequent piracy attacks, involving kidnappings and attempted robbery. The Asia Pacific region has far more maritime incidents than any other, as noted by Control Risk: Maritime Risk Review 2014. From this point Mr. Prodi acknowledged that more needed to be done in terms of maritime security. Yet in order to do this, a multilateral approach would be necessary.


BT 201507 09 Master talk nsrPiracy in the Gulf of Aden, known to most as the Somalia Piracy issue was another key point. Mr. Prodi stated the need for intensified military patrols to safe-guard economic expansion of the sea route.. The fundamental question here is regarding the Chinese People's Liberation Army Navy (PLAN) projection capabilities and the impact that it may have. Can the PLAN operate so far away from home without any overseas military bases in the region? And would such operations display an expansive China, in terms of interests? Mr. Prodi then cautiously reminded the audience that potential New Silk Road participant's may not possess the security forces able to protect an enlarged shipping lane such as this. European navies are already stretched thin by operation standards.


Despite these facts, strategically speaking, the Maritime Silk Road fits perfectly into Chinese regional economic aspirations on all accounts: Diplomatic leverage, further bilateral linkages, greater power projection capabilities and economic development. Yet favourable factors have not entirely risen for the other perceived land routes. Mr. Prodi is not the only person to deliver some scope on this issue. A whole host of leaders, former leaders, foreign ministers and economists have all tried to provide analysis on the topic. Until recently, none had significant concrete conjectures thanks to Beijing's puzzling array of statements. When asked to sum up the New Silk Road project in one phrase Mr. Prodi chose to say, "When assessing China, actions really do speak louder than words... overlook what's been said and instead look at actions case by case".


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