At the recent Innovation Circle Network conference I spoke about China’s One Belt One Road vision. This blog sketches and comments on this ambitious transnational project.
In January 2017 the East Wind arrived in London. The freight train’s journey had taken 16 days and covered 12,000kms from when it left China, halving the time a similar maritime trip would have required. It is part of a new and growing reality. In 2016, 1702 freight trains from China arrived in Europe, twice the number from the previous year. This is just one element n the dramatic implementation of the One Belt One Road idea that China launched in 2013. At a time when the European Union has cooled towards the idea of spatial planning, and many Western nations see planning as a local regulatory system, a very different approach is being delivered in China, and from there across the globe.
What has been called “The New Silk Road” anticipates an investment of $5trillion across 60 countries traversing Asia, the Middle East, Europe and Africa. To give a perspective, the only comparator is the post-1945 Marshall Plan to rebuild Europe’s war-damaged economy. That covered 16 nations and came in at $13billion. One Belt One Road has been called the project of the 21st century and it is easy to see why. The countries currently impacted constitute 63% of the world’s population and 29% of its GDP. By 2030 66% of the world’s middle class are expected to live in Asia: China is planning to connect these growing markets.
The Sea Route
Major port developments are a key part of the strategy. These include the Malaysia Malacca Seaside Industrial Park, the port-industrial park-city mode of integrated development of the Kyaukpyu port in Myanmar, the Colombo Port City and the Phase II Hambantota Port Project in Sri Lanka. The Sri Lankan ports have been somewhat controversial: the President suspended work in 2015 after visits by Chinese naval vessels, but with Sri Lanka owing China some $8billion, work eventually recommenced. In Pakistan the development of a port at Gwadar, together with a linked international airport, is the country’s largest infrastructure project since independence. In Africa, there is to be a railway linking Ethiopia and Djibouti, and a railway between Mombasa and Nairobi in Kenya.
Kumport is Turkey’s third largest port. Three state-owned Chinese companies have purchased it, and it is being developed as a hub to lnk the land and maritime routes. Similarly the Athenian port of Piraeus is now 51% Chinese owned. It was sold after the EU told Greece that publicly-owned assets had to be privatized as part of the austerity programme imposed on that country.
As global warming mlts the ice, the northern link in the sea belt is through the Arctic, an area rich in oil, gas and mineral resources. There is again a new port, Sabetta, and pipelines connecting these sparsely populated lands to markets in Europe and Asia. While the other Nordic countries have so far stood back, Finland and Iceland are showing interest in the potential of this northern link.
The Chinese expertise in planning and building high speed railways and associated infrastructure is to be used to create a 3000kms network connecting China to Singapore and including other major south-east Asian hubs. The China-Pakistan Corridor will literally pave the way from China to the oil resources in the Middle East. Special Economic Zones and development hubs are planned along the route. In additiion, there is a network of gas pipelines across central Asia.
The official EU position is cool. It states that any scheme connecting Europe and Asia should adhere to market rules and international standards, and should complement existing networks and policies. While the EU has set out its plans for investment in trans-European networks, it stops short of the kind of ambition being shown by the Chinese. However, many countries in central and eastern Europe are more enthusiastic. They have formed the Group of 16+1, the “plus one” being China. Thus countries that include Poland, the Baltic States, Hungary, Albania, Montenegro and Serbia meet annually with China, and have become advocates. Latvia has endorsed One Belt One Road, for example. Meanwhile one of China’s top state-owned enterprises is building a rail link between Budapest and Belgrade. The EU has expressed concern over the way that the tendering of the project was done.
Spatial planning and economic integration
One Belt One Road is an exercise in using transnational spatial planning, that is not just indicative, but ather backed by investment in big infrastructure, to promote economic integration. In today’s world, production is rooted in value chains that typically transcend national boundaries. China is putting in place the networks to deliver all stages of production – and distribution – to its doorstep. One Belt One Road will facilitate access to the energy and raw materials it will need as pressure builds on these finite resources. It will also allow the low value end of production to be outsourced to neighbouring but connected countries as China itself moves up the value chains. The strategy will help China to reposition itself in the international division of labour. Meanwhile, in the short term, it sustains demand for Chinese products and labour, particularly in the construction sector which has been so vital to the country’s economic growth and domestic stability.
As many EU countries still struggle to recover from the economic crash of 2007-08, nourishing xenophobic politics, the contrast is very clear. Cohesion Funds have been a sticking plaster, not a transformative response. Once Brexit is out of the way, might EU revisit the scope and purpose of spatial planning?
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