EFOP-3.4.

3-16-2016-00014

Dr. László Gulyás, PhD

General Overview
A Brief Introduction to the Belt and Road Initiative

This teaching material has been made at the University of Szeged,

and supported by the European Union. Project identity number:
EFOP-3.4.3-16-2016-00014
 Class I: General Overview

Estimated reading time:

18-20 minutes
Estimated learning time:
Dr. László Gulyás, PhD
45-60 minutes

Class I: General Overview

Summary

This class gives a general overview about the Belt and Road Initiative. It introduces the
main goals of the project and explains how the People’s Republic of China aims to
achieve those goals.

Topics of the class include:

- Defining the main goals of the Initiative

- Showing the main institutions behind the Belt and Road Initiative
- describing the planned land routes and planned sea route of the project
- Said routes can be easily identified using the maps

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 Class I: General Overview

The so called Silk Road Economic Belt was announced by Xi

Jinping in September 2013 in Kazakhstan -it is an interesting
fact why Kazakhstan was chosen as the point where the
announcement was made and we will get to there once we get
to the Central Asia part of this course. In October 2013 the
concept of the Maritime Silkroad expanded the Economic
Belt plan into the One Belt One Road Initiative. The Maritime
Silk Road was announced in Indonesia.
Basically what it was and is, is the People’s republic of China’s
1. picture: Xi Jinping
newest “5 year plan” for both economy and foreign policy. Photo by: Adnilton Farias
https://commons.wikimedia.org/
Obviously, it is going to take way longer than 5 years to actually wiki/File:Xi_Jinping_2019.jpg

reach all goals previously set but the “spirituality” is the same.

The official name of the Initiative changed in mid 2016 to Belt and Road Initiative,
but it is still widely known as 一带一路

The main objective of China is to take a larger role in global affairs with a China-
centered trading network, in order to ensure the economic growth of the country
and to make it sustainable in the long run.

Another important factor is that it favors free trade with the efficient allocation of
resources. It was/is a very good opportunity for China because the US has turned down
the Transatlantic Trade and Investment Partnership (TTIP) with the European Union
and also withdrewn from the Trans-Pacific Partnership (TPP). Ever since the US is
gradually turning towards isolationism and protectionism all the while China is opening
up more and more.
But still there are questions regarding the Initiative. Can it be considered successful so far?
Is this cooperation really beneficial for the associated – most third world – countries? In
the upcoming 10 lessons we will be trying to cover both sides of this question.

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 Class I: General Overview

First and foremost we need to look at the Initiative and define its objectives.

The main goals are:

• policy coordination: this means that the associated countries create joint
development plans with China and with each other and basically focus on
cross-national cooperations.
• facilities connectivity: this aspect focuses on the advancement of
transportation routes throughout numerous countries, both land and sea; also
facilitates the building of ports, railways, highways, airports; furthermore it
increases the area where modern communication devices and the internet is
available – obviously this is the most important thing for developing countries;
and last but not least the most important element is the making of new
pipelines between the oil producing countries and the People’s Republic of
China
• unimpeded trade: reduce investment and trade barriers among the
participants, lower trade (customs) and investment costs, additional taxes;
promote the usefulness of wide economic integration
• financial integration: That does not mean the introduction of a common
currency – especially since it would go against Beijing’s plan to make the Yuan
an internationally accepted currency. What it means is cooperation in
monetary policy, acceptance of local currencies throughout certain regions
(South-East Asia, Central Asia and so on), generally deepen multilateral
financial cooperation. Furthermore the aim is also to set up financial
institutions or manage financial risks through regional arrangements.
• and people-to-people connectivity: exchanges and dialogues between
different cultures, strengthening friendly interactions between countries and
regions and so on.

The pragmatical implementations consist of the joint development of the program

through continuous consultation with all interested parties. Existing bi- and multilateral

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 Class I: General Overview

cooperations will be utilized to promote the integration of the development plans of the
countries along the route.

Institutions behind the Initiative

Beside the People Republic of China’s government, a number of institutions are also taking
a very important role in the implementation of the Initiative. These are:
Silk Road Fund: The US$40 billion (at least at the start) Silk Road Fund has been
established to finance the Belt and Road Initiative. Its main purpose is to invest in
infrastructure and resources, as well as in industrial and financial co-operation. The Fund
was set up in December 2014 with its founding shareholders including China’s State
Administration of Foreign Exchange, the China Investment Corp, the Export-Import Bank
of China and the China Development Bank. The Fund will comply with market rules and
the international order of finance, and welcome participation from domestic and
overseas investors, such as the China-Africa Development Fund and the Asian
Infrastructure Investment Bank. The first capital installation of the Fund amounts to
US$10 billion. On 14 May 2017, President Xi Jinping delivered a keynote speech at the
opening ceremony of the “Belt and Road Forum for International Co-operation”, and
announced that China would contribute an additional 100 billion yuan to the Silk
Road Fund.
The Asian Infrastructure Investment Bank (AIIB), a new multilateral development
bank (MDB), has been set up with a view to complementing and co-operating with the
existing MDBs in order to address infrastructure needs in Asia. AIIB will focus on the
development of infrastructure and other productive sectors in Asia, including energy and
power, transportation and telecommunications, rural infrastructure and agriculture
development, water supply and sanitation, environmental protection, urban development
and logistics.
It started operating in 2016 January. As of 2020 June it has 82 member countries and 20
prospective members.

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 Class I: General Overview

Six main paths:

New Eurasian Land Bridge, running from Western China to Western Russia
From Jiangsu Province to Xinjiang and then Kazakhstan, Russia, Belarus, Poland and
finishes at Rotterdam, Netherlands. Capitalizing on this concept China has started a new
international freight railway linking Chongqing to Duisburg, Germany. another linking
Chengdu to Lodz, Poland. It makes the moving of cargo so much easier and also shortens
inspection times, because authorities are checking manifests much more rarely.

2. picture: The New Eurasian Landbridge (source for the World Map: https://en.wikipedia.org/wiki/File:Afro-
Eurasia_location_map_with_borders.svg; the route and coloring is done by the author of this paper

China–Mongolia–Russia Corridor, running from Northern China to Eastern Russia

Russia and China has a long history and a changing relationship. Nonetheless trade has
been established between these two countries a long time ago. Mongolia also got involved
as a sort of an intermediary between the other two sides. In September 2014 agreement
was reached between the parties on forging a tripartite cooperation based on bilateral
ties. That is China-Mongolia, Mongolia-Russia, and China-Russia. During the same meeting
the basics of an actual trilateral cooperation were also defined. Furthermore both Russia
and Mongolia pledged themselves to the New Silkroad concept. They have agreed to

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 Class I: General Overview

strengthen the highway and railway connectivities between their countries which will
obviously help to invigorate trade between their states. And in the long term this will help
China establish the China-Russia-Mongolia Economic corridor.

3. picture: The China-Mongolia-Russia Economic Corridor (source for the World Map::
https://en.wikipedia.org/wiki/File:Afro-Eurasia_location_map_with_borders.svg; the route and coloring is
done by the author of this paper)

China–Central Asia–West Asia Economic Corridor, running from Western China to

Turkey
Starts from Xinjiang and exits China in Alashankou, goes through Central Asia and then
West Asia, then the Middle-East, finally reaching the Mediterranean. This corridor mainly
covers 5 countries in Central Asia, the “Stans”, also the Northern parts of Iran and finally
Turkey. In June 2015 the five Central Asian Stans have affirmed their willingness to help
build the Silk Road Economic Belt jointly, all of them together. Before that those countries
had bilateral agreements with China but their relationship with each other was not clear
even from a trade aspect. With this mutual cooperation all of these Central Asian countries
could deepen and expand cooperation on multiple basis: not just trade, but investments
in general, also transportation and communication. Each of these countries have their

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 Class I: General Overview

own plan for modernization and economic growth which overlaps nicely with China’s aim
for the new Silk Road.

4. picture: The China-Central Asia – West Asia Economic Corridor (source for the World Map:
https://en.wikipedia.org/wiki/File:Afro-Eurasia_location_map_with_borders.svg; the route and coloring is
done by the author of this paper)

China–Indochina Peninsula Corridor, running from Southern China to Singapore

Regarding the area of Indochina a proposal was made by China in December 2014. The
suggestion included a plan to build and use jointly an extensive transportation network,
to invest in large industrial projects, to provide an appropriate environment for
investments and last but not least to ensure the continuous and sustainable economic and
social development of the countries on the Indochina Peninsula. The investments so far
focus on the countries along the Mekong River: there are many highways being built as of
now, and some of them have already been finished. Also there is an international rail line
from Nanning to Hanoi, and there are numerous airports being upgraded in order to be
able to receive more planes and adding more international air routes heading to Southeast
Asian cities.

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 Class I: General Overview

5. picture: The China-Indochina Peninsula Economic Corridor (source for the World Map:
https://en.wikipedia.org/wiki/File:Afro-Eurasia_location_map_with_borders.svg; the route and coloring is
done by the author of this paper)

China–Pakistan Corridor, running from South-Western China to Pakistan

The concept was first raised by Premier Li Keqiang during his visit to Pakistan in May
2013. At the beginning the objective was to build an economic corridor running from
Xinjiang to Pakistan’s Gwadar Port in the South. There are long-term plans for building
railways, highways, oil and gas pipeline between the south of Pakistan and Xinjiang. As of
2015 there is also a plan for building and maintaining a new airport for international air
routes and also to ensure high speed communication and internet by stretching optic fiber
networks from Pakistan to China. Furthermore, the parties have stated their aim to repair
and upgrade and at many places completely rebuild the Karakoram Highway.

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 Class I: General Overview

6. Picture: The China-Pakistan Economic Corridor (source for the World Map:
https://en.wikipedia.org/wiki/File:Afro-Eurasia_location_map_with_borders.svg; the route and coloring is
done by the author of this paper)

China–Myanmar–Bangladesh–India Corridor, running from Southern China to

Myanmar
So far it is more like an agreement to advance connectivity between countries and to make
the basis for further cooperation regarding infrastructural upgrades, investments and
commercial relations. But it has more political problems than the rest of the Economic
Corridors. There are security issues about border questions and also there is the difficulty
of the Indian-Pakistani relation. Beijing and New Delhi can and should find more areas of
cooperation on non-traditional security issues, such as food security, water, energy,
strategic metals, common concern over environmental protection and climate change and
reforming the post-war international economic order. But so far this is the least developed
part of the New Silk Road concept.
However India was always dismissive of the project from the get go. As time has passed
and Beijing tried to pressure New Delhi to participate, the Indian government became
more and more reluctant to join, eventually becoming hostile towards China. After the
second Belt and Road Initiative Forum in 2019 this Economic Corridor has dropped out

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 Class I: General Overview

from the Belt and Road Project. Even previously it was only considered as a semi-official
part of the Initiative or more like as a project that was related to it. We will be talking
about the reasons for this when we get to the China – Pakistan Economic Corridor.

7. picture: The planned China-Bangladesh India Economic Corridor (source for the World Map:
https://en.wikipedia.org/wiki/File:Afro-Eurasia_location_map_with_borders.svg; the route and coloring is
done by the author of this paper)

21st Century Maritime Silk Road, running from the Chinese Coast through
Singapore to the Mediterranean
The 21st Century Maritime Silkroad can be considered (the CPEC is the other) the most
well-used and has made the most progress since the announcement. It goes from the
South China Sea to Northern Indonesia and to Singapore and then through the Straits of
Malaca towards the Indian Ocean. It utilizes the Pakistani port of Gwadar then goes to the
Red Sea (and to some extent to Kenya). After crossing the Suez Canal the route ends in
Greece and in Italy – with option to make new ports in Spain).
There will be a whole class about the Maritime Silk Road. The reason for this, is that the
New Silk Road has some historic roots to it, but the Maritime Silk Road concept can be
considered completely new and full of unprecedented challenges.

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 Class I: General Overview

8. picture: 21st Century Maritime Silkroad (source for the World Map:
https://en.wikipedia.org/wiki/File:Afro-Eurasia_location_map_with_borders.svg; the route and coloring is
done by the author of this paper)

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 Class I: General Overview

Questions for Self-Checking

1. What is the main objective of the Belt and Road Initiative?

2. Through what goals does China wants to achieve this objective?

3. What are the main routes for the Initiatives?

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