The problem for China’s new silk road

From the FT:

…Beijing wants to build a new Silk Road across the Eurasian landmass, equal in economic and cultural significance to that ancient precursor. Its ambition is leading it to make deals in a volatile region from which the west — in its preoccupation with east Asia — is essentially withdrawing.

Oil-rich Kazakhstan has pledged $40bn to revamp its railway network. Russia is among the other needy countries that Beijing hopes will build sections, possibly with Chinese loans. But it is in Afghanistan and Pakistan, two of the region’s least-stable countries, that hopes are running highest.

…The Chinese are not offering a free lunch. Beijing wants an end to the civil war in Afghanistan, and a settlement between the government and the Afghan Taliban. It is trying to nudge Pakistan’s army to end its selective support for terrorist groups, crush the Taliban in the country and bring a peaceful end to the separatist insurgency in Baluchistan province, along the route of the corridor. The Pakistan army has promised to raise a new division of 10,000 troops to protect Chinese engineers and workers — but that is not the same as ending the violence. Chinese engineers have been attacked, kidnapped and killed in both Pakistan and Afghanistan.

The magnitude of investment that is being considered has its own power to stabilise troubled regions by bringing many winners across old conflicts.

But let’s not kid ourselves here. These are basically failed states that China is dealing with across central Asia. They barely exist in terms of collective identity, have only the basic rudiments of good government and have precious little civil society to glue the whole thing together. If you add China’s strategic agenda, graft and foreign workers to that mix sure and night follows day you are going to upset some armed and dangerous folks.

Put another way, China has about as much chance of seamlessly subduing these nations to its development agenda as Western powers had at the point of gun.

The new silk road will probably add something to global infrastructure demand in the medium term but pinning your hopes on this as a saviour for oversupplied commodities is pretty desperate stuff!

Comments

  1. This type of issue helps explain why silk was so expensive centuries ago while plentiful in China itself.

    There was a risk in transporting it which redoubled the initial low value.

  2. St JacquesMEMBER

    Silk was relatively cheap in China because under the Ming Dynasty people were required to pay tax in silver coin. The result was everyone put aside some of their land for Mulberry trees to raise silk worms resulting in a massive oversupply of silk.

  3. China has ALREADY built freeways and and ports in Pakistan and has done a great deal of work in Afghanistan.

    Their freeways and ports are set to revolutionise Pakistan.

    Not entirely sure how anyone could not be aware of these projects – they were massive.

    Eitherway it is also troubling that people are not aware of how Chinese foreign policy works in these types of places – they have transformed failed states all over the world. Right through Africa, Myanmar and many other “failed” places.

    Quite a strange lack of knowledge really.

  4. Kazakhstan is far from a failed state. Dictatorship – yes, corrupt – yes, failed state – no.

    Afghanistan will always be unstable as it is tribal lands where tribal people are unlikely to change their ways. And they don’t take kindly to submitting to outsiders.