Silk Road Summit. China is creating a new world economic order. Russia is sending oil and gas to China
These days, Beijing has become the world capital. From Moscow to Beijing by train in two days. Is this possible? Perhaps quite soon. Today Russian President Vladimir Putin arrived in Beijing to participate in the “One Belt, One Road” forum. 28 heads of state and government attended the forum.
We all know about the Great Silk Road from China to Europe. It has existed for thousands of years, dating back to the times of the Roman Empire. It was along this route that gunpowder and paper, Chinese inventions, came to Europe. Then China weakened, and the Great Silk Road was no longer needed. China is strong again. And several years ago he took the initiative of a new project - the revival of the great path. And even more. It's not just a path. This is a project to involve most Eurasian countries into a single economic space.
The construction of a high-speed railway from the Pacific Ocean to the Atlantic is in the plans of this grandiose project. Therefore, it will actually be possible to travel from Moscow to Beijing by train in two days.
If we talk in general about this initiative, “One Belt - One Road,” then it is still difficult to even estimate the total investment. But it is clear that we will be talking about trillions of dollars. And Russia, with its vast space, reserves of natural resources, and scientific potential, can play a leading role in this project.
The opening ceremony is more than laconic - more than three years after the Chinese first mentioned the grandiose project “One Belt - One Road” at the forum, decorations are no longer needed to attract attention. There are almost three dozen heads of state in the hall. Those who are called friends in the Middle Kingdom are in the first row, to the left of Chinese President Xi Jinping, Turkish Recep Erdogan, to the right - Russian President Vladimir Putin. The Russian leader came to the podium second. And his speech went far beyond formal words about Russian-Chinese friendship. Putin spoke about the future of all of Eurasia, a partnership that could change the political and economic landscapes of the entire continent, and perhaps the whole world.
“Many previous models and factors of economic development are practically exhausted. Protectionism is becoming the norm, and its hidden form is unilateral illegitimate restrictions, including on the supply and distribution of technologies. The ideas of openness and free trade are increasingly rejected today. And often by those who recently acted as their champions. Imbalances in socio-economic development and the crisis of the previous model of globalization lead to negative consequences for relations between states and for international security.
Poverty, social disorder, and colossal gaps in the level of development of countries and regions create a breeding ground for international terrorism, extremism, and illegal migration. We will not cope with these challenges if we do not overcome stagnation and stagnation in global economic development,” said Vladimir Putin.
The Eurasian megaproject “One Belt - One Road” is essentially the same Great Silk Road along which caravans with gunpowder, spices and silk, of course, traveled from Asia to Europe even before our era.
The modern interpretation of the Silk Road combines land transport corridors, railways, especially, and sea transport routes. Southern, from China to Greece, skirting the shores of Asia and the East. And the Northern - otherwise, the Russian Northern Sea Route, the potential of which Vladimir Putin reminded today.
“We are consistently modernizing the maritime, railway, and automobile infrastructure, expanding the capacity of the Baikal-Amur and Trans-Siberian Railways. Significant resources are being invested in developing the Northern Sea Route so that it becomes a global competitive transport artery. Taking a broader view, the infrastructure projects announced within the framework of the EurAsEC and the One Belt - One Road initiative, in conjunction with the Northern Sea Route, are capable of creating a fundamentally new transport configuration of the Eurasian continent. And this is the key to the development of territories and the revival of economic and investment activity. Let’s build such roads of development and prosperity together,” said Vladimir Putin.
On the sidelines of the forum, the Russian president spoke, as diplomats say, on his feet with Turkish leader Recep Erdogan. In total, representatives from hundreds of countries come to Beijing. Nobody wants to be left on the side of the new Silk Road. Many capitals on the route from Beijing to London are counting on multi-billion dollar investments from the Middle Kingdom. Russia is among those countries that are ready to independently invest in the future of a united Eurasia.
“Russia is ready not only to trade, but also to invest in the creation of joint ventures and new production facilities on the territory of partner countries, in the development of industrial assembly, sales and services. It is important that entrepreneurs in our countries earn money and achieve success together and create competitive technological and production alliances. For such cooperation to be effective, it is necessary to move towards unification, and in the future, towards the development of uniform standards and technical regulations for both traditional industrial and agricultural products, and for new high-tech products,” said the Russian President.
Even the melody of the song “Moscow Windows,” which Vladimir Putin performed on the piano while waiting for the start of a bilateral meeting with the Chinese leader, was in the spirit of a world without borders.
China highly appreciates the fact that Russia opposes the policy of protectionism, that despite sanctions, it has overcome difficulties in development and refrained from belligerent rhetoric.
“In the face of the complex and rapidly changing situation in the world, China and Russia have shown a sense of responsibility as great states, making efforts to politically resolve the situation in Syria, the nuclear issue of the Korean Peninsula, and played a stabilizing role in ensuring peace,” Xi Jinping said.
“More than ever, we need new mechanisms for cooperation, opening doors for each other, removing various barriers and obstacles. We managed to overcome negative trends and achieve renewed growth in bilateral trade turnover - by 4% in 2016, and in January-March of this year the growth rate was already 37%. But what is especially important and what makes us happy is that the structure of our trade turnover is changing, the share of mechanical engineering and agricultural products is increasing. Moreover, these are flows in both directions,” noted Vladimir Putin.
The leaders of the two countries discussed the further development of relations behind closed doors. They came into view of television cameras again only during a working breakfast.
Russian reception house in one of the mansions. Following his Chinese friend, Putin receives European friends: the leaders of the Czech Republic and Greece.
The meeting with Milos Zeman immediately went beyond the formal protocol. That this would be a friendly conversation became obvious when the Czech president refused an interpreter and addressed Minister Lavrov in Russian.
Milos Zeman: “Mr. Minister, are you a smoker like me? But Mr. President prohibits smoking.”
Sergei Lavrov: “Not so much Mr. President as our State Duma.”
Vladimir Putin: “Several years ago, we also met with you here in China on the sidelines of an international event... Translation?”
Milos Zeman: “There is no need to translate, we all understand, some kind of Russian dialect. Maybe it’s a dialect of Russia.”
Vladimir Putin: “Literary Russian language.”
Milos Zeman: “Yes!”
Vladimir Putin: “In the economic sphere, despite the decline in previous years, we have seen an increase in trade turnover at the beginning of this year. Even more than 44%. This is a good sign and a good trend that we will need to continue.”
Milos Zeman: “The number of tourists is growing, this is very positive.”
During the negotiations with Greek Prime Minister Alexis Tsipras, it was no longer possible without translators. And still, things are going uphill - the flow of tourists and trade turnover between Moscow and Athens are growing. Integration cooperation between the countries of Eurasia is already not only generating billions in profits and hundreds of thousands of jobs, but also helping to overcome social unsettlement and the gap at the level of development of countries. However, each of the regions of the vast continent still has a list of unresolved problems.
The Russian delegation brought a ready-made solution to the forum - the “Energy Ring” project developed by Moscow. Moscow has long been ready to begin deliveries. They are even more relevant now that China is thinking about the electric silk road - the Asian Ultra-High Voltage Network. And judging by the way Vladimir Putin is received in China, it is obvious that Russia and its continental neighbors have more than one project of similar magnitude ahead.
After a meeting with the Premier of the Chinese State Council, a joint photo of the premiers and presidents, the evening of the distinguished guests of Beijing continued at a gala dinner. The first toast is from Chinese President Xi Jinping.
When it was already dark outside, the participants of the first Belt and Road Forum also had a gala concert at the Chinese Grand Theater. At first glance, it is a completely traditional oriental show, but if you look closely, it is a mixture of cultural traditions from the entire continent.
On Sunday, May 14, the summit in Beijing dedicated to the New Silk Road (NSR) project initiated by China began with a scandal. Representatives of EU states, after discussing a number of trade issues with the Chinese side, refused to sign the planned joint statement, dpa agency reports, citing informed sources.
Context
According to them, China rejected proposals from European partners regarding compliance with social and environmental standards, as well as transparency and the provision of government contracts in the implementation of the NSR project, after which the leaders of the EU countries notified Beijing that they would not sign the statement.
In addition, the atmosphere of the forum was darkened by reports that the DPRK had conducted another test of a ballistic missile, which rose to an altitude of about 2000 meters above sea level and flew about 700 kilometers.
China will contribute another 100 billion yuan to the NSR project fund
Meanwhile, Chinese President Xi Jinping, who was present at the negotiations, announced that China would transfer an additional 100 billion yuan (almost 13 billion euros) to the New Silk Road Fund to finance the project, which was announced at the end of 2013.
Representatives of more than 100 countries, including 29 heads of state and government, are participating in the “One Belt, One Road” summit on NSR issues, which will last until May 15.
Over the past few years, China has been unsuccessfully building a route bypassing Russia, and seems to have come to the conclusion that the Silk Road will not take place without Russia. On May 14-15, 2017, the Silk Road Summit will take place in Beijing, where the Russian President was invited. As RT experts note, Vladimir Putin will be the main guest of the summit.
The “One Belt, One Road” strategy is to create a transport and logistics system connecting China with the countries of the Eurasian continent.
"Maritime Silk Road of the XXI century." - most of the cargo is delivered from China by sea through the Suez Canal and the Mediterranean Sea. Today this is a relatively inexpensive route, but too long. For example, a sea container ship takes approximately 30-40 days to reach the ports of St. Petersburg.
The "Silk Road Economic Belt" is a land route that has encountered difficulties. So far, land transport accounts for only 6% of cargo coming from China, with most of it transported along the Trans-Siberian Railway.
Transib's power is enough to transport a huge amount of cargo. But there are problems. For example, a railway track. Since the time of Tsar Nicholas I, the railway gauge in Russia (1520 mm) does not coincide with the European one (1435 mm) and, as a result, with the Chinese one.
Previously, cars were actually moved from one platform to another. The losses were insignificant - about 2 hours for 16-18 cars. Now Russian Railways has created special new-generation platforms with automatic changes in the width of wheel pairs at speeds of up to 60 km/h. With them, temporary losses were leveled out.
The Trans-Siberian Railway needs investment and modernization.
“Russia is counting on investments in the development of Russian infrastructure, including transport systems, this is the basis of the economic component of the Silk Road. But these investments will have to be received on a competitive basis, intense joint work will be needed,” said Vladimir Petrovsky, chief researcher at the Institute of Far Eastern Studies of the Russian Academy of Sciences. “Connecting to the Silk Road is a chance for Russia to qualitatively improve its infrastructure, including transport.”
Land schemes
The first and most risky route was to go through Afghanistan, Iraq, Iran and Turkey. But the war in Syria and Daesh prevented the implementation of the plan. Perhaps China will return to this option later.
Trans-Caspian International Transport Route (TITR) - was supposed to pass through Kazakhstan, Azerbaijan, Georgia and Turkey. But the presence of two sea crossings across the Caspian and Black Seas complicates the passage of goods. Two weeks is the minimum, and any storm can delay the passage of cargo.
The third way to bypass Russia is through Kazakhstan, Azerbaijan, Georgia and Ukraine. The same problems arose as with the TMTM project - sea crossings. The test train completed the journey without cargo in 15 days due to the absence of customs checks.
The fourth option is the “Russian” route through Kazakhstan, Russia, Belarus and Poland. The train loaded with Chinese goods arrived in London on January 18, 2017, having covered 12 thousand kilometers in 18 days without any problems. The membership of Kazakhstan, Russia and Belarus in the EAEU helped save time on the transit of goods across borders. There are no sea crossings or mountain ranges along the way.
Russia and China are interested in cooperation - in combining the projects of the Silk Road and the Eurasian Economic Union (EAEU). In the future, the process of cooperation between the EAEU and the Silk Road may become the basis for the formation of a Greater Eurasian Partnership with the participation of the Shanghai Cooperation Organization and the Association of Southeast Asian Nations.
The transport artery from East to West, from China to Western Europe, is the most ambitious project in the field of transport in recent decades. All this is about the “New Silk Road”.
In September 2013, Chinese President Xi Jinping proposed a new idea for this ambitious project called “One Belt, One Road.” The essence of the idea is to unite the transport infrastructure of Eurasia into a single and integral system through which China will be able to freely export and import goods (manufactured goods, light industrial products, natural resources, etc.) to the European Union and other countries of the continent.
What does this mean in practical terms? China is engaged in the construction of various transport infrastructure projects, namely railways, highways, ports and pipelines.
As a result of the implementation of this project, the transport system of the PRC should gain “points of contact” with the transport systems of Western countries, primarily the countries of the European Union and, possibly, the United Kingdom, which will allow China to increase trade turnover with its consumers from this region. And this is additional income for the Chinese economy. These are huge markets where China, according to some experts, was deliberately not invited for a long time.
What has been done and what will be done in the future? So far, the Chinese leadership is primarily engaged in diplomatic negotiations with a number of countries, including Russia and Kazakhstan.
For the needs of the project, the Silk Road Company investment fund was created, with $40 billion at its disposal. In the future, the Chinese leadership expects support from a number of European and Islamic countries in the field of financing the construction of some facilities that can benefit not only the New Silk Road, but also the infrastructure of those states on whose territory they will be built.
The main part of the project must be carried out by land (railway). It will consist of 3 parts (corridors). The northern part of the railway should pass through Russia, and the southern and central part through Kazakhstan and other countries in the region. After connecting the railways of East and West, it is planned to build highways.
Opinion: experts in the field of geopolitics assure that our country has its own ambitions, and being part of the Chinese project, the Chinese world, is not so important for us (enough). But at the same time, both states are looking for points of closer interaction, since a role has emerged for Russia in Russia, and for Russia, China is a profitable investor.
The main part of the project is the route from China to the European Union through the territory of Central Asia. Its length should be about 6,500 kilometers. The route of this path is as follows: China-Kazakhstan-Uzbekistan-Turkmenistan-Iran-Iraq-Syria-Turkey-European Union.
The sea part of the route should pass along the coasts of China, the countries of Southeast Asia, India and Egypt, thus reaching the Mediterranean Sea through the Suez Canal.
What about implementation? So far, the main achievement of the “New Silk Road” is the opening of the longest railway (freight) route in the world - Harbin-Hamburg, which passes through the territory of Russia (in February of this year a new railway route was opened between Harbin and Yekaterinburg).
In general, the project can play a very positive role for the world economy, including the Russian and Kazakh ones, however, the main part of the route bypasses the territory of Russia, so it is too early to talk about the real results of this project.
For the economy of Kazakhstan, one of the most significant projects in the implementation of the concept of this project was the construction of a railway track with a length of 293 kilometers between Zhetygen and Korgas. This railway has already become part of the Chongqing-Duisburg highway.
Silk Road Summit in China May 14–15, 2017
Leaders from 28 countries are coming to China, including the President of Russia. The One Belt, One Road international summit begins in Beijing. Representatives of 110 states and 20 international organizations will meet at the forum. This is the first time that China has assembled such a representative meeting in the economic sphere. Now, a bid is being made for international economic leadership.
According to press reports, Beijing intends to sign two dozen agreements with new countries.
Russia is not a Silk Road country, but the press calls our country China's main ally.
In addition to Vladimir Putin, the Prime Minister of Pakistan, Nawaz Sharif, the Prime Minister of Cambodia, Hun Sen, and the Prime Minister of Italy, Paolo Gentiloni, are expected.
It is interesting that Crimea was previously part of the Silk Road, until Russia gave public signals that it was ready to allow China to build its port here. And in Europe, not everyone wants to see cheap Chinese goods, which can easily displace local producers. There is talk of protectionism. However, the United States also looks at the rise of the Celestial Empire with concern. A separate and very complex issue is China’s relationship with the Islamic world.
The Russian president can take part in the Silk Road summit, which will take place on May 14-15 this year in Beijing. As Russian Ambassador to China Andrei Denisov told the press, Vladimir Putin has already received an invitation from Chinese President Xi Jinping.
Vladimir Putin will presumably take part in the forum while on a working visit to Beijing. The summit will be an integral part of the “One Belt, One Road” strategy, proclaimed by Xi Jinping in 2013 and including the creation of the “Silk Road Economic Belt” and the “Maritime Silk Road of the 21st century.” The main goal of the project is to create a transport and logistics system connecting China with the countries of the Eurasian continent. As experts note, the Russian leader will be the main guest of the May summit in Beijing.
Today, most of the cargo is delivered from China by sea: it is relatively inexpensive, but it takes a long time, at least until the launch of the Northern Sea Route. For example, a sea container ship takes approximately 30-40 days to reach the ports of St. Petersburg.
Over the past years, Beijing has been negotiating with a number of potential participants in the project, searching for the most promising routes for the overland trade route. So far, land transport accounts for only 6% of cargo coming from China, with most of it transported along the Trans-Siberian Railway.
Despite the fact that Russia and China are strategic partners, Beijing is actively testing alternative trade and transport routes that bypass the Russian Federation. This tactic is explained by the desire to diversify transportation routes.
China also expects to stimulate the development of its western regions, which will receive direct access to the markets of transit countries.
Path diagrams
The first and most risky route was to go through Afghanistan, Iraq, Iran and Turkey. However, these plans of the Chinese leadership were upset by the expansion of the Islamic State*, which spread beyond Syria in 2014. It is possible that Beijing will return in the future to creating a Middle Eastern branch of the Silk Road, but to do this, terrorist activity in the region must first be suppressed.
Another thread of the trade route - the Trans-Caspian International Transport Route (TITM, another name - Silk Wind) - was supposed to stretch through Kazakhstan, Azerbaijan, Georgia and Turkey.
The main disadvantage of the route is the presence of two sea crossings - through the Caspian and Black Sea. To optimize travel, the Baku-Tbilisi-Kars railway is being built, the launch of which will eliminate the ferry crossing across the Black Sea. But even one crossing across the Caspian Sea can greatly complicate the passage of goods. According to the most encouraging estimates, the journey along the Silk Wind route may take about two weeks, but any storm in the Caspian Sea can extend this period.
The third route also bypasses Russia - through Kazakhstan, Azerbaijan, Georgia and Ukraine.
In January last year, a trial train was sent from the port of Chernomorsk (Odessa region) to China. Deputy Minister of Infrastructure of Ukraine Vladimir Omelyan estimated the duration of the route at 10-12 days (the official even allowed the transit period to be reduced to 9 days in the future), but the train went to China for 15 days, crossing the Caspian and Black Seas on ferries. And this despite the fact that the trial train left Chernomorsk without cargo for faster completion of border procedures.
Another Ukrainian train, sent by the Ukrainian authorities to China at the beginning of 2016, was simply lost on the territory of Kazakhstan. According to media reports, the train was detained in the Karaganda region due to non-payment of transit duties.
As a result, the “Russian” route became the most successful: Kazakhstan - Russia - Belarus - Poland.
The train, loaded with Chinese goods, traveled through European territory and arrived in London on January 18, 2017, covering 12 thousand kilometers in 18 days without any problems. The success of this direction was quite predictable. There are no sea crossings or mountain ranges on the route; it is also optimal from the point of view of military-political risks - the states through which it runs are not subject to political cataclysms. Another advantage is the membership of Kazakhstan, Russia and Belarus in the EAEU: uniform customs rules facilitate the transit of goods across borders.
“Alternative routes turned out to be not very profitable; in this case, the big question remains what goods will travel on trains back to China. This is necessary for the economic loading of transport routes. In this sense, the possibilities of the Russian direction may seem more attractive, for example, we can talk about the supply of raw materials to China,” Vladimir Petrovsky, chief researcher at the Institute of Far Eastern Studies of the Russian Academy of Sciences, noted in an interview with RT.
Problem points
However, there are problems in trade and economic cooperation between the Russian Federation and China. Even taking into account all the advantages of this cooperation, many issues still require resolution - and not least from the Russian side. In particular, experts note shortcomings in the Russian transport infrastructure. Built under Nicholas II, the Trans-Siberian Railway still remains the main transport hub connecting the eastern and western parts of Russia. The highway is fully loaded with domestic traffic and in its current state it simply cannot withstand the increase in transit flow from China.
“Russia must do very serious homework, in particular, it is necessary to modernize both the BAM and the Trans-Siberian Railway; now there are problems with the safety and speed of cargo movement,” Petrovsky believes. — Another important aspect is the readiness of the Russian side to participate in the legislative interface project. As an example: the Eurasian Transport Highway project, which should pass through the Orenburg region and the Urals to the West. China has already built its part of the route, but there is no movement on the Russian side due to the imperfection of legal norms on public-private partnerships for a period of more than 10 years. This is already a matter of strategic planning; there is still a lot to be done.”
A similar point of view is shared by the director of the Coordination Center of the International Congress of Industrialists and Entrepreneurs “Economic Belt of the Silk Road” Vladimir Remyga.
“The average speed of trains along the Trans-Siberian Railway is 11.7 km/h, which is the speed of a cyclist. The highway is overloaded, there are many sections where traffic is slowed down,” the expert noted in an interview with RT.
The Trans-Siberian Railway needs investment and modernization, but Beijing can rely on a different route: a high-speed railway has already been built to the border with Kazakhstan, and this year its second part, running through Kazakhstani territory, will be put into operation.
However, despite all the difficulties, both Russia and China are interested in cooperation - we are talking not only about the transit route, but about the comprehensive combination of the Silk Road and the Eurasian Economic Union (EAEU) projects.
For Beijing, cooperation with the EAEU means the Silk Road has reached a fundamentally new level. And Moscow, for its part, is interested in investing in its infrastructure.
“Russia is counting on investments in the development of Russian infrastructure, including transport systems, this is the basis of the economic component of the Silk Road. But these investments will have to be received on a competitive basis; intense joint work will be needed,” noted Vladimir Petrovsky. “Connecting to the Silk Road is a chance for Russia to qualitatively improve its infrastructure, including transport.”
Unified philosophy
In addition, Moscow expects to involve China in its integration projects, the scale of which is not inferior to the Chinese “One Belt, One Road” plan.
- Reuters
In May 2015, the President of Russia and the President of the People's Republic of China signed a joint statement on cooperation within the framework of the Eurasian Economic Union and the trans-Eurasian trade and infrastructure project of the Silk Road economic belt. As explained by Assistant to the President of the Russian Federation Yuri Ushakov, the goal of linking integration projects is “to build a common economic space on the entire Eurasian continent.”
As Vladimir Putin explained in the fall of 2016 in an interview with RIA Novosti, in the future, the process of cooperation between the EAEU and the Silk Road could become the basis for the formation of a Greater Eurasian Partnership with the participation of the Shanghai Cooperation Organization and the Association of Southeast Asian Nations.
“This initiative (to combine the EAEU and the Silk Road. — RT.) suggests new approaches to the formation of the world economic order, this is its strength and philosophy. It is noticeably different from American projects, such as the Trans-Pacific and Transatlantic Partnership, where there is one leader - the United States. And the projects of Moscow and Beijing are based on the principles of equality, the basic principle being the mutual benefit of all participants. We can say that the EAEU and the Silk Road have the same philosophy, and they can complement each other,” emphasized Vladimir Remyga.
* "Islamic State"— terrorist group banned on Russian territory.
