Regional Connection under the Belt and Road Initiative

The Prospects for Economic and Financial Cooperation

Fanny M. Cheung, Ying-yi Hong

• Publisher: Routledge
• Year: 2018
• ISBN:
  9780429883835
• Edition: 1
• Topic: Economics
• Subtopic: Commercial Policy
• Index: Economics

China's Belt and Road Initiative (BRI) is intended to radically increase investment and integration along a series of land and maritime routes. As the initiative involves more than 100 countries or international organizations and huge amounts of infrastructure construction, cooperation between many different markets is essential to its success. Cheung and Hong have edited a collection of essays that, between them, examine a range of practical issues facing the BRI and how those issues are being addressed in a range of countries. Such challenges include managing financing and investment, ensuring infrastructure connectivity, and handling the necessary e-commerce and physical logistics.

Emphasizing the role of Hong Kong as an intermediary and enabler in the process, this book attempts to tackle the key practical challenges facing the BRI and anticipate how these challenges will affect the initiative's further development. The book provides a holistic and international approach to understanding the implementation of the BRI and its implications for the future economic integration of this huge region.

Chapter 5 of this book is freely available as a downloadable Open Access PDF at http://www.taylorfrancis.com under a Creative Commons Attribution-Non Commercial-No Derivatives (CC-BY-NC-ND) 4.0 license.

Part I
Retrospect and evaluation

1 Silk roads and the centrality of Old World Eurasia

Gungwu Wang

China’s One Belt One Road Initiative has attracted considerable interest since it was launched. Thousands of scholars, activists, businessmen, and government officials all over the world have been engaged in trying to understand its significance. Ultimately, the initiative is about what developments it can bring to those who take part. There are numerous studies about how it would work, and also much speculation about China’s intentions. Underlying it all is an assumption that the Chinese have a strategic plan, and that each participating partner sees it as directly beneficial.

The literature available is so large that I am unable to keep up with most of it. People in Hong Kong along the frontline of the project would be more aware of what is involved than almost anybody else. So I shall fall back on being a historian and look for the way this initiative fits into the longer period of world history. Some of you know that I had a series of dialogues with my colleague Ooi Kee Beng on Eurasia in world history. There we examined the Old World where the three enduring world civilizations centred on the Mediterranean and southern and eastern Asia connected with one another through the Eurasian continent.

Eurasia the Old World

From a historian’s point of view, this Eurasia has had 5,000 years of recorded history, longer and more continuous than any other part of the world. There were, of course, states and societies elsewhere but, if they did not record their history, we do not know much about them. For the Eurasian people, however, their thousands of years of recorded history provide us with a strong sense of the continuity of the human experience in a super-continent. Of course, this Eurasia is hard to define. In my book, Eurasia refers to Europe, North Africa, and what we call Asia today. We are still trying to reconstruct from fragments of archaeological and anthropological findings the history of some other parts of the world, but their earlier links with Eurasia have not been determined. What distinguishes Eurasia is that it was highly interconnected, often deeply interlocked, throughout that recorded history. I have tried to understand some of the consequences flowing from these links. The story is unevenly told and we know some parts of it better than others, but enough of the story was so closely tied together that it is possible to construct a meaningful picture.

This was the Old World before the discovery of the New World by Europeans when they crossed the Atlantic 500 years ago. What became global after that included the Americas and the course of human story began to change direction. Today, we may ask if that Old World Eurasia is still relevant. Is it merely a part of global history and there is no turning back? The records describing that Old World suggest that it still has a role to play. Clearly it was a world of contestations displaying a great deal of violence and brutality. But it was also one of continuous culture contacts that enhanced the development of several civilizations. At the same time, it was also a world in which relatively peaceful trading connections by seas also enriched many economies over millennia.

This Old World divided into four main parts. Three of them had distinctive and enduring civilizations while the fourth connected the other three during long periods of contact and competition. I shall not go into details about how they interacted with one another.

In brief, the civilization that arose in the Mediterranean was probably the most ancient. It started with the two rivers of Tigris and Euphrates and was followed by Egypt on the Nile. The Greco–Roman model of city-states developed separately but was subsequently integrated eastwards with the monotheistic Abrahamic religions. That led to struggles for dominance first within a Christian West and then also with an Islamic East, bitter struggles that continued for centuries. That competition for power included the ambition to control all trade with the wealthy realms of India and China on the other side of Eurasia. Eventually, that led the European west to cross the Atlantic and Indian Oceans and build the powerful navies that determined the shape of modern world history.

As for the Indian and Chinese civilizations, they were ancient and resilient and, when threatened by Western dominance, have fought to survive to the present. On the edges of Asia, one was centred on the Ganges River on the Indian sub-continent and the other on the Yellow and Yangzi rivers of China. Connecting these two with the Mediterranean were the realms of nomadic tribes and oasis-based towns across the vast region of continental Eurasia. For a long time, this was the untamed middle that helped the three civilizations to interact with one another. Those linkages did much to shape at least 2,000 years of recorded history before modern times.

Today’s globalization, unlike the 5,000 years of Eurasia, has had a relatively short history. The developments arising from the extended contacts and settlements across the Atlantic and across the Indian Ocean, as well as those across the Pacific from the Atlantic, have created our maritime global world. The drive that enabled that to happen began in the 16th century primarily with economic goals, but soon led to political and strategic struggles for domination and empire. This second stage of political globalization has been particularly significant because it forced a new modernization process across the globe. While that process made us more alike and more connected, it also at the same time injected into each state and society deep disagreements and tensions that simply would not go away. This is the world that we have inherited, one that was created since the 18th century.

During the 20th century, economic dynamism shifted across the Atlantic, and at its centre was the United States of America. The United States carried the seeds of European civilization of the Mediterranean across the seas and opened up a new way of looking at global history from a perspective unknown in the past. For the last half century, that New World has dominated the rest of the world with its economic and military power. This is the reality we have lived with since the end of the Second World War. In this context, the world now observes with growing interest China’s efforts to recover after a great fall. It is riveting to see how China is regaining a position that the world has not known for two centuries.

We know that China was the centre of a great civilization that kept meticulous and well-structured records of its history and that provided its people with a strong sense of continuity with their past. Their civilization had endured and survived many kinds of challenges during the past three millennia. Unlike ancient civilizations that disappeared after the fall of their states, China is a civilization-based state that had fallen and risen several times.

China’s survival experiences

The Chinese have been changing throughout their history. This is something worth emphasizing. Chinese civilization did not stagnate the way some books have portrayed it. The portrait of an unchanging China through thousands of years of history was simply not true. The China before the Qin–Han unification was quite different from imperial China. The Qin–Han period was when identifiably Han peoples came to share similar values and beliefs. This marked a very important turning point in their history.

That was only the beginning. After the fall of the Han dynasty, what was “China” went through a very turbulent period of three centuries. The main catalysts for the changes were invading nomadic forces along its borders, particularly from the North and West. More than 200 years of political divisions followed and they were accompanied by religious and political transformations. There was considerable resistance to rule by the tribal leaders but there were also adaptations to new social and economic conditions. By the time the “Chinese” were brought together again following the empire’s re-unification under the Sui–Tang regimes, they were a different body of peoples.

From the format of the official historical records, we may get the impression that there had not been any break in continuity. But if the records were read carefully, it would be clear that the Chinese peoples had undergone considerable change. The most striking example is the introduction of Buddhism from India and Central Asia. Its ideas and practices induced local Taoists to reinterpret their own traditions. The benefits of opening to the outside world were incalculable. There developed significant growth in relationships not only overland along what has come to be called the Silk Road, but also across the Silk Road by sea to the Indian Ocean. By the time of the Sui–Tang unification, we see a very different China. Those familiar with the development of South China would know that the Yue peoples there identified themselves as Chinese only during the Tang dynasty. To them, being Chinese was becoming Tangren, people of the Tang.

There followed a period of cultural consolidation when the Song rulers defended and refined their heritage and brought considerable advances to Chinese society and economy. But it was also the time when a series of new rulers from Manchuria, Mongolia, and further west in Central Eurasia imposed their rule over much of northern China and eventually all of China. The Chinese fought back and reunited the country under the Ming. But, despite great efforts to teach the invaders to accept Chinese culture, it proved impossible not to absorb new influences from the foreign rulers. Notable were some of the scientific and technological ideas and skills that the Mongols brought to China, but there were also aspects of governance that were retained.

How the Chinese reacted and adapted to foreign ideas, not least among the Ming elites that had set out to restore Han and Tang political and cultural values, has aroused great interest. Modern studies show that the conquest dynasties did produce changes at various levels of society. This was even more obvious during Manchu rule after 1644. The Qing rulers skilfully merged the Confucian state structure with their Manchu institutions and created a mixed parallel system of governance that served them well for over 250 years.

With over 1,500 years of change in response to foreign power and ideas, the picture of a stagnant China waiting for the West to come and arouse it from slumber is totally misleading. China was often slow and reluctant and paid a heavy price for their sluggishness, but its people have always reacted to challenges and changes were taking place all the time. Of course, there was an inbuilt resilience that came from a core set of values and practices based on what was inherited from the Qin–Han “revolution”. That core was supported by a set of classical texts and standard histories that embodied the sense of continuity and identity, thus enabling China and its governance ideals to survive.

The way Chinese elites, increasingly well-schooled to govern by Confucian principles, adapted new ideas and sought opportunities to make China stronger and more defensible is a fascinating story. They succeeded in learning from defeat and foreign conquest and, from time to time, enabled China to become larger and more integrated. People who compare the maps of the Ming and Qing dynasties are often astonished how much the borders of China have been extended. Certainly, the land area of China was doubled in the course of 200 years. Chinese leaders since 1912 are still learning how to deal with what the Manchu Qing had added to the country’s historical borders.

But the greatest challenge China faced began during the second half of the 19th century. At the beginning of that century, China was still powerful and highly respected for its achievements. However, when it began to decline, it did so very quickly. This was largely because Chinese leaders underestimated the new kind of power that British and other European national empires brought to Asia, the central factor in the new globalization based on maritime dominance. It was accompanied by the economic system of capitalism that supported imperial expansion beyond the Americas to Africa and almost all of Asia. During that stage of momentous change, the Chinese found they had no answer to the challenge and had to go through more than a hundred years of turmoil in response. For the first time in Chinese history, the country faced powerful enemies who came overland and by sea at the same time.

In recent times, the Chinese people have rediscovered the Zheng He expeditions sent out when China was master of the seas and had the biggest navy in the world. Zheng He went out to the Indian Ocean seven times and confirmed that there were no enemies out there. The Ming court then decided that the voyages were not worth the immense cost. Enemies were threatening overland from the north, so they spent a fortune building the Great Wall instead. Thus, they decided to give up their maritime supremacy. The decision was not wrong. It was a realistic and practical response to the realities of the time. What were needed were coastal defence forces primarily to deal with piracy and enough to keep the trading classes honest. Four centuries later, they were helpless in the face of a modern navy backed by very efficient economic institutions. For a country that was essentially rural and agrarian, the challenge was too much to overcome without a total overhaul of everything they knew.

The much-studied Chinese decline need not detain us here. What does need stressing is that the enemies not only came by sea but also, in the form of Tsarist Russian expansion, arrived overland. The Russian response to West European imperialism was to expand deep into central and northern Asia to the borders of Qing China. It was significant that the first modern treaty signed between two equal states, the Treaty of Nerchinsk in 1689, was between the Chinese and Russians. The West saw that as extraordinary, but the Qing rulers viewed it as the normal way that China dealt with powerful overland enemies. Those who came by sea had not been enemies and were treated as trading entities that could be regulated and controlled. Thus, the Chinese were really surprised when the new naval power was turned against them.

The Chinese economy also declined rapidly after 1840. The answer to that challenge was to learn enough from the capitalist enterprises to compete. But the Chinese soon realized that the treaty concessions they had made had given so many advantages to the foreign companies that this was not enough. They would have to dismantle the whole treaty system to have any chance to succeed. Pushing back to the past was not the answer. A total restructuring that gave the Chinese a level playing field was essential. This was not exactly the China dream, but it was soon seen as a precondition in order that China could regain its position in the world. Generations of leaders subscribed to this vision of the future. It would have been, however, no more than a dream if the Chinese had remained divided. As long as they were, foreign powers could go on intervening to further their own interests. The Japanese went further to invade China in order to break the country up and keep each part under their control.

By that time, everybody knew that China could not become rich and powerful again unless the country was unified. Thus, the reunification of the country in 1949 was the first success after a century of what the Chinese continued to describe as years of humiliation. Restructuring could begin so that effective long-term programs could be devised. They were caught in the Cold War between the United States and USSR and Mao Zedong and his colleagues had no choice but to take sides. On ideological grounds, they had to accept Soviet leadership in the global struggle. They managed eventually to get out from under that umbrella after receiving Nixon and Kissinger and moving closer to America.

I offer the preceding summary to underline the Chinese capacity to endure and recover many times in their history. What are the challenges now? The leaders were committed to communist ideology, but recognized by the end of the Cultural Revolution that there was no future pursuing that path. Deng Xiaoping took the bold decision to adopt capitalism as a means towards the socialism he still wanted for China. His reforms were successful at the level of material wealth and enabled the recovery of military and political power for the central government. There is no question that Deng Xiaoping was correct in choosing to proceed as he did. But to the surprise of the Chinese and just about everyone else, the Soviet Union collapsed and communist ideology lost credibility. For those who had committed their lives to revolutions in order to build a communist world, that disaster was a shock from which they have not fully recovered. They have since learnt to cope with the global market economy and finding new roles for themselves. The Deng Xiaoping era of the past 40 years saw the use of economic weapons to ensure development and create the platform for the wealth and power that Chinese would need to fully restore their position in the world.

China under Xi Jinping

China has gained a position in the world that would have been hard to imagine a hundred years ago. The speed at which it recovered from the conditions of the 1970s was indeed surprising. I am old enough to remember what China was like when the war ended in 1945, the poverty and deprivation all around. It is incredible how much China has achieved since that time. Now that China is wealthier and stronger, President Xi Jinping could give a confident report to the 19th Party Congress that sees China in a position where it does not have to be as modest as it used to be. He believes that the country is now capable of leadership in many matters, something it has not been able to do for a long time. He can now say that China should play a more prominent part in world affairs. Coincidently, other things are happening that encourage the Chinese to believe that the world is changing and in many ways to China’s advantage. And this mood is embedded in the 19th Party Congress message.

There are still many challenges ahead. Some are new and others remain salient from the recent past, and these will be of concern ...

Table of contents

• Cover
• Halftitle
• Series
• Title
• Copyright
• Contents
• Preface
• Notes on contributors
• Part I Retrospect and evaluation
• Part II Finance and investment
• Part III Infrastructure connectivity
• Part IV e-Commerce and logistics
• Part V Prospect and challenges
• Index