China Heads West

Beijing's New Silk Road to Europe

By Erich Follath



China is building new roads, railroads and pipelines from Central Asia to Europe in an effort to build new connections to the rest of the world. The results may be good for the Chinese -- but less so for the other countries involved.

In Kashgar, on the western edge of the Peoples' Republic of China, the view is reminiscent of the Bible and the days when the ancient Silk Road began to take shape here in the 1st century B.C. Today, the government plans to use Kashgar as the starting point for a new, global trade route -- but at this point, there is still little evidence of it.

"Posh, Posh," the men shout on their horse-drawn carts, as they make their way to the meadow where drivers are selling camels. Potential buyers expertly reach into the animals' mouths to examine their health. The air is dusty and filed with the sounds of animals neighing, braying and bleating, as if the horses, donkeys and goats know that they won't stay tied up for long.

Women, only a few of them wearing veils, walk through the chaos carrying sacks of apricots and raisins.

The Sunday market in Kashgar, one of the world's largest, attracts several thousand livestock owners and traders to the oasis city on the edge of the Taklamakan Desert, near the high mountains of the Pamir and the Hindu Kush. It is a fascinating mix of ethnicities. Uighurs, wiry men with knives in their belts, are in the majority. There are Nomadic Kyrgyz wearing felt hats, and occasional light-skinned, green-eyed boys who look like descendants of Alexander the Great. The market is policed by the region's true rulers, the Han Chinese.

Here, people can still taste and feel the myth of the old Silk Road.

On the edge of the market, an artist captures the past on old silk paper. He paints images of the ancient caravans that struggled through deserts and across high mountains beyond the Jade Gate Pass, passing through the Kashgar oasis on their way to cities like Samarkand, Bukhara, Tehran and Baghdad, or transferring their precious goods, in a relay race of sorts, to other caravans that continued to the Mediterranean and the Roman Empire. The caravans introduced silk and jade, ceramics, paper and tea to the Western world, and brought garlic and castor oil to the Far East. The Silk Road was a meeting place of world cultures and a missionary route for religions, first for Buddhism and later for Islam. When Mongolian dominance collapsed in the 14th century, the trade routes petered out.

Massive New Project

Xi Jinping, 63, the president of China and general secretary of the Communist Party, wants to revive the myth and build a New Silk Road, in large parts along the old trade route. It would mark the return of a legend. For some time now, many of his speeches have included references to "yi dai yi lu," or "a belt, a road." It is a gigantic project, and China envisions about 60 countries being involved, or about half of humanity.

China wants to expand trade along the route and develop infrastructure. Beijing has earmarked $40 billion (€36 billion euros) for the project, to be invested in building new roads, and in railroads, pipelines and ports from Lithuanian to the Horn of Africa, Sri Lanka to Israel, and Pakistan to Iran.

Two railroad lines lead to Germany, one from Zhengzhou to Hamburg and the other from Chongqing to Duisburg.

In order to finance the massive project, the Peoples' Republic initiated the establishment of a financial institution: The Asian Infrastructure Investment Bank (AIIB). For years, Xi Jinping was displeased by the fact that Washington provided his country with little say in organizations like the World Bank and the International Monetary Fund (IMF). In June 2015, 57 countries signed the charter of the AIIB, against the will of the United States. They included France, Great Britain and Germany.

Everyone wants to be involved when the Chinese are planning big things.

But what is Beijing trying to achieve with its Silk Road plan? Does the Chinese leadership want to promote economic development in nearby and faraway countries and "bring together" the world, as it insists in its government propaganda? Is it because Chinese companies need globalization to bolster their stuttering economy and create new export routes for surplus production of goods, as well as routes for importing oil? Or is the real goal to break the West's political dominance -- a plan, in a sense, to conquer the world?

Beijing has deployed officials to work on the major project in Kashgar, where it is developing a new economic corridor. The high mountain road to Pakistan is being expanded, and when it is finished it will lead across the Khunjerab Pass to Gwadar, a port the Chinese are building from scratch on the Arabian Sea. Feasibility studies for ambitious new railroad lines to Kyrgyzstan and Kazakhstan are stacked on the engineers' desks. And although the proposed lines present enormous technical challenges, everything seems possible since the Chinese built a railroad line to Tibet, at altitudes above 5,000 meters (16,400 feet).

It's clear that China's Communist Party is investing enormous amounts of money in its transit routes toward Central Asia and in new economic zones. The standard of living among Kashgar residents is rising, and tax-advantaged high-tech parks have created new jobs in the provincial capital of Ürümqi.

The economy is growing at 9 percent in the Xinjiang Autonomous Region, outpacing growth in many other parts of the country.

In return, Beijing expects gratitude and compliance -- mistakenly. For most Uighurs, there is something far more important than having a better choice of goods to buy: respect for their people and their religion, Islam. Instead, they often experience the opposite. Mosques are placed under video surveillance, Muslim men are no longer permitted to wear long beards, and Chinese officials force their children to break the fast during Ramadan.

Economic and political elites welcome the opportunities brought by Beijing's financial injections, but the local population in Xinjiang view the new Silk Road, and the domination by Han Chinese that comes with it, with considerable skepticism. This is a recurring pattern, with concerns becoming even greater immediately beyond China's borders.
Almaty, Kazakhstan

Two airlines now serve the route from Ürümqi to Almaty, the biggest city in Kazakhstan. New roads and railroad lines now bridge the 1,500-kilometer (930-mile) distance between the two large cities. A special economic zone is being established in the Chinese border town of Khorgas.

China's neighbor plays a key role in the Silk Road strategy. It is no accident that Chinese leader Xi Jinping first mentioned the new project in Kazakhstan, in September 2013, during a meeting with Kazakh President Nursultan Nazarbayev. On the surface, at least, his host seemed enthusiastic about the project. He had his railroad minister announce that the country would invest several billion US dollars in new trains and lines in the next five years.

Nazarbayev, 76, the son of a shepherd and head of the regional Communist Party during the Soviet era, has been president of the independent Republic of Kazakhstan for a quarter century. He's an authoritarian ruler and ever since he built Astana, a new capital of glass-walled skyscrapers in the middle of the desert, the West sees him as a megalomaniac.

Nazarbayev rules a country that is almost eight times the size of Germany but has a population of less than 20 million.

He can afford extravagant projects because he controls massive natural resources, including oil, natural gas and uranium. So far, he has managed to sedate the population with revenues from these mineral reserves, but now Kazakhstan is also suffering from falling commodity prices. The per capita income, measured in dollars, has declined by half since 2013, and the economy is stagnating.

Nazarbayev skillfully cooperates with the various major powers, allowing the Americans to exploit Kazakhstan's natural resources, making the European Union the country's biggest trading partner and cooperating with the Russians in the Eurasian Economic Union and in security groups.

But he pays special attention to his country's "strategic partnership" with China. In recent years, pipelines have been completed to bring crude oil and natural gas from the Caspian Sea directly to the Peoples' Republic. The Chinese now control almost a third of Kazakh natural resources and are in the process of buying their way into the agricultural sector on a large scale.

At the beginning of this year, Nazarbayev signed a law that granted foreign investors 25-year leases on real estate, triggering a storm of protest that shook the foundations of his power.

"Down with the Chinese, Kazakhstan for the Kazakhs!" an agitated crowd chanted in a demonstration near the National Museum in late May -- despite the fact that Nazarbayev had already withdrawn the law by then and dismissed his economics minister.

The public anger was directed against the alleged "selling out" of the country. A short time later, armed men attacked members of the national guard in the industrial city of Aktobe.

Twenty-five people died in the ensuing firefight in early June. And the protests continue.

For many Kazakhs, the new Silk Road is not a promise but a threat. This suspicion is especially palpable in the Korgas special economic zone on the border. On the Chinese side, new businesses sprang up, apartment buildings were built and luxurious shopping developed. On the Kazakh side of the border, only a few gas stations and kiosks are complete, and gaping empty lots alternate with giant garbage dumps. Kazakhs come to Korgas with the new fast train from Almaty, buy cheap Chinese goods "over there" and take the evening train home.

But this minor border traffic is of little importance to Beijing. It is more interested in the big picture, and Korgas' important role as a hub through which trains roll on their way to Central Asia, Iran and, ultimately, Europe. The turnover of goods has reportedly doubled in Korgas since 2014.
Bishkek, Kyrgyzstan


If there is anyone who is equally at home in China and Russia, the European Union and the United States, and who can evaluate the Silk Road project from a Central Asian perspective, it is Djoomart Otorbaev, the former prime minister of Kyrgyzstan. After a year in office, he became an independent political consultant in the spring of 2015. Since then, he has spent his time as an intermediary between different worlds, regularly jetting back and forth between Beijing and Moscow, Astana and Brussels.

Bishkek, a four-hour drive from Almaty on an upgraded highway, was a caravan station in the days of the classic Silk Road. Today the sleepy city, with its Stalinist architecture, feels like a vestige of the Soviet era. The image is misleading, because Kyrgyzstan is more cosmopolitan, democratic and liberal than its neighbors. The small country of nomads, with a population of 6 million, maintains good relations with the West, as well as with China and Russia. Kyrgyzstan is both a member of the Shanghai Cooperation Organization and the Moscow-dominated Eurasian Economic Union.

"We are a poor country, wedged between the high mountains of the Tian Shan and the Pamir, without access to the sea," says Otorbaev. He praises his country's free election as "exemplary" but is critical of rampant corruption among the Kyrgyz elite. "For trade and tourism, we need every conceivable connection to the outside world, including open borders and transport routes. That's why we can only benefit from China's Silk Road project."

He admires China for having lifted so many people from total poverty in the last few decades, more than any other country in the past. "But China should grant its citizens more freedom at home. And it shouldn't behave like an elephant in a china shop abroad."

Otorbaev, trained as a physician, likes to dissect the situation in his native region. Whenever the Chinese overrun a place, he says, it goes like this: "They bring their own people, and they start by building what they want. And then if someone demands a permit, they bribe the relevant officials."

But Beijing cannot succeed in the long run if it continues to exploit its status as the economically stronger country. "The Chinese lack soft power. They don't understand that if you want to succeed in the long term, you need to win over people's hearts." Still, he adds, senior Communist Party officials are at least listening to his criticism now, and this is progress, but it hasn't led to any consequences yet.

A New Marshall Plan

In an ideal scenario, the new Silk Road could become the biggest economic stimulus program since the Marshall Plan, with which the United States helped Germany get back on its feet after World War II. Russia should also benefit from the initiative. And Moscow, which needs investment during its current recession, is fundamentally interested in closer cooperation with the Peoples' Republic.

Nevertheless, the Kremlin is deeply suspicious of an increasingly self-confident China. Russian President Vladimir Putin believes that Beijing aims to solidify its dominant political position with the Silk Road initiative.

Iran and Turkey strongly support the Silk Road project. The first direct train from China arrived in Tehran in February to unanimous applause. The Peoples' Republic has long been the Islamic Republic's biggest export partner, and the Iranians are grateful to the political leadership in Beijing for supplying them with high-tech goods and allowing Iran to continue exporting its raw materials during the sanctions. Even today, after most economic restrictions have been lifted, Tehran is unwilling to place all its bets on the West and reportedly intends to remain loyal to Beijing when it comes to lucrative deals.

Turkey takes a similar view of the situation. The normally self-confident Turkish president, Recep Tayyip Erdogan, is very accommodating to the Chinese. This may be because Turkey has few friends in international politics at the moment. And with an economy in crisis, billions from China come at just the right time.

But the new Silk Road is experiencing the greatest and most surprising success in a region that its "classic" precursor never touched: Eastern Europe.
Minsk, Belarus

The most exclusive five-star hotel in the capital of Belarus is called the Beijing, an ostentatious building with 180 rooms and a conference center that holds 500 guests. The hotel was a joint project by companies from both countries. The most popular restaurant in Minsk is also named after the Chinese city, and one of the items on the menu is baozi, dumplings filled with pork or bean paste.

Cantonese pop rules in the karaoke bars along the city's ring road.

More than 10,000 immigrant workers have come to Belarus from China in the last two years alone. Next to Ukrainians, they are the largest group of foreign workers. Air China recently introduced four nonstop flights a week from Beijing to Minsk -- an astonishing development, considering that the two cities are 6,500 kilometers (4,040 miles) apart, and Belarus has much closer historic and cultural ties to Russia.

The Union State of Russia and Belarus is a defense and economic community, and in better times political leaders in Moscow and Minsk even considered merging the two countries.

But now the Chinese are gaining ground in Belarus, where they spare neither prestige nor effort, nor cost, to outdo their trade rivals from Russia and the EU. When Chinese President Xi Jinping paid a state visit to Minsk in May 2015, his Belarussian counterpart Alexander Lukashenko, 61, rushed to the airport to pick up his guest in person and greet him with bread and salt. Xi had joint ventures established in which the Chinese held at least one more decisive vote than the rest.

The most significant of these major projects is called "Great Stone." The site near the Minsk airport measuring roughly 80 square kilometers (30 square miles) is currently being developed into a giant industrial park. In phase 1 of the Great Stone project, forests are being cut down and bulldozers are digging deep into the ground.

Large propaganda signs proclaim, in Russian, Chinese and English: "Time is Money, Organization is Life." Almost all the guest workers from the Far East work at the site, which will include company buildings, as well as schools, hospitals and housing for 170,000 people.

The E30, the highway that connects Berlin with Moscow, passes nearby. It is quite possible that this route will eventually become an appendage of the new Silk Road, which will then lead to Beijing.

Widespread Eastern European Interest

As important as Belarus is as a new bridgehead in the region for Xi Jinping, he isn't putting all of his eggs in one basket. Last November, the Chinese president invited 16 Eastern European leaders to his hometown of Suzhou. It was the fourth summit meeting of its kind, and it took place largely without the participation of Western media. In China, however, the newspapers were filled with stories about the two-day meeting, which was celebrated as a milestone along the new Silk Road. And just as their hosts probably expected, all of the Eastern Europeans tried to secure a piece of the big pie -- irrespective of whether this could jeopardize their own strategic interests.

In contrast to Central Asia, where some projects currently exist only on paper, many programs are already underway in Eastern Europe. Beijing reached an agreement with Serbia and Hungary in which it is paying for a new high-speed train from Belgrade to Budapest. Chinese firms are involved in the development of hydroelectric dams in Croatia and Poland. In Lithuania, funds from Beijing are being used to expand the Klaipeda port. And in the wake of President Xi Jinping's visit in late March 2016, the Czech Republic is also entertaining dreams of a privileged strategic partnership. "I would like to see the Czech Republic become China's gateway to the European Union," Czech President Miloš Zeman said during the visit.

Or will it become a gateway for something else?

Aside from the Silk Road investments, China's state-owned companies are on an aggressive shopping spree, especially in the field of high technology. At the same time, the Communist Party uses protectionism to seal off Chinese companies in the Peoples' Republic from Western competition and harasses companies from the West. There is no sign of a unified EU strategy to combat this unequal treatment, or of a unified position on Beijing's Silk Road project.

The Eastern European countries' rapprochement with the economic power from the Far East is viewed with suspicion in the EU. "It's our own fault if we in Europe do not speak with one voice," Chancellor Merkel said during a trip to Beijing last fall.


Translated from the German by Christopher Sultan

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