China’s Silk Road Fund: Towards a Sinocentric Asia



An often overlooked commonality between BRICS countries is their contested claim for regional leadership. However, the regional ambitions articulated at differing degree of specificity and coherence in Brasília, Moscow, Beijing and Delhi, are generally received with indifference, skepticism or outright fear in neighboring capitals. It is no coincidence that countries such as Argentina and Pakistan are the most vocal critics of their respective bigger neighbor's quest to become a permanent member of the UN Security Council. In the same way, China's and Russia's regional leadership claims generate apprehension by  neighbors such as Japan and Kazakhstan, respectively.

Each BRICS country's difficulty is three-fold. First, they need to develop a cohesive and compelling vision of what they want their region to look like - how to improve transport links, how to promote democracy or political stability, which regional institutions to establish, and how the region should relate to the rest of the world. Second, they need to convince neighbors that the implementation of such a project generates positive results for the entire region, and that fears of regional bullying are unwarranted. Finally, they need to muster the diplomatic and financial muscle to turn their vision into reality - after all, infrastructure projects (roads, ports, etc.) to connect the region tend to be costly and complex. Over the past decades, none of the BRICS has been particularly successful in addressing the three concerns, largely due to internal development challenges.

Yet more recently, China has arguably been the most active and capable backing up its leadership claim with an actual vision. After Xi Jinping articulated a vision for China's ties with Central Asia last year during a  visit to Kazakhstan, he now announced an initial $40 billion for a "Silk Road fund" to invest in infrastructure and industrial and financial cooperation, seeking to "break the connectivity bottleneck" in Asia. Xi made the pledge when he met with leaders of Bangladesh, Cambodia, Laos, Mongolia, Myanmar, Pakistan and Tajikistan. The Fund is nothing less than the first step towards a regional system of mutually beneficial political  and economic relations with China at the center: As the President argued, linking Asian countries is

not merely about building roads and bridges or making linear connection of different places. More importantly, it should be a three-way combination of infrastructure, institutions and people-to-people exchanges and a five-way progress in policy communication, infrastructure connectivity, trade link, capital flow and understanding among peoples.

Silk Road

Of course, China's dream of a sinocentric Asia predates Xi. A direct train to Duisburg in Germany left Chongqing in 2011. A map of the envisioned Silk Road published by Xinhua depicts two routes: one through Kazakhstan, Kyrgyzstan and Iran en route to Austria; and a maritime route from Chinese to Antwerp in Belgium. While the latter is set to benefit China's eastern coastal regions, the landroutes are also seen as a tool to enhance economic development in the poorer, landlocked western provinces of China.

Shannon Tiezzi shows how the Chinese media is meticulously covering China's regional project. She writes that

Xinhua’s recently unveiled an updated, interactive map depicting the extent of two Silk Road projects. A quick comparison to Xinhua’s earlier version of the map reveals a number of new “stops” that have been added in the past six months, including Moscow, Russia; Dushanbe, Tajikistan; Jakarta, Indonesia; and Colombo, Sri Lanka. And Beijing is still expanding its list of potential partners: in his recent visit to China, Afghan President Ashraf Ghani indicated his country’s willingness to be part of the project.

Given how expensive and durable the construction of train and road links is, Xi's large-scale investments in the region may tie neighbors into a sinocentric Asia for decades, significantly reducing their governments' capacity or incentives to oppose China. As Kerry Brown, Director of the China Studies Centre at the University of Sydney, has recently argued,

There are obligations being created here, dependencies and commitments, that many who are included in the Silk Road idea might need to seriously consider.

China's Silk Road Fund can be seen as part of a larger effort to establish a series of complementary or parallel structures in the region that may at some point challenge existing institutions such as the World Bank or the Asian Development Bank. It may also be seen as a threat by Russia and India, who will rightly interpret China's efforts as a challenge to their own attempts to assume regional leadership. Still, while China's economic power provides it with far more room for maneuver in the region, the other BRICS countries should certainly keep the case of China's Silk Road project in mind as they articulate their own regional strategies.

Read also:

China’s parallel global order

In Brisbane, BRICS reaffirm commitment to establish joint development bank

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Photo Credit: The Silk Road Project. (2014). Maps of the Silk Road