One Belt, One Road strategy and Korean-Chinese cooperation

The idea of the Silk Road Economic Belt (絲綢之路經濟帶) was first mentioned by Secretary Xi during his visit to Kazakhstan in September 2013 and developed into his proposal, in Indonesia in October of the same year, to jointly build a Maritime Silk Road. On 28 March 2015, China’s National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce together released a detailed plan for the strategy implementation, titled “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road”.

The strategic intentions behind the initiative are to satisfy the demand of neighboring countries by utilizing China’s foreign reserves of 4 trillion USD, to resolve the problem of overproduction of steel and cement in China through trade, and to expand China’s global influence in concert with over 60 nations of the Silk Road. The demand in neighboring countries for the construction of infrastructure (social overhead capital) facilities through loans is enormous. It is estimated that in Asia alone the demand for infrastructure development until 2020 will amount to 8 trillion USD and the investment in transportation infrastructure in the regions beyond Asia will total 5 trillion USD. To bring the One Belt, One Road initiative into fruition, China created the 40 billion USD ‘Silk Road Fund’ in 2014 and led the establishment of the Asian Infrastructure Investment Bank (AIIB). The investment of a large part of China’s 4 trillion USD foreign reserves into infrastructure development is expected to facilitate the use of yuan internationally and contribute to its advancement to the rank of one of the key currencies in the world.

Another important strategic objective is energy security. To China, securing energy is crucial for continuous growth. For this reason, “Vision and Actions” clearly states that communication in procuring and transporting energy is a major goal of the One Belt, One Road strategy. It is worth pointing out that the plan calls for increased cooperation in the connectivity of energy infrastructure and sets forth “work in concert to ensure the security of oil and gas pipelines and other transport routes”. China’s dependence on foreign oil and gas is so high that the document refers to it as “security of oil and gas transport routes”. 80 percent of crude oil imports, 50 percent of natural gas imports, and 42.6 percent of the entire imports and exports of the country are transported through the Strait of Malacca. Therefore, obtaining reliable transport routes and diversifying transport routes by procuring oil and natural gas from the energy-rich Central Asian region through the construction of the land-based Silk Road is of critical importance to China’s energy security. From this perspective, the Silk Road Economic Belt and Maritime Silk Road projects can be likened to two wing axes of the rising China.

The success or failure of the initiative will ultimately depend on the progress in China’s relations with its neighbors. Although the initiative is welcomed in the Asian and African countries with high demand for infrastructure development, the US and other great powers along with a number of regional players are concerned that China is using this opportunity to expand its sphere of influence. Several nations, including the US, Japan, and India, regard One Belt, One Road as a Chinese solo performance rather than a choral performance and are wary of it.

Especially worthy of observation is the reaction of the US. During her tour of four countries in Central Asia in 2011, then-Secretary of State Hillary Clinton proposed building a New Silk Road economic zone by investing in the countries of the region in order to increase the American influence there. The Chinese strategy can be seen as countering that plan. There is also an opinion that One Belt, One Road is not intended to directly challenge the US policy of rebalancing Asia, but to thwart it indirectly by expanding China’s sphere of influence. At the time of establishing the AIIB, the US assessed it as an attempt to build a new financial order led by China and, to foil the plan, took a stand opposing membership in the bank by American allies and countries of Western Europe. The US failed, however, as the UK, Germany, France, South Korea, Australia, and other countries joined the AIIB. The subsequent change in US attitude – the welcoming remarks and promises of cooperation by the Governor of the World Bank and expression of support by Washington – is a positive sign. Nevertheless, we have yet to see how American-Chinese relations over the issue unfold in the future, since building an international political and economic order is a long process and the One Belt, One Road initiative is no more than a step toward it.

Recognizing such concerns, Beijing emphasized in the “Vision and Action” implementation plan (made public at the Boao Forum in March 2015) that One Belt, One Road is not China’s version of the Marshall Plan but a strategy of mutually-beneficial regional cooperation evolving through joint efforts of participating nations. In reality, for One Belt, One Road to succeed, it needs support of not only neighboring developing countries but developed countries as well. Given that the number of neighboring nations in the initiative exceeds 60 countries with a total population of 4.4 billion people (63 percent of the world’s population) and an economic scale amounting to 29 percent of the global economy, the strategy can hardly succeed in the format of a Chinese solo performance. Secretary Xi Jinping himself emphasized in his keynote speech at the Boao Forum that the programs of development “will be a real chorus” and “not a solo for China itself.”

Korea, too, hopes that the initiative is realized as a chorus. What effect will the joint implementation of One Belt, One Road have on the Korean Peninsula and how will South Korea and China cooperate? There is no doubt that the initiative provides economic opportunities for the Korean Peninsula and Northeast Asia. According to the “Vision and Actions” plan, three northeastern provinces (Liaoning, Jilin, and Jeilongjiang) are to become sea-land ‘windows’ linking Russia, Mongolia, and other areas in the Far East. In this light, there are many points for cooperation with the Eurasia Initiative of the Korean government and ways in which One Belt, One Road can contribute to building a Northeast Asian economic zone.

One of the key projects of the Eurasia Initiative is the construction of the Silk Road Express with a trans-Korea railway and transcontinental railroads as its basic axes, to promote peace on the Korean Peninsula. China is already pushing forward with or examining several business projects related to transportation infrastructure – such as roads and railways – in North Korea, so there is the possibility of South Korea’s participation in those projects. However, with the relationship between South and North Korea strained by North Korea’s fourth nuclear test, the Silk Road Express remains an unattainable dream.

Nevertheless, both South Korea and China have the will to connect One Belt, One Road and the Eurasia Initiative. Even if the construction of a trans-Korea railway cannot be realized due to the North Korean nuclear development problem, there are many other ways for South Korean-Chinese cooperation. Korea can take part not only in building infrastructure in developing countries but also join efforts with China in distribution, development of resources and new industries. Such cooperation is beneficial to both parties, but it is also desirable for the future of Northeast Asia because it contributes to creating a regional economic zone.

To summarize, One Belt, One Road is China’s grand strategy for the next 35 years, which envisions building a Datong (大同, Great Unity) society in Asia. Its success is indispensable for the attainment of the Chinese dream as propagated by Secretary Xi Jinping. China estimates that it will take the strategy at least 8 to 10 years to bear fruit. For One Belt, One Road to be successful in the three northeastern provinces and the Korean Peninsula during that period, the most desirable and necessary task is achieving unification of the peninsula through the joint efforts of Korea and China. I hope the sound of the One Belt, One Road chorus spreads loud and wide across Northeast Asia. 

Tai Hwan Lee, Director of Center for Chinese Studies, Sejong Institute (thlee@sejong.org)