Silk Road China's New Trade Routes Need German Support

The One Belt One Road initiative will only succeed if China cooperates with Germany and accepts international rules, writes Handelsblatt's China expert.
It's a long way home.

The name sounds strange to Western ears: One Belt, One Road. Even the acronym OBOR sound more like a new mouth wash than a monumental project connecting Asia with Africa and Europe. And yet there is an obvious name they could have used: The New Silk Road.

But that sounds almost too romantic. For this project is fraught with danger. One route leads through Central Asia to Europe, the other even through Pakistan to the Iranian border, meaning through countries where ageing tourist guides are the only ones able to remember when the countries were thriving economically. Countries that are, for the most part, struggling just to remain stable.

Nevertheless, the New Silk Road will come. Simply because the head of party and state, Xi Jinping, is insisting on it, and it makes economic and geopolitical sense since it will bind Europe and Asia more closely together. After the British, the Russians, and finally the US and its allies failed to militarily subjugate the region over almost the last 200 years, it is worth an attempt during an economic upswing.

If there is any country at all having the power, money and organizational talent to shoulder such an monumentally epic project, then it is China.

It makes sense economically because the New Silk Road means huge infrastructure contracts that will create growth and ideally open up new markets. And it makes sense sending goods to and from Europe by land, traveling three times as fast by train than transporting them by ship. The Duisburg-China train route is already a success today. If there is any country with the power, money and organizational talent to shoulder such a monumental project, then it is China.

The fact that it will be difficult doesn’t mean it has to be hopeless. Back in the eighties, VW's then chief executive Carl Hahn’s idea of making cars in China also initially seemed like a suicide mission in an unstable, communist country, where they were still beating fenders out of sheet metal with hammers. But even China won’t be able to manage it alone. Strong partners are needed and that's why this weekend, the big Silk Road Forum takes place in Beijing. German Minister for Economic Affairs, Brigitte Zypries, will also take part.

But Germany will only play along if Beijing follows the example of its newly-founded development bank, the Asian Infrastructure Investment Bank or AIIB and agrees together with its partners to common, transparent game rules for the new Silk Road, instead of negotiating bilateral agreements with each individual country and in that way create dependencies. That won’t win over Berlin and certainly not at all German companies. Without Germany, Europe’s leading economic power, the New Silk Road barely makes sense.


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