The Maritime Silk Road China's High Seas Ambitions
With its Maritime Silk Road, China is tapping the world's oceans for its own strategic purposes. It's a bold plan that is causing unease in India and the United States -- and also has implications for Europe.
The powerful Yangtze River winds its way for more than 6,000 kilometers (3,700 miles) through China, from the barren highlands of Tibet to the densely populated plains on the east coast where, shortly before it flows into the Pacific, a large waterway forks off. It is the Huangpu, Shanghai's river.
Ships carrying ore, cement and coal, freighters loaded with containers and loose cargo toil their way up the Huangpu until, at its tightest turn, one of China's most spectacular vistas opens up before them: to the left, the skyscrapers of the Pudong financial district; to the right, the palatial buildings and towers along the Bund, the historic Shanghai waterfront promenade.
Yan Jun, the 56-year-old head of the Port of Shanghai, resides on the 20th floor of one of these towers. He likes to take first-time guests to the next floor up, to the hall where executives of his company, the Shanghai International Port Group, usually meet. Inside the room is a massive, 10-meter long wooden table made out of planks from old quay walls; in front of the window is a globe as high as a person.
If the trading and naval powerhouse of China had a single command bridge, it could be located here. And Yan Jun, a large, elegant man with a deep voice, would be its captain. China's major industrial provinces, with their megacities on the left and right banks of the lower Yangtze, are like the two wings of a dragon, he says, "and Shanghai is the dragon's head." No other port in the world delivers as many products to the global market as Shanghai. China exports goods valuing over $2 trillion a year.
Yan recently spent a few weeks in Europe. His company, like many others in his industry, is on a shopping spree. It is looking at entire ports and individual terminals all over the world, from Jakarta to Djibouti, Pakistan to Panama.
It's all part of a plan that China's leadership calls the Maritime Silk Road. Three years ago, Chinese President Xi Jinping announced that his country wanted to revive not just the trade route from antiquity that led from China's western provinces through Central Asia to the Middle East and Europe, but also a new sea route to match the one on land. It would be comprised of a network of ports and naval bases connected by canals, roads and trains, built and operated with Chinese participation.
As with the land route, there's also a historical precedent for the Maritime Silk Road. At the beginning of the 15th century, legendary Chinese explorer Zheng He began the first of seven sea expeditions that would lead him through the Indian Ocean to Ceylon on the east coast of Africa, and onward to present-day Saudi Arabia. Zheng left carrying silk, brocade and porcelain. He came back with spices, rare woods and giraffes. Almost 100 years prior to Christopher Columbus' trip to America, China was the world's most important sea power. It's a tradition that modern China wants to rekindle.
There are three key differences between the resurrection of the maritime and the land-based Silk Roads. First, there the number of countries along the sea route to Europe is much greater, not to mention to the size of their markets. Countries on the Indian Ocean alone are home to a greater number of people than all of sparsely settled Central Asia. Plus, China's leadership has left open just how far the Maritime Silk Road will go. Panama, where a Chinese company recently bought a port, is "probably a little too far," says Tan Jian, a senior official with the Chinese Foreign Ministry. "But we will probably add Australia to it." In 2015, the same firm signed a 99-year lease on the Port of Darwin.
Second, in contrast to Kazakhstan and Croatia, where numerous Chinese projects are still in the planning stage, Beijing has already invested billions in the sea routes to the West and proceeded with construction projects. From an industrial park in Kuantan, Malaysia to a container terminal the Shanghai International Port Group has taken over in Zeebrugge in Belgium, dozens of projects are already in operation and dozens more are under construction.
Third, whereas Beijing's efforts on Central Asia and the former Eastern Bloc countries are raising eyebrows in Russia and Europe, its growing influence from the Western Pacific to the Middle East has caught the attention of two other major powers: India and the United States.
Both the place and the circumstances under which Xi Jinping informed the world about his plan turned out to be symbolic. For the occasion, he chose a visit to Indonesia, the country where his American counterpart Barack Obama grew up. The leader of the United States, the self-proclaimed "Pacific Nation," was unable to attend the subsequent summit meeting of Pacific leaders in Bali for scheduling reasons. A budget crisis had kept him held up in Washington.
"That was just a coincidence," says senior official Tan Jian, who helped to draft Xi's speech in 2013. "We didn't plan that. We are not imperialists and we do not want to colonize the world. The Maritime Silk Road is a concept of peace and economic cooperation. Those who participate will benefit from it."
But is that really true? Is the focus of Beijing's Maritime Silk Road really trade and not politics? Can the two even be separated in a project of this magnitude?
A car bridge spans the Huangpu a further bend upriver from Yan Jun's office. The road leads for a good hour to the coast, where it transforms into a bridge that extends for 30 kilometers over the open sea to the Yangshan Deep Water Port, the world's largest container terminal.
More than 36 million standard containers are processed each year at the port, around four times as many as in Hamburg, Germany's largest port. The containers are stacked up to the horizon like Lego bricks and as many as 16 ships can be docked at any given time, including the largest ships currently sailing the seas, with a draft as much as 16 meters deep.
It's from ports like Yangshan that the "world's factory" sends its products around the globe each day. But the reconstruction of the Chinese economy has begun and its view of the world is changing. Wages in China have risen and an enormous amount of excess capacity has developed. China is no longer content just exporting manufactured goods -- it also wants to send abroad the steel, cement, workers and engineers that it no longer requires itself.
At the same time, as its power and prosperity has grown, so too has China's ambition to have a greater say in the world.
Colombo, Sri Lanka
When Zhang Xiaoqiang visited Colombo for the first time, he was afraid. "There were armed personnel in front of the airport, the city was full of checkpoints and there was a curfew after sundown," he recalls. Sri Lanka was in the midst of a civil war between government troops and Tamil rebels in the country's northeast. It was a shock to the young Chinese engineer.
The war has since ended and Zhang is now managing Sri Lanka's biggest construction project, Colombo Port City, a multi-billion dollar real estate project being built by the state-owned China Harbour Engineering Company, based in Shanghai.
From his smoky office high above the Indian Ocean surf, Zhang has a view of the entire construction site. "First we expanded the harbor," he says. "Now we are reclaiming two square kilometers of land from the sea where we will build apartments, office towers and shopping malls." The plan is technically challenging: The ocean on Sri Lanka's west coast is rough, the environment is sensitive and the port-side development must be able to withstand a rise in sea levels over the next 100 years of up to two meters.
But Zhang's company has experience with complicated commissions. It has constructed hundreds of piers, bridges and wharves in China and Zhang himself has worked on many of the projects. "But in China, large construction companies like ours are now under stress," he says. Most of the ports, train lines and roads have been built, demand is sinking, wages are increasing and the competition is getting fiercer.
This has led China Harbour, traditionally a construction firm, to add real-estate to its portfolio, looking for potentially profitable projects around the world. Because Beijing's state-owned companies are specialized in megaprojects, they are also competing with each other abroad for major commissions -- and that can at times lead to political turmoil.
When the opposition won the election in 2015 in Sri Lanka and suspended the port city contract, the project's future became uncertain. "You have to be prepared for things like that -- and you have to have good lawyers," Zhang Xiaoqiang says. After several rounds of negotiations, the new government reversed its decision. Zhang's company will not own the land it is reclaiming, but it will be granted a 90-year lease.
"The Chinese are so strategic," says Dushni Weerakoon of the Colombo-based Institute for Political Studies. That can be seen in Africa, but also in the countries along the Indian Ocean like Pakistan, Bangladesh and Burma -- and in Sri Lanka.
Sri Lanka has traditionally had two sponsors, India and the United States. But when the government in Colombo decided in 2008 to expand the fight against the Tamil separatists into a full-fledged war, Washington and New Delhi pulled back, as did the European Union. "It was around that time that the Chinese engagement in Sri Lanka increased significantly," says Weerakoon. "Beijing didn't ask uncomfortable questions -- it simply invested, which our government liked better than being lectured by the Americans or Europeans."
Since then, Chinese companies have invested more than $5 billion in roads, power plants, hotels and ports in Sri Lanka alone. At times, as many as 30,000 Chinese workers were in the country -- and they made sure that the individual projects were completed on deadline.
But observers have posed questions about some of the projects, asking whether they make sense from an economic perspective -- such as the port at Hambantota built by Zhang's company on the southern tip of the island, where a boat only docks every few days.
"The economic logic behind this project is obvious," Zhang Xiaoqiang says, rejecting such criticism. "One of the world's busiest sea routes is located just 10 nautical miles south of Hambantota." His company is now planning to build an industrial park next to the port.
Weerakoon says that India, especially, is concerned that Beijing could one day use the strategically well-positioned port at Hambantota as a naval base. Chinese warships have been spotted several times in the waters near Sri Lanka and in 2014, two Chinese submarines docked at the new port in Colombo built by China Harbour. Officials did not inform India in advance. "That's the kind of thing that fuels suspicion," says Weerakoon.
- Part 1: China's High Seas Ambitions
- Part 2: A Double Standard When Judging China's Intentions?