China's Iron Silk Road
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By Stephen Costello
New thinking about China's One Belt, One Road (OBOR) initiatives and the newly launched Asian Infrastructure Investment Bank (AIIB) shows why key rail and development projects will test and sort out companies, national interests, and leaders in the coming decades.
Together with the Northeast Asia Peace and Cooperation Initiative (NAPCI) from Korea and its Iron Silk Road predecessors, these initiatives may begin to bear fruit, now that their economic and development logic is pushing against the short-term security objections that have stalled them until now.
Shaohua Yan wrote in The Diplomat recently that the interests of China and Europe are converging to support increased work on the OBOR, and that some of the security concerns of Europeans could be met. Reasons for European disinterest at this point could be several.
The OBOR projects need time to develop, and for their supporting structures to be created. Europe is a long way from China. But the political impact of U.S. and South Korean objections ― for reasons similar to objections to the AIIB from the U.S. and for unrealistic diplomatic prerequisites and mythical reunification scenarios from the South Korean administration, also may keep European planners away.
Similar to the OBOR, Bradley Babson has noted in 38North.Org that the AIIB could be one of the most attractive opportunities for North Korean involvement ― and integration ― since the coordinated Korean-US engagement of the 1990s.
In one sense the China-Europe OBOR is in competition with the Japan-China Korean Peninsula plan. Which one will gain AIIB, government or private investment first? In which case will the security concerns be addressed first, or with the most creativity? Which has the most viability, and when? The costs of freight by rail provide multiple incentives along several routes west from China and east from Europe.
The same is true for the Japan-China route through the Korean Peninsula. The people-to-people advantages are as important as commercial and trade expansion, according to Yan, and the security considerations begin to weigh heavily toward cooperation.
On the Korean peninsula, any South-North or South-Chinese infrastructure projects only become viable when two conditions are met. First, the strategies and diplomacy of leaders and elite groups must once again support capture of the extensive opportunities in multiple sectors, including security.
Secondly, full participation by the Japanese in the Peninsular rail/transportation initiatives would make an obvious difference, locking in economic, trade, people-to-people, and security gains from the major investments. The OBOR project alone is expected to cost $1.6 trillion, notes Yan, and a similar scale applies to the Korea-Japan-China (and maybe Russia) projects.
The political nature of these two major development opportunities should be seen as a reason for debate, planning and promotion, rather than frustration. After all, the number of interest groups and stake-holders with something to gain is enormous. In the cases of the linked New Silk Road Economic Belt and 21st Century Maritime Silk Road, as well as the Korean-led NAPCI, they have been discussed in detail for at least decades, and sometimes longer. They are the kinds of issues that ambitious industrialists, thinkers and political leaders can build careers on.
The next time there are leaders in key countries who are smart enough, prepared enough and bold enough to reach for the multiple and potentially mutually reinforcing - advantages from such projects, hold on to your seats. The last time this happened, in the late 1990s, everything began to change. Ironically, the security logic was successfully integrated into the economic logic at that time.
This time, the OBOR and the AIIB will be linked to the Japan-Korea-China plans. The question is: Who will be far-sighted and politically visionary enough to embrace the mutually-reinforcing economic, trade, political and security dimensions of such projects in coming years?
Stephen Costello is producer of AsiaEast, a Web and broadcast-based policy roundtable focused on security, development and politics in Northeast Asia. He previously directed the Korea program at the Atlantic Council of the U.S. He writes from Washington, D.C. He can be contacted at cosetllos@asiaeast.org.