Why Are the Silk Roads Important Today?

Introduction

Throughout history, Eurasia had been using communication paths for trade purposes, which gradually acquired the meaning of the specific concepts that are now called Silk Roads. The Great Silk Road was one of the oldest Eurasian trade routes of a global meaning. It began on the imperial road in the old capital of China similar to all other trade routes to Europe. This road then went through the northwest of China and continued in Central Asia. Recently, China has decided to revive this project. This involves creating a belt for the economic development of the New Silk Road based on the old concept. The construction of such routes is very important for participating countries, since it makes it possible for them to obtain economic benefits for themselves, cooperating with powerful economies in the trade and economic spheres, and also to realize socio-cultural exchange despite certain disadvantages.

Features of the Silk Road in the Past and Their Impact on the Present

The Great Silk Road was one of the main components of economic cooperation between the countries of Asia and the European continent. The maritime and land routes formed an integral undivided network, which served as a link between East and West and was used mainly for trade purposes. These paths also contributed to the constant movement and mix of people who differed in their religious, ethnic and cultural backgrounds. Silk Road made it possible for people of different nations share their knowledge, ideas, beliefs and cultures. As a result, all these processes led to development of the Eurasian peoples, as well as made a great influence on their history (United Nations Educational, Scientific and Cultural Organization n. d.). It signified an intellectual and cultural exchange, and many cities through which the Great Silk Road went, became cultural and educational centers. This helped different peoples to share their knowledge on art, science, and literature, as well as craft and technology.

These routes were also the main methods of communication in regard to the spread of religions across the Eurasian continent. For example, Buddhism is one of those religions that were transmitted through Silk Roads, with their ideas and art, regardless of distance lying ahead. Other world religions were also involved, for example, Hinduism and Islam were introduced to such remote island countries as Malaysia and Indonesia, due to maritime trade routes that began in Arabia and India (United Nations Educational, Scientific and Cultural Organization n. d.). It was a comprehensive socio-cultural and economical exchange, the results of which are valid even today.

The Meaning of the Silk Road Today

In 2013, the president of China — one of the most powerful economic powers in the world — announced the creation of the “Silk Road” initiative and expressed a desire to implement it as soon as possible. This meant tremendous investment into the means of connectivity such as ports, highways, and railways, which transformed the ancient Silk Road into a golden road for neighboring countries (Hansen 2015). Pakistan, Afghanistan, and many other Central Asian countries can also take part in the deployment of economic corridors to the European region. The initiative was officially called the “Economic Zone of the Silk Road and the Sea Silk Road of the 21st Century”, and its alternative name is “One Belt, One Road”.

Central Asian countries from Kazakhstan to Tajikistan play an important role in this economic interaction because they act as an underground bridge linking China’s fast growing markets with the European ones. However, according to the official information, the economic corridor is accessible to any country wishing to accept Chinese investments in its infrastructure. For example, one of the first countries in Europe, which signed an official Memorandum of Cooperation in June 2015 was Hungary.

However, within the framework of this project, the participating countries are forced to use Chinese investments. One of the most important goals of the New Silk Road is to reduce pressure on Chinese ports (including the ports on Shanghai, Hong Kong, and Guangzhou). Moreover, its creation is also aimed at improving trade position of China in the world, especially by taking into consideration problems connected with some of its trade routes (for example, from Pacific to America) (Hansen 2015). Another aim of the New Silk Road is to balance the economic inequalities across highly developed coastal regions, where most middle-class Chinese citizens live and the domestic regions where the level of income leaves much to be desired. This is mainly due to the fact that China is heavily dependent on maritime trade. Strategically, this is unprofitable for China, so it is looking for other ways to implement trade and economic practices.

The Silk Road and the Chinese Economic Marvel

Today, China is one of the strongest economies in the world. Therefore, it tries to seize all the possible benefits from economic cooperation and transform them into economic achievements for its own prosperity. In order to free itself from excessive labor and industrial power, China seeks to engage the countries of the Middle East, Central Asia and Southeast Asia in order to alleviate the situation (Kroeber 2016). The “One Belt One Road” initiative will open economically attractive economic cooperation projects that will bring many benefits not only to China but also to its partner countries. One of the projects under the control of this initiative is the Sino-Pakistani Economic Corridor. The creation of this path included China’s investments in pipelines, motorways, railways, and other connectivity routes in the excess of $ 46 billion (Kim 2017). As a result, Islamabad characterizes relations with Beijing as the cornerstone of Pakistan’s foreign policy (Kim 2017). Obviously, Chinese workers will take most job positions in such projects and most of the profits will be obtained by Chinese development companies. Despite this fact, Pakistan has undoubtedly benefited from infrastructure projects that Beijing largely pays for.

Accordingly, infrastructure is the key subject of China’s export to other countries involved in the Silk Road. In this respect, China is one of the world leaders in the export of goods. For example, it has been the world’s largest solar panel manufacturer since the year 2013, and is, of course, Japan’s first competitor in the development of high-speed railroads (Kim 2017). Recently, China has launched the railway line, which stretches from Zhejiang in the east coast of China to London, Great Britain. According to Kim, the government approved the further expansion of the rail network scheduled for 2020, which will be accompanied by an investment of $ 503 billion (2017). This approach is cheaper and faster than freight transport that brings specific advantages. Such building projects under the New Silk Road are usually approved by partner countries, because the infrastructure involved undoubtedly brings additional revenues to the region.

Advantages of the Silk Road

Considering the characteristic features of such roads, they are capable of facilitating the economic development of many countries. One of the main advantages of the Silk Road is that it connects different regions of the world (Mouselhy 2014). In fact, this is a trade route that provides a link between states located in different regions across the globe (Finer 2017). The economic impact on the countries involved in the interaction is also a benefit in terms of the economic plan. China has a particular impact, since this country is the founder of the process and invests most in the construction of the route, providing the largest share of its infrastructure involved in this project. For China and other participating countries, this is logistical and economic state security, the development of the economic potential of landlocked regions, diversification of trade routes, reduction in the time of delivery of goods, and expansion of trade coverage.

The Silk Road is important for such countries as Russian Federation, Pakistan, Georgia, Azerbaijan, Kazakhstan and many others. The last two are dependent on oil production, whose reserves are decreasing every year (Cummings 2012). The situation in Azerbaijan is critical, because oil reserves, as estimated by specialists, will last for no more than 30 years (Shepard 2016). Russia initially accepted the construction of the New Silk Road as an intervention of China to its sphere of influence. However, the situation later changed, because the Russian Federation is currently suffering from low oil prices and sanctions imposed by the United States due to the violation of Ukraine’s territorial integrity. Due to these economic burdens, Russia is forced to seek other ways to replenish its economic reserves, so China’s economic initiative is a good option for doing it. Georgia is one of the countries whose economy was almost destroyed as a result of political instability and civil war (Shepard 2016). However, the improvement of the situation in the mid-2000s and successful reforming of the state economy gave the country a chance for progressive cooperation within the New Silk Road project, which is an undeniable advantage for the Georgian economy. As for Pakistan, due to the disadvantageous geopolitical situation, the country has difficulties in the economic sphere. This is due to the political struggle against India in the south-east, with Iran in the west and Afghanistan in the north, which make the country especially vulnerable (Shepard 2016). The Sino-Pakistani economic corridor, which is the basis of the Chinese initiative, is a brilliant opportunity for Pakistan to improve its economic potential and expand its internal infrastructure. The context of economic cooperation and the establishment of the economic status of the states depend on the success of the Silk Road project.

In practical terms, logistics companies are involved in the transportation process. This is an additional guarantee of cargo storage that is meant to prevent customs clearance issues. The logistics provider, as an intermediary in the scheme, to which the state and the client are parties, assumes responsibility for the customer’s product and can also offer a full range of additional services such as trucking, customs brokerage, warehousing services, etc. With the participation of key players in the logistics and transportation market, they will be able to guarantee the provision of relevant services and approaches that would take into account the client’s interests, ensuring rapid adoption of operational decisions, high level of engagement of staff, customer loyalty and other benefits that usually arise in the conditions of market competition.

Some of the countries participating in the route development see the most important strategic advantages of this process in the development of alternative routes bypassing Russia. For example, for Georgia and Ukraine, such a route would be a guarantee of national security. An equally important aspect that makes the construction of the Silk Road important for the whole world is the socio-cultural exchange. In the context of modern globalization processes that have absorbed the entire world, this issue is of great importance. Countries exchange cultures, ideas, art, religions, etc., thus enriching each other’s cultural heritage. This allows citizens of different states to get closer and might also reduce the probability of wars between different nations. This is a good role model for other countries of the world that can create their own economic initiatives of a similar nature in other regions and ensure economic and cultural prosperity for themselves and their partners.

Disadvantages and Weaknesses of the Silk Road

Despite the significant economic benefits, the project has a range of disadvantages that affect the efficiency and the actual process of establishing economic interaction between different states. From a global perspective, the New Silk Road project first of all poses a threat to small or developing countries. The problem lies in the absorption by large countries and economic giants of underdeveloped economies (Mouselhy 2014). Some of the tools used in this process are the seizure of economic markets, the imposition of certain economic strategies, non-mutually beneficial cooperation, etc. The same problem can be applied to the socio-cultural aspect. The cultures of developing countries can be absorbed by others, which may lead to them losing their cultural identity and peculiarities, and eventually getting blurred among the “stronger” foreign cultures.

The practical side of the project also has some disadvantages related to economic planning. Some of them are related to the route and have been detected at the stage of project preparation. One of such “bottlenecks” is the possible delivery time (much longer than the usual route through Russia) and the irregularity of running, which does not allow the business to plan loading. The question has also arisen at the two maritime stages of the route in relation to the fact that across the two seas, the train was transported on ferries. In this context, there are a number of challenging issues, including the problem of high probability of adverse weather conditions at sea. The test run of the train has shown that for the commercial success of the project it is necessary to solve a number of topical issues. Problematic is also the question of the cost of delivery, which is much larger than when transported through the territory of the Russian Federation. However, this issue is almost resolved, as an increase in the volumes of transportation and involvement in the project of other countries is likely to reduce the cost of delivery.

Conclusion

In conclusion, China’s economic initiative, called the New Silk Road, is one of the examples of how partnerships in this area with other countries help in the development of the region. This is very important not only for participating countries, but also for other countries of the world that can be sure that the initiative is working and make their own plans for economic corridors in other regions. The Silk Road is a valuable instrument that brings a number of economic and socio-cultural benefits and is one of the means of uniting the world and promoting cooperation between different countries. Under the conditions of globalization threats, the Silk Road is an initiative that gives each country an opportunity for development and prosperity.