Europe stands to benefit from new Silk Roads

More than 500 delegates and entrepreneurs from countries along the Silk Road Economic Belt attended the China-EU Rail Logistics Forum Multi-communication, in Zhengzhou, capital of Central China's Henan province, Friday. [Photo by Xiang Mingchao/provided to chinadaily.com.cn]

The European Union is following China's initiatives to develop a Silk Road Economic Belt and a 21st Century Maritime Silk Road with considerable interest. The two projects have major geostrategic, political and economic implications that the EU (and the United States) cannot ignore.

During his visit to the EU in spring 2014 Chinese President Xi Jinping informed EU leaders about Beijing's initiatives to deepen connectivity between East Asia and Europe via the New Silk Road (or the Silk Road Economic Belt) and the 21st Century Maritime Silk Road. EU leaders expressed interest in the initiatives. The final communiqué stated: "In view of the great potential to improve their transport relations, both sides decided to develop synergies between EU policies and China's 'Silk Road Economic Belt' initiative and jointly explore common initiatives along these lines."

In the intervening nine months Xi's initiatives have developed rapidly with China announcing a number of major infrastructure projects to support the maritime road initiative. Beijing has said it plans to create a $16-billion fund to build and expand railways, roads and pipelines in Chinese provinces and autonomous regions that are part of the planned Silk Road Economic Belt.

China is also encouraging its State-owned enterprises and banks to support infrastructure development along the two routes. This is in addition to the substantial funds that it has already promised for its Silk Road partners. With the establishment of the Asian Infrastructure Investment Bank, even more money is likely to flow into the region to strengthen infrastructure capabilities.

The maritime road initiative appears to envisage a system of linked ports, infrastructure projects and special economic zones in Southeast Asia and the northern Indian Ocean. Perhaps of equal or even greater significance is the development of new production and distribution chains across the region, with China at its center.