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Chinese Silk Road – One Road, One Belt, One Last Chance

new silk road project

How the New Chinese Silk Road Offers Istanbul an Unprecedented Opportunity

As Christopher Columbus set foot in the Caribbean Islands in October 1492, it marked the beginning of the end of the old world order and the start of the Atlantic era. The Ottoman Empire and the Chinese Ming Dynasty were at their height at this point, commanding the trade in their respective Mediterranean and East Asian regions. Both of these old world empires were well-aware of this rapid development thanks to their legendary naval explorers, Barbaros Hayreddin and Zheng He, but were unwilling to join the Western civilized in their exploitation of the Americas. As a result, the millennial Silk Road lost its appeal as the Western explorers flocked to the resource-laden new found lands.

Such reluctance has cost both these civilizations quite significantly, as both were eventually dominated severely by the rising European powers in the following centuries. Xi Jinping’s New Silk Road project that was proposed in 2013 with the motto of “One Belt One Road” may be a catalyst in the reversal of the current Atlantic oriented world order of the traditional integrated Eurasian model. The New Silk Road project is an exciting development for all the countries involved in it, yet offers an unprecedented opportunity for Istanbul in its race to the top.

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Due to its geographical location, Istanbul will inevitably aim to be the major crossroad in this project between Europe and Asia. Yet, Istanbul’s branding as being a “hub between the West and the East” is contested much in the 21. The Century by the miracles of the Gulf, such as Dubai and Abu Dhabi, as both emirates handle a volume of international trade that is more than the double of the amount that goes through Istanbul. Contrary to the common belief, both these cities did not get where they are today solely with petrodollars. By the 2000s, oil revenues accounted for less than 3% of Dubai’s GDP. It was the value added sectors of finance, air transport and tourism that played the most significant role in their story of becoming global business centres from barren deserts in less than two generations.

Istanbul, having lost the chance to become the financial centre of the Middle East to the Emirates due to many structural reasons, is presented with a valuable chance to regain its Leadership position in the EMEA business arena with the New Silk Road project. Relying on conventional forms of trade through shipping ports and trains will not get Istanbul too far. In order to compete with the Gulf for becoming the major hub between the East and the West, a 3-pronged strategy that is oriented to high-tech and intellectual development must be adopted.

I. Air transport

As the first part of this strategy, Istanbul’s third airport, poised to become the largest in the world, must be oriented to become the leading connection destination in air traffic between Europe and the Asia Pacific. At the moment Turkish Airlines may be the airline that flies to the most countries in the world, but it has limited access to Asia compared to Etihad or the Emirates. Turkish

Airlines could use its vast network in Europe, where its rivals from the Gulf are relatively less present, to lead the Eurasian air transport in terms of tourism and cargo shipments. Istanbul has the necessary ability and experience of hospitality to successfully handle the growing contingent of East Asian tourists. It also has the advantage of being within the EU Customs Union, which puts it a step forward than its competitors from the Gulf, given the trilateral trade between the EU, China and ASEAN is expected to grow around 10% annually in the coming years.

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II. High-tech Communications

The second pathway that should be expected to rapidly grow with the “One Belt, One Road” is the intercontinental fibre optic infrastructure. The initiative “Trans Eurasian Super Information Highway” will become the largest communications network in the world and will connect Western Europe to China through Turkey, Azerbaijan, Russia and Kazakhstan. This grand investment is to be completed by the end of 2015 and is led by Turk Telekom, the Azerbaijan Communications Ministry and China Telecom to set up the fibre optics network of the Eurasian region that is needed to support the future developments of 4G connections. If Istanbul can use such developments to place itself as the management centre of the Eurasian communication networks, it will be indispensable to global investors in high tech developments. Compared to any other rival from the Gulf, Istanbul would have a very expedient geographical reach that would attract significant international players from the sector, especially from Central and Far East.

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III. Higher Education

In order to make sure the sustainability of the integration within the New Silk Road, it is critical to increase collaboration among the regional universities. The first step towards a true integration could be establishing a “Silk Road Exchange Program” that is modeled on the European Erasmus scheme. A widespread exchange program among the Silk Road countries, rather than bilateral scholarship agreements with limited reach, is much more instrumental in terms of creating the adequate mutual awareness and free movement opportunities.

Despite the growing trade levels, cultural exchanges within the Silk Road countries are still at an insufficient level. Through university students, coöperation in the industries like science, cinema and sports can be promoted. Istanbul became the Hollywood of the Middle East in the last decade, where scores of tourists arrive for the tour the villas where the Turkish soap operas are filmed. Turkish television shows reach 700 million viewers worldwide and Istanbul can easily use this global reach to create awareness of the Silk Road initiative through documentaries and movies within the younger generation. Collaboration in higher education would also enhance the already vibrant startup scene in Istanbul, as mutual funds can be established to support entrepreneurial initiatives. Many Turkish universities already have well-established incubation centers and research programs that can accommodate the use of these mutual funds. Such cultural soft power and educational competitiveness would put Istanbul a step ahead of its rivals from the Gulf within the Eurasian context.

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During the Atlantic era, Istanbul was gradually relegated from being the center of global trade and cultural interaction to a city with limited regional reach.

The New Silk Road, as it proposes to rejuvenate the ancient crossroads through the cultivation of trade routes, offers Istanbul an greatest chance to fulfil its potential of becoming the leader of Eurasia in terms of business and culture.

If the value added sectors that can enhance Istanbul’s competitive edge over its regional rivals are advanced further, such an opportunity would be well seized upon.

About the author

ONAT KİBAROĞLU

ONAT KİBAROĞLU

Business Administration graduate from Koç University, Istanbul. He is now studying South East Asian studies (MA) at the National University of Singapore. He studied Mandarin in Fudan University in Shanghai during the 2015-16 academic year. He has also spent exchange semesters in The University of Hong Kong and Sciences Po Paris during 2014. He is currently the East Asia Marketing Manager of a German consulting firm involved in high-end construction projects. He is also a weekly contributor at the Global Times in Shanghai, one of the largest newspaper establishments in the PRC.

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