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Great Britain’s Venture into the Silk Road

Four Significant Reasons Why Expanding the Traditional Routes into the British Isles Will Make a Lot of Sense ― and Cash …

Simply Google the phrase “Silk Road” for a second. You will come up with images of caravans strolling through vast deserts of Central Asia and many versions of maps which depict routes from East China all the way to Istanbul or Venice. The recently emerging rhetoric of the post-modern Silk Road ― or China’s One Belt One Road initiative ― is also generally based upon those traditional routes that stretch through old world.

The champion of the One Belt One Road (OBOR) initiative, Chairman Xi Jinping, has been busy with an engaging international agenda of mutual state visits since the project’s announcement in 2014. China is rapidly strengthening its ties with nations within the span of the OBOR: Pakistan, Kazakhstan, Turkey and many more that make up the Eurasian economic corridor. Yet, one state visit during October 2015 to London sticks out of the line-up. From that gathering it became clear that Britain, which is not within the traditional Silk Road territory, seeks to play a substantial role within the new OBOR initiative. It’s intriguing to decipher why the UK is so eager to take part in the Silk Road project and why China is hoping for its high-profile involvement.

The New Silk Road

So, here are 4 competencies that the British can offer China to boost the competence and reach of the newly developing Silk Road initiative:

1. Banking and Infrastructure Financing …

“Connecting China’s less developed West to developed Europe presents exciting economic opportunities. Last week saw almost £40bn of contracts signed between our two countries, which is impressive”, indicates the Chairman of Standard Chartered Bank, Sir John Peace in an article he penned down for The Telegraph following Xi Jinping’s London visit. Standard Chartered, among with other British banks like HSBC and Barclays are indeed excited to give credits, financial consultancy and risk management services for the upcoming mega-projects within the OBOR scheme. British banks, owing to the UK’s colonial legacy in East Asia, already have strong establishments in China and are well poised to build upon that foundation by providing the cash needed to link up the Eurasian economic belt.

2. Architecture …

Besides its experience in finance, Britain is also well-equipped to offer its ability in architectural design and technology in the upcoming projects of OBOR. China could very well manage to build the highways and train tracks that will move through the Silk Road but when it comes to certain new structures that will be the landmarks of the new initiative, British architects could offer their services to come up with cutting-edge designs. Such Sino-British joint architectural landmarks aren’t too seldom already: The Shanghai Tower, which dominates the latest skyline of China’s financial hub, was designed by a British architect, along with the famous Terminal 3 of Beijing International Airport.

3. Renminbi Internationalisation & Commodity Trade …

Renminbi’s international reputation, presence and reserve asset value improved significantly with its accession to the IMF’s SDR basket, which roughly could be described as an élite league of world’s leading 5 currencies. The accession was a part of China’s grand plan of putting the Yuan in every central bank’s treasury, preferably in high amounts. London is well-equipped and determined to lead this globalisation drive of the red-back, as it is conducting 40 percent of the world’s foreign-exchange trade. In line with China’s ambitions, the City of London already officially launched an initiative back in 2012, aiming to “Advise HM Treasury on maximising London‘s capacity to trade, clear and settle RMB and articulate practical next steps and long term aims for the development of the RMB market in London”.

4. AIIB’s Legitimacy and Global Reach …

The UK enjoys a century old, robust alliance with the US in every possible arena, from economics to world politics. The news of the UK joining the Asian Infrastructure and Investment Bank founded by China in mid-2015, however, sent ripples of shock waves through that alliance. Scores of countries from all over the globe to join the AIIB, also called China‘s World Bank ― but none caused such a diplomatic quandary as much as the accession of the UK. Formally, AIIB aims to become a massive source of investment funds for developing Asia, although it’s no secret that it’s China’s visionary attempt to create its own realm of global institutions, challenging the US dominated post-WWII world order. White House officials were frustrated about this accession, slamming it as “UK’s constant accommodation of the PRC”, as it goes against it’s strategy to keep it’s close allies out of the AIIB scheme.

Britain’s accession to the AIIB not only diluted US’ strategy of containing China’s global ambitions but also brought much-needed legitimacy to the new bank. Many critics and scholars were worrisome about the bank’s prospects of transparency and governance. Having the UK, along with many other Western European powers on board minimized those worries, boosting the bank’s image while unlocking Britain’s experience in developing and maintaining global institutions.

It goes without saying that the success of the new Silk Road scheme and the prosperity of the AIIB depends heavily and ultimately on China. The OBOR is a highly ambitious, long-term initiative requiring visionary Leadership and sound funding from the Chinese Government, which hasn’t been so encouraged to build such a scheme for centuries. But given so many windows of opportunities for coöperation, the UK could be one of the critical actors who can realise Xi’s Chinese Dream.

About the author

ONAT KİBAROĞLU

ONAT KİBAROĞLU

Onat Kibaroglu is a PhD candidate at the National University of Singapore and a weekly contributor at the Global Times in Shanghai, one of the largest newspaper establishments in the PRC. At the time of writing he is working part-time at a Public Affairs & Relations consulting agency “Hume Brophy” at their Asian HQ in Singapore.

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