As preoccupation with trade deals, single markets and customs unions continues, maybe it’s time to take a fresh look at a rapidly changing world?
Listening, as one does, with barely half an ear to the Today programme while scanning the daily paper, the other morning, my reverie was interrupted by Nick Robinson announcing the next interviewee as “Peter Frankopan, professor of global history at Oxford University and author of The New Silk Roads”. As I’m currently half way through Frankopan’s earlier book The Silk Roads: a new history of the world, I abandoned the newspaper and listened properly.
Discussion was of how the focus of global trade is shifting eastward to a world connected by the old “silk road” which ran from China’s Pacific ports to the Mediterranean. According to Frankopan, half of global GDP is now accounted for by the countries in between which include China, India, Turkey and all of Central Asia. “Are we making a historic error in looking West and not enough to the East?” asked Robinson. “The world that is on the move, more aggressively and more optimistically,” replied Frankopan, “is the world that connects across the old silk roads.”
For this segment of the global economy “Brexit is of no significance” added Frankopan, and instead of engaging with this rapidly growing market, a typical western reaction has been President’ Trump’s various trade wars, sanctions or troubled relationships involving such “silk road” countries as Iran, Pakistan, Turkey, Russia and China.
This need for a more global view of world trade has figured in the ongoing Brexit saga, with some lamenting the introspective nature of EU trade while others cited all those potential trade deals not only with the USA and Australia, but with India and China as well. Indeed, I was told earlier this year of at least one UK supermarket already investigating Indian farms as possible sources of fresh products in a post-Brexit world.
A preoccupation with Dover-Calais freight movements, may be understandable in the current climate, but Frankopan argues that this very limited horizon is due to a lack of knowledge or understanding of the world further East, at a time when China is making substantial investments in building supply links along those old silk road routes. Already Chinese trains are regularly making the three week journey to London, Madrid or the Duisburg distribution hub.
Its “belt and road initiative” (BRI) – with its “belt” of road and rail links connecting Europe, Africa and Asia to China and maritime “roads” spreading out from the South China Sea and Indian Ocean – has met with much criticism in the West, not least because the construction contracts have a marked tendency to be awarded to Chinese firms, while some of the poorest countries in the world are building up massive debts to China in the form of loans used to finance the local infrastructure needed to be part of the BRI: one Sri Lankan port which defaulted is apparently now owned by the Chinese on a 99-year lease.
Rather than – as Frankopan would recommend – learning to “adapt to a changing and evolving world”, many European nations prefer to raise concerns about growing Chinese involvement in the continent. A German news report in September suggested that 27 of the EU’s 28 ambassadors to China (the dissenter was apparently the Hungarian envoy) had signed a report criticising the BRI, arguing that it “runs counter to the EU agenda for liberalising trade and pushes the balance of power in favour of subsidised Chinese companies”. Given the EU’s fondness for protectionist common external tariffs the claim to be “liberalising trade” does sound rather contrary. One could imagine that the EU’s ambassadors might now understand how the Empress Dowager Cixi and the “Boxers” felt back in 1900 when they rebelled against “Western colonisation” and restrictive trading practices forced on the Chinese.
European multinationals may understandably be concerned about competition from Chinese producers, especially when enabled by a fast track supply route for their goods, but rather than whinge, surely they should be focusing on encouraging two-way traffic for the BRI? Travelling by the original silk roads merchants would have taken 18 months to go from Xian to Rome or Constantinople and back again. Far more likely those carrying Chinese silks made it no further than Samarkand, traded their wares for woollen carpets, glass, camels or furs and headed for home. Products likely to appeal to modern Chinese customers are rather more sophisticated, but given their growing affluence – and European high-tech innovation – there must be some items that could help fill an East-bound train?
If Europe looks on the “new silk road” with trepidation, others take a very different view. Visit the ancient city of Khiva in Uzbekistan – an original “silk road” trading point – as I did recently, and the guide will point out an enormous mural on the city walls. It puts Khiva, along with Samarkand and Bukhara, at a key crossing point for supply lines coming from both China and India. This, the guide declares, is not the old “silk road” but the new “silk road project” with China and will bring “much prosperity” to the region. As Peter Frankopan says, perhaps it really is time to “understand more about these other countries” and extend our trading horizons further East beyond Europe?
This article first appeared in Logistics Manager December 2018.