159th bergedorf round table

Berlin, 26 – 28 June 2015 cooperation along the new silk road

Körber Foundation International Affairs

August 2015 Cooperation along the new Silk Road

Executive Summary

• For the time being, China’s new Silk Road constitutes a broad conceptual framework for enhanced cooperation between the countries involved in the initiative, which still lacks precisely defined standards, regulations, and structures. Proponents point out that the new Silk Road will provide mutual benefits for everyone involved and that it provides for cooperation “on an equal footing.” In contrast, critics argue that the initiative is a means of enforcing economic and political interests.

• The EU should more clearly define its (economic) policy objectives in the context of the new Silk Road. The EU needs to move from a “fast follower” to a “first mover” on cooperation with China if the new Silk Road is to reflect European interests.

• In view of the fraught state of current European-Russian relations, the conflict in Ukraine could have a negative impact on cooperation in the framework of the new Silk Road.

• Although increased connectivity along the new Silk Road facilitates freight transport, it also increases the mobility of terrorist groups and organized criminals. In order to counter these threats, states along the new Silk Road will have to intensify inter­ governmental cooperation and better utilize existing multilateral forums.

The new Silk Road: More than just a Narrative?

A number of participants welcomed the Chi- A number of participants stressed that the nese initiative to deepen economic coopera- new Silk Road represented little more than tion along the new Silk Road. However, they a narrative, as it continued to lack precisely argued that the aim and substance of Presi- defined standards, regulations, and struc- dent Xi Jinping’s 2013 initiative remained elu- tures. They also cau- sive. As had been the case with the historical tioned against treat- “The new Silk Road is Silk Road, the new Silk Road comprised a net- ing the initiative as little more than a com- work of transport lanes and trade routes link- a parallel model to prehensive conceptual ing China and Europe economically, politi- - the Eurasian Econom framework that can be cally, and culturally. The 11,000 km-long new ic Union or other re- deployed as desired.” Silk Road consisted of a land route reaching gional integrational from China through Central Asia, and Russia projects. Instead, they to the EU. In addition, its maritime corridor viewed the new Silk Road as a comprehensive would link South and East Asia to the Middle conceptual framework that could be deployed East, Europe and Africa. as desired, and that provided enough space

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for existing institutions. Moreover, the new ­integration. The EU was said to favor “coop- Silk Road illustrated a gradual change in Chi- erative integration,” Russia, in contrast, was nese foreign policy as it represented China’s promoting “assertive cooperation”, whereas answer to demands that the country accept a China was primarily interested in “economic higher level of inter- penetration.” “The parties compris- national responsibility.­ ing the new Silk Road The Chinese partici- initiative are involved pants repeatedly high- ‘on an equal footing.’” lighted the initiative’s From Economic Integration flexibility and inclu- to Political Cooperation? siveness. Unlike the European Union, they argued, the new Silk Several participants stressed that Central Road was open to all interested states that Asia’s location meant that it was well placed pursued common interests in the areas of to act as a site of enhanced economic coop- infrastructure, trade, and investment. No one eration between China, Russia, and Europe would be excluded, and cooperation would due to the shared economic interests of these be based “on an equal footing.” They also countries. emphasized that there would be no formal Beijing was viewed as particularly interest- founding treaty. ed in the region’s natural resources. At the Nevertheless, some Western participants same time, the region acted as a market for were skeptical, and questioned whether Bei- Chinese exports, especially due to its loca- jing was pursuing a hidden agenda. They ex- tion “on China’s doorstep.” The region also pressed concern that China might use the offered promising investment opportunities, new Silk Road to strengthen its economic and and large-scale projects in Central Asia could political influence. At the same time, the partly absorb the overcapacity of China’s in- Western participants frastructure sector. In addition, the partici- underlined that func- pants argued that China was using the new “Is China pursuing a tioning economic co- Silk Road to develop poorer regions of West- ‘hidden agenda’ with operation not only re- ern China with the aim of furthering politi- the new Silk Road?” quired mutual trust, cal stabilization. Furthermore, China sought but also a minimum to counter rebalancing by the US towards the level of symmetry. Importantly, the states Asia-Pacific by orienting itself more strongly along the new Silk Road were viewed as dif- to the West. Finally, the participants main- fering substantially in terms of population tained that China’s attempts to connect East size, economic power and trade volume. The and West underscored its character as zhong Western participants also questioned wheth- guo (“the Middle Land”). er China – as an economic and political heav- Given Russia’s fraught (economic) relations yweight – would actually permit all of its with the EU, Russian participants viewed the partners to co-determine the rules governing new Silk Road as a welcome alternative. They cooperation. also underscored the Eurasian Economic One participant viewed China, Russia and ­Union (EEU) as a complementary institution the EU as proposing competing models of to the initiative and emphasized possibilities

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for cooperation in infrastructure, transport, ments could lead Central Asia to establish it- energy, and investment. However, one par- self as a competitive alternative to the East ticipant pointed out that Russia, Belarus, and Asian boom regions. Some participants even Kazakhstan, as members of the EEU, were re- believed that cooperation on technical issues sponsible for about one third of global protec- might result in deeper cooperation on other tionist measures. This point was said to dem- issues and even lead to onstrate the challenges that Russia would the development of “So far, cooperation have to overcome if it were to move towards free trade areas. How- between the countries China in terms of economic openness. ever, this seemed un- along the new Silk Several participants called on the EU to likely in the near fu- Road has been re- more clearly define its (economic) policy ob- ture. stricted to technical jectives regarding the new Silk Road. They ar- The Shanghai Coop- questions.” gued that if the EU wanted to be viewed as eration Organization a more attractive and serious partner in the (SCO) was viewed as region, then it needed a Central Asia strate- the most useful existing format for current gy that went beyond soft policy issues. More­ economic cooperation and integration in Cen- over, in terms of cooperation with China, the tral Asia. Nevertheless, its role was in need of EU would have to change its strategy and be- clarification to avoid competition with other come a “first mover” instead of a “fast fol- organizations, as this would be counterpro- lower” to ensure the initiative reflected its ductive. Some participants were concerned interests.­ that the founding of the New Development So far, cooperation between the countries Bank by the BRICS states, and the Asian In- along the new Silk Road was said to have frastructure Investment Bank (AIIB), would been restricted to technical questions, such result in increased competitive pressure – as harmonizing standards, developing more even though a number of Western states had flexible rules of origin, and improving coop- ­decided to participate in the AIIB against the eration on customs regulations and access to ­position of the United States. public procurement. In the long-term, how- ever, new perspectives were developing and this was particularly the case for Central Asia. The construction of value chains of geopoliti- cal relevance was highlighted as an example. The participants stressed that these develop-

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The Conflict in Ukraine: parency regarding their respective goals and An Obstacle to Cooperation? interests in the Ukraine conflict. One par- ticipant maintained that although President What are the implications of the conflict in ­Putin had proven himself a competent tac- Ukraine for cooperation between Russia, Chi- tician, he could hardly be considered a fore- na, and European states in terms of the new sighted strategist, as his acts were barely cal- Silk Road? Some participants feared that in culable to outsiders. This was also reflected the long term the conflict would have a neg- in the current situation in eastern Ukraine ative effect on cooperation between these where President Putin was said to be treat- countries. Other participants pointed out that ing the separatists as useful instruments that Russia and Europe had maneuvered them- could be deployed at will. The support of the selves into a dead end during the course of Kremlin, however, was neither boundless nor the conflict in Ukraine and that it was time unconditional and Moscow was seen as hav- to begin a dialogue that went “beyond the cri- ing made no previous attempts to establish sis.” They pointed out that cooperation was coherence between the largely uncoordinat- needed on issues associated with low politics, ed separatist groups. as these could build confidence and hence pave the way to rapprochement between Rus- sia and Europe. Other participants disagreed vehemently with this view, arguing that pro- Challenges in Security Policy gress in the Ukraine conflict was indispen- sable for improved relations between Russia One participant argued that the Chinese and the EU. proverb “If you open the window, flies come The participants pointed out that Russia into the house,” emphasized the security was orienting itself increasingly towards the risks that China faced through the increased East to compensate for the economic impact economic and infrastructural integration as- of Western sanctions. However, the Chinese sociated with the new Silk Road. More con- and Russian partner- nectivity, the participant argued, not only “President Putin has ship was viewed as lit- facilitated freight, it also increased the mo- proven himself a tle more than an alli- bility of terrorist groups and organized crimi- competent ­tactician, ance of convenience. nals. Therefore, the construction of transport but he is by no According to some, corridors in China’s western neighborhood means a far-sighted the fact that the Chi- would have to be accompanied by options ­strategist.” nese government had for action on security policy challenges, par- abstained on the UN ticularly on jihadist terrorism. The majority Security Council’s res- of participants agreed that the causes of the olution on the Russian annexation of Crimea security threats along the new Silk Road were on March 15, 2014 could be understood as mainly rooted in the various conflicts in the China signaling tacit support for Russia, with- Middle East. Instability within the arc of cri- out exposing itself to Western criticism. sis stretching from the Levant to the Hindu Russian and European participants accused Kush, as well as the growing threat posed by each other of lacking predictability and trans- Islamist terrorism, posed serious hazards to

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the new Silk Road. Close cooperation in the Kyrgyzstan, Libya and Syria, and investment fight against terrorism, however, was viewed and the development of infrastructural pro- as unlikely in the near future. jects in regions that Beijing considered strate- Beijing had expanded its bilateral coop- gically important. eration in military and security policy is- sues with Afghanistan and Pakistan. Howev- er, multilateral forums such as the SCO, the Organization for Security and Co-operation Geostrategic Implications and in Europe (OSCE) and the Collective Securi- the Role of the United States ty Treaty ­Organization (CSTO) had been not used enough. Trilateral cooperation between One participant compared the role of the US China, Russia and Europe on security-related in the new Silk Road to China’s participation issues, it was argued, was unlikely for the mo- in the Trans-Pacific Partnership (TPP). Al- ment. though the new Silk Chinese participants stressed that Beijing Road was not directed “Washington has a was reacting to the frequently expressed at Washington, the low-level presence in ­criticism that it was not accepting enough American approach Central Asia.” ­responsibility in security policy. They pointed was still said to be sig- out that China was conducting an internal nificant, albeit indi- ­debate on “creative in- rectly. One participant explained that it was “Beijing is more prag- volvement,” but that unlikely that the US would view the expan- matic in its applica- this constituted a sion of Chinese soft power along the new Silk tion of the principle more pragmatic inter- Road as a threat to its own role. Instead, the of non-intervention.” pretation of non-inter- participant underscored Washington’s low- ference, rather than a level presence in Central Asia, and reminded departure from this that the US was concentrating on its own principle. Furthermore, they stressed that “New Silk Road” via the promotion of energy China had to strengthen its capacity to act on projects in Afghanistan and Pakistan. elementary security interests and strategic Several participants argued that it was not goals, but ruled out the use of military force. enough to analyze Beijing’s initiative through Examples that were said to be illustrative of the prism of economic and geo-economic China’s “creative involvement” included the ­factors, as geostrategic aspects also had to be evacuation of Chinese citizens from southern taken into account. It was ­conceivable that

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geopolitical blocks could emerge that would compete with one other. One possible con- stellation included deepening rivalries be- tween the EU and the Eurasian Economic ­Union – with the conditional support of Chi- na. An alternate scenario focused on EU-Rus- sian rapprochement, as this could thwart the economic and increasing political domi- nance of China. In the third scenario, the EU, Russia and China formed a “Eurasian bloc” as a counterweight to the US; this was the only scenario that took Washington’s role into consideration. One participant remind- ed that as Beijing had begun the initiative, it enjoyed the strategic advantage of being the firstmover. ­ Finally, the extent to which the new Silk Road might develop geopolitical ­relevance beyond the region stretching from China to Russia and the EU was said to de- pend largely on the evolution of its maritime corridor, which also included the Middle East and Africa.

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host and chair Dr. Thomas Paulsen, Member of the Executive Board, Körber Foundation, Hamburg list of participants Niels Annen, MP, Spokesman on Foreign Affairs, Dr. Thomas Paulsen, Member of the Executive Social Democratic Party (SPD) Parliamentary Group, Board, Körber Foundation, Hamburg German Bundestag, Berlin Konrad Pawlik, Undersecretary of State for Develop- Dr. Thomas Bagger, Head, Policy Planning Staff, ment Cooperation, Polish Diaspora and Eastern Policy, Federal Foreign Office, Berlin Ministry of Foreign Affairs, Warsaw Alexander Gabuev, Senior Associate and Chair, Paul Quinn-Judge, Senior Advisor on Ukraine and ­Russia in the Asia-Pacific Program, Carnegie­Moscow Russia, International Crisis Group, Kiev Center, Carnegie Endowment for International Prof. Dr. Mirzokhid Rakhimov, Head, Department Peace, Moscow of Contemporary History and International Rela- Dr. Nadine Godehardt, Deputy Head, Asia Re- tions, Institute of History, Tashkent State Pedagogical search Division, German Institute for International University,­ Tashkent and Security Affairs (SWP), Berlin Klaus Remme, Correspondent, Foreign and Security H. E. Guo Yezhou, Vice-Minister, International Policy, Deutschlandfunk, Berlin ­Department, Central Committee, Communist Party Daniel N. Rosenblum, Deputy Assistant Secretary of China, Beijing for Central Asia, Bureau of South and Central Asian Prof. Dr. Valerie Hansen, Professor of History; Sen- ­Affairs, U.S. Department of State, Washington, DC ior Essay Director, Yale University, New Haven, CT H. E. Kairat Sarybay, Ambassador of the Republic of Prof. Dr. François Heisbourg, Chairman of the Kazakhstan to the Republic of Austria and Permanent Council, International Institute of Strategic Studies Representative to the International Organizations in (IISS), Paris Vienna, Geneva / Vienna John C. Hughes, Managing Director, JCH Global Erich Staake, CEO and President, Duisburger Hafen Consulting, London AG (duisport), Duisburg Ambassador Prof. Wolfgang Ischinger, Chairman, Marik String, Associate and Nonresident Senior Munich Security Conference, Munich ­Fellow, Brent Scowcroft Center on International Prof. Li Xiangyang, Dean, National Institute of ­Security, Atlantic Council, Washington, DC ­International Strategy (NIIS), Chinese Academy of Dr. Justyna Szczudlik-Tatar, China Analyst, The Pol- Social Sciences (CASS), Beijing ish Institute of International Affairs (PISM), Warsaw Michael Georg Link, Director, Office for Democratic Michael Thumann, Diplomatic Correspondent, Institutions and Human Rights (ODIHR), Organi- Die Zeit, Berlin zation for Security and Co-operation in Europe Viola von Cramon, Former Member, German (OSCE), Warsaw Bundestag,­ Berlin Fyodor Lukyanov, Editor-in-Chief, Russia in Stanislav Voskresenskij, Deputy Minister for Eco- Global Affairs, Moscow nomic Development, Russian Federation, Moscow Oleksii Makeiev, Political Director, Ministry of Xu Yongquan, Deputy Director General, China Center ­Foreign Affairs, Kiev for Contemporary World Studies (CCCWS), Inter­ Dr. Stefan Meister, Head, Program on Eastern national Department, Central Committee, Commu- ­Europe, Russia and Central Asia, German Council nist Party of China, Beijing on Foreign Relations (DGAP), Berlin Dr. Yang Cheng, Associate Professor and ­Deputy Nora Müller, Executive Director International Af- ­Director, Center for Russian Studies, School of fairs; Head, Berlin Office, Körber Foundation, Berlin ­Advanced International and Area Studies, East China Bernhard Müller-Härlin, Program Director Normal University, Shanghai ­International Affairs, Körber Foundation, Berlin Zhao Huasheng, Professor and Director, Center for Dr. Andreas Nick, MP, Member, Committee on Russia and Central Asia Studies, Fudan University, ­Foreign Affairs, German Bundestag, Berlin Shanghai

List of Participants 7 159 th bergedorf round table

the bergedorf round table

Initiator Dr. Kurt A. Körber (†)

Coordinators Dr. Thomas Paulsen Nora Müller

Program Managers Laura Bake Elisabeth von Hammerstein

Address Körber Foundation Berlin Office Pariser Platz 4 a 10117 Berlin Phone + 49 · 30 · 20 62 67 ‑ 60 Fax + 49 · 30 · 20 62 67 ‑ 67 E‑mail [email protected] Twitter @KoerberIP @paulsen_thomas @MuellerNora facebook.com/KoerberStiftungInternationalAffairs bergedorf-round-table.org

© Körber Foundation, Hamburg 2015

Editor Elisabeth von Hammerstein Translation Simon Phillips Photos Körber Foundation / Marc Darchinger Design Das Herstellungsbüro, Hamburg

Responsible according to the press law (Hamburgisches Pressegesetz): Dr. Lothar Dittmer, Körber Foundation, Kehrwieder 12, 20457 Hamburg

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