China’s “One Belt One Road” initiative. Development trends and perspectives

In 2013, the Chinese government announced the One Belt One Road initiative, which it calls a global infrastructure development project. This project aims to cover Asia, Europe and Africa, ie 64% of the world’s population and 30% of the world’s GDP. In 2017, the project was formally enshrined in China’s constitution, enshrining China’s emergence from isolation as it aims to assume leadership of the global economic network. Although infrastructure development is a central component of the initiative, the project is comprehensive in nature and includes 5 formal objectives: 1. to minimize political disagreements that will hinder economic integration, 2. to create new routes connecting South, East and Armenian Asia, 3. to promote the establishment of free trade relations, to eliminate obstacles preventing the increase of investment volumes, 4. to change the rules of dram circulation, making a gradual transition to regional countries to trade in drams, 5. to contribute to the activation of contacts between the citizens of these countries. The main target of the project is currently on 2 components: energy and transport sectors. Given the fact that China is largely dependent on imported fossil fuels, most of the investment is in the energy sector itself.

In the geopolitical context, this initiative of China can be explained from the point of view of Mackinder’s theory. According to Mackinder’s theory, “he who rules Eastern Europe rules the Heartland, and he who rules the Heartland rules the world island” [1]. Mackinder includes Russia and Central Asia in the Heartland. This area has a large population and can produce a certain collective identity that will fight against the naval forces. Mackinder believed that the main challenge for the maritime states was the Russo-German unification around the Heartland. According to Mackinder, another possible candidate for control of the Heartland could be the Sino-Japanese axis. Despite the fact that the Sino-Japanese power never came to be, yet in the 21st century, China’s aspiration to the Heartland is evident, the unique manifestation of which is the ICRC initiative, which reaches the Heartland through railway junctions, transport routes and corridors. Since China is surrounded by the naval powers allied to its rival USA, Japan, South Korea, Taiwan, Singapore, so the best way for China to get out of this region is to become a naval power. Thus, China acts as a hybrid state in order to advance its interests. Therefore, it is no coincidence that One Belt One Road initially has 2 components: sea and land.

The Maritime Silk Road passing through the Indian Ocean and the western part of the Pacific Ocean is of key importance for China. These routes are used to export goods to Europe, as well as import energy resources, particularly oil from the Middle East to China. The main problem here is that these routes pass through the Strait of Malacca, which is under US control. Therefore, China needs an alternative that bypasses the strait, in the event that the routes connecting the South China and East China seas with the world are closed due to disputes with other countries of the region instigated by the USA.

Thus, the development of land corridors, railways and pipelines, which will allow bypassing the Strait of Malacca, is also important for China. In this regard, Central and Western Asia, as well as the Middle East, are important for the ICRC. Pipelines and railways in the region enable China to import oil and gas resources bypassing the Strait of Malacca, as well as connect China to its Western consumers. In addition, compared to ship shipments, rail shipments are twice as cheap and fast. In particular, against the background of the development of high-tech industry, the need for fast and cheap transportation options has increased even more. Therefore, from an economic point of view, the mutual benefit of the investments of the Moscow State University in the region is increasing.

As for the South Caucasus region, China views it as an energy and transport hub. Here, China made the most investments in Azerbaijan, particularly in the energy field. China has actively invested in the development of the Shah Deniz 2 mine. China is also interested in the Trans-Caspian underwater pipeline construction project, which will connect the resource-rich countries of the Caspian Sea. As for Georgia, it is considered by China as a geographically appropriate transport hub, in the case of Georgia, its free trade agreements with both the European and Chinese markets are also attractive, so Georgia is an attractive area for importing Chinese goods to the European market. Georgia benefits economically by providing cargo storage and distribution services. In Georgia and Azerbaijan, in addition to economic projects, China also implements social infrastructure development projects, which China implements either as a donation or on highly preferential terms. Thus, in parallel with the investment and credit policy, China also implements the soft power policy itself. Debt-financed economic projects are the result of economic power policies, while aid-financed social infrastructure development policies are defined as soft power tools. Thus, China’s influence in these two countries can be defined as smart power policy.

As for Armenia, China made the fewest investments here. The main transport project in which Armenia is involved is the North-South Corridor. However, only 5% of the road passing through the territory of Armenia has been built, and China has not made special investments in this sector. Within the framework of the transport sector, China donated ambulances and buses to Armenia in order to solve public transport problems. Unlike Armenia’s neighbors, China conducts cultural diplomacy towards Armenia. The main emphasis is on the spread of language and culture, as well as the exchange of human resources, which takes place through educational programs and is preferred over economic projects.

As it was mentioned, the two key components of the ICMP are energy and transport. Therefore, it is no coincidence that in the South Caucasus, China has made large investments in the Southern Gas Corridor project, as well as in the Baku-Tbilisi-Kars railway. The Trans-Caspian Energy Corridor is an attractive project for both Western and Eastern investments. If for the West it is an alternative way to reduce dependence on Russian gas, then China is considering a project to combine the Trans-Caspian Energy Corridor with the Trans-Caspian Energy Corridor in the future. Currently, the most developed land section of the ICRC is the Northern Corridor, which connects China with Germany through Kazakhstan, Russia, Belarus, and Poland. Back in the 2010s, the question of an alternative path bypassing Russia became important for China in connection with the ongoing confrontation between the West and Russia. Therefore, the importance of Turkey as a gateway to European markets increased.

However, the dynamics of the development of relations show that Turkey was more interested in expanding relations with China in order to ensure economic progress. Since 2014, Erdogan has made 4 official visits to China. During this time, it can be said that the parties have come to a silent agreement to develop relations around the Moscow State University, bypassing political differences.

At the G20 summit held in Antalya in 2015, China and Turkey signed a memorandum of understanding on combining the Middle Corridor and the ICRC. China has made significant investments in some Middle Corridor projects. Thanks to these investments, the Marmara underwater railway, the Eurasia tunnel and the Yavuz Sultan Selim bridge, which connects Europe and Asia via Istanbul, were completed. In November 2019, as a symbolic action to show that these investments are connecting China to Europe, a train departed from Xi’an, China to Europe via the Baku-Tbilisi-Kars route and the Marmara Undersea Tunnel. This was symbolic, showing for the first time that a train could travel from China to Europe without stopping, allowing Chinese cargo to reach Prague in 18 days.

It is noteworthy that during this period, Turkey largely avoided discussing the main disagreement between the two sides, the Uyghur issue. This became a frequent protest occasion for the Uyghur population living in Turkey, whose protest actions were suppressed by the government. In 2021, to counter Turkish public criticism in this regard, Turkish officials issued statements condemning China’s arbitrary arrests, physical attacks in detention centers and prisons. In response, China’s ambassador to Turkey, Deng Li, issued a statement warning Turkey that such statements would cause anxiety among Chinese investors and “inevitably damage bilateral relations.”

In 2018, Turkish State Railways and China’s Ministry of Transport reached an agreement on the construction of a high-speed railway between Edirne and Kars, particularly the western and eastern borders of Turkey. However, at the moment only a small part of this project is completed.

Starting from 2021, there is a decline in investment flows from China, along with which statements about political disagreements are increasing. In December 2022, Foreign Minister Mevlüt Çavuşoğlu made a surprise critical statement about China’s policy towards the Uyghur minority, stating that the slowdown in bilateral relations was the result of Turkey defending Uyghur rights to the international community, as well as Ankara’s refusal to accept China’s extradition request. Cavusoglu also criticized China for not allowing Turkey’s ambassador to China, Abdulkadir Emin Onen, to visit Xinjiang.

Thus, the recent events show that China’s interest in the Middle Corridor issue is not clear, and at the moment, China has largely adopted a wait-and-see attitude and is trying to follow the changes in the region from afar, which also determine the scenarios of possible corridors.

However, taking into account the activation of the pan-Turkist ideology promoted by Turkey, which implies the unification of all Turkic-speaking nations up to China, the strengthening of Turkey’s role in the South Caucasus also threatens China’s security. The separatist aspirations of the Muslim Uyghur community of Turkic origin living in China’s border Xinjiang province will increase due to the infiltration of extreme Islamist currents spread by Turkey. Thanks to the ICRC, China is trying to weaken the state’s separatist aspirations in some way. Thanks to China-Pakistan cooperation, China strives to improve the socio-economic situation of the province, thereby trying to reduce the grievances of the local residents. It is also an important issue that a number of terrorist groups, using the problem of poverty in the province, are trying to recruit Uyghurs into their ranks, as a result of which the separatist tendencies in the province are increasingly intensifying. Thus, the infiltration of terrorist currents near China’s borders is a security threat for China. In order to somewhat neutralize these threats, China also seeks to stabilize the political and economic situation of neighboring countries and the Middle East through the ICRC, providing financial assistance and investing, so that the spread of extreme Islamist and terrorist currents is limited as much as possible.

However, this policy cannot provide security guarantees as long as the terrorist and extreme Islamist currents are directed by the state actor. During the 44-day war, solid evidence was recorded about mercenary terrorists who were transported to the South Caucasus through Turkey. In the event of the handover of the so-called enclaves and the establishment of the Zangezur Corridor, the risks of infiltration of terrorist groups into the South Caucasus will increase significantly. Therefore, these facts are a direct impetus to the ongoing trends in the South Caucasus for China to be more consistent, as their nature is directly related to China’s national security interests.

In contrast to the weakening trend in Turkey-China relations, China-Iran relations have reached a new level since 2016, when the two sides signed the “Joint Declaration on Comprehensive Strategic Cooperation”, which became the basis for the signing of a 25-year comprehensive partnership agreement between the two sides in 2021. . Since the 2000s, China has become the savior of Iran’s economy due to the sanctions policy implemented by the West against Iran, which has given China the opportunity to have great leverage. In 2018, according to the index of Chinese investment flows, among the countries of the region, Iran was second only to the UAE and Pakistan. In turn, China is the main consumer of Iranian oil. From January 2020 to February 2021, China imported about 17.8 million tons of oil from Iran, about 75% of which was carried out “indirectly” through Malaysia, Oman, UAE bypassing the sanctions imposed by the United States.

As for the political rapprochement, it is completely logical, because both countries have a main opponent in the form of the USA. From a logistical point of view, Iran is located at the intersection connecting the Middle East, Central Asia and the South Caucasus, so it has a key role in the framework of the ICRC.

The 25-year strategic cooperation agreement between the foreign ministers of Iran and China was signed in Tehran on March 27, 2021, which is characterized by some expert circles as the “Lion and Dragon Alliance”. The above-mentioned document signals the strategic nature of the relations between the parties. The agreement outlines important milestones for the development of bilateral relations, among which cooperation in the energy sector and in the direction of infrastructure development, including the development of railways, highways and seaways, is particularly important, with the aim of increasing Iran’s role in the IGC.

It is noteworthy that the main part of the document also states that “taking into account the common interests, the parties will encourage bilateral relations and multilateral ties by implementing joint projects in the neighboring or third countries within the framework of the ICRC initiative.” Thus, in addition to bilateral relations, the document is also related to a number of comprehensive regional issues and is generally aimed at promoting the regional interests of China and Iran within the framework of the ICRC initiative. Thus, it is no coincidence that the document received great attention not only in Iran and China, but also in various countries of the region. In particular, the involvement of the parties in the North-South (Chabahar port-Central Asia) and South-West (Chabahar and Bandar Abbas ports-Turkey and Azerbaijan) corridors is mentioned. It is also mentioned about Pakistan-Iran-Iraq-Syria railway and related sub-projects, supply of natural gas through China-Pakistan economic corridor and other projects.

Although the North-South is a project promoted by India, which has a number of deep political differences with China and views the North-South as competing with the One Belt One Road initiative, China is actively interested in the One Belt One Road and the North-South in the direction of combining. Among the goals of the ICM, easing of political differences with important regional actors through economic cooperation is important, so China is taking active steps to involve India in the ICM. From this point of view, North-South is a suitable option, because the interests of the parties on this route do not clash and both countries seek to deepen relations with the main members of the project, Russia and Iran, of which, in particular, the volume of trade with Russia has increased significantly due to with the Russian-Ukrainian war.

The North-South road for Moscow and Tehran, under the sanctions applied by the West, is of key importance from the point of view of replacing the European market with the Asian one. For Moscow, the route provides an opportunity to improve its economic relations with India, which has increased the volume of Russian oil imports 22 times since the beginning of the war. For Iran, the development of the corridor offers a profitable opportunity to earn transit fees, which are estimated at about $100 per ton of goods across its territory, which is comparable to the cost of a barrel of oil. with

The North-South corridor can be crossed by 4 possible routes: the Central Asian railway, the Caspian Sea route, the road through the territory of Armenia, the railway through the territory of Azerbaijan. The route passing through Central Asia, having infrastructural inconsistencies, by and large does not justify the expectations of trade volumes between Iran and Russia. The western road, which passes through the territory of Azerbaijan, has certain advantages in terms of infrastructure preparation. The volume of trade on this route from January to May 2023 was 3.6 million tons, which is a 37.9 percent increase compared to the same period in 2022.

The problem of completion of the western route conditioned by the Russian-Ukrainian war has entered a more active phase. In May of this year, the agreement between Iran and Russia on the construction of the Resht-Astara railway, which will connect the Iranian city of Resht on the coast of the Caspian Sea with Astra on the border with Azerbaijan. According to the agreement, Russia allocated 1.6 billion euros ($1.71 billion) for the development of its section of the railway, which is expected to be completed within 48 months. Iran will pay from transit fees when the route is operational. After completion, Iran will be able to connect its railway network with the countries of the South Caucasus, Russia and the countries of Northern Europe, which will reduce the time of cargo transportation from Asia to the European Union by 4 weeks. However, for Iran, the option passing through Azerbaijan is at least preferable, against the background of the ongoing sharp geopolitical tension with Azerbaijan.

As for the transit through the territory of Armenia, recently India has been showing an active interest in strengthening ties with Armenia and expressing its desire for the North-South international road to pass through the territory of Armenia itself. The political motive for this is the day by day relations between India’s main rival Pakistan and Turkey and Azerbaijan. In addition, India shows an active interest in EAEU, and Armenia is the only EAEU member country that has a land connection with Iran. For its part, Iran has recently been taking more active steps to sign a free trade zone agreement with the EAEU. The free trade zone agreement between Iran and the Eurasian Economic Union is an important step for Tehran and Moscow to oppose Western sanctions and economic pressure. By creating a free trade zone with EAEU, Iran strengthens its relations with Russia, Central Asian republics and Armenia. Increasing the Armenian-Iranian economic partnership will strengthen Tehran’s position in the Caucasus, countering the growing role of Turkey and Azerbaijan in the region after the 2020 war.

Thus, currently, Turkey and Iran, fighting for influence in the South Caucasus, advance the logic of the corridor, which derives from their political interests, in the form of the Middle Corridor and the North-South Corridor. It is imperative for Turkey today to open the so-called Zangezur Corridor, which is a direct threat to the vital interests of Armenia and Iran and a gateway to the realization of Turkey’s pan-Turkist aspirations. This political project serving Turkish interests is presented by the Turkish-Azerbaijani tandem as a project that fundamentally changes regional communication channels, which will become the shortest option connecting the north to the south, as well as the east to the west. In this way, Turkey is trying to involve interested parties such as India and China in the project in order to break Iran’s resistance. On May 3, President of Azerbaijan Ilham Aliyev announced that “Zangezur Corridor” can become a part of both “One Belt, One Road” and “North-South” projects.

Studying the dynamics of relations with Turkey and Iran, we can say that both India and China show more active interest in the development of relations with Iran. However, as it was mentioned, the ICRC implies integration with regional communication corridors, not opposition, so if Turkey actually implements the Zangezur Corridor, the risk that China will cooperate with the project is realistic.

Examining China’s current attitude towards the South Caucasus, we can say that it has entered a waiting phase, watching the transformations taking place in the region from afar, in order to understand in the end which direction of integration the MGMU will be involved in. Today, from the point of view of both security and economic interests, it is important for Armenia to oppose the Zangezur Corridor together with Iran. Although Armenia, as a potential candidate for the North-South Corridor, is inferior to Azerbaijan from the point of view of infrastructure development, from a political point of view, Armenia’s position is stronger due to the Iran-Azerbaijan tension. Taking into account the interest shown by India and China in the relations with Iran, it can be assumed that the establishment of the North-South corridor through the territory of RA and the strengthening of economic and political ties with Iran will also determine the prospects of economic cooperation within the framework of China’s IGC project.

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