The Maritime Silk Road: China's Belt and Road at Sea
The spectacular Belt and Road Initiative (BRI), launched by China’s President Xi Jinping is one of the largest infrastructure projects undertaken in the last decade. Thus far, most of the BRI-related ventures have focused on improving physical infrastructure in the form of railways, roads, and pipelines across the vast Eurasian land mass. The explicit objectives have been to shorten transportation times between China and Europe to facilitate market integration along the route, and to consolidate China’s political, economic, and commercial position at the global level. Not surprisingly, the various initiatives have raised concerns regarding the asymmetry between China’s geopolitical and strategic interests on the one hand and, on the other hand, the need among less powerful countries in Central Asia, South Asia, and Africa to improve infrastructure and to become more attractive for foreign direct investments.
The BRI may also shift the delicate balance of power with other state actors along the route, including those with more direct involvement, like India, Japan, South Korea, and the Russian Federation, as well as the USA and the EU. Following the completion of the BRI projects, China’s transportation connections will be improved in all cardinal directions: north towards Russia through new pipelines and roads as well as the Polar Silk Road; west towards Central Asia and Europe through railways, road tunnels, and pipelines; and south through railways, roads, and pipelines through Pakistan, Myanmar, Laos, Cambodia, and Thailand to newly built ports on the Arabian Sea, the Bay of Bengal, and the Gulf of Siam. Together, these ventures will also improve China’s eastward coastal and sea connections by relieving the present overloaded port infrastructure and reducing the dependence on shipping lanes across the disputed South China Sea and the congested Malacca Strait.
Since its launch, the BRI has produced a vast volume of books, academic papers, and popular articles, not least from China itself, where all possible aspects of different projects, related to the initiative itself, have been scrutinized, viewed from historical, geopolitical, commercial, and cultural angles. In this context, it is remarkable that the simultaneous launch of the “21st Century Maritime Silk Road” (MSR) concept by President Xi Jinping in October 2013 has attracted far less attention. This bias is particularly notable because about 95 percent of the volumes and 70 percent of the values of goods traded between Asia and Europe are transported by sea, while the corresponding shares for rail-borne traffic are one percent and two percent, respectively. About 28 percent of the trade by value is airborne. The vast infrastructural improvements in rail transport between China and Europe have reduced the average transportation time from about 35 days in 2006 to 12-18 days in 2020, thereby increasing the time-gap advantage vis-à-vis shipping’s alternatives, which take 25-45 days depending on the place of origin and the final destination. However, these developments are unlikely to change the current situation in which the bulk of the interregional trade is carried by sea.
It is therefore most welcome that Richard Griffiths – who has been an active contributor in the academic mission to provide deeper, broader, and more balanced knowledge of the BRI through his previous books Revitalising the Silk Road (2017) and The New Silk Road. Challenge and Response (2019) – has undertaken the task to devote his third book to the topic of the maritime aspects of the BRI. His previous books were characterized by thorough, well researched, and meticulously described details of rail, road, and pipeline projects, mainly in Central and South Asia, and his new book follows the same path.
The MSR can be seen as the umbrella concept for the comprehensive management of intermodal logistics. It covers the chain from end to end – from manufacturing and consumption points in China to their corresponding locations in Europe – and includes the coordinated operation of ports, terminals, storage and handling, customs procedures and control, insurance, and shipping finance as well as the transportation operation itself (i.e., by container vessels with linked road or rail haulage). At the same time, China has become the world’s largest importer of essential raw materials, which is why the MSR also can be regarded as the framework for how to organize and control the supply chains of dry bulk and oil and gas shipments to China’s ever-growing consumption needs. The pure size of the handled volumes is impressive, thought-provoking, and difficult to grasp. Among the world’s ten largest container ports, seven are in China, and the same goes for import terminals for raw materials. In the past decade, China has furthermore systematically and purposefully built a powerful shipping capacity through mergers of state-owned and private companies. Through ports and terminals along its own coastline and a parallel internationalization process focused on strategic acquisitions of ports and terminal operators in South Asia, the Middle East, Africa, and Europe, China’s government has created a “string of pearls” along the route from China to Africa and Europe.
The book is organized systematically along the value chain of maritime transport. It begins with dry bulk, oil and gas, and ends up with cars and containers. In each chapter, the perspective is altered between the trade flows, the ports, and the carriers. To illustrate the macro perspective of aggregated figures, stories are told of individual vessels and ports along the routes, from Australia and the Middle East to China regarding raw materials, and between China and Europe in the car and container shipping business. This writing strategy makes the story more vivid and understandable but also involves the risk that the big picture can be lost, and that important hubs are excluded. These traps are generally avoided in the book, since the cases are the most appropriate and illustrative ones.
There is, though, one dimension that is generally left out in the description, although it figures through all cases in the background – namely, the management and organization of the traffic by the main actors involved, particularly the container shipping companies. The container operations have gone through both a horizontal and vertical integration process of mergers and acquisitions between shipping, ports, terminals, and hinterland operations towards the creation of an oligopolistic structure of comprehensive global logistics firms. A more thorough description of these firms and their performed global strategies would have been a welcome part of the book. The rise of the Chinese actors COSCO and China Merchants Group to challenge the existing dominance of the European global firms Maersk, MSC, CMA/CGM, and Hapag-Lloyd fits very well into the larger context of the current discourse regarding increasing systematic rivalry between China on the one hand and the EU and USA on the other. The author is careful to stress that the current geopolitical debate should be better balanced to bring about a better understanding of China’s perspectives of the global economic and political order. True, it is a sign of asymmetric international relations that China has become the largest country in international maritime trade, while the dominant parts of this trade are controlled by European companies. The author describes the strategic alliances between the major actors, both Chinese and European, but the issue of market-based competition between state-owned enterprises on the one side and European private actors restrained by EU competition policy limits on the other side is a story well worth telling. This would complement and increase understanding of the ideas behind the MSR.
The biggest problem in writing such a well-informed description of an ongoing phenomenon is undoubtedly the continuous dramatic changes in the global political environment. Since the book was completed in May 2020, we have faced a rollercoaster development in the international economy, with, in this context, suddenly accelerating freight rates to previously unforeseen levels, large scale supply chain disruptions, and lack of containers and handling capacity. This has led to congestions in ports and terminals around the world. The lesson is that it is almost impossible for the academic community to keep in pace with sudden and unexpected changes. The author is indeed fully aware of this problem and has in this respect taken the step – deserving, but unusual for a scholar – to launch a special website to keep up to date with these changes: http://www.newsilkroads.info. This idea might be a future strategy for the academic community, which struggles to compete with much more resourceful government actors, private think tanks, and social media. He should be wished all good luck in this initiative, which in many ways is a much larger challenge than writing a traditional textbook. In any case, the written version of The Maritime Silk Road will continue to provide an excellent platform for interpretations and explanations of not only the seaborne trade between China and the rest of the world, but also of the understanding of the global economy and politics in general.