ACCORDING to the late Deng Xiaoping, “one country, two systems” means there is only one China and under this premise, the mainland adheres to the socialist system while Hong Kong, Macau and Taiwan retain their capitalist systems over time. This has proven to be effective in the ‘80s to the ‘90s but economic development has not been the same for provinces in the northern part of the country as compared to the southern side, which faces the ocean. It has been said that the poor are becoming poorer while the rich are increasing their wealth and hold on the economy of China, thus creating some silent unrest. The need to open new markets has become a necessity for China.
Cognizant of its population and the limited natural resources to support its people, China needs to engage more with the outside world using culture as a magnet and trade as a means to open markets for its products and access resources for its domestic market as well as consumption needs. Hence, China took the next big leap in its so-called “open Asia” pronouncement in September and October 2013, when Chinese president Xi Jinping launched the Silk Road Economic Belt or SREB and the Maritime Silk Road or MSR under the Belt and Road Initiative or One Belt One Road (OBOR). OBOR is a “development strategy and framework, proposed by PRC that focuses on connectivity and cooperation among countries primarily in Eurasia. OBOR is composed of two main components, the land-based SREB and ocean-going MSR.”
OBOR uses the historical Silk Road or Silk Route, “an ancient network of trade and cultural transmission routes that were central to cultural interaction through regions of the Asian continent connecting the West and the East by merchants, pilgrims, monks, soldiers, nomads, and urban dwellers from China and India to the Mediterranean Sea in the olden times. Extending 4,000 miles (6,437 kilometers), the Silk Road derives its name from the lucrative trade in Chinese silk carried out along its length, beginning during the Han Dynasty (206 BC – 220 AD). The Central Asian sections of the trade routes were expanded around 114 BC by the Han dynasty, largely through the missions and explorations of Chinese imperial envoy, Zhang Qian. The Chinese took great interest in the safety of their trade products and extended the Great Wall of China to ensure the protection of the trade route. Trade on the Silk Road was a significant factor in the development of the civilizations of China, the Indian subcontinent, Persia, Europe, the Horn of Africa and Arabia.”
The 21st Century Maritime Silk Road (21stCMSR) builds on the framework of Free Trade Zones (FTZs) and that is why China is on a building spree connecting the whole country by a network of townships, seaports, airports, trains and lengths of roads and bridges crisscrossing the whole of China. Skyscrapers are changing the landscape of China. Embracing the idea of if we build, they will come, China is offering the FTZs for ASEAN corporations as well as entrepreneurs. It has established a China-ASEAN Marine Product Exchange where one can trade fish and aquaculture products online with a multi-currency platform. It has also wired the FTZs in Fujian and Guangdong so one can secure a license to do business in just three days via the One Window Service. Fujian, in the scheme of things, is important as a show window because President Xi Jinping is from Fujian where he started his career as a provincial director.
The 21stCMSR can be viewed as a modern day Great Wall encircling both land and maritime resources and creating trade links via waters surrounding such markets as Africa and the Middle East. In this grand scheme, sea posts are vital. It will only be a reality if ASEAN or ASEAN+3 supports it. Interestingly, much of the seaport operations were copied from Singapore while the Mekong Delta countries seem interested to connect readily via land. Vietnam and the Philippines have been classified as late entrants to the grand scheme due to territorial disputes. That it cannot just be a one-way trade was made clear among the ASEAN journalists who attended the charm offensive. Details were left out, in particular the negative lists per FTZs, IPRs, among others.
In the event the ASEAN Economic Community (AEC) is set up by December 2015, it is important that each country should be able to determine its competitive advantage in terms of accessing the huge market of China. It is also more important to deal with China collectively as AEC than as individual countries since AEC carries more weight than a single country. The AEC market stands at 600 million, so harmonization is critical among the 10 nations of ASEAN. But the formula is yet to be discovered on how AEC can best equalize opportunities among its members in dealing with China in terms of trade and cooperation. China must first stop ruffling feathers. If it is a “peaceful rise” it should be able to dialogue among partners instead of directing everyone to agree on their strategy. A “community of common destiny” is easier said than done in a region where territorial issues have not been settled, the degree of development is at the extremes. It seems not respecting the UNCLOS or even international bodies designed to resolve disputes is no way to an “open Asia.” There can be no “open Asia” unless China acknowledges international institutions. There can be no “open Asia” unless China is open to the world.
Finally, the principle of “peaceful rise” states that “China will develop economically by taking advantage of the peaceful international environment, and at the same time maintain and contribute to world peace by its development. The policy was articulated by Chinese leaders in 2003 to counter international fears about Beijing’s growing economic and political might. In 2004, Premier Wen Jiabao said China’s rise “will not come at the cost of any other country, will not stand in the way of any other country, nor pose a threat to any other country.” The policy is intended to create “an environment that maximizes the chances of China’s economic development.” The “peaceful rise” policy is encouraging but the building on contested territories is a contradictory act.
Wàn shì jù bèi, zhǐ qiàn dōng fēng or everything is ready except the east wind.