China's maritime Silk Road development to get a boost with 10 billion yuan
The development of China’s Maritime Silk Road will be supported by 10 billion yuan (1.6 billion US dollars). The city government of Fuzhou, capital of east China’s Fujian province, inked a pact with the China Africa Development Fund (CAD Fund) and the Fujian branch of the China Development Bank to establish a joint fund.
Chinese President Xi Jinping had proposed a 21st century maritime Silk Road during his visit to Indonesia in October 2013. The sea route from ports in Fujian to overseas markets has been providing China a channel to trade its silk, ceramics and tea to the world for centuries.
The fund will aid such projects as establishing marine aquaculture farms and industrial parks in South-East Asian countries.
The CAD Fund is a private equity fund that is devoted to bridging and connecting China and Africa, as well as governments and companies. It is specialized in operating funds on cross-country cooperation projects.
Maritime Silk Road development project
The project is an initiative by China to resurrect the ancient maritime Silk Road. It is perceived to be an attempt by China to ameliorate relations with South and Southeast Asia—in this case the focus is on maritime trade security. The project will prioritize construction ports and infrastructure in strategically significant countries in Southeast Asia and the Indian Ocean region, which includes Bangladesh and Sri Lanka. China has already begun building of port projects in Gwadar (Pakistan), Hambantota (Sri Lanka) and Chittagong (Bangladesh) respectively.
However, the map of the project does not show Gwadar port though it mentioned Kolkata and Colombo as cities with which China to build closer trade linkages.
Through this project China also plans to establish free trade zones connecting China’s coastal areas with Southeast Asian nations and in the Indian Ocean. These are the regions with which China had trade relations through ancient maritime Silk Road.
Importance for China
The global economic crisis and domestic social problems have rendered China’s current export- and FDI-driven economic model less effective. China needs to search for new export markets or maintain existing ones, as well as narrow the development gaps between the well-developed coastal areas and the less-developed inland parts of the country and preserve stability inside China and its neighbourhood. This is the main reason why the Chinese current leadership has launched this project.
Route of proposed Maritime Silk Road
Starts: Quanzhou (Fujian province)
Via: Guangzhou (Guangdong province) — Beihai (Guangxi) — Haikou (Hainan)—turns south to Malacca Strait– Kuala Lumpur – Kolkata (crosses Indian Ocean) –Nairobi (Kenya) – towards north around Horn of Africa—through Red Sea—Mediterranean Sea—Athens– meets the land-based Silk Road in Venice.
Month: Current Affairs - May, 2014