Recently the subject of competition of interests of the Eurasian Economic Union (EEU) and the Chinese concept of the Silk Road Economic Belt (SREB) even more often sounds in the global agenda. Many experts highlight the importance of this Chinese project on reorganization of the developed system of trade and economic relations in all Eurasia today. A large number of researches and forecasts of rather impressive freight traffic volume which will go from the East to the West along the created economic corridors only confirm this interest.
This article addresses the importance of the implementation of both the Chinese initiative and the Euroasian integration that can lead to formation of new structure of economy on Eurasian space where Central Asia becomes the main link.
Recently the subject of competition of interests of the Eurasian Economic Union (EEU) and the Chinese concept of the Silk Road Economic Belt (SREB) even more often sounds in the global agenda. It is known that in 2013 the Chinese President Xi Jinping has presented a comprehensive and ambitious initiative of creation of “an economic belt of the Silk Road” on space of all Euroasian continent.
The Chinese leader has formulated the action program with five points:
- strengthening of coordination of the states of the region in a political sphere as they are at the moment rather poorly developed in comparison with the level of development of economic contacts with the countries of the region;
- an intensification of construction of a uniform road network “from the Pacific Ocean to the Baltic Sea” which has to connect the Southern, East and Western Asia;
- development of trade by elimination of trade barriers, decrease in expenses of trade and investments, increases in speed and quality of economic operations in the region;
- increase in currency streams due to transition to payments in national currencies where the countries of the region already have a successful experience of cooperation which in the future will allow to lower expenses and to increase competitiveness of the region;
- strengthening of a role of national diplomacy, expansion of direct connections between the people of the countries of the region [1].
The announced initiative within a very short period of time began to turn not just into the concept, but into the international megaproject which is of huge economic interest not only to China but also for all countries located along the Great Silk Road including Kazakhstan. So, these issues were discussed on June 24, 2016 at the historical and anniversary summit of the Shanghai Cooperation Organization (SCO) in Tashkent which has come under the spotlight of the world community.
Many experts highlight the importance of this Chinese project on reorganization of the developed system of trade and economic relations in all Eurasia today. A large number of researches and forecasts of rather impressive freight traffic volume which will go from the East to the West along the created economic corridors only confirm this interest.
Three decades of structural changes and rapid growth in comparison with many countries of the world have made China the engine of a world economy of one of two leading economies of the world. The country also became the largest global manufacturer and the exporter of the majority of types of industrial output. It should be noted also the fact that China is one of key trade and economic partners of Kazakhstan, and other members of EEU.
So, China takes the third place in commodity turnover of the Republic of Kazakhstan after the EU and Russia (10,6 billion US dollars and 14% of the total amount of commodity turnover) and the second place after the EU on consumption of the Kazakhstan production (12%). China is also one of the largest investors in economy of Kazakhstan (in 2005-2015 the volume of direct foreign investments of China was 13 billion US dollars), and among the Chinese trade partners in the CIS Kazakhstan takes the second place after Russia [2].
At the present stage the important sector for Central Asia is a construction of railway and automobile tracks. For the region with huge, but sparsely populated territories development of transport connections has double value. A motor transportation corridor “the Western China — Western Europe” will bring to China revival of trade with Central Asia and implementation “an economic belt of the Silk way” — the transcontinental route between Europe and to Central Asia, and Kazakhstan — the effective tool for reconstruction of 7 thousand km of republican highways. So, importance of overland ways will only grow in the near future in Central Asia [3].
Besides, in present difficult conditions search of effective economic corridors, expansion of sales markets of production, establishment of equal access to the general infrastructure and attraction of investments for economies are very important for the countries.
The fact that both the states of EEU and China are interested in implementation of large-scale infrastructure projects on space of big Eurasia is explained by it.
Question of the competition of EEU and SREB
According to many foreign experts, the SREB is a large geopolitical, geoeconomic and cultural and humanitarian project of China which by a number of provisions really has similarity to integration association and is in certain conflicts with EEU. However in order to answer this question, it is necessary to take concrete contents of these two projects into account.
First of all, in EEU freedom of the movement of goods, the services, the capital and the labor and also carrying out coordinated, coordinated or uniform policy in branches of economy is provided. The EEU is also the international organization of regional economic integration of five states (Kazakhstan, Russia, Belarus, Kyrgyzstan, Armenia). Two years later after signing of the Contract on creation of EEU it is possible to say that the Union has taken place as modern integration association and is designed to become the effective economic bridge connecting Europe and dynamically developing Asia.
In turn, the SREB is the program developed by the Government of the People’s Republic of China which is a part of an initiative “One belt – one way” and is aimed to develop a multilateral regional cooperation on space of Eurasia. Infrastructure projects and the international transport corridors from the western regions of China in the key centers of economic activity in Europe and the Southern Asia which can provide uninterrupted trade and free movement of the capital on Eurasian space are considered to be the main directions of the New Silk Road [4].
In general this strategic project has large scope and covers the huge territory of Eurasia and also reflects aspiration of China to the accelerated development of the western provinces and expansion of close economic cooperation with the countries of Central Asia.
Thus, the SREB – not the just transit and transport project, but is the comprehensive plan of economic development of a number of the states of the region directed to formation between them the close complex relations in economic, political and humanitarian areas.
Along with it, development of the Euroasian integration introduces the amendments into the standard approach of Beijing. In the course of inevitable economic advance of China to Central Asia, the Union becomes the effective instrument of trade protection of the national markets of member states of EEU when maintaining their investment attractiveness. At the same time interface of EEU and SREB to high degree of probability will become an incentive to expansion and strengthening of the Union since it will strengthen positions of his member countries at negotiations even with such powerful player as China.
One more advantage of EEU is formation of the general rules of economic behavior with lack of customs barriers between its participants. As a result, such market becomes economically attractive to the Chinese business. For example, access to the markets of Kazakhstan and Kyrgyzstan will also allow the Chinese companies and banks to enter on the common markets of goods, services, the capital and work of all EEU, and Union member states at the same time will get access to the huge and perspective Chinese market.
It is known that Vladimir Putin in his article “the XXV APEC summit in Da Nang: together to prosperity and harmonious development” have reminded about so called Big Euroasian partnership the project which is formed on the basis of EEU and the Chinese initiative “One belt – one way”. Не emphasizes that it is the flexible, modern project open for association of other participants. He assured that “as the largest Euroasian power with the extensive Far East territories having considerable potential, Russia is interested in the successful future of the Pacific Rim, in providing steady comprehensive growth on all his space” and considers “the key tool of the solution of this task effective economic integration on the principles of openness and mutual benefit, on the basis of universal rules of the World Trade Organization” [5].
According to the President Putin development of infrastructure, including transport, telecommunication and energetic is intended to become a basis of effective integration complex. Today Russia actively upgrades sea and air ports in the Far East, develops transcontinental railway routes, builds new gas and oil pipelines. Russia is set up on implementation of double-sided and polygonal infrastructure projects which will connect our economies and the markets. Means including the energetic «superring» integrating Russia, China, Japan and the Republic of Korea, or the transport passage between Sakhalin and Hokkaido.
Experts representatives of the countries of Central Asia have discussed the prospects of interaction of the countries of the region and China in the light of the May 2017 forum «Belts and Ways» at the Kazakhstan Institute of the international economy and policy (IMEP) during the round table «The prospects of interaction of the countries of Central Asia with China in the sphere of results of the forum «Belt and Way». One of the main conclusions to increase efficiency of economic contacts with Celestial Empire, the countries of CA need to But in the region internal contradictions are strong, and China objectively strengthens them, doing the five of the countries of CA by competitors for the Chinese investments. At the same time experts agree that our countries wouldn’t be prevented by the general rules of the competition for the Chinese capital [6].
On the round desktop experts of the countries of the region provided the general estimates of an initiative to IMEP «Belts and ways», described country strategy and called potential risks. The director of National Institute of strategic researches in case of the president of the Kyrgyz Republic Azamat Dikambayev emphasizes such features of an initiative as systemacity, long-term vision and suspension of each of these behind which huge operation and discussions are felt. Konstantin Syroyezhkin, the chief researcher of the Kazakhstan Institute of Strategic Researches (KISR), believes that the initiative «Belts and ways» is a new geopolitical concept of China concerning the adjacent states.
The Central Asian states in general have decided long ago on strategy for China therefore the new initiative hasn’t introduced anything essentially new. As Mr. Syroyezhkin notices, the quality of interaction of the countries of the region with China depends in many respects on whether there are national programs interfaced to «A belt and way».
Kazakhstan has such strategy it is «Nurly zhol», one of parts of which is devoted to development of transport infrastructure. The Chinese technologies are applied on the productions opened within the program of industrial innovative development (the project of transfer of 52 production lines in RK).
For interface of EEU and SREB the issues of simplification of procedures of trade and investments aimed as at gradual decrease, and then and complete elimination of trade and investment barriers, and at reduction of delivery periods of transit freights from Asia to Europe on high-speed international railway lines will be discussed.
In the long term development of cooperation will enhance complementarity of economies of member countries of the project of a new Silk way and can lead to removal of the specified trade barriers therefore the huge free trade zone on space of member countries of EEU, SCO, the EU and ASEAN can be created naturally.
Thus, from the economic point of view of EEU and SREB not only don’t contradict, but also mutually supplement each other.
Kazakhstan and the SREB project
Kazakhstan holds extremely important geostrategic position and can turn into an important link between two economic giants – the EU and the People’s Republic of China. Besides Kazakhstan has the largest economy in the region (Russian Ambassador) and accumulates more than 70% of a trade turnover of China with the countries of Central Asia [7].
Here it should be noted that on August 30 – on September 3, 2015 during the official visit of the President N.A. Nazarbayev to China the Joint declaration of the Republic of Kazakhstan and the People’s Republic of China on a new stage of the relations of full strategic cooperation has been signed. In this document the foundation is laid for joint advance of cooperation in interface of the New economic policy of Kazakhstan «Nurly zhol» (A light way) and the Economic belt of the Silk way. According to the contents two programs mutually supplement each other as are aimed at the development of infrastructure and industrialization in Kazakhstan, first of all transport and communications.
Thereby national plans of member countries of the Silk way are practically built in SREB. In this case the project of the Silk way becomes not the purely Chinese, but really joint Euroasian project that is undoubted advantage of SREB.
Important advantage of a corridor is that it only acting and the most part of the existing transit stream goes through him. It is expected that by the end of implementation of the project the general freght traffic will increase by 2,5 times and will make about 33 million tons a year. The constructed roads will increase the bandwidth of machines by 1,5 times, transport and transit transportations will accelerate twice, time of stay in a way will be reduced by 1,5 times [8].
Conclusion
Implementation of the Chinese initiative and the Euroasian integration can lead to formation of new stricture of economy on Eurasian space where Central Asia becomes the main link.
To Kazakhstan, as well as other countries of Central Asia, it is important to participate in implementation of integration projects, to effectively use originating new opportunities and advantages of regional cooperation, trying to obtain at the same time minimization of risks and threats.
In the long term it can become guarantee of creation of new clusters of economy and, eventually, lead to growth of other branches of economy, including the industry. So scale project potentially means diversification of sources of state revenues, creation of additional jobs and improving of the general economic situation for all region of Central Asia. Nevertheless, in case of all advantages of this project, it is necessary to provide transition from a one-sided directivity of economic cooperation with China to a format of equivalent partnership. Central Asia should become a region of cooperation, where conditions should be guided by not some political requirements, but economic reasons and innovative approaches.
Thus, SREB is, certainly, the continuation of an ancient Silk Road and important initiative expected a long-term outlook for many decades ahead. But still it is necessary to do a lot of work for its full implementation.
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