Plotting the New Silk Road and what it will could mean for economic development

Moscow and Beijing this month signed a memorandum of understanding to set up a Russian-Chinese economic alliance aimed at fostering cooperation based on the planned Silk Road East-West route, a concept for a modern trading framework based on the ancient Silk Road that connected China to the Mediterranean.

The plan envisages strengthening cooperation and increasing competitive advantages of Russia and China as part of Beijing's 'One Belt, One Road' initiative to create a modern trade route known as the Silk Road Economic Belt and a 21st Century Maritime Silk Road. The blueprint includes a network of highways, railways and other critical infrastructure linking China to Central and South Asia, the Middle East and Europe. 

The maritime route entails building or expanding ports and industrial parks in Asia, the Middle East, Africa and Europe. To an extent, the scheme will bypass Siberia: for example, a new high speed rail link from China, through Kazakhstan, will connect with the Russian network in Yeketerinburg. 

Yet a round table in Novosibirsk involving representatives of Xinjiang University of Finance and Economics, namely Professor Gao Zhigang, Dr. Su Laiman, SiLamu and Dr He Weida, highlighted the possible advantages for Siberia and the Russian Far East from the initiative. 

Xinjiang Uygur Autonomous Region - which shares a 45 kilometre border with Russia -  will be actively involved in the development of the modern Silk Road: it is seen as being the 'gates' from China to the west.

Professor Gao Zhigang said he had received a grant to study ways of deepening co-operation under the Silk Road umbrella. 'Do not be afraid that Siberia will be on the periphery of the new 'Silk Road,' he emphasised. 'If we speak about imports from Siberia and the (Russian) Far East, at the moment China is basically interested in raw materials, like oil, gas and timber. Still I think that it can change in the near future. 

'For example in the late 2014, when the rouble was cheap, China actively bought Russian goods and food, especially chocolate. The other big field of cooperation is Chinese investment in road construction in Siberia. 

'Chinese companies propose to help with the modernisation of the Trans-Siberian railway. You know, Russia is very big and it should have fast transport connections. Currently, the speed of Russian trains is very low. We can help with the building of the high-speed rail in Siberia and Far East. We have have excellent proven technologies and our prices are among the cheapest in the world.

But he warned: 'To implement these infrastructure projects, we need to agree with Russian officials about the state guarantees for such investment projects. The rouble rate is not stable, so we do not know how much it will cost in ten years. As soon as we agree about the guarantees, we are ready to start the investment.' 

The financial squeeze in Russia, however, could reduce funding, for example for the Trans-Siberian railway and Baikal-Amur Mainline. Potentially, Chinese investors could assist in these developments if there were suitable guarantees. 

He cited examples of other co-operation, which could develop further. 'Currently, we have for example the project 'Big Altai', which unites Russia, China, Mongolia and Kazakhstan,' he said. 'It is mostly about the tourism, ecology and education, but it is a good example of our joint work.'

Dr He Weida emphasised: 'The idea of the Silk Road economic belt implies  joint projects in the fields of tourism, production, transportation, but I believe that the first thing we must do is to involve cultural and scientific relations. 

'We tried to find experts in Moscow to discuss problems of cooperation between Russia and China, but failed. I think it is due to the lack of cultural relations. Scientists and  experts must discuss modes of cooperation first, to determine the fields where we can be useful for each other. Then representatives of business and officials could talk about the exact projects. 

'For example we are ready to find the investors for big infrastructure projects, like railways, bridges, subway, but we need to understand if there is a need in such  projects - and with whom we can talk about them.'