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The New Silk Road

Written By: - Date published: 9:48 am, August 4th, 2016 - 45 comments
Categories: capitalism, Economy, energy, Environment, Globalisation, infrastructure, sustainability - Tags:

A quick heads up on the progress of this global multi-billion dollar infrastructure project that China is pushing ahead with. Here is one part of it:

It’s one of the great engineering achievements in history…

At 48 miles long, the Panama Canal cuts through a narrow strip of land in Central America. It links up the Atlantic and Pacific oceans, allowing ships to pass through the landmass instead of sailing around a whole continent.

Ships pay dearly to use this shortcut… up to $375,000 for a one-way toll.

It’s worth the price.

There’s only one other route between the Atlantic and Pacific oceans: a 7,872-mile journey around the tip of South America. This trip can take weeks and cost hundreds of thousands of dollars in fuel.

The U.S. built the Panama Canal in the early 1900s. At a cost of $9 billion in today’s dollars, it was the most expensive construction project in U.S. history at the time.

So when other countries (including Germany and Japan) tried to build a second canal in nearby Nicaragua, the U.S. wouldn’t have it. A second canal, just 500 miles away, would dilute its value.

In 1912, the U.S. military even occupied Nicaragua to make sure there would be no Nicaraguan canal. And there never was.

But that’s all about to change…

The Chinese are preparing to build a Nicaraguan Canal. Like the Panama Canal, it will be a shortcut for ships to pass through Central America.

If all goes to plan, China will finish its canal in about 10 years.

And here’s the thing…

China’s Nicaraguan Canal is just a small piece of a much larger strategy of building strategic infrastructure to bypass U.S. control.


The Telegraph of India has the above graphic to show part of the new planned “Silk Road” which already comprises the longest railway service in the world (Yiwu in China to Madrid Spain).

You’ll notice that the maritime part of the route through the narrrow Straits of Malacca is the only practical way that China can connect with India, Africa and the energy rich states of the Gulf.

During a super power confrontation a simple naval blockade of the area targetting oil tankers heading to China or Chinese exports heading west would close down China’s economy ASAP.

Which partially explains why China has been busy building strategic military installations in the middle of the South China Sea. And why the US plans to block that development every step of the way, institute a TPP which leaves China out in the cold, and is determined to remain the unopposed naval power in the area.

45 comments on “The New Silk Road ”

  1. Worth reading Pepe Escobar on this if people are interested in more about the New Silk road and its role in Xi Jinping’s ‘Chinese Dream’ manifesto.

  2. Wayne 2

    The Malacca Straights are controlled by Singapore, Malaysia and Indonesia, and are only a few miles wide near Singapore.

    The US Navy has basing rights at Singapore naval base. But China does not.

    So I am not sure that the South China Sea issue really is about control of the maritime route, given that the choke point of the Malacca Straights is a few hundred miles to the west of the South China Sea.

    China’s reclamation’s in the South China Sea on the reefs adjacent to The Philippines are certainly huge (12 sq k), and arguably the largest civil engineering projects anywhere in the world over the last two years. But what has China really gained? Three highly vulnerable runways.

    The US has no chance of being the unopposed naval power in the region, and the US knows that. The Chinese naval build up is so large that by 2030, at least in the South China Sea, they will be able to rival the US Navy.

    What does naval parity in the region mean, given that it is highly unlikely that China and the US would get into a shooting war. They are after all both nuclear powers, and both have an interest in free passage of commerce. Unlike the USSR of the Cold War era, China is integrated into the global economy, so a new cold war is a zero sum game. In fact in a new cold war China and the US would each loose in that they would harm both their economies.

    It is noteworthy that current Chinese strategy has alienated virtually all of their neighbors in one way or another. And driven some of them (Vietnam for instance) into a much closer embrace with the US. One would think that China would re-evaluate the way they are doing things in order to improve their relations with their neighbors.

    All in all a lot of uncertainty ahead.

    • Colonial Viper 2.1

      Appreciate your perspective on the issues involved, Wayne.

    • McFlock 2.2

      But what has China really gained? Three highly vulnerable runways.

      And support facilities for small vessels that might be used in low-level resource (fisheries/minerals) confrontations.

      For me, the biggest argument against the idea of the South China seas expansion being even in part to preserve strategic sea lane access is the fact that a blockade is an act of war. In that case there are only a few limited routes for ship access to China anyway, so having bases in the SCS isn’t exactly going to change the situation all that much.

    • dukeofurl 2.3

      Note below the new pipelines which Transit Burma , indeed go into the heart of China now as well. Malacca problem solved

  3. Draco T Bastard 3

    Which partially explains why China has been busy building strategic military installations in the middle of the South China Sea.

    They’re not building them in the middle but in the deep south where China has no business being. The only countries that have any claim over that territory is Malaysia, the Philippines and Vietnam.

    Is this a strategic threat to China? Possibly but life’s a bitch ain’t it.

    • Colonial Viper 3.1

      It would appear that the Chinese military and political leadership aren’t quite as cavalier as you about ensuring China’s long term national security interests.

      • Draco T Bastard 3.1.1

        That doesn’t give them the right to encroach upon others long term national security interests.

        Because that is most definitely what they’re doing by claiming territory that is not theirs.

        • Peter Ch Ch

          Totally agree. Add Tibet (xizhang) and xinjiang (the turk islamic province) and Mongolia to that list. These provinces are ethnically, religiously, culturally and linguistically alien to han china.

          Make no mistake, China is an imperialistic empire that treats its minorities appallingly. All.its doing now is continuing what china has always done. Like the soviet union, it will end in collapse.

          • Colonial Viper

            oh look a westerner preaching about imperialism and treating minority groups of other religions, ethnicities and languages appalingly. If only you could hear yourself above the laughter of the gathered people of the world as you sip your (originally) slave sourced tea or coffee or cocoa with slave plantation sugar.

            • Draco T Bastard

              Why are you so determined to paint China as being in the right when if it was the US doing the same you would be declaiming their actions?

              • Colonial Viper

                Geeexus I’m not positioning China as being “right”. I’m positioning them as a rising superpower which is actively looking out for its strategic interests in its very own back yard.

                The US has already co-opted multiple countries in the region to put American military bases on.

                And they are currently using a massive ring of these bases from Singapore through to Japan in order to constrain China’s strategic options in a coming neocon led super power confrontation.

            • red-blooded

              Do you drink coffee or use sugar, CV?

              And how far back are we going to take the blame game, here? Is Peter (whom you assume to be a “Westerner”) personally responsible for the Crusades? For British imperialism in the 19th century and before?

              It seems from what you’re saying here, that imperialism by “Westerners” is bad, but by China is pretty much OK by you. Interesting.

              • Colonial Viper

                China learnt cold hard capitalism from its western colonial masters, red-blooded.

                No need to talk about the Crusades etc, this was in the last ~110 years, and especially in the last 25 years.

            • Peter Ch Ch

              If you feel so strongly about your infantile and ignorant beliefs, why are you using a computer? Where did the source materials for the circuit boards come from? How many people’s lives are effectively lived as slaves to enable you to post your ignorant drivel?

              • Colonial Viper

                Hi Peter, do try again, and this time if you could piece together your comment with some logic that a normal person can follow, that would be great. Thank you in advance.

        • Colonial Viper

          DTB don’t even preach about the importance of respecting a nation’s “long term security interests” right after dismissing the validity and importance of China’s long term security interests.

          • Draco T Bastard

            China aren’t taking over the entirety of the South China sea for security purposes. They’re doing to grab all the resources there.

            And their actions are actually contributing to the loss of security because they are encroaching upon others territory.

            China is in the wrong here.

            • Colonial Viper

              What do you care about China’s long term security interests. You clearly said above that if their interests are compromised, tough.

              And as I already said to you – the Chinese military and political leadership clearly aren’t going to be as cavalier as you about this issue.

              • Peter Ch Ch

                As per usual your ignorance of these issues is showing through. This has little to do about security and a lot to do about economics. The South Sea (only the westerners you so despise call it the South China Sea) is rich in minerals. Chinas economic growth has consistently outstripped its ability to source raw materials internally. It has little choice but to steal the resources of its neighbors if the Community Party is to survive to see a century.

                • Colonial Viper

                  Hi Peter Ch Ch

                  It is unfortunate that you choose to take such a belligerent tone in your reply.

                  Did you never take notice of the resources and land the English stole to maintain their empire?

                  • Peter Ch Ch

                    Ok cv i apologize if that came across a little strong. But really, because the English stole to build their empire is relevant how? So did the Russian empire. And isreal was founded on theft of land and the destruction of a local culture and community. Same with ottoman and so on.

                    But the topic is china and this is the 21st century. The Chinese empire has a mindset that is far worse than the British empire i would say. Just look at its very short history and how its treated even its own people. In less than 70 years there was the Great Leap Forward. 45 million dead. The Cultural Revolution. Another 20 million. Even today the Community Party has total control over the most minute aspects of peoples lives, even with compulsory forced abortions still occurr8ng in much of china.

  4. Wayne 4

    I should also add that I think the current Chinese initiatives are about staking a claim to be a key, perhaps the key stakeholder, in guaranteeing the security of the region.

    For the last 70 years the US has pretty much policed the Pacific Ocean, in that they have been the guarantor of freedom of navigation. No-one else could come close to equaling them. The US intends to maintain this position as long as possible. Hence the $13 billion on the USS Gerald Ford, the first of the new class of carriers

    However, China wants to have the same role, at least to be a co-equal with the US. Obviously China can’t do that across the wide swath of the Pacific. But in the ocean space near China (the 1000 miles from the Chinese coast) it is arguably an achievable goal.

    By 2030 China will have at least 150 advanced destroyers and frigates. They are not in the same class as the US Navy DG51’s, but there will be more of them, all able to concentrated in this one area of the world, whereas the US has to place its Navy throughout the world. Similarly China will want air parity/dominance in the same air space. By 2030 they will have 2,500 aircraft that are Su27 or better, though these aircraft are range limited, and are not in the same league as the F22 or the F35. One of the specific things the US wanted to achieve with the F35 was much greater range/combat radius than the current F16. That is why the F35 is so big. And that makes it more useful across ocean distances.

    Will China achieve the status as a co-guarantor in the 1000 miles adjacent to its coast. Probably yes, though the way they are going about it is leading their neighbors to build up their own capacity, especially Japan and Vietnam. Both these states have serious interests to protect, and they are determined that China will respect them.

    If China wants to be accepted as a co-guarantor it is going to have to take a more collaborative approach, a lesson long learnt by the US, which has not antagonized the Asian nations (the Vietnam war notwithstanding) to anything like the extent that China is currently doing.

    • One Two 4.1

      a lesson long learnt by the US, which has not antagonized the Asian nations (the Vietnam war notwithstanding) to anything like the extent that China is currently doing

      Asian nations are increasingly turning toward eachother for improved co-operation and security, simultaneously treating the rot left by the Imperialist West

      Only a small number of asian vassal states remain, and they are fighting hard to remove the imperialist parasite

      • Wayne 4.1.1

        One Two,

        You are obviously unaware that a number of Asian nations are enhancing their defence relationship with the US, including Japan, Philippines, Singapore, South Korea and Vietnam. China being the principal reason.

        It is pretty obvious why they would do that. If you have a powerful and growing neighbor that is acting in a somewhat threatening manner, you might want to check that with another powerful nation.

        As the Vietnamese Defence Minister said to me in 2010, the Vietnam war had lasted 30 years, but conflict with China had stretched over centuries. So yes, Vietnam and many other countries in the region have a different perspective to what we have, when we view just about everything from the experience of the latter half of the twentieth century.

        • Colonial Viper

          It is pretty obvious why they would do that. If you have a powerful and growing neighbor that is acting in a somewhat threatening manner, you might want to check that with another powerful nation.

          Oh bullshit, with the “somewhat threatening manner” Wayne. Remind me who has who ringed with military bases? And who has moved an additional one if not two carrier groups into the region.

          Is it China which has surrounded the USA with military forces?

          Or is it America which has surrounded China with military forces?

          And given the answer to that, can you reply which country can be interpreted as behaving in a “somewhat threatening manner” in the region?

          • jcuknz

            Reminds me of the comment that all America [west] does is to make Russia feel threatened when Russia just wants to co-habitate. Same tomfoolery going on in another part of the world.

          • Wayne


            Tell that to the Vietnamese. I presume they are perfectly able to work out what is in their best interests. After all the US can hardly demand things from Vietnam, given the mutual history.

            So I suggest it is Vietnam that is making the running here. Vietnam is giving a clear signal to China, in deciding to be part of TPP and to have closer military co-operation with the US, especially in naval matters, that they want China to take a different approach.

            As I noted, it is not unreasonable that China would want to be at least a co-guarantor of maritime security. But it seems to me that China is going to have to act a differently, at least over the longer term, if they want to achieve that. I suppose an initial part of asserting that role is to show a tough stance and assert presence by reclamations and patrols. But such an approach is not sustainable over the long term. China will need to be co-operative with their neighbors to achieve their goal as co-guarantor.

            On your broader point of “ringed with military bases.”

            Ask yourself why the NATO countries thought they had to do that in the Cold War. They collectively feared the USSR in a way they didn’t fear the US. The way the USSR treated the Warsaw Pact nations was very different to the way the US conducted itself. The USSR had to regularly invade it’s neighbors (East Germany 1953, Hungary 1956, Czechoslovakia 1968, the Berlin Wall, etc). No Western European country ever had any fear the US would do that.

            The East Asian and South Eastern nations have similar concerns about China, though to be fair not nearly to the same degree. China is not the USSR.

            So everyone wants good relations with China, especially in the economic sphere. They also know that China will have strong security presence in the region. China simply needs to be more respectful of their neighbors interests in asserting that presence.

            China’s actions, both in the South China Sea, and in the East Asia Sea, have not generated confidence that China is a benign influence. Hence the reason why the Asian nations are building, or rebuilding their US relationships. While the US clearly wants to retain its position as the dominant power in the Pacific, it also suits the Asian nations, from their own perspective, for the US to have a strong presence in their immediate region.

            • Colonial Viper

              So, you are rationalising the USA surrounding China and Russia with new military bases, advanced weapon systems and additional carrier groups on the basis of China and Russia acting in ways that the west does not approve of.

              I ask again – how long are people going to accept the PR line that it is China and Russia who are making predominantly aggressive moves while all the US is doing is making defensive moves (moving military bases closer and closer to Russia and China).

              All you need to do is to think for 3 seconds how that looks like from the standpoint of Russia and China, and you will be able to guess the reflexivity which occurs next: a regional arms race with both Russia and China asserting ever more keenly their own security interests.

              Which is indeed what we are seeing.

              Re: the Vietnamese. I notice that they are more than happy to work with both Russia and the USA in the military and economic spheres. Expect their behaviour to continue in that regard.

              • Wayne


                You are fundamentally missing the point that it is the Asian nations that are wanting to re-engage with the US. They are doing so because they think it is in their best interests to do so. The US can’t force them to do this. But of course the US is more than receptive for the opportunity.

                However the situation in Asia is not the same as the Cold War. All Asian nations have comprehensive relations with China. But they expect China to be more respectful of their interests. And they are prepared to play the US card to make that point.

                It is worth noting that the US is a Pacific nation with sovereign territory (i.e. actually part of the US) in Hawaii, Midway, Guam, Northern Mariana’s, American Samoa and several other islands. Guam is 1,500 miles from the Chinese coast, i.e. comparable to the distance from New Zealand to Australia. So the US is not leaving anytime soon.

                • Colonial Viper

                  The more US bases pop up surrounding China, the more China is going to raise the stakes in the region.

                  That’s what a “regional arms race” means, Wayne.

                  The US is of course keen to encircle and contain China with its military power. What you euphemistically call the US being “receptive to the opportunity.”

                  And hence tensions will continue to ratchet up until mistakes are made.

                  Guam is 1,500 miles from the Chinese coast, i.e. comparable to the distance from New Zealand to Australia. So the US is not leaving anytime soon.

                  Ahem. I don’t think China is shifting away either.

                  • McFlock

                    I don’t think China is shifting away either.

                    nope, it’s shifting forwards on artificial islands. That’s one reason why China’s neighbours are looking for protection by getting closer to the US.

                  • The more US bases pop up surrounding China, the more China is going to raise the stakes in the region.

                    And the more China encroaches on its neighbours’ territory, the more those neighbours are going to look to the US for support. Turning Vietnam into a US ally is quite an achievement – maybe a policy of not pissing off every single one of your neighbours would be a better one?

                    • dukeofurl

                      China has a radar station on the end of the Coco Islands which point out in the Indian Ocean part of the Andamans.
                      Thats a long way from China ! Indeed its 500km to India !

                      “Kyaukpyu is a small port town in Myanmar and possibly Beijing’s answer to its “Malacca Dilemma.” The Chinese presence in Myanmar and the Bay of Bengal is too close for comfort for policymakers in New Delhi. However, undeterred by Indian concerns, China has continued to invest in Myanmar, resulting in two gas and oil pipelines ferrying Chinese energy imports straight from the Indian Ocean without crossing the Straits of Malacca. The first project to materialize was the gas pipeline connecting Kyaukpyu to Kunming in 2013. The pipeline enables Beijing to completely avoid using the Malacca Strait and tap directly into Myanmar’s offshore gas fields. The second project is an oil pipeline starting from Maday Island in Kyaukpyu and transiting to China’s Yunnan province. The oil pipeline entered its operational stage as recently as January 2015. This oil pipeline runs parallel to the gas pipeline, directly transferring Beijing’s oil imports from West Asia and Africa. The gas and oil pipelines help solve China’s “Malacca Dilemma,”

    • Colonial Viper 4.2

      One of the specific things the US wanted to achieve with the F35 was much greater range/combat radius than the current F16. That is why the F35 is so big. And that makes it more useful across ocean distances.

      Is that from Lockheed Martin’s brochure?

      The F-35 software can only accommodate a very narrow range of weapons at the moment. The plane is not ready for combat outside of optimum conditions. It has never demonstrated that it can fly even one mission a day for an extended operational period.

      So far it has typically managed to fly one mission every 5 or so days.

      The other reason that the F-35 is so big is because they needed to fit the requirements of 3 different services inside the same air frame.

  5. Dave 5

    I guess the trouble will start nicruagwa to make sure the canal is never built

  6. Sanctuary 6

    China’s variation of the Greater East Asian Prosperity Sphere is about as appealing to it’s neighbours as Japan’s original one. Anyway, that new silk road isn’t particularly impressive. China has the same problem as Russia/Germany/USSR had. The Anglo-Saxons have secure land borders, big navies, open acccess to the ocean and control key chokepoints that will keep China hemmed into the South China sea. The Chinese, like the Kaiser in the North Sea before them, can assault their jailer but they’ll remain firmly in jail.

    The new Panama canal is completely indefensible. The Munroe doctrine means any attempt to station Chinese troops there would be sufficient to spark a war, and it isn’t safe from a US inspired coup or simply US occupation on some pretence or another. If it is only being built for strategic reasons it is a huge waste of money.

    The internal land route is about as secure as a stripper in a room full of Waikato Chiefs players, and goes nowhere useful given that NATO is firmly a US ally.

    • Colonial Viper 6.1

      Hi Sanctuary, is your analysis that the Anglo-US empire will be able to maintain its policies of exceptionalism in the coming decades of world affairs then, even though their internal unrest seems on the rise and domestic infrastructure is crumbing?

  7. Stuart Munro 7

    China’s SCS escalation includes a historical grievance with Japan. http://www.economist.com/blogs/economist-explains/2013/12/economist-explains-1

    The maritime silk road is often linked with the Thai Kraj canal – though ground isn’t broken on it yet.

  8. dukeofurl 8

    Panama canal – average toll is US$54,000, the number mentioned was the most expensive ever , for a Cruise ship ( who pay extra based on numbers of passengers)

    As for the Nicaragua canal, too many schemes have come to nothing before as will this one.

    “But when a Chinese billionaire, Wang Jing, officially broke ground in a field outside this sleepy Pacific Coast village [Brito] about a year ago, many Nicaraguans believed that this time, finally, they would get their canal.”

    And this may be why
    “At the time of the groundbreaking in December 2014, the Chinese government said it was not involved with the project.”

    And even more questions
    “There are also concerns about the seismic activity in the area, or the many volcanos. Some analysts point to China’s poor record on environmental matters and Mr. Wang’s inexperience in building anything, let alone a $50 billion (some say $80 billion) canal carving through miles of protected areas that are home to many endangered species, including the jaguar, and legally recognized indigenous lands. The little-known Mr. Wang made his fortune in telecommunications, not in construction.”

    So even less qualified to be involved with a project like this, than Trump is to be president.

  9. dukeofurl 9

    Now we can pull apart the Rail Silk Road as well, like the wings on a butterfly.

    Through trains have been operating for some time, via Russia though

    “Currently, these trains travel along one of two main routes: either going due north from China and connecting with Russia’s Trans-Siberian or going west across Kazakhstan and feeding into the Trans-Siberian at Yekaterinburg,”
    A possible third route , but not available yet is :
    Although there was also a very ambitious, though pending, third rail route outlined on the China Railways map, which stretches south from Kunming, the capital of China’s western Yunnan province, through Myanmar, Bangladesh, India, Pakistan, Iran, and Turkey, before terminating in the heart of Europe at Hamburg”

    This is just as implausible as the figment which now shows this route through central asian republics and northern Iran and Turkey and up through the Balkans to Rotterdam

    But back to what is happening, a regular service Chengdu ( Sichuan)-Lodz ( Poland)

    Which means around a 2 week train journey from western China to Eastern Europe via Yekaterinburg , Russia . Train spotters will be aware of the change of gauge from Chinese to Russian and back to European.
    But the cincher is
    “Though ocean shipping costs 25 percent less than rail transport..” and I understand armed guards are required on the trains to protect the high value containers , eg computers, phones, electronics parts.

    gee that butterfly has no wings now. No rail route through central asia, no canal through Nicaragua.

    • dukeofurl 9.1

      PS If you were going to stick to Russian Broad gauge through into Poland built in 1979 , that ends up near Katowice ( not Lodz which is an existing rail hub for Europe) but it travels through Southern Ukraine. ( Kryvbas Region for its iron ore mines)

  10. Lloyd 10

    The presence of the off-shore oil and gas fields of Malaysia, Brunei and Indonesia in the South China Sea might have quite a lot to do with the Chinese expansion into the region.

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    Travellers from the United Kingdom or the United States bound for New Zealand will be required to get a negative test result for COVID-19 before departing, and work is underway to extend the requirement to other long haul flights to New Zealand, COVID-19 Response Minister Chris Hipkins confirmed today. “The new PCR test requirement, foreshadowed last ...
    BeehiveBy beehive.govt.nz
    3 weeks ago