Skip to main content

China's Silk Road: a lucrative opportunity for Germany?

http://m.dw.com/en/chinas-silk-road-a-lucrative-opportunity-for-germany/a-39723364


As a big exporter of goods, Germany is dependent on efficient infrastructure. Therefore, it's little surprise that China's new Silk Road project is also seen as important in Berlin. But too many questions remain open.

The Silk Road is a German invention. At least the name is, anyway. It largely goes back to German researcher Ferdinand von Richtholfen, who referred to it as a historical network of caravan routes which linked the Mediterranen by land via Central Asia to East Asia in the 19th century. Richtholfen's name soon became immensely popular.

In 2013, the Chinese government used the well-known label to promote its new infrastructure project, the "One Belt, One Road" initiative. The Silk Road of modern times is an ambitious and coordinated project planned from Beijing, which will connect China on land and sea with Europe, Africa, the Middle East and South, Central and Southeast Asia.

Merkel's government sees the potential in a successful Silk Road project for China

Unanswered questions

When the first information on the Chinese project became public in 2013, many German entrepreneurs initially didn't know what to make of it.

"My perception was that the initiative has only really come to companies in 2015 when the Asian Infrastructure Investment Bank (AIB) was founded," said Daniel Müller from the East Asian Association (OAV) in Hamburg, which represents 500 German companies active in the Asia-Pacific region.

Backed by China's government, the AIB, in which Germany holds a stake of $4.5 billion (3.9 billion euros), is an important building block for the expansion of infrastructure in Asia. Only the eventual founding of the bank demonstrated China's intent to invest money into the project. This mood was also reflected by German entrepreneuers, who were convinced that "something big" was happening and that they should definitely be present.

But there are a number of open questions regarding the Silk Road project. Is China's initiative really a targeted and coordinated plan? Or is it rather a conglomerate of different individual initiatives, all of which were assigned the name "New Silk Road"? "This is the latter, in my view," said Müller. And as diverse as the various projects are, the direction and impact of the overall strategy is so far inscrutable and unclear.

Transparency and Standards

For Müller, the central key words are transparency, inclusion and sustainability. "There are proven international standards and you shouldn't deviate from them in order to achieve short-term economic gains," he explained. But the standards shown at the Beijing Silk Road Conference in May were bitterly disappointing. The objective must be a genuine multilateral coordination among the main protagonists.

"Germany is open to cooperation, we want to create meaningful synergies between European and Chinese approaches, but we are also committed to our principles," said Ina Lepel, head of the newly-established Asia-Pacific department within the German Foreign Ministry.

 "The prerequisites for our participation are that internationally recognized regulations, as well as environmental, work and social standards are respected. The projects must also be sustainable in economic, ecological and socio-economic terms. We are not naive: of course, infrastructure expansion alone is not a guarantee for successful development processes," she added.

Read more: The new Silk Road and China's hegemonic ambitions

Read more: Xi Jingping uses Silk Road summit to call for rejection of protectionism

Only for the big players

Thus far, only a few German companies have implemented concrete steps to participate in China's new Silk Road. One of them is Deutsche Bank, which has ploughed three billion dollars into the Chinese Development Bank, and aims to boost the economic cooperation between China and Germany, within the framework of the new initiative.

Duisburg Port, the largest inland port in the world, has positioned itself as an important and strategic endpoint to the Silk Road. Now already 24 trains from the Far East are unloaded there every week. Meanwhile, Deutsche Bahn, Germany's publicly-owned rail company, plans to expand its activities in China. In June 2016, an agreement on cooperation was signed between China Railway Corporation and Deutsche Bahn, which strives for further progress in the development of infrastructure.

The Silk Road is connecting China with London and Europe

According to Müller's assessment, the Silk Road initiative is currently very attractive to leading German companies. But such a megaproject, where there are many uncertainties that involve several unstable countries and regions, is very challenging for small and medium-sized businesses, which cannot mitigate the risk of poor investments. Experience counts, too, to be successful in such a complex and ambiguous situation.

Müller says it's an indication that the project is not yet sufficiently advanced enough to be attractive to the private sector given that there are practically no private investors committed. The German government is convinced that German companies could contribute a lot to the project.

However, they are hesitant because the conditions aren't always fair. China seals off certain areas of its economy, but the Germans are trying to change that mindset, says Lebel. "We are therefore persistently working on China to improve its market access for non-Chinese companies, such as through open and transparent tenders and tendering procedures, which is a requirement of fairness

Comments

Popular posts from this blog

SSG Commando Muddassir Iqbal of Pakistan Army

“ Commando Muddassir Iqbal was part of the team who conducted Army Public School operation on 16 December 2014. In this video he reveals that he along with other commandos was ordered to kill the innocent children inside school, when asked why should they kill children after killing all the terrorist he was told that it would be a chance to defame Taliban and get nation on the side. He and all other commandos killed children and later Taliban was blamed.
Muddassir Iqbal has deserted the military and now he is  with mujahedeen somewhere in AF PAK border area”
For authenticity of  this tape journalists can easy reach to his home town to interview his family members or   ISPR as he reveals his army service number”
Asalam o Alaikum: My name is Muddassir Iqbal. My father’s name is Naimat Ali. I belong to Sialkot divison (Punjab province), my village is Shamsher Poor and district, tehsil and post office  Narowal. Unfortunately I was working in Pakistan army. I feel embarrassed to tell you …

The Rise of China-Europe Railways

https://www.csis.org/analysis/rise-china-europe-railways

The Rise of China-Europe RailwaysMarch 6, 2018The Dawn of a New Commercial Era?For over two millennia, technology and politics have shaped trade across the Eurasian supercontinent. The compass and domesticated camels helped the “silk routes” emerge between 200 and 400 CE, and peaceful interactions between the Han and Hellenic empires allowed overland trade to flourish. A major shift occurred in the late fifteenth century, when the invention of large ocean-going vessels and new navigation methods made maritime trade more competitive. Mercantilism and competition among Europe’s colonial powers helped pull commerce to the coastlines. Since then, commerce between Asia and Europe has traveled primarily by sea.1Against this historical backdrop, new railway services between China and Europe have emerged rapidly. Just 10 years ago, regular direct freight services from China to Europe did not exist.2 Today, they connect roughly 35 Chinese…

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میںPlease help the deserving persons...Salary:Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows;Welder: Rs. 1,700 dailyHeavy Duty Driver: Rs. 1,700 dailyMason: Rs. 1,500 dailyHelper: Rs. 850 dailyElectrician: Rs. 1,700 dailySurveyor: Rs. 2,500 dailySecurity Guard: Rs. 1,600 dailyBulldozer operator: Rs. 2,200 dailyConcrete mixer machine operator: Rs. 2,000 dailyRoller operator: Rs. 2,000 dailySteel fixer: Rs. 2,200 dailyIron Shuttering fixer: Rs. 1,800 dailyAccount clerk: Rs. 2,200 dailyCarpenter: Rs. 1,700 dailyLight duty driver: Rs. 1,700 dailyLabour: Rs. 900 dailyPara Engine mechanic: Rs. 1,700 dailyPipe fitter: Rs. 1,700 dailyStorekeeper: Rs. 1,700 dailyOffice boy: Rs. 1,200 dailyExcavator operator: Rs. 2,200 dailyShovel operator: Rs. 2,200 dailyComputer operator: Rs. 2,200 dailySecurity Supervisor: Rs. 2,200 dailyCook for Chinese food: Rs. 2,000 dailyCook…