The Conundrum of China’s New Silk Road Plan

Italian Prime Minister Paolo Gentiloni (who will attend New Silk Road summit) talks to the media at Chigi Palace in Rome, Italy April 7, 2017. REUTERS/Remo Casilli

In its report yesterday titled “China to gather friends for biggest summit of year on New Silk Road”, Reuters says, “While China has portrayed the New Silk Road as a genuine effort to share the bounty of China’s economic development and to fund infrastructure gaps, many Western countries are concerned about a lack of detail and transparency in the project and are suspicious about China’s broader political intents.”

China certainly is not so generous as to contribute billions of dollars to its New Silk Road projects for nothing in return. The sharing of bounty is but propaganda. China is simply not rich enough to do so. It has to first eliminate poverty at home and raise its own people’s living standards to a level similar to Western developed countries. To achieve those goals, China still has a long way to go.

Therefore, it helps other countries build infrastructures first of all for its own benefits, i.e. to provide alternative routes for import and export, which will facilitate not only its trade but also national security.

The most important are pipelines for import of oil and gas from Russia, Central Asia and the Middle East. The shipping route to the Middle East and Europe through Indian Ocean can easily be cut by powerful US navy. Russia and Central Asia offer alternative land routes, but the China-Pakistan Economic Corridor will be even better.

The roads, railways and pipelines to be built and expanded through the corridor will provide China with connections to the Middle East, Europe and Africa as there is military protection by Iran and Russia of the sea route from Pakistan’s Gwadar Port that China has been building. That trade route will facilitate the economic development not only in Pakistan but also China’s vast west.

In addition, China may move its labor-intensive industries to Pakistan to exploit the cheap labor there.

The New Silk Road projects are first of all for China’s own security and economic growth while enabling other countries along the road to become rich through win-win cooperation. Leaders of Western developed countries will not attend the New Silk Road summit as they do not think that their countries will be much benefited by the road. Only Italian Prime Minister will attend the summit as the sea route from Gwadar Port may connect to land route through Italy to Europe.

However, can China’s good relations with those small and poor nations along the New Silk Road in Asia enable China to replace the US as world leader? I don’t think Western leaders have such rich imagination as Reuters points out in its report.

Comment by Chan Kai Yee on Reuters’ report, full text of which can be viewed at

China’s Trade Lifeline to Middle East, Africa Ensured through Pakistan

In this April photo, Pakistan Navy personnel patrol Gwadar port. Pakistan's top leaders opened a new international trade route on Sunday from the newly built port. Photo: AP

In this April photo, Pakistan Navy personnel patrol Gwadar port. Pakistan’s top leaders opened a new international trade route on Sunday from the newly built port. Photo: AP

The newly built Gwadar port will be used for international trade. Photo: AP

The newly built Gwadar port will be used for international trade. Photo: AP

SCMP says in its report on November 13 titled “Chinese ship opens new international trade route via Pakistani port” that Pakistani civil and military leaders went to Gwadar Port to see off a Chinese ship that exported goods to the Middle East from the port that has been newly built with Chinese investment.

SCMP says, “Pakistani army has created a special force to guard port and new trade routes”.

That marked the beginning of China’s Silk Road economic belt in Pakistan called the “China-Pakistan Economic Corridor” where China is building a network of roads and power plants to facilitate shipping of Chinese goods through the corridor to the Middle East and Africa. The Corridor will also make great contributions to Pakistan’s economic growth.

China has developed its J-20 to have air superiority in the area around it to prevent attack by the US, but its trade lifelines through the oceans, especially the Indian Ocean may be cut by powerful US navy.

According to SCMP, “Gwadar port is located on the Arabian Sea and occupies a strategic location between South Asia, Central Asia and the Middle East. The port is also located at the mouth of the Persian Gulf, just outside the Straits of Hormuz.”

The port is therefore the key to China’s 21st century maritime Silk Road. As the sea route from Gwadar to the Middle East is protected by Pakistani and Iranian air forces, China now has a safe trade route through its Southwest China and Pakistan on land and the Persian Gulf and Strait of Hormuz along Pakistani and Iranian coast instead of the Indian Ocean that may be cut by US or even Indian navy.

Comment by Chan Kai Yee on SCMP’s report, full text of which can be found at

Pakistan army chief accuses India of undermining China investment corridor

Pakistani Army Chief of Staff General Raheel Sharif leaves after attending the Pakistan Day parade in Islamabad, Pakistan, March 23, 2016. REUTERS/Faisal Mahmood

Pakistani Army Chief of Staff General Raheel Sharif leaves after attending the Pakistan Day parade in Islamabad, Pakistan, March 23, 2016. REUTERS/Faisal Mahmood

Pakistan’s army chief on Tuesday accused longtime regional rival India of seeking to undermine his country’s $46 billion project to build an economic corridor to transport goods from China’s western regions through the Pakistani deepwater port of Gwadar.

Chief of Army Staff General Raheel Sharif, speaking at a development conference on the impact of the China Pakistan Economic Corridor (CPEC), said the significance of a Pakistan-China economic alliance had “raised eyebrows” in the region.

“In this context, I must highlight that India, our immediate neighbor, has openly challenged this development initiative,” Sharif told the conference in Gwadar.

“I would like to make a special reference to Indian intelligence agency RAW that is blatantly involved in destabilizing Pakistan. Let me make it clear that we will not allow anyone to create impediments and turbulence in any part of Pakistan. Therefore, it is important for all to leave behind confrontation and focus on cooperation.”

Indian officials could not be reached for comment late on Tuesday night.

RAW is India’s Research and Analysis Wing, its main external intelligence agency.

Last month, Pakistan said it had detained a suspected Indian spy for RAW in Baluchistan, the southwestern Pakistani province where most of the CPEC is taking shape.

India has confirmed that the man is a former Indian navy official but denied that he is a spy.

Majority Hindu India and mostly Muslim Pakistan, once part of a vast British colonial holding, have fought three wars since they were partitioned upon independence in 1947, leading to a violent separation that has fed decades of mutual suspicion.

Pakistan believes India is supporting a separatist insurgency in resource-rich Baluchistan. It also accuses India of fuelling strife in the city of Karachi. India denies any such meddling.

India has long accused Pakistan of backing militants fighting Indian security forces in its part of the divided Kashmir region, of helping militants launch attacks elsewhere in India and backing the Taliban in Afghanistan.

Pakistan says it only offers diplomatic support to the Muslim people of Kashmir living under what Pakistan says is heavy-handed Indian rule. It denies backing militant attacks in India.

(Reporting by Kay Johnson; Editing by Mark Heinrich)

Source: Reuters “Pakistan army chief accuses India of undermining China investment corridor”

India, Pakistan Join Russia and China’s Camp, a Heavy Blow to the US

Xi Jinping and Putin. Credit: Host photo agency / RIA Novosti via Getty Images

Xi Jinping and Putin. Credit: Host photo agency / RIA Novosti via Getty Images

Reuters says in its report “India, Pakistan to join China, Russia in security group”, “India and Pakistan began accession to a regional security group led by China and Russia on Friday after two days of summits which President Vladimir Putin held up as evidence Moscow is not isolated in the world.

“The Shanghai Cooperation Organisation (SCO), meeting in the Russian city of Ufa a day after the BRICS emerging economies held a summit there, said the invitation to the two Asian nations showed a ‘multi-polar’ world was now emerging.”

Putin is certainly happy as the expansion of SCO and the intensification of the cooperation among BRICS states shows that the US has failed to isolate Russia.

It is certainly a political victory for Putin in his struggle against US hegemony.

So is it for Chinese President Xi Jinping. I may say that it is even greater a victory for him. US media The National Interest described the problems in Indian-Chinese relations in its article on Modi’s recent visit to China titled “The Chinese ‘century’ is already over”, by quoting Modi as saying to media in China, “I stressed the need for China to reconsider its approach on some of the issues that hold us back from realising full potential of our partnership,” and “I suggested that China should take a strategic and long-term view of our relations.”

I said in my post on May 29:

Everybody who has some knowledge about Chinese-Indian relations knows the problems. When I talked with ethnic Indian Hong Kong residents about Chinese-Indian relations, most of them did not think the border dispute was a great issue but had serious questions about close Chinese-Pakistani relations especially the China-Pakistan economic corridor that will go through the disputed Kashmir area.

If Modi had failed to mention those serious problems in his talks with Chinese leaders, the improvement in the ties between the two countries would have been but a diplomatic show without any true meaning.

I provide the last sentence that National Interest’ omits in its quote of Modi’s words: “I found the Chinese leadership responsive.”

What is Chinese leaders’ response? With Putin’s help, they have succeeded in bringing both India and Pakistan into their camp the SCO.

Reuters says, “The addition of Pakistan and India, two nuclear-armed neighbors who have years of tensions between them, could also lead to easing the conflicts between New Delhi and Islamabad.”

In addition, according to Reuters, the leaders of the two countries agreed in a separate meeting in Ufa that Modi would visit Pakistan next year.

That will remove India’s opposition to the China-Pakistan economic corridor through disputed Kashmir that is vital to China’s energy and trade security.

Moreover, Iran wants to join SCO earnestly but due to the existence of sanctions, SCO cannot accept it. When the sanctions have been lifted, Iran will become a member to supply oil and gas to India through Pakistan. While China’s Bangladesh China India Myanmar Economic Corridor initiative will provide a land link between China and the Middle East in addition to that through the China-Pakistan economic corridor.

Intensive cooperation between SCO, BRICKS and the Eurasian Economic Union will soon make Xi Jinping’s Silk Road economic belt a reality.

The expansion of SCO to form a vast area of cooperation together with the Euroasian Economic Union make the vast Asian land area an area of Russian and Chinese influence.

In establishing such an important area of influence with a fifth of the world’s oil and half of the global population, Russian-Chinese alliance is vital.

US media Foreign Policy says in its report today that Beijing and Moscow have overcome their decade-long competition and become partners.

It says, “Russia is instead aiming to retain its influence as the security guarantor in the region, keeping its sway in the region through military bases in Central Asia, arms deals, and the Collective Security Treaty Organization, a security bloc of former Soviet countries. This formula satisfies both China, which is wary of deploying troops beyond its borders, and Central Asian countries used to a Russian military presence.”

It quotes Alexander Gabuev, senior associate and the chair of the Russia in the Asia-Pacific program at the Carnegie Moscow Center, as saying “Under this arrangement, China would be the bank and Russia would be the big gun”.

China as the bank is richer than the US while Russia and China combined are not small as a big gun in countering the US. Russia and China have thus subdued the US by diplomacy, the second best way to subdue an enemy according to Sun Tze’s The Art of War.

Article by Chan Kai Yee in response to Reuters and Foreign Policy’s reports

Reuters and Foreign Policy’s reports are respectively available at and

China’s Xi Showcases the Benefit of Having it as a Rich Iron Brother

In its report “China Picks Pakistan as First Stop on $40 Billion Silk Road” on Chinese President Xi Jinping’s visit to Pakistan, Bloomberg listed not only Xi’s allocation of $45 billion for the development of the China-Pakistan Economic Corridor with funds coming entirely from Pakistan and China without borrowing from China-led Asian Infrastructure Investment Bank (AIIB) or allocation of China’s $40 billion Silk Road fund (Silk Road fund). As Pakistan is very poor, it is obvious that most of the fund will be provided by China.

In addition, $1.65 billion of the Silk Road fund will be invested in Pakistan’s Karot dam project on the Jhelum river for the construction of a 720-megawatt power station to ease Pakistan’s serious power shortage.

Chinese President Xi Jinping has two priorities in his Silk Road economic belt and 21st century maritime Silk Road (One Belt, One Road) initiative:

First to expand China’s space for economic expansion abroad that will enable China’s further economic development through Xi’s thorough domestic economic reform; and

Second to protect China’s trade lifelines.

Hitler tried to expand Germany’s space of survival by military force but failed.

The US has tried hard to maintain its world leadership by keeping its military the most powerful in the world but failed.

All its allies except Japan join China-led AIIB in spite of US opposition. That signals the end of US world leadership.

Xi Jinping certainly shall not follow Hitler’s or US examples.

Xi’s creative way is to build up iron brother relations with the countries along his One Belt, One Road.

That is really a surprise move to Western politicians, scholars and media.

There have been mountains of reports, articles and books on the threat from China’s rise that have filled small countries with consternation.

Even US President Obama accused China in early April of bullying its neighbors by its “sheer size and muscle”.

Xi uses his visit to Pakistan to showcase what China does to its iron brother.

Bloomberg says in its report, “On Monday, Xi and Pakistani Prime Minister Nawaz Sharif signed pacts to build roads, ports and power plants, nearly equal to the amount of foreign aid the U.S. has provided to Pakistan over the past decade to support its war in Afghanistan.”

Full text of Bloomberg’s report can be read at

Xi set Pakistan as an example of what other countries may be benefited by being China’s iron brothers.

China sets no conditions on the funds it provides in helping its iron brothers nor interferes with their internal affairs.

Quite a few countries will be attracted to become China’s iron brothers, brothers or friends.

On the other hand, China has showcased what it will do when another country tries to confront it by force in maritime territorial dispute.

In 2012, believing its “iron-brother” ally the US may help it in its dispute with China, the Philippines sent its navy to round up Chinese fishing boats at Scarborough Shoal. China responded with taking sole control of the shoal and forbid Philippine fishermen from fishing there.

In its report “Philippines accuses China of turning water cannon on its fishing boats” today, Reuters says, “The presidential palace in Manila said China’s coast guard used water cannon on Monday to drive away a group of Filipino fishermen at Scarborough Shoal, damaging some of their wooden boats. Chinese ships rammed a fishing boat in the area a few months ago.”
According to Reuters, US and Philippine troops were conducting a joint military drill near the shoal but did not respond to the incident.

Reuters says that some Philippine people criticized Philippine “government’s dependence on the U.S. military to protect the country.”

Reuters quotes, Renato Reyes, secretary-general of left-wing activist group Bayan (Nation) as saying in desperation, “To stand up to China, we need to develop our economy and our capacity for external defense. We can’t do this by hanging on the coattails of Uncle Sam.”

While China is gaining friends by setting an example in Pakistan, the US is setting an example in losing its allies in the Philippines.

Full text of Reuters report can be find at

Source: Bloomberg “China Picks Pakistan as First Stop on $40 Billion Silk Road”

Source: Reuters “Philippines accuses China of turning water cannon on its fishing boats”

Iron Brothers (Tie Ge’ermen) v. Sworn Brothers in China

The banners that welcom visiting Chinese President Xi

The banners that welcome visiting Chinese President Xi

Map of China-Pakistan economic corridor

Map of China-Pakistan economic corridor

“China and Pakistan are tie ge’ermen (iron brothers).” That is the caption in Chinese of the photos of Pakistani and Chinese leaders on some of the many banners in Pakistani streets to welcome visiting Chinese President Xi Jinping.

This blogger saw feature shots of the banner in CCTV’s primetime report on Xi’s visit to Pakistan.

The term tie ge’ermen is quite new in Chinese.

Traditionally, for more than a thousand years in Chinese history close friends ties the bond of sworn brotherhood but that tradition seems obsolete now.

When I was in primary school, I was fascinated by the sworn brotherhood of Liu Bei, Guan Yu and Zhang Fei in the well-known Chinese fiction The Romance of Three Kingdoms and suggested to have sworn-brother relation with my closest classmates but none of them was interested in such a relation. I did not know why.

Perhaps, at that time we lived in the areas that were foreign concessions a few years earlier, where strong Western influence remained. Westerners are not interested in sworn-brother relations.

Perhaps, it was due to the then Chinese leader Chiang Kai-shek’ poor examples. Chiang offered and became Feng Yuxiang’s sworn brother when he needed Feng’s help in defeating the warlords in the north to become Chinese leader. However, later he fought a war against and defeated his sworn elder brother Feng by the trick of buying over the generals under Feng.

He offered and became powerful Northeast warlord Zhang Xueliang’s sworn brother to make Zhang accept his national leadership, but later he placed his younger sworn brother Zhang under house arrest for decades.

Moreover, Chinese Mafia gangs regard their organizations as sworn brotherhood. They worshiped Guan Yu as their guiding god due to the description in The Romance of Three Kingdoms of Guan’s loyalty to his sworn elder brother Liu Bei.

However, a Mafia is in fact not an organization of brothers. Its members call its head “Laotouzi (old man)” the term people call their fathers at home.

When I studied in Anhui and did business in northern China for years after I had grown up, I never heard anybody mention that he had sworn brother relation with another person. As far as I know, sworn brotherhood is obsolete in China since 1950s.

Since then, the term “ge’ermen (brothers)” equivalent to “buddies” in English had been viral among people who regard one another as close friends.

However, during the Cultural Revolution, it was common that a person betrayed his buddies under severe pressure from Red Guards or Rebels. People now want iron bond relations among his buddies. The term “tie ge’ermen (iron brothers)” becomes viral now.

The iron bond between iron brothers is so strong that no pressure however severe can break it.

In reality, people may have iron brother relations but can countries have such relations? Iron brotherhood is among equals. There is no elder brother or leader in the group of iron brothers. There have been iron bond relations between the US or the Soviet Union and its allies. But it’s not equal relations. The US and the Soviet Union are the bosses to be followed by their allies.

In a group of buddies in Shanghai, there is usually a big brother equivalent to the leader of the buddy group. As a result, there is no term equivalent to tie ge’ermen in Shanghai dialect.

The term “sidang (diehard friend)” is perhaps its equivalent term in Hong Kong’s Cantonese dialect.

When I just arrived at Hong Kong, I could not find a job and had to work at a relative’s retails shop as I did not understand Cantonese. I saw my relative’s friend came to borrow more money three months after he had borrowed a large sum from my relative and had not made any repayment as he promised. My relative draw a check for the sum he asked without hesitation. I was surprised and asked my relative why he lent more to the person. It was obvious that the person was in financial difficulties.

My relative replied that the person was one of his sidings. He gave me the advice that if I had become a small entrepreneur, I had to have my own group of sidings. In such a group, when one is in difficulties, the others will help him out.

It turned out that the borrower was a factory owner who moved his factory to Chinese mainland to exploit the cheap labor there. He lacked working capital when he had accepted lots of orders due to the low prices of his products. He was unable to borrow more from banks as he had already mortgaged his residential unit and factory premises, but he avoided bankruptcy as he was helped out by his diehard friends. He became much richer than his friends later when his enterprise succeeded in the Mainland.

The sidang relationship in Hong Kong is similar to that of tie ge’ermen in Mainland China. All the friends are equal. There is no big brother who wants others to be loyal to him.

That is the attraction of such relationship. China is Pakistan’s iron brother. It will lend Pakistan lots of funds but on no conditions. And China takes great risks in doing so due to the problems in Pakistan such as militancy, separatism, political volatility and official corruption that BBC points out in its report “China’s Xi Jinping agrees $46bn superhighway to Pakistan” today.

However, BBC is wrong in quoting correspondents as saying that China’s project in Pakistan marks a major advance in China’s plans to boost its influence in Central and South Asia.

Such a relationship is too risky to be an offensive one to boost China’s influence. Just like what my relatives said, the diehard friendship or iron brother relationship is established for survival.

Such a relationship is possible only because of the serious danger each of the friends or brothers faces so that they are willing to take the risk to help one another.

For China, the China-Pakistan economic corridor will provide it with the safe route to get energy from and export goods to the Middle East and Europe through Iran.

For Pakistan, it will enable Pakistan to become rich and have Chinese aids in dealing with a rising India.

That is why an iron brother relationship is possible between China and Pakistan.

Source: CCTV “Xi Jinping arrived at Islamabad to begin his state visit to Pakistan” (summary by Chan Kai Yee based on the report in Chinese)

Source: BBC “China’s Xi Jinping agrees $46bn superhighway to Pakistan”

The full text of BBC report can be found at

China-Pakistan Economic Corridor Begins as First Maritime Silk Road

China and Pakistan are expected to discuss projects linking the Gwadar Port (above) with Xinjiang when President Xi Jinping visits next week. Photo: AFP

China and Pakistan are expected to discuss projects linking the Gwadar Port (above) with Xinjiang when President Xi Jinping visits next week. Photo: AFP

China got exclusive 10-year right to run the commercial operation at Pakistan’s Gwadar deepwater port in February 2013. China’s Global Times says in its report “Pakistani media says Gwadar Port will begin operation within this month: It is entirely run by a Chinese enterprise” that the facilities for the operation of the port will soon complete.

China and Pakistan plan to invest $46 billion in building a Pakistan-China economic corridor, with a network of roads, railways and energy projects linking Gwadar with China’s northwestern Xinjiang Autonomous Region.

China is vigorously develop its vast western areas, but as West China lies deep inland, it has to go a long way to the Middle East and Europe through the ports in East China for import and export.

Gwadar Port is located close to the Middle East, the transport through it provides a shortcut of thousands of miles for West China to get oil and natural gas from Iran and Iraq and export goods to the Middle East and Europe.

That will be China’s first maritime Silk Road. It will also turn Pakistan into an important part of China’s Silk Road economic belt.

In fact, it will also turn China’s vast Xinjiang into a part of China’s Silk Road economic belt though China does not say so as it regards the Belt as something outside China.

SCMP quotes in its report on the event Chinese assistant foreign minister Liu Jianchao as saying, “Ground has already broken on some projects, so we can now say the China-Pakistan economic corridor is in the implementation stage,”

Moreover, I pointed out in my book Space Era Strategy: The Way China Beats The U.S. that it is now the end of aircraft carrier era. However US aircraft carrier fleets, though unable to attack China close to Chinese coast, still dominate the oceans and are able to cut China’s trade lifelines. China’s major aim of its arms race with the US now is to develop the capabilities to protect its trade lifelines at high sea.

China has the financial resources to build a fleet of aircraft carriers rival to the US for that purpose but it takes decades to build such a fleet as Chin has no technology or experience in doing so.

As we are living in the Space Era, it’s natural that Xi regards as his priority in the arms race to acquire the integrated space and air capabilities for both attack and defense. If China succeeds in developing an aerospace bomber described in my book able to kill an entire aircraft carrier battle group within minutes, China’s trade lifelines will be free from US naval attack. However, it also takes a long time to develop such a bomber though shorter and more economic than building China’s aircraft carrier fleet.

The maritime Silk Road through Pakistan is another way to protect China’s major trade lifelines to the Middle East and Europe.

The transport facilities in Pakistan are safe as Pakistan and China are all-weather friends.

The marine part of the Silk Road lies close to Iran that regards the US as its no.1 enemy. China may exploit the enmity to get help from Iran in defending its ships near Iranian coast against attack from US navy. In addition, as China is a major buyer of Iran’s oil, US attack will be regarded as an attack at Iran’s oil export lifeline.

Moreover, there is great possibility for the construction of an oil pipeline and even a railway from Iran to China through Pakistan to make China’s trade lifeline to the Middle East entirely free from US naval attack.

The further part of that maritime Silk Road is located near Russia, which may help China defend US attack as the US is now Russia’s no. 1 enemy.

However, there are drawbacks: First, Pakistan is not politically stable enough with Taliban active along Pakistan-Afghanistan border while China itself has problem of Islamic terrorists in Xinjiang

Reuter says, “Beijing, concerned about stability in its far western region of Xinjiang, has long urged Islamabad to weed out what it says are Islamist separatists from there holed up in a lawless tribal belt on the Pakistan-Afghanistan border, home to a mix of militant groups.

“Liu said that China and Pakistan had very effective cooperation in tackling the militants, and Beijing approved of Islamabad’s ‘resolute and decisive’ actions on the problem.”

Second, the $46 billion investment in the maritime Silk Road is huge. Pakistan is not rich enough to share the investment.

For China, however, it is an insignificant sum compared with building aircraft carriers. It is entirely affordable for China.

Reuters says in its report “China says AIIB won’t be used for $46 bln Pakistan deal” on April 17 that the $46 billion will be provided by China and Pakistan without borrowing from AIIB or funds from China’s $40 billion Silk Road fund.

With China as the major contributor of funds, Pakistan will be much benefited without much financial burden. This Pakistani model will attract other countries to join China with enthusiasm in developing the Silk Road economic belt and maritime Silk Road

Source: Chan Kai Yee Space Era Strategy: The Way China Beats The U.S.

Source: Reuters “China says AIIB won’t be used for $46 bln Pakistan deal”

Source: SCMP “US$46 billion Pakistan-China Corridor will not use Asian bank funds”

Source: Global Times “Pakistani media says Gwadar Port will begin operation within this month: It is entirely run by a Chinese enterprise” (summary by Chan Kai Yee based on the report in Chinese)