Richard T. Griffiths, The New Silk Road: Challenge and Response, HIPE Publications, Leiden, 2019; £33.30 hbk, £15.30 pbk, £6.89 ebook.
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One of the greatest obstacles to understanding global politics today is the lingering influence of the idea that its dynamics necessarily lie in the realm of 'high politics' - military power and rivalry - rather than in the grubby 'low politics' of production and exchange. Its signature move - the automatic reading of developments in the global political economy in a realist frame - is an easy one, and one that saves thinking very hard, or enquiring too deeply into the empirical detail of changing global patterns of accumulation. Nowhere is this more conspicuous than in relation to the 'rise of China'. While Chinese leaders understandably insist on their commitment to peaceful integration into the world market, and get a sympathetic hearing from liberal internationalists (and the liberal institutions that govern the global economy), realists, egged on by the usual suspects in the US and elsewhere, insist that their designs are sinister, and preach the virtual inevitability of war. Currently the focus is on the complex of issues surrounding the 'New Silk Road', the One Belt, One Road or Belt and Road Initiative (investment in land routes - the 'Belt' - and sea routes - the 'Road' - stretching from China to Western Europe), and the Asian Infrastructure Investment Bank (AIIB) founded in 2015. The resulting debate boosts the publication record of both sides, but is inconclusive for an obvious reason: given its massive material and financial resources, its relatively low level of development, and the recent weakening of its growth strategy, if China wished to boost its development while cooperating with its immediate and more distant neighbours to the general good, it would invest surplus resources heavily in transport networks and infrastructure, to build transport routes, facilities, and markets stretching beyond its borders, while investing in diplomacy that made new friends and painting all of this as harmonious development ultimately based upon global liberal values. So the liberal internationalist case is an easy one to make. Unfortunately, if alternatively it wished to pursue relative strategic power behind a façade of benevolence, with the undeclared goal of global domination, it would do exactly the same.
The consequence of this is that while publications proliferate (it's easy to compile a bibliography running into hundreds of articles on the BRI and AIIB alone), sifting through them in the hope of arriving at a basic understanding of what is actually happening on the ground and what its significance might be is a laborious and frustrating task, and one that confronts the reader at every step with the danger of falling for the premise that this is primarily a story of Chinese strategy and US response. Thank goodness, then, for this excellent primer from Richard Griffiths - clear, concise, bang up-to-date, shrewd in its analysis, restrained in its conclusions, and wholly dedicated to laying out the material and institutional reality of the momentous developments taking place in relation to infrastructure and transport links across five Eurasian regions: Central Asia; Russia, Belarus and Ukraine; the Caucasus; the Western Balkans and Moldova; and the 'New EU'. He details the roads, railways and pipelines that constitute the material substance of the new networks that stretch from China to Western Europe; he corrects any impression that this might be a purely Chinese venture, detailing both the range of EU initiatives in process since the mid-1990s and the contributions from international organisations (such as the ADB and the EBRD), and he locates all this convincingly in specific local historical context. In short, the book is a miracle of common sense and sound judgement, and not to be missed.
Griffiths starts in the place that is obvious if you look at a map with post-World War Two history in mind: with trading arrangements under COMECON, and the consequences of the eventual collapse of the USSR. Those arrangements were heavily biased towards exchange within the bloc, with the result that as of 1990 the transport infrastructure was dedicated to ‘sending goods that were no longer competitive to markets that no longer existed’ (xix), and to keeping trade external to the bloc to a minimum. So:
‘The story told in this book starts with a shattered and fragmented Eurasian trading bloc. It shows how the international community, including China, has devoted finance and expertise to help resolve it. It demonstrates the role played by western aid agencies in Central Asia and the role played by the EU in the countries in its neighbourhood. All of these parties shared a belief that coordinating policies, facilitating trade, building infrastructure and promoting greater people-to-people exchange would boost peace and prosperity. All of them have helped build roads, railways and pipelines and they will all have experienced setbacks along the way (xxiii-iv).
The structure of the book after this introduction is straightforward. The first chapter, 'The New Silk Road', briefly addresses the Belt and Road Initiative (BRI) and the Western response, before touching on the ancient Silk Road, and profiling the 'Soviet Silk Road' that emerged after the founding of the Council for Mutual Economic Assistance (COMECON) in 1949:
'Within the COMECON system trade was bilaterally negotiated between partners with the aim of venting (planned) surpluses at agreed (artificially determined) prices and designed individually to balance (i.e. a surplus on trade with one partner could not be used to pay for a deficit with another). Exports outside the area would earn foreign currency but that usually flowed to the national bank, and not to the enterprise involved. ... The effect of the socialist foreign trade regime was to create a region with high levels of intra-area trade (the proportion of imports and exports traded with other nations in the bloc) but low levels of foreign trade dependence
(the share of imports and exports relative to GDP)' (13).
The second chapter, 'Challenge and Response', sets out the objectives of the BRI and examines the core regions of the geographic space to which it is addressed (the five identified above). It dwells only briefly on three of those objectives - policy coordination, currency convertibility and people-to-people exchanges - selecting two - trade facilitation and transport connectivity for closer examination. The BRI, in other words, is seen as China's response to the challenge of the 'disruption and dislocation caused by the collapse of the Soviet-led trade bloc a quarter of a century below' (25). Given the prominence of this theme, Alexander Lukin, China and Russia (2018) is an excellent and highly relevant complementary study. The chapter concludes with a discussions of trade facilitation (32-9) and infrastructure (39-43). The first of these accepts that foreign trade is beneficial, but adds that its benefits are best realised if unequal trading relationships and lack of control over resources and supply chains are combatted by 'developing the higher value-added industries and becoming more efficient in the delivery of services' (32). It then addresses the costs that necessarily arise in getting goods to and across borders, and to their final destinations. World Bank data, much of it conveniently summarised in its Logistics Performance Index (https://lpi.worldbank.org/international/global), suggest that while tariffs have relatively little overall impact (though they can be so punitive in specific areas as to be virtually prohibitive), both domestic and international freight costs and other costs incurred 'at the border' - whether in currency exchange, transport logistics, customs and related controls and charges or other 'paperwork' - vary enormously from country to country. This is no surprise, but the data for the regions studied lay bare immediately the motivation behind the BRI and EU and other investment across these regions. If trade cost 'penalties' are expressed as tariff equivalents, 'China's trade costs with the Caucasus and Moldova and the Western Balkans are eye-wateringly high' (33), while with Germany (if shipped directly by sea) they are relatively low, in part because Germany ranks first in the world on the Logistics index. China ranks 26th, with the 'New EU' countries some way behind. Between China and the eastern borders of the EU, cumulative costs place severe obstacles in the way of trade. Where quantitative data have been collected (most of the data on which the Index is based are qualitative), the picture is stark:
'For the year 2010, the LPI operation also collected information on border charges - the fees levied on a 20-foot container for the costs for documents, administrative fees for customs clearance and technical control, customs broker fees, terminal handling charges and transport to the road and rail network. The result for China was surprisingly exact - $299.80. This cost was also far and away the lowest. The result for the Central Asian cluster, GDP weighted, was a staggering $3,334, followed by the Caucuses with $2,660 and Russia, Belarus and Ukraine with $1,880. The average for the other three clusters lay between $1,218 and $1,027. None of these
charges includes import tariffs' (37).
On transport infrastructure, Griffiths cites the influential Asian Development Bank (ADB) calculations for Asia as a whole first made in 2009 and revised in 2017 (ADB, 2017). These now estimate that 'over the period 2016-2030 the region would require $22.6 trillion ($1.5 trillion a year) to realise its growth trajectory; $26 trillion if measures were taken to reduce the impact on climate change' (41). Of the 'New Silk Road' countries, only those of Central Asia figured here: their combined needs were estimated at between $492 billion and $565 billion. More than half of the total costs related to China itself, but: 'Excluding China, which only needed a small percentage increase in investment levels to meet its requirements, the countries in the ADB analysis faced a problem. They were devoting 3.3 per cent of their GDP to infrastructural investment but would need to find 8.2 per cent to meet the challenges of population growth, economic development and climate change' (41). Similar calculations made by the European Bank for Reconstruction and Development (EBRD) in 2018 confirmed this picture, arriving at a figure of $1.6 trillion for the countries under its remit for the short period to 2022 (EBRD, 2018, cited p. 43).This is crucial to understanding the positive reception of the BRI in Asia and Europe - China has been swimming with a strengthening tide: 'The two ADB reports had the effect of deflecting the world’s attention away from a fixation with issues of good governance, complemented it with a gritty analysis that demonstrated that without the tools to do the job, no amount of good governance would suffice to drag economies along a path of sustainable development, or any development at all' (ibid).
The topic of 'trade infrastructure and logistics' might not set your blood racing (though it will for some), but if you want a super-simple explanation for the BRI it works a lot better than 'great power rivalry'. China and every country beyond it to the borders of the EU stand to gain enormously if trade is facilitated and its material costs are reduced, and Griffiths concludes the chapter by conjuring up the image of a potential marriage made in heaven: 'It is perhaps whimsical to reflect that the EU’s experience in lowering/ eliminating border costs and China’s experience in its own domestic infrastructure boom could provide the perfect symbiosis for dealing with the needs of the new Silk Road' (44). Not so whimsical, perhaps.
On the basis of these strong foundations, the remaining three chapters, 'Roads', 'Rail', and 'Pipelines', deliver a comprehensive picture of the material infrastructure and networks that are shaping the New Silk Road, showing how the BRI, fundamentally important though it is, is part of a broader and largely collaborative effort. Indeed, they are so self-explanatory, clearly structured and informative that only the barest indicative outline is necessary here. In all three, a wealth of local and regional detail is provided, but it does not smother strong linking themes.
On roads, the key point is that 'it is not the roads, themselves, that represent the problem, but the point at which they cross international borders' (49). If I could drive (which I can't), I could now drive for 8,445 kilometres along the West Europe-West China Highway from the Chinese port of Lianyungang to St. Petersburg, then on to Warsaw and beyond. Just as significant, if I were driving a truckload of, say, washing machines, I could clear customs in the essentially new city (and dry port) of Khorgos, on China's border with Kazakhstan, and proceed unimpeded to my final destination (https://www.cevalogistics.com/release/27-november-2018). In doing so, I would benefit from Chinese investment in China itself, and from joint China-Kazakhstan investment and reformed procedures that reduced clearance time at the border from 65 hours in 2012 to 10 hours by 2016 (the detail, 55-6, is illuminating); but thereafter I would be beholden to investment from the World Bank, the ADB, the EBRD, the EIB (European Investment Bank) and the EU among others (along with China's EXIM bank and the AIIB) and from individual governments along the way (extending also to new port facilities to the west, north and south and rail hubs all over) - concrete evidence, literally, that the 'New Silk Road' is far from the exclusively Chinese initiative as which it is sometimes erroneously presented. All states and social forces appear to be involved: the road from Minsk to Smolensk, Griffiths reports, courtesy of the Moscow Times, 'has been widened and raised, provided with more turning points and reinforced to carry heavy vehicles - all the work done by gangs of smugglers looking to avoid regular control points' (70).
The logistical problems surrounding the transport of goods by road across multiple borders are significant, then, but they pale into insignificance when compared with rail. The major contrast is that whereas with road significant efficiencies at borders can be achieved without massive infrastructural investment, with railways the reverse is the case. 'Block' trains running from China to Western Europe can clear customs on departure, but infrastructural problems are not so easily solved, either in this case or (much more so) across the long-distance network in place, under construction, planned or imagined across the vast Eurasian landmass. Although in principle rail has a significant cost advantage for long-distance freight, the construction cost of modern two-track electrified lines is very high at the best of times (Griffiths quotes an ADB estimate from 2010 of an average of $3.8 million per kilometre, p. 109). Add in the inefficiencies that can arise from a single bottleneck on a long-distance line, the need to switch between different gauges of track when entering or leaving the wider-gauge system prevalent across the former Soviet Union, or the workarounds required by the often longstanding unavailability of otherwise efficient routing options arising from intractable instability or political disputes, and the danger that such workarounds will cement relative inefficiency (and isolation and exclusion) in place (as in the case of the Caucasus), and it is easy to see that the dream of a seamless network running east, west, north and south at peak efficiency and plied by dedicated freight trains 740 metres long (the EU standard) is a long way from reality. Beyond this, as Griffiths spells for both China and the European Union, the goal of better integration of 'domestic' space may run counter to the investment priorities and most efficient solutions for long-distance freight.
Surveying the current state of development in an environment subject to a combination of multiple initiatives and fluctuating fortunes, Griffiths offers two main conclusions, while acknowledging the credit that goes to 'the authorities in China' for the active promotion of new routes, the improvement of handling facilities along their borders, and the provision of subsidies (significant on the 11,179 kilometre Yuxinou or Chongqing-Duisberg line) : 'The first is that despite the hype built up around China’s railway building projects, the country has actually helped build very few. The second is that there has been relatively little railway building at all, and what little has occurred, has been in the European countries at the western end of the new Silk Road, and has been built with support of the EU' (110).
Even so, there are initiatives under way to the east, again with multiple sources of funding, that make rail increasingly important for the bulk transport of raw materials such as minerals, grain, oil, and fertilizer between Russia and China, with links to the extended and up-graded Trans-Siberian Railway or to the Caspian Sea, as physical bottlenecks (for example, over the Amur River at Heihe, or on the single track stretch of line through Mongolia), or institutional constraints (such as the now lifted Russian ban on the shipping of foodstuffs from Europe) are removed. They are complemented by extensive pipelines dating mostly from the Soviet period that move oil and gas from Russia, Central Asia and the Caucasus, which are the subject of the final chapter. This the context:
'Measured at the end of 2017, Russia and Central Asia have 8.5 per cent of the world’s proven oil reserves, but account for 15.3 per cent of its output. For natural gas the percentages are 30 per cent and 21.6 per cent respectively. Russia dominates the picture in both reserves and production of oil and gas. Of the Central Asian countries, Kazakhstan has the largest proven reserves of oil and is also the largest producer. Turkmenistan and Uzbekistan each have smaller oil reserves and their production is mostly for the domestic market. On the other hand, Turkmenistan has huge reserves of natural gas and is the region’s largest producer, narrowly followed by Uzbekistan, whose reserves, however, are much smaller' (125).
Because the major production areas are landlocked, practically all of the production of 636.8 million tonnes per year (oil equivalent, 2017) is moved by pipeline - an amount that equates to 338,000 fully loaded China-Europe Express freight trains. And when the Soviet Union collapsed, the network remained in the hands of Russian companies, later consolidated into the monopoly operator Transneft. Hence the dilemma in which the newly independent Central Asian countries found themselves:
'Faced with a monopsonistic buyer, these countries were continuously searching for alternative outlets but they faced a critical dilemma. Lack of guaranteed access to international pipelines reduced the incentive to invest in increasing output. Equally, without a guaranteed throughput of the energy, there was little point in expanding capacity' (127).
Subsequent development and discovery have added further to the demand for the building and periodic up-grading of new pipelines, such as the Caspian Pipeline Consortium Pipeline that runs west from the Kazakh field of Tengiz to the Russian port of Novorossiysk on the Black Sea and frees the Western oil companies who have a 50 per cent share of ownership, and the Kazakh government, from the Transneft monopoly (127-9). Griffiths takes the reader briskly through this example, and the varying and sometimes complex circumstances of Turkmenistan, Azerbaijan, and Russia itself, highlighting not only the issue of monopsony that confronts producers, but also the crop of initiatives that bring or may bring natural gas in particular to Mediterranean and other European markets, and the desire on the part of the EU and the USA to see alternatives to Russian control (and to alleviate the risk to supply from pipelines passing through Ukraine). China, of course, is the other major consumer. Here the highlight is the Gasprom/CNPC (Chinese National Petroleum Corporation) project for two or potentially three natural gas pipelines from the Eastern Siberian gas fields, agreed in 2014. Russia is strapped for cash but keen to diversify away from reliance on European markets, while China is keen to switch from more polluting fuels to natural gas, as well as to ensure its projected energy needs (143-4). The eastern Power of Siberia line is due to come on stream this year; the current price tag for the 'Power of Siberia 2' line that would run to Urumqi in western China is estimated at $77 billion, roughly the same following massive upward revision (and with apologies for the parochial reference) to the projected high speed rail line from London to Birmingham and Manchester, HS2, and on balance perhaps more likely to be built.
Griffiths himself is sparing in drawing broader observations from his account. He is at pains throughout to emphasise the contribution of the EU to the development of the new Silk Road, pointing out at the outset that since 1990 it 'has completely integrated nine of the states included by China in its BRI into a single market, where all frontier barriers to trade have been eliminated. It has concluded free trade agreements with five of the others. Finally, in January 2019, it included a further six in its plans for an integrated European transport network. Europe’s own ‘belt and road’ extends to the borders with Russia and to the shores of the Caspian Sea (x). He notes that the EU even has its own 'BRI', in the form of the TEN-T (Trans-European Network - Transport) programme, though he regards as it seriously underpromoted, with a history of missed opportunities (6, 66-7, 103), and a dismal contrast with China's success in international branding of the BRI (xvii, 154). His brief final reflections (153-6) first reaffirm the disruption caused by the end of the Cold War, and, second, insist that 'at the western end of the new Silk Road, the reintegration of the newly independent states into each other, and into the richer markets of Western Europe, should be recognised as a major contribution to the creation of the new Silk Road' (153). Third, 'borders do matter', and fourth, 'the reconstruction of the new Silk Road involves many more players than China alone' (153-4) - not only the EU, but international development banks and private companies too. And fifth, 'this book contests the one-sided focus of much commentary in the West, since 2013, on the geopolitical rivalry between China and the West. This focus is to the detriment of the very real regional and economic cooperation that is occurring in the world, and that is helping to improve the lives of the majority of its citizens. The story of the new Silk Road is a shining example of this process in action, if only either ‘side’ in these discussions could be bothered to embrace it' (154). These points, the last of which reflects a liberal internationalist position, are well taken. Four policy recommendations for the EU follow: national European leaders and EU representatives and officials 'should adopt a more positive attitude to the BRI (and national leaders should 'start shedding their annoying tendency of claiming the credit for everything positive stemming from the EU whilst blaming "Brussels" for everything that goes wrong); the EU itself 'should realise that it is a geopolitical player, and act in accordance with its March 2019 China Strategic Outlook, 'seeing China simultaneously as a partner, a competitor and a rival, depending on the field of activity' ('The EU is not a moral crusade. It does not need to preface every initiative with a reference to the "norms and values" that supposedly underpin its existence'); it should realise that 'its businesses operate in a global market place and that rules made for the sanctity of free markets may not be appropriate for meeting competition outside its jurisdiction' (so it might emulate the Chinese, and reserve some contracts in European-funded investment projects for European firms); and it should 'pay more attention to the operation of its own infrastructural programme', and in order to address current perverse incentives, 'either tighten central management of its international priority transport corridors or adjust the rules on national contributions that govern EU subsidies and grants in this policy area' (154-5). He concludes by requesting the Chinese government to provide more clarity on BRI projects regarding the countries included in GDP and population aggregates, and investments that are strictly part of the project, and recommending that 'China should recognise that the BRI is already a multilateral effort, albeit one in which China is making its own unique and important contribution. One does not need to have signed an MoU with China to contribute to building the new Silk Road. A road, railway or pipeline will facilitate the movement of goods regardless of by whom it has been constructed' (156).
These recommendations, consistent with a robust liberal internationalist/multilateralist stance, bring the book to a close. And it is one of its many virtues that it takes such a clear policy position, and makes its own perspective explicit. However, it has a degree of significance that transcends its character as an excellent introduction to a topic that is sorely in need of one, or the perspective that it reflects. In the manner in which it is framed and in its single-minded focus on roads, rail and pipelines, it identifies and situates not just a shared liberal project, but a shared liberal project for the material and institutional building of the world market, focused on the most central world region as yet imperfectly integrated within it. The material infrastructural network taking shape across Eurasia addresses directly the deficiencies that were the legacy of the trading arrangements in force under the Soviet Union, materially advances the integration of Central Asia, Russia, China and Europe into a single space, and reaches out to South and Southeast Asia, the Middle East, and Africa. In other words, it represents a massive step towards the completion of the world market which is the mission of capital. In doing so, it places the political economy of the capitalist world market in process of completion front and centre as the frame within which the new Silk Road should be addressed, and it connects directly to Marx's discussion of the role of improved transport systems in the development of the forces of production: 'Capital by its nature drives beyond every spatial barrier. Thus the creation of the physical conditions of exchange - the means of communication and transport - the annihilation of space by time - becomes an extraordinary necessity for it' (Marx, Grundrisse, Penguin, 1973, p. 524). The New Silk Road doesn't just debunk the notions of sole Chinese proprietorship or the centrality of China's strategic relations with the US, though it does these things very well. It identifies and gives a detailed empirical account of a hugely important episode in the contemporary annihilation of space by time, and it hardly wastes a word in doing so. If you are new to this topic, make this the first thing you read. If not, make it the next.
References
ADB. 2017. Meeting Asia's Infrastructure Needs. Manila: ADB (free download).
EBRD. 2018. Transition Report 2017-2018: Sustaining Growth. London: EBRD (free download).
The consequence of this is that while publications proliferate (it's easy to compile a bibliography running into hundreds of articles on the BRI and AIIB alone), sifting through them in the hope of arriving at a basic understanding of what is actually happening on the ground and what its significance might be is a laborious and frustrating task, and one that confronts the reader at every step with the danger of falling for the premise that this is primarily a story of Chinese strategy and US response. Thank goodness, then, for this excellent primer from Richard Griffiths - clear, concise, bang up-to-date, shrewd in its analysis, restrained in its conclusions, and wholly dedicated to laying out the material and institutional reality of the momentous developments taking place in relation to infrastructure and transport links across five Eurasian regions: Central Asia; Russia, Belarus and Ukraine; the Caucasus; the Western Balkans and Moldova; and the 'New EU'. He details the roads, railways and pipelines that constitute the material substance of the new networks that stretch from China to Western Europe; he corrects any impression that this might be a purely Chinese venture, detailing both the range of EU initiatives in process since the mid-1990s and the contributions from international organisations (such as the ADB and the EBRD), and he locates all this convincingly in specific local historical context. In short, the book is a miracle of common sense and sound judgement, and not to be missed.
Griffiths starts in the place that is obvious if you look at a map with post-World War Two history in mind: with trading arrangements under COMECON, and the consequences of the eventual collapse of the USSR. Those arrangements were heavily biased towards exchange within the bloc, with the result that as of 1990 the transport infrastructure was dedicated to ‘sending goods that were no longer competitive to markets that no longer existed’ (xix), and to keeping trade external to the bloc to a minimum. So:
‘The story told in this book starts with a shattered and fragmented Eurasian trading bloc. It shows how the international community, including China, has devoted finance and expertise to help resolve it. It demonstrates the role played by western aid agencies in Central Asia and the role played by the EU in the countries in its neighbourhood. All of these parties shared a belief that coordinating policies, facilitating trade, building infrastructure and promoting greater people-to-people exchange would boost peace and prosperity. All of them have helped build roads, railways and pipelines and they will all have experienced setbacks along the way (xxiii-iv).
The structure of the book after this introduction is straightforward. The first chapter, 'The New Silk Road', briefly addresses the Belt and Road Initiative (BRI) and the Western response, before touching on the ancient Silk Road, and profiling the 'Soviet Silk Road' that emerged after the founding of the Council for Mutual Economic Assistance (COMECON) in 1949:
'Within the COMECON system trade was bilaterally negotiated between partners with the aim of venting (planned) surpluses at agreed (artificially determined) prices and designed individually to balance (i.e. a surplus on trade with one partner could not be used to pay for a deficit with another). Exports outside the area would earn foreign currency but that usually flowed to the national bank, and not to the enterprise involved. ... The effect of the socialist foreign trade regime was to create a region with high levels of intra-area trade (the proportion of imports and exports traded with other nations in the bloc) but low levels of foreign trade dependence
(the share of imports and exports relative to GDP)' (13).
The second chapter, 'Challenge and Response', sets out the objectives of the BRI and examines the core regions of the geographic space to which it is addressed (the five identified above). It dwells only briefly on three of those objectives - policy coordination, currency convertibility and people-to-people exchanges - selecting two - trade facilitation and transport connectivity for closer examination. The BRI, in other words, is seen as China's response to the challenge of the 'disruption and dislocation caused by the collapse of the Soviet-led trade bloc a quarter of a century below' (25). Given the prominence of this theme, Alexander Lukin, China and Russia (2018) is an excellent and highly relevant complementary study. The chapter concludes with a discussions of trade facilitation (32-9) and infrastructure (39-43). The first of these accepts that foreign trade is beneficial, but adds that its benefits are best realised if unequal trading relationships and lack of control over resources and supply chains are combatted by 'developing the higher value-added industries and becoming more efficient in the delivery of services' (32). It then addresses the costs that necessarily arise in getting goods to and across borders, and to their final destinations. World Bank data, much of it conveniently summarised in its Logistics Performance Index (https://lpi.worldbank.org/international/global), suggest that while tariffs have relatively little overall impact (though they can be so punitive in specific areas as to be virtually prohibitive), both domestic and international freight costs and other costs incurred 'at the border' - whether in currency exchange, transport logistics, customs and related controls and charges or other 'paperwork' - vary enormously from country to country. This is no surprise, but the data for the regions studied lay bare immediately the motivation behind the BRI and EU and other investment across these regions. If trade cost 'penalties' are expressed as tariff equivalents, 'China's trade costs with the Caucasus and Moldova and the Western Balkans are eye-wateringly high' (33), while with Germany (if shipped directly by sea) they are relatively low, in part because Germany ranks first in the world on the Logistics index. China ranks 26th, with the 'New EU' countries some way behind. Between China and the eastern borders of the EU, cumulative costs place severe obstacles in the way of trade. Where quantitative data have been collected (most of the data on which the Index is based are qualitative), the picture is stark:
'For the year 2010, the LPI operation also collected information on border charges - the fees levied on a 20-foot container for the costs for documents, administrative fees for customs clearance and technical control, customs broker fees, terminal handling charges and transport to the road and rail network. The result for China was surprisingly exact - $299.80. This cost was also far and away the lowest. The result for the Central Asian cluster, GDP weighted, was a staggering $3,334, followed by the Caucuses with $2,660 and Russia, Belarus and Ukraine with $1,880. The average for the other three clusters lay between $1,218 and $1,027. None of these
charges includes import tariffs' (37).
On transport infrastructure, Griffiths cites the influential Asian Development Bank (ADB) calculations for Asia as a whole first made in 2009 and revised in 2017 (ADB, 2017). These now estimate that 'over the period 2016-2030 the region would require $22.6 trillion ($1.5 trillion a year) to realise its growth trajectory; $26 trillion if measures were taken to reduce the impact on climate change' (41). Of the 'New Silk Road' countries, only those of Central Asia figured here: their combined needs were estimated at between $492 billion and $565 billion. More than half of the total costs related to China itself, but: 'Excluding China, which only needed a small percentage increase in investment levels to meet its requirements, the countries in the ADB analysis faced a problem. They were devoting 3.3 per cent of their GDP to infrastructural investment but would need to find 8.2 per cent to meet the challenges of population growth, economic development and climate change' (41). Similar calculations made by the European Bank for Reconstruction and Development (EBRD) in 2018 confirmed this picture, arriving at a figure of $1.6 trillion for the countries under its remit for the short period to 2022 (EBRD, 2018, cited p. 43).This is crucial to understanding the positive reception of the BRI in Asia and Europe - China has been swimming with a strengthening tide: 'The two ADB reports had the effect of deflecting the world’s attention away from a fixation with issues of good governance, complemented it with a gritty analysis that demonstrated that without the tools to do the job, no amount of good governance would suffice to drag economies along a path of sustainable development, or any development at all' (ibid).
The topic of 'trade infrastructure and logistics' might not set your blood racing (though it will for some), but if you want a super-simple explanation for the BRI it works a lot better than 'great power rivalry'. China and every country beyond it to the borders of the EU stand to gain enormously if trade is facilitated and its material costs are reduced, and Griffiths concludes the chapter by conjuring up the image of a potential marriage made in heaven: 'It is perhaps whimsical to reflect that the EU’s experience in lowering/ eliminating border costs and China’s experience in its own domestic infrastructure boom could provide the perfect symbiosis for dealing with the needs of the new Silk Road' (44). Not so whimsical, perhaps.
On the basis of these strong foundations, the remaining three chapters, 'Roads', 'Rail', and 'Pipelines', deliver a comprehensive picture of the material infrastructure and networks that are shaping the New Silk Road, showing how the BRI, fundamentally important though it is, is part of a broader and largely collaborative effort. Indeed, they are so self-explanatory, clearly structured and informative that only the barest indicative outline is necessary here. In all three, a wealth of local and regional detail is provided, but it does not smother strong linking themes.
On roads, the key point is that 'it is not the roads, themselves, that represent the problem, but the point at which they cross international borders' (49). If I could drive (which I can't), I could now drive for 8,445 kilometres along the West Europe-West China Highway from the Chinese port of Lianyungang to St. Petersburg, then on to Warsaw and beyond. Just as significant, if I were driving a truckload of, say, washing machines, I could clear customs in the essentially new city (and dry port) of Khorgos, on China's border with Kazakhstan, and proceed unimpeded to my final destination (https://www.cevalogistics.com/release/27-november-2018). In doing so, I would benefit from Chinese investment in China itself, and from joint China-Kazakhstan investment and reformed procedures that reduced clearance time at the border from 65 hours in 2012 to 10 hours by 2016 (the detail, 55-6, is illuminating); but thereafter I would be beholden to investment from the World Bank, the ADB, the EBRD, the EIB (European Investment Bank) and the EU among others (along with China's EXIM bank and the AIIB) and from individual governments along the way (extending also to new port facilities to the west, north and south and rail hubs all over) - concrete evidence, literally, that the 'New Silk Road' is far from the exclusively Chinese initiative as which it is sometimes erroneously presented. All states and social forces appear to be involved: the road from Minsk to Smolensk, Griffiths reports, courtesy of the Moscow Times, 'has been widened and raised, provided with more turning points and reinforced to carry heavy vehicles - all the work done by gangs of smugglers looking to avoid regular control points' (70).
The logistical problems surrounding the transport of goods by road across multiple borders are significant, then, but they pale into insignificance when compared with rail. The major contrast is that whereas with road significant efficiencies at borders can be achieved without massive infrastructural investment, with railways the reverse is the case. 'Block' trains running from China to Western Europe can clear customs on departure, but infrastructural problems are not so easily solved, either in this case or (much more so) across the long-distance network in place, under construction, planned or imagined across the vast Eurasian landmass. Although in principle rail has a significant cost advantage for long-distance freight, the construction cost of modern two-track electrified lines is very high at the best of times (Griffiths quotes an ADB estimate from 2010 of an average of $3.8 million per kilometre, p. 109). Add in the inefficiencies that can arise from a single bottleneck on a long-distance line, the need to switch between different gauges of track when entering or leaving the wider-gauge system prevalent across the former Soviet Union, or the workarounds required by the often longstanding unavailability of otherwise efficient routing options arising from intractable instability or political disputes, and the danger that such workarounds will cement relative inefficiency (and isolation and exclusion) in place (as in the case of the Caucasus), and it is easy to see that the dream of a seamless network running east, west, north and south at peak efficiency and plied by dedicated freight trains 740 metres long (the EU standard) is a long way from reality. Beyond this, as Griffiths spells for both China and the European Union, the goal of better integration of 'domestic' space may run counter to the investment priorities and most efficient solutions for long-distance freight.
Surveying the current state of development in an environment subject to a combination of multiple initiatives and fluctuating fortunes, Griffiths offers two main conclusions, while acknowledging the credit that goes to 'the authorities in China' for the active promotion of new routes, the improvement of handling facilities along their borders, and the provision of subsidies (significant on the 11,179 kilometre Yuxinou or Chongqing-Duisberg line) : 'The first is that despite the hype built up around China’s railway building projects, the country has actually helped build very few. The second is that there has been relatively little railway building at all, and what little has occurred, has been in the European countries at the western end of the new Silk Road, and has been built with support of the EU' (110).
Even so, there are initiatives under way to the east, again with multiple sources of funding, that make rail increasingly important for the bulk transport of raw materials such as minerals, grain, oil, and fertilizer between Russia and China, with links to the extended and up-graded Trans-Siberian Railway or to the Caspian Sea, as physical bottlenecks (for example, over the Amur River at Heihe, or on the single track stretch of line through Mongolia), or institutional constraints (such as the now lifted Russian ban on the shipping of foodstuffs from Europe) are removed. They are complemented by extensive pipelines dating mostly from the Soviet period that move oil and gas from Russia, Central Asia and the Caucasus, which are the subject of the final chapter. This the context:
'Measured at the end of 2017, Russia and Central Asia have 8.5 per cent of the world’s proven oil reserves, but account for 15.3 per cent of its output. For natural gas the percentages are 30 per cent and 21.6 per cent respectively. Russia dominates the picture in both reserves and production of oil and gas. Of the Central Asian countries, Kazakhstan has the largest proven reserves of oil and is also the largest producer. Turkmenistan and Uzbekistan each have smaller oil reserves and their production is mostly for the domestic market. On the other hand, Turkmenistan has huge reserves of natural gas and is the region’s largest producer, narrowly followed by Uzbekistan, whose reserves, however, are much smaller' (125).
Because the major production areas are landlocked, practically all of the production of 636.8 million tonnes per year (oil equivalent, 2017) is moved by pipeline - an amount that equates to 338,000 fully loaded China-Europe Express freight trains. And when the Soviet Union collapsed, the network remained in the hands of Russian companies, later consolidated into the monopoly operator Transneft. Hence the dilemma in which the newly independent Central Asian countries found themselves:
'Faced with a monopsonistic buyer, these countries were continuously searching for alternative outlets but they faced a critical dilemma. Lack of guaranteed access to international pipelines reduced the incentive to invest in increasing output. Equally, without a guaranteed throughput of the energy, there was little point in expanding capacity' (127).
Subsequent development and discovery have added further to the demand for the building and periodic up-grading of new pipelines, such as the Caspian Pipeline Consortium Pipeline that runs west from the Kazakh field of Tengiz to the Russian port of Novorossiysk on the Black Sea and frees the Western oil companies who have a 50 per cent share of ownership, and the Kazakh government, from the Transneft monopoly (127-9). Griffiths takes the reader briskly through this example, and the varying and sometimes complex circumstances of Turkmenistan, Azerbaijan, and Russia itself, highlighting not only the issue of monopsony that confronts producers, but also the crop of initiatives that bring or may bring natural gas in particular to Mediterranean and other European markets, and the desire on the part of the EU and the USA to see alternatives to Russian control (and to alleviate the risk to supply from pipelines passing through Ukraine). China, of course, is the other major consumer. Here the highlight is the Gasprom/CNPC (Chinese National Petroleum Corporation) project for two or potentially three natural gas pipelines from the Eastern Siberian gas fields, agreed in 2014. Russia is strapped for cash but keen to diversify away from reliance on European markets, while China is keen to switch from more polluting fuels to natural gas, as well as to ensure its projected energy needs (143-4). The eastern Power of Siberia line is due to come on stream this year; the current price tag for the 'Power of Siberia 2' line that would run to Urumqi in western China is estimated at $77 billion, roughly the same following massive upward revision (and with apologies for the parochial reference) to the projected high speed rail line from London to Birmingham and Manchester, HS2, and on balance perhaps more likely to be built.
Griffiths himself is sparing in drawing broader observations from his account. He is at pains throughout to emphasise the contribution of the EU to the development of the new Silk Road, pointing out at the outset that since 1990 it 'has completely integrated nine of the states included by China in its BRI into a single market, where all frontier barriers to trade have been eliminated. It has concluded free trade agreements with five of the others. Finally, in January 2019, it included a further six in its plans for an integrated European transport network. Europe’s own ‘belt and road’ extends to the borders with Russia and to the shores of the Caspian Sea (x). He notes that the EU even has its own 'BRI', in the form of the TEN-T (Trans-European Network - Transport) programme, though he regards as it seriously underpromoted, with a history of missed opportunities (6, 66-7, 103), and a dismal contrast with China's success in international branding of the BRI (xvii, 154). His brief final reflections (153-6) first reaffirm the disruption caused by the end of the Cold War, and, second, insist that 'at the western end of the new Silk Road, the reintegration of the newly independent states into each other, and into the richer markets of Western Europe, should be recognised as a major contribution to the creation of the new Silk Road' (153). Third, 'borders do matter', and fourth, 'the reconstruction of the new Silk Road involves many more players than China alone' (153-4) - not only the EU, but international development banks and private companies too. And fifth, 'this book contests the one-sided focus of much commentary in the West, since 2013, on the geopolitical rivalry between China and the West. This focus is to the detriment of the very real regional and economic cooperation that is occurring in the world, and that is helping to improve the lives of the majority of its citizens. The story of the new Silk Road is a shining example of this process in action, if only either ‘side’ in these discussions could be bothered to embrace it' (154). These points, the last of which reflects a liberal internationalist position, are well taken. Four policy recommendations for the EU follow: national European leaders and EU representatives and officials 'should adopt a more positive attitude to the BRI (and national leaders should 'start shedding their annoying tendency of claiming the credit for everything positive stemming from the EU whilst blaming "Brussels" for everything that goes wrong); the EU itself 'should realise that it is a geopolitical player, and act in accordance with its March 2019 China Strategic Outlook, 'seeing China simultaneously as a partner, a competitor and a rival, depending on the field of activity' ('The EU is not a moral crusade. It does not need to preface every initiative with a reference to the "norms and values" that supposedly underpin its existence'); it should realise that 'its businesses operate in a global market place and that rules made for the sanctity of free markets may not be appropriate for meeting competition outside its jurisdiction' (so it might emulate the Chinese, and reserve some contracts in European-funded investment projects for European firms); and it should 'pay more attention to the operation of its own infrastructural programme', and in order to address current perverse incentives, 'either tighten central management of its international priority transport corridors or adjust the rules on national contributions that govern EU subsidies and grants in this policy area' (154-5). He concludes by requesting the Chinese government to provide more clarity on BRI projects regarding the countries included in GDP and population aggregates, and investments that are strictly part of the project, and recommending that 'China should recognise that the BRI is already a multilateral effort, albeit one in which China is making its own unique and important contribution. One does not need to have signed an MoU with China to contribute to building the new Silk Road. A road, railway or pipeline will facilitate the movement of goods regardless of by whom it has been constructed' (156).
These recommendations, consistent with a robust liberal internationalist/multilateralist stance, bring the book to a close. And it is one of its many virtues that it takes such a clear policy position, and makes its own perspective explicit. However, it has a degree of significance that transcends its character as an excellent introduction to a topic that is sorely in need of one, or the perspective that it reflects. In the manner in which it is framed and in its single-minded focus on roads, rail and pipelines, it identifies and situates not just a shared liberal project, but a shared liberal project for the material and institutional building of the world market, focused on the most central world region as yet imperfectly integrated within it. The material infrastructural network taking shape across Eurasia addresses directly the deficiencies that were the legacy of the trading arrangements in force under the Soviet Union, materially advances the integration of Central Asia, Russia, China and Europe into a single space, and reaches out to South and Southeast Asia, the Middle East, and Africa. In other words, it represents a massive step towards the completion of the world market which is the mission of capital. In doing so, it places the political economy of the capitalist world market in process of completion front and centre as the frame within which the new Silk Road should be addressed, and it connects directly to Marx's discussion of the role of improved transport systems in the development of the forces of production: 'Capital by its nature drives beyond every spatial barrier. Thus the creation of the physical conditions of exchange - the means of communication and transport - the annihilation of space by time - becomes an extraordinary necessity for it' (Marx, Grundrisse, Penguin, 1973, p. 524). The New Silk Road doesn't just debunk the notions of sole Chinese proprietorship or the centrality of China's strategic relations with the US, though it does these things very well. It identifies and gives a detailed empirical account of a hugely important episode in the contemporary annihilation of space by time, and it hardly wastes a word in doing so. If you are new to this topic, make this the first thing you read. If not, make it the next.
References
ADB. 2017. Meeting Asia's Infrastructure Needs. Manila: ADB (free download).
EBRD. 2018. Transition Report 2017-2018: Sustaining Growth. London: EBRD (free download).