The Political Economics of the New Silk Road

Open access


What has now been coined the term XXI Century Silk Road had evolved from a speech given by Chinese premier Xi Jinping in Kazakhstan in 2013. It was initially a plan aimed at promoting the bilateral relations of China and its neighbors; however, the initiative had since then traversed the region’s borders and become a global project.

This paper examines the Silk Road Economic Belt initiative in light of Chinese-EU relations. It reviews the initiation of the Silk Road Project and focuses on its political economic analysis through investigating the potential routes the Belt can take, the EU-Chinese trade and investment standings as well as the global political context that the increased cooperation and connection is likely to influence.

The paper uses the Modern Silk Road concept as an example of China’s foreign policy in the wake of globalization and the emergence of a new multipolar world order. To set the stage we will begin with a political-economic approach of the New Silk Road. Highlighting the possibilities of Chinese high culture, which accommodate global governance, we state that the Modern Silk Road project is one of its materialized forms. The concept of the New Silk Road (together with the Eurasian Union) denies the previous era of corruption and personality cult and indicates a milestone in the development of China, proving that it is already a globally responsible power (Värk, 2015).

Even if transport by land is significantly more expensive than transportation by sea, the New Silk Road may have significant advantages: It may take only two weeks, saving potentially a week in shipping time, and diversify China’s dependence on sea transport that could reduce the importance of its regional diplomatic conflicts. Already these aspects show that the purpose of the Modern Silk Road is basically not to explore cost-efficiency but to contribute to the establishment of a new, multipolar world order. The fact that the Modern Silk Road is a supply-driven concept in spite of the historical one underlines this argument. Even if politics dominate, henceforward directing the economic activities, we will nonetheless examine the China-Eastern European relations through the lenses of trade and investment as well.

After the initial analysis and description of the Silk Road Economic Belt as a tool of Chinese foreign policy, the paper goes on to examine the potential routes the railway takes from China to Europe. It reviews the trade and investment ties that the two entities share and assesses how this initiative contributes to the rise of Europe and China beside the USA. Lastly, it outlines how various regional and global powers are affected by the renewal of the Silk Road.

Andrea, A. J. (2014), The Silk Road in World History: A Review Essay. Retrieved from [accessed Oct 2015]

Brugier, C. (2014), China’s way: the new Silk Road, EUISS Brief no. 14, Paris: ISS. Retrieved from: [accessed Oct 2015]

China Institute in America (2015), Exchange of Goods and Ideas Along The Silk Roads. Retrieved from [accessed Oct 2015]

Dawber, A. (2015), “China to Spain cargo train: Successful first 16,156-mile round trip on world’s longest railway brings promise of increased trade,” Independent, 24 February 2014. Retrieved from: [accessed July 2015]

EEAS (2013), EU-China 2020 Strategic Agenda for Cooperation, European Union External Action. Retrieved from [accessed Oct 2015]

Erdősi, F. (2015), ‘Trans-Eurasian transport links in great and medium-size spaces of power,’ Tér és Társadalom, vol. 29, no. 2, pp. 106-126.

Fedorenko, V. (2013), The New Silk Road Initiatives in Central Asia, Rethink Paper 10. Retrieved from [accessed Oct 2015]

Felföldi, Sz. (2009), Egy új szemléletű Selyemúttörténet alapvonalaihoz. Retrieved from [accessed Oct 2015]

Freedholm, J. (2011), ‘The Dynamics of Trade along the Silk Road,’ SPICE Curriculum guide. Retrieved from [accessed Oct 2015]

Fung Business Intelligence Centre (2015), The Silk Road Economic Belt and the 21st Century Maritime Silk Road. Retrieved from [accessed Oct 2015]

Geeraerts, G. (2011), ‘China, the EU, and the new multipolarity,’ European Review, vol. 19, no. 1, pp. 57-67.

Godement, F. (2015), “‘One belt, one road’: China’s great leap outward, China Analysis, 10 June, London etc.: European Council on Foreign Relations.

Hansen, V. (2012), The Silk Road: A New History, Oxford: Oxford University Press.

Heilmann, S.; Rudolf, M.; Huotari, M. & Buckow, J. (2014), “China’s Shadow Foreign Policy: Parallel Structures Challenge the Established International Order,’Merics: China Monitor, no. 18, 28 October. Retrieved from: [accessed in October 2015]

Huang, Y. (2015), “Don’t Let ‘One Belt, One Road’ Fall into the Trap of Japan’s Overseas Investments,” Zhongguo Gaige Wang, 10 February.

Inotai, A. (2010), ‘Impact of the global crisis on trade relations between the European Union and China,’ in Hungarian Statistical Review, vol. 14, pp. 46-67.

-- (2011a), “Kína világgazdasági szerepének erősödése, az exportorientált ‘modell’ jövője,” Köz-gazdaság, vol. 6, no. 1, pp. 215-218.

-- (2011b), ‘Impact of the global crises on EU-China relations: facts, chances and potential risks,’ in T. Matura (ed.) Asian Studies, Budapest: Hungarian Institute of International Affairs, pp. 80-102.

-- (2014), ‘Economic relations between the European Union and China,’ L’Europe en Formation, vol. 2013/4, no. 370, pp. 47-84.

Jia, Q. (2015), ‘A number of issues that the OBOR urgently needs to clarify and prove,’Aisixiang, 24 March.

Juhász, O. (2015), ’A Selyemúton oda-vissza,’ Remény, 2. szám. Retrieved from [accessed Dec 2015]

Jun, Z. (2015), ‘China’s pursuit of a new economic order,’ Project Syndicate, 2 June. Retrieved from [accessed Oct 2015]

Kaczmarski, M. (2015), “The New Silk Road: a versatile instrument in China’s policy,” OSW, 2 October. Retrieved from [accessed Oct 2015]

Karluk, S. R. & Karaman, S. C. (2014), ‘Bridging civilizations from Asia to Europe: The Silk Road,’ Chinese Business Review, vol. 13, no. 12, pp. 730-739.

KPMG (2015), China Outlook 2015, KPMG Global China Practice. Retrieved from [accessed Oct 2015]

Lai, S-Y. & Zhang, L. (2013), “Challenging the EU’s economic roles? The impact of the Eurozone crisis on EU images in China,” Baltic Journal of European Studies, vol. 3, no. 3, pp. 13-36.

Lawton, J., ed. (2008), Integral Study of the Silk Roads: Roads of Dialogue, Paris: UNESCO. Retrieved from [accessed Oct 2015]

Laruelle, M. (2015), ‘The Chinese Silk Road and their Reception in Central Asia,’Testimony before the U.S.-China Economic and Security Review Commission Hearing on ‘Looking West: China and Central Asia.’ Retrieved from [accessed Oct 2015]

Li, J. (2014), ‘Report: Silk Road Economic Belt may be divided into three phases; initial completion predicted in 2049,’ Zhongguo Xinwen Wang, 28 June.

Liu, X. (2010), The Silk Road in World History, Oxford: Oxford University Press.

Liu, Z. (2014), Central and Eastern Europe in Building the Silk Road Economic Belt, Working Paper Series on European Studies, Institute of European Studies, Chinese Academy of Social Sciences, vol. 8, no. 3.

Marshall, G. (1947), Speech given by United States Secretary of State, General George Marshall at Harvard University, 5 June.

Matura, T. (2012), ‘The pattern of Chinese investments in Central Europe,’ International Journal of Business Insights & Transformation, Special Issue, vol. 5, no. 3, pp. 104-109.

Maxxelli Consulting (2015), West China’s International Railway Development. Retrieved from [accessed Oct 2015]

Men, J. (2015), “China’s New Silk Road and EU-China relations,” in EU-China Observer, no. 1.15, pp. 12-15.

Messenger (2014), ‘Reimagining the Silk Road,’ vol. 25, no. 5. Retrieved from [accessed Oct 2015]

Ministry of Foreign Affairs of the People’s Republic of China (2013), President Xi Jinping Delivers Important Speech and Proposes to Build a Silk Road Economic Belt with Central Asian Countries, 7 September. Retrieved from [accessed Oct 2015]

van der Putten, F.-P. & Meijnders, M. (2015), ‘China, Europe and the Maritime Silk Road,’ Clingendael Report, 26 March. Clingendael: Netherlands Institute of International Relations. Retrieved from [accessed Oct 2015]

Railway Road Connections Map (2005), ‘Railway and Road Corridors Connecting the Central Asia Regional Economic Cooperation Member Countries,’ [image] Central Asia Regional Economic Cooperation. Retrieved from [accessed Oct 2015]

Railway Gazette (2015), ‘DB Schenker launches Hamburg-Zhengzhou train,’5 September. Retrieved from [accessed Oct 2015]

Rolland, N. (2015), “China’s New Silk Road,” The National Bureau of Asian Research (NBR), 12 February.

Schweisgut, H. D. (2015), ‘EU-China 40th Anniversary: Expectations for Expanding Connections, in EU-China Observer, no. 1.15, pp. 7-10.

Staburova, J. & Bērziņa, U. A. (2013), ‘Glimpse at EU-China relationships since 2008,’ Baltic Journal of European Studies, vol. 3, no. 1, pp. 44-57.

Stahl, A. K. (2015), “China’s New Silk Road Diplomacy: Implications for China’s Relations with Europe and Africa,” in EU-China Observer, no. 1.15, pp. 16-19.

Szczudlik-Tatar, J. (2013), China’s New Silk Road Diplomacy, PISM Policy Paper, no. 34 (82). Retrieved from [accessed Oct 2015]

Tao, X. (2014), “Back on the Silk Road: China’s version of a rebalance to Asia,’Global Asia, vol. 9, no. 1. Retrieved from [accessed Oct 2015]

The World Bank (2015), The World Bank Investor Brief. Retrieved from [accessed Oct 2015]

TRACECA (2012), Silk Wind: The Route of Multimodal Block Train (Project Progress Presentation), National Secretariat of IGC TRACECA in the Republic of Kazakhstan. Retrieved from [accessed Oct 2015]

Trautmann, L. & Gervai, P. (1999), ‘Ázsiai kultúra és információs társadalom,’Fordulat, 1999 ősz, pp. 53-76.

Turcsányi, R. (2014), ‘Central and Eastern Europe’s courtship with China: Trojan horse within the EU?’ EIAS: EU-Asia at a Glance, January. Retrieved from: [accessed Oct 2015]

Txabarriaga, R. (2010), ‘Implications of increasing Europe’s trade with China, Tcworld, February. Retrieved from [accessed Oct 2015]

Vangeli, A. (2015), “China’s New Silk Road and its impact on Sino-European relations,”in EU-China Observer, vol. 1.15, pp. 20-26.

Värk, J. (2013), ‘Russia between China and the European Union: Friends or Foes?’ Baltic Journal of European Studies, vol. 3, no. 1(13), pp. 29-43.

-- (2015), “China’s dilemmas on the road to reform under Xi Jinping,” Baltic Journal on European Studies, vol. 5, no. 1, pp. 133-149.

Wang, J. (2012), “‘Marching towards the West’, China’s geopolitical strategy of rebalancing,” Huanqiu Shibao, 17 October.

Waugh, D.C. (2010), ‘The silk roads in history,’ Expedition, Special Issue: Silk Road, vol. 52, no. 3, pp. 9-22. Retrieved from [accessed Oct 2015]

Wood, F. (2002), The Silk Road: Two Thousand Years in the Heart of Asia, Berkeley, Los Angeles: University of California Press.

Xu, G. (2014), “Looking at the ‘One Belt, One Road’ strategy from a return on investment point of view,” Financial Times (Chinese version), 20 November.

Yanchun, W. (2015), “Reconstructing China’s trade,” Caijing, 2 February.

Yang, Y. (2015), ‘China-EU Relations: Broader, Higher and Stronger,’ in EU-China Observer, vol. 1.15, pp. 6-7.

Yiping, H. (2015), “Don’t Let ‘One Belt, One Road’ Fall into the Trap of Japan’s Overseas Investments,” Zhongguo Gaige Wang, 10 February.

Zhang, J. (2015), “China’s pursuit of a new economic order,’ Project Syndicate, 2 June. Retrieved from [accessed June 2015] Zheng, X. (2014), “‘One Belt, One Road’ is not ‘China’s Marshall Plan’,” Huanqiu Wang, 17 November.

Zheng, Y. (2015), “The ‘One Belt, One Road’ strategy helps the world economy rebalance,” Lianhe Zaobao / Oriental Morning Post, 8 January.

Baltic Journal of European Studies

Tallinn Law School, Department of Law, School of Business and Governance, TalTech University

Journal Information

CiteScore 2017: 0.50

SCImago Journal Rank (SJR) 2017: 0.199
Source Normalized Impact per Paper (SNIP) 2017: 0.223

Cited By


All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 514 514 108
PDF Downloads 248 248 64