Western Europe Is Missing the Boat on China’s Silk Road

 
 

As the first Chinese co-sponsored event discussing the Silk Road held outside of China, the recent Silk Road Forum in Tbilisi 2015 showed how seriously Georgia is about positioning itself as an important partner in China’s One Belt, One Road project. The event demonstrated how Georgia and its neighbors are taking ownership of their own roles in shaping China’s new foreign policy vision. For example, the event in particular showcased existing and future plans for cooperative transport projects involving Turkey, Azerbaijan, Georgia and Kazakhstan, highlighting a somewhat ideal response to China’s Silk Road proposal. In contrast, there was a distinct and noticeable absence from the event of representation from Brussels or other Western European capitals. This symbolized a missed opportunity for Europe to engage on the Silk Road project, as well as show support for Georgia as a key European Neighbourhood Policy (ENP) partner country.

Although there were high-level representatives present from Central Europe, absent were their counterparts from Western Europe. The United States Deputy Secretary of Commerce, Bruce Andrews congratulated Georgia on its forward-looking development and highlighted U.S. support for Georgia’s expansion of trade routes. Not only is Europe missing out on the opportunity to understand its position within the Chinese Silk Road Economic Belt, it also missed the chance to highlight its role in the U.S. New Silk Road project. Others are waking up to the opportunities presented in particular by Georgia, the link between Asia and Europe, as a geographical trade, energy and transport crossroads between Asia and Europe within these two frameworks. Western Europe is much less engaged.

Although the Silk Road concept is in initial stages of development, and often vague on details, the Silk Road Forum itself has already established the need to unpack its goals. This discussion already goes further than that of the EU’s ENP. Unlocking the full economic potential of Silk Road participating countries was a key theme of the forum discussions. Georgia and its neighbors seek to share ideas and seek outside consultation on how best to do this. Having signed its Association Agreement with the EU in June 2014, which included the Deep and Comprehensive Free Trade Area (DCFTA), Georgia committed long-term to closer European integration. Although poorly communicated by the EU, the DCFTA has already boosted trade figures, with Georgian exports to the EU increasing by 12 percent in the first six months of the trade agreement. Nonetheless, the DCFTA is a long-term project usually explained through technical adjustments and complex reforms, the potential of which is not often made clear to Georgian businesses and people. The strategic goal and opportunities of Georgia’s European integration should be much better communicated to all strata of Georgia’s economy, and linking it with the Silk Road could enhance this.

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China is therefore offering another strand to Georgia’s trade development, but it is in part up to Georgia to define what this will mean. This is not intended to clash with European economic integration but instead to complement and enhance it. Western Europe and the EU as a whole needs to be a part of this, broadening out the Eastern Partnership economic integration program to take a more holistic approach to Georgia’s development within an evolving and expanding economic framework. The EU should invest time in linking up the principles and values embodied in its Association Agreement to enhance Georgia’s role in this global Silk Road project. For example, the anti-corruption reform conditionality of EU relations with Georgia give the country a value-add in approaches to regional integration and harmonization. After all, this will ultimately assist Georgia’s trade with Europe.

This also presents a huge opportunity for European businesses and expertise. Georgia needs to determine how it can become more than just a transit country for air, rail, sea and road links, carrying goods and energy from China to Europe. Western Europe should engage to influence this discussion. China has already demonstrated its seriousness in playing an active role in this. Xinjiang company Hualing has been present and active in Georgia for years, and it recently opened a Free Industrial Zone. State-owned company Power China agreed to work on the Anaklia Port. This bid also gives an indication of the key foreign contractors active in Georgia: The two bids accepted in the final selection round announced in June 2015 included Power China as part of a Georgian consortium, against a U.S.-Georgian consortium. There is no benefit to being a geographical crossroads, and notably the fastest route between China and Europe, if the country is unable to unlock its full potential. Western Europe should seize the opportunity to be part of this discussion, particularly in Georgia, before it is sidelined by others.

Sarah Lain is a Research Fellow of Russian Studies at the Royal United Services Institute in London and is working on a report highlighting the outcomes and next steps of the Tbilisi Silk Road Forum.

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