Silk Road at sea plan needs open approach to avoid conflicts

Maritime version of trade strategy faces obstacles amid South China Sea disputes unless all participants share benefits, warn experts

PUBLISHED : Friday, 16 May, 2014, 1:05am
UPDATED : Friday, 16 May, 2014, 8:42am

Violent anti-China protests in Vietnam are the latest sign that Beijing must share more of the potential economic riches it eyes in the region or risk missing out on a trade boost of more than US$500 billion.

At a forum held in Nanning, the capital of Guangxi province that has land and sea links with members of the Association of Southeast Asian Nations, officials and researchers said they expected opportunities to arise in regional infrastructure, industrial and cultural cooperation under the so-called 21st century Maritime Silk Road strategy broached by President Xi Jinping last year.

But they also noted challenges facing Beijing amid rising tension with countries such as the Philippines and Vietnam.

"The Silk Road strategy faces some obstacles," said Qu Xing, the president of the China Institute of International Studies, referring to the fears that it will only help China deepen its influence on the South China Sea. "All these are challenges that merit study and need to be solved."

The conference came before a weekend forum of trade ministers from the Asia-Pacific Economic Cooperation grouping in Qingdao, Shandong province, as Beijing studies the feasibility of an Asia-Pacific free-trade agreement to rival a US-initiated deal that excludes the Asian giant.

Beijing's deployment of an oil rig in the contested South China Sea sparked violent anti-China protests in the past few days. Vietnam's biggest steel plant, owned by Taiwan's Formosa Plastics Group, was attacked after a rally by Vietnamese demonstrators outside the Chinese embassy in Hanoi on Sunday.

But Chinese officials at the forum yesterday focused more on accelerating business to advance Xi's Silk Road strategy rather than harp on regional instability.

Vice-Commerce Minister Gao Yan said the government would speed up implementing a string of projects including port and logistics zones and fishing production bases.

Former National Development and Reform Commission deputy chairman Du Ying said China aimed to boost bilateral trade to US$1 trillion with Asean by 2020, from US$443.6 billion last year, encourage more domestic firms to invest overseas, expand currency swaps, and "actively prepare" the establishment of the Asian Infrastructure Investment Bank.

Du also said China should "properly handle the disputes in the South China Sea through friendly negotiations".

Cheng Yung-nien, the head of the Institute of Eastern Asian Studies at the National University of Singapore, said the clashes over South China Sea issues should not discourage Beijing's regional economic plans.

"The more serious the conflicts get, the more urgently China needs to implement the plans," Cheng said. "China should allow more local people and all kinds of stakeholders to participate in the projects.

"It's no longer the colonial era. The new era calls for more openness and participation."

The Maritime Silk Road proposal runs parallel to the plan to build a land-based "new Silk Road" economic belt that seeks to bolster trade and investment ties westwards with some Asian and European nations.

China has moved ahead in developing infrastructure such as ports. Guangxi Beibu Gulf International Port Group last year bought a 40 per cent stake in Malaysia's Kuantan Port for 334.4 million ringgit (HK$802 million). The port will connect the Kuantan Industrial Park and China's Qinzhou Industrial Park.

Nguyen Hong Truong, Vietnam's vice-transport minister, said his country and China were discussing agreements on cooperation in areas such as civil aviation and railway transport. On the South China Sea dispute he said: "There's no big problem. In the long term, we should be able to handle these issues well."