China’s Belt & Road Initiative:
Connecting maritime transport flows for trade-driven prosperity,
multilateralism and global peace

Professor HE Haralambides
Dalian Maritime University
Texas A&M University
Erasmus University Rotterdam

ROUNDTABLE ON FUTURE MARITIME TRADE FLOWS
15-16 April 2019
Paris, FranceWhat is BRI(OBOR)?

• A transport network consisting of a “Belt”, i.e., overlandtransport connecting China to Europe through Central Asia;and a “Road”, i.e., a maritime return-route from southern
Europe, through Suez, back to Asia, with a stopover at East
Africa (alternatively known as the “Maritime Silk Road”). The
Mediterranean Basin is therefore ‘central’ in this network,
being the “hub-of-hubs”, connecting Asia with Europe,
Africa and the Americas.*• Looking at Chinese investments in Australia, Central- andSouth America, BRI could be easily extended to a global
Around the World (ATW) transport system. Recently, China
has again made known its interests in S. America (including
the Nicaragua canal).
* That was the reason why –in the past three years- H&A has helped
Mediterranean ports create the MEDPorts Association.

Inclusion of the Pacific! And the Arctic

MYANMARA lot of talk has
been taking placeover the years on
the importance (forChina) of the
Pakistani port of
Gwadar. Little
however is known(publicly) on theimportance ofMyanmar and its
port Kyaukphyu.

© Haralambides & Associates(www.maritimeeconomics.eu)© Haralambides & Associates (www.maritimeeconomics.eu)

Introduction: BRI and its OBJECTIVESBRI, the Chinese Belt-and-Road Initiative, is a US$
one trillion plan aiming at greater economic
integration and development, through better
connectivity. BRI promotes connectivity as the main
enabler of trade growth and trade driven
prosperity. Recent research shows that a 10%
improvement in connectivity* between countries
along the “Maritime Silk Road” would deliver a 3%
decrease in Chinese trade costs which would in turnboost China’s imports and exports by around 6%
and 9% respectively. The latest studies by theWorld Bank and other international institutions
suggest that BRI cooperation could cut the costs ofglobal trade by 1.1 to 2.2 percent.
Since the BRI was first announced in 2013 by
President Xi Jinping of China, 25% of this budget has
been spent. There are as many plans as interested
countries, and China is talking to most of them.

One should not forget also China’s “Made in China
2025” strategy. According to this, by 2025, China
should supersede, as an industrial, high-tech,
manufacturer, USA and Japan taken together; andthis requires secure global supply chains, including
ports; thus, BRI.
In the past 3 years, China has managed to commit
nearly US$ 2 trillion from various sources including
the Asian Infrastructure Investment Bank (AIIB).

*Connectivity is usually defined as a function of
frequency of calls and number of liner companies
calling at a port.

© Haralambides & Associates (www.maritimeeconomics.eu)

President Xi Jinping’s
noble BRI objectives:
A shared future formankind• The BRI is guided by the principles of consultation andcooperation, aiming at shared benefits. The initiative represents anapproach to international cooperation featuring mutual respect,justice, equity and cooperation for win-win outcomes. BRI iscommitted to multilateralism and an open global economy. As
such, BRI will help move economic globalization toward greater
openness, inclusiveness, balance and win-win outcomes.
• As President Xi Jinping has pointed out, the BRI aims to replaceestrangement with exchanges between different civilizations,replace clashes with mutual learning and replace a sense of
superiority with coexistence; it aims to boost mutual
understanding, mutual respect and mutual trust among different
countries. In this light, the BRI is seen as a path towards global
peace.

________
Source: Yang Jiechi, Member of the Political Bureau of the Central Committee of the Communist
Party of China and Director of the Office of the Central Commission for Foreign Affairs. China Daily,
30 March 2019.

© Haralambides & Associates (www.maritimeeconomics.eu)• China is not investing only in African infrastructure but it transfers
manufacturing activity there. By the end of 2015: 128 industrial projects in
Nigeria, 80 in Ethiopia, 77 in South Africa, 48 in Tanzania and 44 in Ghana. It
seems developing Africa is much easier than developing China’s own
northwestern territories, and this trend in bound to continue in line withrising labor costs in China.

Africa, theMediterranean,
Russia and Iran

• With investments in Australia (Darwin), Central- and South America, and acontinuing interest in the Nicaraguan canal, China will soon be looking at
the Pacific Ocean, expanding BRI to a global, “around-the-world” network,
served, possibly, by the ultra-large containerships (25,000+) China isbuilding, or by the “hub-free ship-carrier carrier” project it is researching.
• What are the prospects of the Panama Canal, in view also of competition
from the Suez Canal and a possible Nicaragua Canal? To my view, not very
promising: BRI and the three global shipping alliances (Ocean Alliance –THE Alliance – 2M) intend to transform the Mediterranean Basin into a“global super hub”, serving Europe, Africa and the Americas (this was thereason why we created the MEDPorts Association).
• Russia is squeezed from both sides: USA/NATO from the west / ChinaEurasia-BRI from the east. Russia’s response: its own ‘OBOR’: The NorthSouth Transport Corridor, running from Bandar Abbas (Iran) to Moscow
through Baku (Azerbaijan).
• Both Russia and China aspire to develop their own currencies into reserve,
clearing ones, away from the dollar and a crisis-prone, risky andoverburdened western financial system. China in particular has created acurrency clearing house in Qatar while Russia has an “oil for goods” deal
with Iran. The latter country too has recently entered into a “rail for oil”
barter deal with Turkey.

42 Ports in 34
countries• On 26 July 2018, at a Press conference held at China’s Ministry ofTransportation in Beijing, it was announced that China has signed atotal of 38 bilateral and regional maritime agreements, covering 47
countries along the BRI route.* The latest one was signed last month(March 2018) with Italy: An MoU comprising 29 deals, including
investments in the ports of Genova and Trieste. Although such MoUs
have no formal legal status, nor they create rights and obligations, they
have nevertheless great value for China, in terms of anchoring BRI
onto as many countries as possible.
• The internet portal for BRI of the Chinese government lists 129
countries that have signed some type of cooperation agreement which
China on BRI.
• In addition, and in the 5 years since BRI’s inception in 2013, China has
participated in the construction and operation of 42 ports in 34
countries, including the highly strategic ports of Piraeus, Hambantota(Sri Lanka), Djibouti, and Gwadar (Pakistan).
•*Although there’s no such thing as “BRI Route”.

Chinese ports
on BRIIn March 2015, with the authorization of the State Council ofChina, China's National Development and Reform Commission,
the Ministry of Foreign Affairs and the Ministry of Commerce
jointly released Visions and Actions on Jointly Building Silk
Road Economic Belt and the 21st-Century Maritime Silk Road.
The document clearly emphasized the construction of 15
coastal ports, namely, Shanghai, Tianjin, Ningbo, Guangzhou,
Shenzhen, Zhanjiang, Shantou, Qingdao, Yantai, Dalian,Fuzhou, Xiamen, Quanzhou, Haikou, and Sanya.
__________
NB: Through a cooperation between Erasmus University Rotterdam andDalian Maritime University, we have established the ports which would
make meaningful economic sense for inclusion in the BRI network in West
Africa; along the Yangtze River; and along the ‘Road’ from ValenciaGenova-Trieste-Piraeus to East China. In the same research, we are also
looking at Chinese industry relocation due to port development along the
BRI. Much of this research has already been published or is under review.

Sample of Chinese investments in Europe (2008-2018)
North-South Divide
Bloomberg has
There’s an important
core-periphery divide
crunched the numbers
when it comes toto compile the most
Europe’s openness tocomprehensive audit toChinese investments. At
the same time thatdate (2018) of China’s
Germany, France and Italy
presence in Europe. It
are pushing for an EUshows that China has
wide investment
bought or invested inscreening mechanism, likethe Americans,assets amounting to atgovernments in Greece,
least $318 billion overPortugal and Cyprus are
the past 10 years.
sceptical of such a move,saying it would hamper
their countries’ ability to
attract much-needed
capital. The sale ofPiraeus to Cosco has A sizable amount of additional investments, of which no financial details are disclosed, as
left a rather bitter
well as investments of Hong Kong companies with no (significant) ties to mainland
aftertaste to Europe. China, are not reported here (e.g. Vado terminal in Italy, Toulouse Blagnac airport inFrance, etc.). In Marseille: China Merchants PH has minority stake in Terminal Link,
owned by CMA CGM, in the OCEAN Alliance with Cosco. In Rotterdam: Cosco SP has
https://www.bloomberg.com/graphics/2018-china-business-in-europe/?utm_campaign=socialflow-organic&cmpid=socialflow-facebooka minority stake in Euromax.
business&utm_source=facebook&utm_medium=social&utm_content=businessEUROPE: FROM GREECE,
BRI MOVES WESTWARDSTO SPAIN, WITH A
STOPOVER IN ITALYCOSCO’s acquisition of Noatum Port Holdings (NPH) was a
strategic move more important even than that of Piraeus.
With Piraeus in the east, and Valencia in the west
Mediterranean, China is solidifying its interests. By
controlling Noatum (Spain’s major terminal operator,
former Dragados), Cosco Shipping Ports (CSP) controls not
only Valencia (the country’s prime container port) and
Bilbao (Short-Sea-Shipping services with Rotterdam andNorthern Europe) but also the inland terminals of Madrid
and Zaragoza. ΒΡΙ moves West and it won’t be long before
it crosses the Atlantic. China’s recent interest in the Italianports of Trieste and Genova completes the northern
Mediterranean (European) picture.

© Haralambides & Associates (www.maritimeeconomics.eu)

March 2019:president xi
jinping’s visit
to rome• After Piraeus in the east and Valencia in thewest of the Mediterranean Basin (as well as the
remoteness of both ports from central/western
European markets), China looks at central
Mediterranean for gateways for its exports.
These are the ports of Genova and Trieste. The
former is well connected by rail (anddistribution) to Rotterdam, while the latter
serves not only Central/Eastern Europe but also
the other Member States of the Northern
Adriatic (Slovenia, Croatia, Bosnia, and perhaps
all the way down to Montenegro and Albania).

China’s “debttrap
diplomacy”:
True or Fake
News? (cont…)

A part of western concerns on BRI consists of what has come to be known as ‘debttrap diplomacy’. The Sri Lankan Port of Hambantota has often been used as a case inpoint. The practice is not unknown to certain western ‘financiers’, however, and in
short it consists of extending loans to borrowers, usually under onerous terms,
when one knows that the latter will be unable to repay. The solution is often a swapof debt with equity, i.e., in our case, the lender takes over control of the port.
Whether this is the case or not, in the case of BRI investments, remains to be seen.
But loans to Sri Lanka (Hambantota) were rather concessionary (2%), while thecountry’s largest debt is to Japan and not to China. The case, to my view, was one ofwide public sector corruption rather than anything else.
The case of the Port of Piraeus is not much different either: At the time of writing,
the Greek government rejected a €600 million port investment plan on grounds ofarcheological finds. Also at the time of writing, a mounting Chinese disillusionment
with the port of Piraeus has led China to start looking at the Italian ports of Trieste
and Genoa. Since it was leased to Cosco, however, the port has become one of thefastest growing container ports in the world, soaring to the 36th place in global
container traffic ranking, from the 93rd in 2010. The port has only 10 Chinese staff
but employs 3,000 Greeks, and it has also created more than 10,000 indirect local
jobs.
*according to researchers at Rhodium Group and the Mercator Institute for China Studies.

• Decisions made in the BRI framework, whether
project selection or investment and financing
cooperation, are all based on full consultation
among the parties, and on the basis of risk
assessment and investment feasibility studies.

(…cont.) China’s “debt-trap
diplomacy”: True or Fake
News? II

• China and another 27 countries have jointly
adopted the Guiding Principles on Financing theDevelopment of the BRI, which highlight the needto ensure debt sustainability in project financing.
• China claims that in cases where its BRI partners
face difficulties in servicing debts, China will
properly address the issue through friendly
consultation, and will never press partners fordebt payment.

• Copying similar procedures of the US Senate, ascreening mechanism was proposed by the European
Commission in 2017 and approved by the Parliament in
February 2019. The screening mechanism aims to see
to it so that “strategic infrastructure”, such as ports, is
not predatorily targeted by foreign investors.

The EU“screening
mechanism”• The “mechanism” is seen as a coordinating tool at EU
level, which does not intend to replace national
mechanisms, or challenge member states’ prerogative
to decide on investments.
• The screening mechanism has led to a 40% drop of
Chinese investments in the European Union in 2018,
compared with 2017, to about €17.3 billion. In 2016,
Chinese investments had reached a record peak of €37
billion. This ‘success story’ has been over-advertised in
Brussels, but, to my view, the decline in Chinese
investments is due to the cooling of the Chinese
economy since 2016 (6% growth is forecast for 2019)
rather than to a (fairly lukewarm) screening
mechanism.

© Haralambides & Associates (www.maritimeeconomics.eu)• Mostly due to mounting western concerns about China’s
possible geopolitical aspirations and objectives, China has
moderated its flowery rhetoric on the Belt and Road Initiativeand has been more reluctant to invest large sums of money
abroad. Indeed, China’s outward investment has fallen by morethan 20% since 2016. Even though the second Belt and Road
Forum is taking place later this month (25-26 April 2019),
commentary around it has been surprisingly limited.

Has China
Started to
Downplay BRI?

• China’s economy is slowing down – 2018 was already theslowest in over two decades and, as already said, 2019 may fall
below 6%. Together with an unfavourable global trade anddevelopment climate -especially the trade wars with the USdomestic economic problems* are starting to have priority inthe minds of policy makers. Last year alone, for example, 2.8
million people were made redundant in China’s industrial
sector. This year (2019), those economic pressures areforeseen to continue.

* The country’s non-performing loans (NPL) represent 25% of its
GDP and this might prove to be a bomb in the foundations of
the Chinese economy.

The slowing-down of the Chinese economy; rising
unemployment and the millions of Chinese living
below the poverty line are all questioning foreign
investments in far away countries, the more sowhen bankable projects have already been
financed and low-hanging fruit has already been
picked up.

Is BRI letting off
steam?

Domestic criticism of BRI intensifies even morefor, as it looks, BRI investments are not limited toinfrastructure, but extend to everything that isfor sale from theaters, football teams, historicbuildings and more. SAFE, the State
Administration of Foreign Exchange has madeknown that it will scrutinize investments in what
it has called, “irrational” sectors including realestate, sports complexes, cinemas and otherareas it deems unrelated to Chinese firms’ corebusinesses.
© Haralambides & Associates (www.maritimeeconomics.eu)

The “Northern Sea Route -NSR” maritime silk road is in the making. China is showing strong interest in port
investments in Russia, Lithuania (new container port in Klaipeda), Norway (Kirkenes) and Iceland.

Both China and Russia have great
expectations regarding the potential of
NSR as an alternative to Suez, and COSCO
is already operating 5 containerships on
the route since 2016, albeit with meagre
results. Other shipping companies (andresearchers) do not share thisenthusiasm, considering the “Belt” (forthe more expensive cargo) and the “Road”(Suez shipping) as sufficient alternatives,in addition to aviation for the very
expensive and time-sensitive cargo. In allhonesty, NSR ought to be much moreinteresting for Russia, due to her Siberian
exports, than for China.

The North-South Transport Corridor: Russia’s response to OBOR
Mumbai-Bandar Abbas (Chabahar)-Tehran-Baku-Moscow
vsMumbai-Suez Canal-Gibraltar-English Channel- St. Petersburg-Moscow(30% cheaper and 40% shorter and less vulnerable to possible “interferences”)
A note on Azerbaijan and Georgia: The new port of
Baku (70 kms south of the city) is the country’s
most strategic investment, according to President
Aliyev. The European Union is showing an interestin this port, and it invests in its future
development. Georgia is developing a new, US$
2.5 billion port in the Black Sea (Anaklia), with US
financing (Conti International). The rail connection
between the two, south of Caucasus, is not bad atall. Would the two Seas be connected? This, to ourview, is a very important “missing link” (yellow line
by H&A – see also below).
© Haralambides & Associates (www.maritimeeconomics.eu)• More interesting though are the developments in Malaysia: Malacca is the nameof the new kid on the block and China aims at developing it into a second
Singapore. In April 2016, transport minister Liow Tiong Lai announced that China
is investing $10 billion to develop a deep sea port in Malacca which would be thebiggest in the region when completed in 2025. In addition to the Melaka
Gateway, China is spending $2.84 bn on Kuala Linggi Port; $1.4 bn on Penang
Port; and $177 m on Kuantan port.

BRI in Southand Southeast
Asia• In another block (Bay of Bengal), the kid is called Kyaukpyu (Myanmar). Together
with Hambantota (Sri Lanka), China is fencing off the east coast of India,(actually, it is fencing off the Bay of Bengal) something that doesn't make thelatter very happy. India thus bypasses Pakistan on the Persian Gulf, talking to the
Iranians for her trade with Russia and Europe. In chess, this is called ‘castling’. In
addition, India has 4 naval bases outside “the fence” at Andaman & Nicobar
islands (Port Blair).
• In Sri Lanka, security concerns among the citizenry have invoked anger and havestalled developments for years. The new (2017) deal, however, appears toappease things: Two companies are created to run the commercial operations at
the port of Hambantota. In the second one, the Sri Lankan government holds the
majority share (51%) while the Sri Lankan Port Authorities is responsible forsecurity controls. The deal provides that no military vessels can berth at the port.
Although, internationally, Hambantota has been described as the showcase of“debt trap diplomacy”, Sri Lanka’s biggest debt is to Japan and not to China,
which has extended rather concessionally loans for the development of the port
(2% interest rate).

Myanmar:
A New Route
Connecting the
Persian Gulf toWestern China,
bypassing
Malacca Straits

The country is extremely important to China (and its outlet to the
Bay of Bengal). This, not just because of the oil and gas pipelines,
railroads and logistics parks constructed by China (among others
in order to bring oil to Kunming (Yunnan Province) directly from
the Middle East), but also because the construction of a new port
(e.g. at the superb natural harbor of Kyaukpyu) would allow
China to bypass the Malacca Straits, where, in Malacca, China isbuilding a “second Singapore”! Connecting Kyaukpyu andKunming via a 1,200 km railway line is another of China’s
priorities. Finally, by 2025 China plans to complete a 1000hectare industrial park and Special Economic Zone (SEZ) at
Kyaukpyu, showing in this was the strategic importance ofMyanmar for China. The deep-sea container port at Kyaukpyu has
a projected capacity of 7 million TEU per annum and obviously its
intention is to also serve both Kolkata in India and Chittagong in
Bangladesh, all the way to Nepal and Bhutan. To complete thepicture, China is showing a great interest in the Kra Canal in
Thailand…

Thailand: the Kra canal• The discussion on the Canal goes back to the 17th century. The projected length, width, and depth of the Thai
(KRA) Canal are approximately 100 kilometres, 500 metres, and 20 metres, respectively. The project is highly
political and against western interests in the region. Thailand said recently (Feb 2018) that the project does nothave high priority.
• The Canal would cut Thailand in two, bypassing Malacca straits (like the Myanmar projects) and thus the Port ofSingapore, establishing Shenzhen and Hong Kong as the “Asian ports of origin”. It will cost $30 billion, to make a
two-way channel, and its construction will employ 30,000 workers. The canal comes into the Bay of Bengal(Andaman Sea) and passes south of the Andaman and Nicobar islands (naval bases of India) to head to Sri Lanka.
This would cut navigational distance between Yellow- and South China Sea on the one hand, and Bay of Bengal –Arabian Sea on the other by more than 1000 n.m.
(See: https://www.business-standard.com/article/economy-policy/china-pushes-plan-for-canal-to-reshape-indianocean-118040600034_1.html)© Haralambides & Associates (www.maritimeeconomics.eu)

Nicaragua- vs. Panama Canal: Direct competitors?
• The idea of constructing a Nicaragua canal can betraced back to the 16th century.
• Strong resistance by environmental lobbies.
• The canal would be able to accommodate thelargest of ships of today and tomorrow (drafts up
to 26 meters, i.e. ultra capers, ULCCs, 25,000 TEU(Cosco)+ containerships, etc.)

As regards exports of US grains to Asia, the Nicaragua canalwould offer a great advantage to shippers, not in terms ofship sizes (grains do not utilize very large bulk carriers) but interms of sailing distances (Nicaragua canal is much closer tothe Gulf of Mexico than the Panama canal).

• However, its use would mostly be westwards bulk
shipments (dry and wet) from the US; Venezuela;
Brazil (iron ore; coal; oil; grains). Eastward
containerized traffic with the ultra-large
containerships of the latest generations (14,000+)
to the US East Coast wouldn’t be possible due toport draft limitations, prohibitive dredging costs,
bridges in NYNJ and other limitations of the US
East-Coast.
© Haralambides & Associates (www.maritimeeconomics.eu)

Comparison of Panama, Suez and Nicaragua Canals
Previous
Panama Canal(*)

ExpandedPanama Canal(*)

Previous Suez
Canal
(**)

New Suez
Canal
(***)

Nicaragua
Canal

Beginning
service year

1914

2016

1869

2015

-

Length (km)

77

77

193

193

276

Maximum
container
vessel size
(TEU)

4,700

14,00018,00024,000>25,000

Maximum
vessel size
(thousand
DWT)

65

180

200

280

400

Maximum
vessel draft
(m)

12.04

15.2

17.7

20.1

24-26

Notes:(*) The maximum vessel size on the Panama Canal is determined by the lock capacity.
(**) The figures relate to the year 2009. In 2009 the Suez Canal was deepened from 18 to 20m, allowing ships of up to 58 feet draft (about 17.7m) to passthrough.
(***) Since August 2015, the New Suez Canal is in operation with a new parallel canal of 35 km in length in the middle part. The water depth now reaches
23m at the shallowest section allowing ships with a draft up to 20.1m.
Source: Jihong Chen, Theo Notteboom, Xiang Liu, Hang Yu, Nikitas Nikitakos and Chen Yang (2019). The Nicaragua Canal: Potential Impact on International
Shipping and its Attendant Challenges. Maritime Economics & Logistics, 21:1, 2019.

A “missing link” in China’s Belt-and-Road Initiative: Connecting The Caspian- to The Black Sea(Turkmenbashi-Baku-Batumi/Poti-Istanbul-Thessaloniki-Constanza-Danube-Rhine-Rotterdam)• The first time I threw around my ideas of connecting the two great seas, The Caspian- and the Black Sea, seeing thisconnection as a missing (multimodal) link in China’s Belt and Road Initiative (BRI), was in 2016 in Amsterdam (TOC
Europe). A roadshow followed (aimed at ‘selling’ the idea to interested parties) to Shanghai, Baku, Kuwait, Tehran,Marseille, Rotterdam, Venice, Hamburg and Brussels.
• Through the Baku-Tbilisi-Kars railway system (BTK), running south of Caucasus, the link would connect the new port of
Baku (President Aliyev’s top national priority) to the Georgian ports of Batumi, or Poti, or -why not- the 2.5 billion dollar
port of Anaklia, once this project materializes.
• As Baku is at the crossroads of the North-South (Iran-Azerbaijan-Russia) corridor (a tripartite grand project alreadyagreed, signed and sealed by the 3 countries), the interests of Iran and Russia in the project are obvious, as are those ofIndia who wants to use the north-south corridor for her exports to Russia and Europe.
• The H&A plan did not stop at Georgia. Navigating the Black Sea, our Missing Link would extend to Istanbul, Thessaloniki
and Costanza and from there, through the Danube-Rhine fluvial system, it would end up to central and northern Europe(Rotterdam) (see map).
• We are therefore pleased to report today that, at a meeting in Bucharest last week, the Ministers of Foreign Affairs of
Turkmenistan, Azerbaijan, Georgia and Romania signed a declaration on the development of the Caspian Sea - Black Sea
international transport corridor (CSBS-ITC).

Connecting the Persian Gulf to the Mediterranean• Although Persian Gulf ports are not yet part of the BRI network in any visible way, the Region’s
importance cannot be underestimated, as seen also by the Chinese investments in Oman, Qatar, etc.,
as well as India’s interest in the Iranian port of Chabahar, so as to ‘bypass’ the (for her ‘worrisome’)Pakistani port of Gwadar, developed by China. In short, and particularly for ports in the Upper Gulf
(MAK, Umm Qasr, Bandar Imam Khomeini), the region could constitute a (land-bridge) alternative toSuez, at the same time connecting the Gulf to the Mediterranean Sea. In addition, a ‘port system’
such as this, would and could serve the vast hinterlands of Iraq, Iran, Turkey, all the way up to
Moscow, thus connecting to BRI (Belt) through Russia’s North South Transport Corridor (NSTC).
• Connecting the Upper Gulf port system of MAK (Kuwait)-Umm Qasr (Iraq)- Bandar Imam Khomeini(Iran) -three ports, in three different countries, at a spitting distance of each other- to theMediterranean Basin (Lebanon or Syria or both), and from there to the Port of Piraeus and to the EU
is another grand project of H&A. The connection of the Upper Gulf Port System to the Caspian Sea(Tehran) would complete the 'big picture', connecting the two projects together, as well as to theNorth-South Iran-Azerbaijan-Russia corridor which, eventually, will extend, by sea, to India (Bombay).

© Haralambides & Associates (www.maritimeeconomics.eu)

Hercules’ Chainsaw

BRI: The Missing Links
Moscow
Rotterdam

VenicePiraeusPort Said
Gwadar?
Kyaukpyu
Djibouti
Colombo© Haralambides & Associates (www.maritimeeconomics.eu)

Singapore
Jakarta

A Game of Chess: China’s (quasi) Maritime Silk Road. India’s Ambitions?

[Rotterdam (Duisburg)-Trieste/Genova-Piraeus-Port Said-Djibouti-Duqm-Gwadar(?) Chabahar-Bandar AbbasColombo-Kyaukpyu-Singapore-Jakarta-(back to) East China Sea]
With port and FTZ
investments in Port
Said, Qatar, Oman
and Djibouti (Gulf ofAden), China “keeps
an eye” at the‘doors’ to the Straitof Hormuz, Red Sea,
Persian Gulf, andthe Mediterranean
Sea. With
investments in Sri
Lanka andMyanmar, China‘fences’ the Bay of
Bengal (red line
drawn by H&A).
India keeps 4 bases
at Andaman andNicobar islands.

India is looking
carefully at the
Iranian port ofChabahar, so as tobypass the Pakistani
port of Gwadar,developed by China.
Connecting itself to
Russia’s NSTC is one
of India’s strategic
objectives. The
second is to connect
to theMediterranean
through Kuwait-IraqSyria-Lebanon.

© Haralambides & Associates (www.maritimeeconomics.eu)

Djibouti and
the Gulf ofAden• Geopolitically, Djibouti and the Gulf of Aden are‘hot’ areas. A number of western countries(France, Italy, Germany, USA) have a militarypresence there, while Djibouti is China’s only
foreign naval base (so far). Illegal arms trade in
Djibouti and the Gulf of Aden is a major cause
for concern but, interestingly, no western powerwith a presence there seems willing to do
anything about it, presumably in fear of losing
their military concessions. At the time ofwriting, the Djibouti government was sentenced
to pay a substantial amount of money to DP
World, for breaking the latter’s concession to
run the Doraleh Container Terminal (thusfavouring China).

The Chinese economy is slowing down and so are its outward BRI investments. SAFE, the State
Administration of Foreign Exchange, has made known that it will scrutinize investments inwhat it has called, irrational sectors, including real estate, sports complexes, cinemas andother areas it deems unrelated to Chinese firms’ core businesses

No evidence, anywhere, of a Chinese ‘debt-trap diplomacy’; rather, conspiracy theories andfake news are at play

Conclusions I

China and its partners have jointly adopted Guiding Principles on Financing and Development,
aiming to ensure sustainability in project financing

Stated BRI objectives are noble, aiming at boosting mutual understanding, mutual respectand mutual trust among different countries. In this light, the BRI is seen as a path towards
global peace

The fundamental concept of BRI is reducing trade and transport costs through better
connectivity© Haralambides & Associates (www.maritimeeconomics.eu)

China considers the Mediterranean Basin as a “global super-hub”, connecting three continents

The major ‘beneficiary’ of a possible ‘Nicaragua Canal’ would be westward (bulk) flows from the Americas to
Asia

The Iran-Azerbaijan-Russia “North-South Transport Corridor” is Russia’s answer to BRI. India is showing greatinterest in this corridor, for its exports to Russia and Europe

It is unlikely that the North Sea Route (NSR) will ever present itself as a serious challenger to Suez in the EuropeAsia seaborne trade

Conclusions II

With investments in Myanmar and Thailand, China bypasses the Strait of Malacca

Outside China, Piraeus; Djibouti, Gwadar, Hambantota, and Kyaukpyu are China’s showcase port investments

Connecting the Persian Gulf to the Mediterranean is a major project of Haralambides & Associates (H&A)

Connecting the Caspian Sea to the Black Sea has been another flagship project of H&A. At the time of writing, a4-country Agreement has been signed (Turkmenistan-Azerbaijan-Georgia-Romania), connecting Central Asia to
Europe, through its eastern gateway, i.e. the Romanian Port of Constanza

H&A research on a “hub-free ship-carrier-carrier” project is presently going on© Haralambides & Associates (www.maritimeeconomics.eu)