13 February 2018

Dawn of the Eurasian century

By Jon Boone

“Old Silk Road”, declares the sign by the side of the road in Pakistan’s Hunza Valley. An arrow points towards what was once the greatest artery of ancient global commerce. The sign has become a stopping spot for adventurous tourists experiencing the Karakorum Highway, the road to China that crosses one of the world’s highest mountain ranges.

Alas, the claim is almost certainly untrue. There is no evidence Hunza’s various towns were ever blessed by the ancient trading of silk, or any other valuable commodity. Awkward as it may be for Pakistani pride, it seems ancient traders made their way in and out of the subcontinent through what is now India.

But people will never stop stepping out of their Land Cruisers to snap unremarkable photos of a distant trail climbing up the scree of the far-off grey slopes. The idea is too romantic and too thrilling: a trade network that for centuries straddled the globe, knitting together Earth’s largest landmass. The point was to profit from trading goods. But it also spread disruptive new ideas, religions, philosophies and, at times, disease.

It is easy to see why such a thing grips the imagination, including that of Bruno Maçães, Portugal’s former junior Europe minister. His recently published book, The Dawn of Eurasia, shows how Europe and Asia are once again being bound together through trade, only on a vastly larger scale. It is hard to disagree when he describes a visit to a place like Yiwu, a Chinese city that is home to an enormous market where the world’s wholesalers come to buy everything from children’s toys to Egyptian tourist-market tat. It is so tapped into the global bloodstream that the traders of Yiwu were not surprised by the election of Donald Trump: their order books had told them well before polling day that Trump flags were far outselling Hillary Clinton flags.

Providing America’s election bric-a-brac is one thing. China wants to go much further. It is attempting to re-engineer Eurasia’s entire economy to suits its needs. Maçães calls it “transnational industrial policy”. China gets the raw materials it needs from countries it is connecting to with “Belt and Road” infrastructure projects. It may make some investments in farming or low-tech sectors. But it will keep the most valuable part of the international value chain for itself.

It is causing unease in countries like Pakistan, which is currently gorging on Chinese infrastructure loans, including an upgrade of the Karakorum Highway. Sceptics like me fear Pakistan will be forever weighed down by Chinese debt. There is unhappiness too in Kazakhstan at the scale of the Chinese incursion, reports Maçães. The public fear there are too many Chinese migrants, who are resented for being paid more than locals. A measure to liberalise land ownership by foreigners sparked popular protests.

There is dissent too within the borders of China itself. No modern day Silk Route can avoid Xinjiang, China’s restive western province. China has responded to the threat of Islamist terrorism with saturation levels of security and surveillance. Maçães describes being stopped by seven different security agents on successive street corners and having to wait with fellow bus passengers at a roadblock for an entire day.

Eurasia’s other big powers are also unsettled.

Russia is particularly fearful of becoming a mere Chinese hinterland. Maçães’ contacts in Beijing don’t hide their glee at the prospect of becoming to Russia what the US is to Canada. Vladimir Putin’s answer is a new geopolitical club, the Eurasian Economic Union, made up of four former Soviet Republics. It has somewhat slowed down the Chinese trade juggernaut: trucks now take longer to clear at the China-Kazakhstan border, where commerce hits the tariff wall of the EEU’s custom union.

The European Union, of course, is based on the same idea of finding strength in numbers. As one of the world’s richest and most important consumer markets it has successfully forced its own strict regulations and standards on the rest of the world.

But its internal divisions and technocratic, rules-based approach is hopeless at dealing with really hard challenges, or incorrigible rule-breakers like Putin. The EU ducked the tough decisions that might have fixed Greece’s economic problems. Instead the Greek crisis was accepted as a “permanent fixture” that might stumble on indefinitely.

It has flunked the external challenges of the war in Ukraine and the migrant crisis. From his time as a government minister Maçães recounts meetings where elaborate “algorithms” were concocted to apportion the flood of migrants to different member states. It was an attempt to avoid a political decision, using “a system of rules that can work on their own”.

It didn’t work. In the end the EU had to contract out its migrant problem to Macedonia and Turkey, two “convenient hybrids” that are “close enough to Europe” but “sufficiently foreign to use some of the more forceful methods that European countries are not willing to use”. In one meeting the Austrian and German chancellors repeatedly insisted Turkey should be given whatever it wanted in return for stemming the migrant tide. Long gone are the days when all-powerful European states could simply impose their will on Asia.

No wonder Maçães concludes that all the countries of Eurasia will have to compromise with each other to some degree. In so doing they will all become a little more “Eurasian”. He thinks it is nothing to be afraid of. For decades Hong Kong and Singapore have thrived as hybrids of East and West. Even Brexit, this former Europe minister thinks, may not be such a bad thing if Britain goes with the Eurasian flow. The UK could copy the approach taken by Singapore after it lost its Malaysian hinterland in 1965 and look to distant markets for trade and investment. London may yet become a “great Eurasian capital”.

Jon Boone is a freelance journalist who was until recently based in Pakistan.