One Belt One Road Project

The One Belt One Road Project, implemented by China, which wants to further improve its economic development and welfare level, aims to revive the Silk Road, which was the most important trade route of its period, starting from China and extending to the West. Turkey is at the key point of the project that will affect many regions, especially Central Asia.

The Royal Road, Spice Road and Silk Road… These roads were the heart of trade and transportation in the past. China, which held power by dominating important trade routes for centuries, had a significant economic development compared to its European rivals until the Industrial Revolution. Over time, the world changed, borders were drawn, and new trade routes emerged. Today, there is another project on the agenda of the logistics industry, that is, One Belt One Road.

Although the project, announced by the People’s Republic of China in 2013, is not new, it is still up-to-date as it has not been completed yet. The main purpose of China’s One Belt One Road project is to revive the Silk Road, which starts from China and extends to the West. Known for being an active road, the Silk Road has developed over the past years, experienced changes and split into different branches. Although it has lost its former importance with the industrial revolution, geographical discoveries, technological developments and the formation of new supply chains, it is a rare road that is still actively used and managed to survive. It is predicted that the project, which progresses in line with the goals that China has built on the Silk Road, will have a direct impact on many regions, especially Central Asia.

China’s Target is Clear

China, which wants to further develop its level of economic development and prosperity, is constantly implementing new projects. The main goal of these projects is to develop the economic and political sphere of influence. China, which believes that its own development as a country will be the development of humanity, underlines that it will continue to make high-level foreign initiatives to open to foreign markets at every opportunity.

Although the One Belt, One Road Project has come to the fore with large infrastructure projects, it mainly aims to strengthen the connections between Asia and Europe in all its dimensions. In this sense, strengthening trade links comes to the fore as a priority.

The project was first announced by Xi Jinping, President of China, in Kazakhstan in 2013, and then became official with the action plan announced by China’s National Development and Reform Commission in 2015. With the initiative, which has been defined as the most comprehensive international economic program of the 21st century so far, it is aimed to strengthen the connections between Asia and Europe through railway, road, port, digital infrastructure and energy infrastructure.

With the project, China aims to develop the infrastructure of the countries on the route and then to strengthen the infrastructure of the connections between these countries, to ensure that transportation and trade are carried out more efficiently. In this context, as the Chinese Government stated in its policy documents, there are five main elements as policy coordination, strengthening links, barrier-free trade, financial integration and people-to-people ties.

Although the project was interrupted due to the pandemic, there were countries where it was implemented with concrete studies. It was observed that the project met a need for economic development in these countries to a large extent and helped the country increase its own capacity in different areas, especially in infrastructure. As of 2021, China has signed a total of 202 agreements with 138 countries and 31 international organizations, including Turkey, for the One Belt One Road Project. The majority of countries participating in the project are low or middle-income countries. According to the World Bank, 33 of 138 countries are classified as high-income and 39 in the upper-middle-income category.

The Size of the Project

As of 2021, the total value of the projects completed and implemented by Chinese companies within the scope of the One Belt One Road Project is said to be 200 billion dollars. According to Chinese sources, when the project is completed, it will reach a total size of between 4 and 8 trillion dollars. At this point, other international organizations have different estimates. For example, the World Bank estimates the total amount of completed, ongoing, and planned projects to be $575 billion. He shares that with the project, the travel times in the corridors on the route will be shortened by 12 percent, the trade will increase between 2.7 percent and 9.7 percent, and there will be an average of 3.4 percent contribution to the incomes of the countries. According to the consultancy firm Refinitiv, which creates an up-to-date database on the project, the number of completed, ongoing or planned projects reached 1,821 as of the first half of 2020. This means a total value of 2.3 trillion dollars. Although the project is an open-ended initiative in terms of duration, it is often stated in the statements that it will be completed in 2049, the 100th anniversary of the founding of the People’s Republic of China.

The Position of Turkey and the Opportunities That will Arise

Thanks to its geographical location that connects the continents, Turkey is one of the important junction points of the One Belt One Road Project. China, which wants to strengthen its strategic cooperation with Turkey, says at every opportunity that Turkey is its natural partner in the project.

In addition to being at a central point, the Project coincides with Turkey’s sustainable economic development goals with the opportunities it offers. At the same time, it is foreseen that Turkey will make a significant contribution to the strengthening of the transportation and logistics infrastructure within its borders. In this way, Turkey, whose transport and logistics connections will be strengthened, will become a logistics center in its own region.

Located in the Central Corridor section of the project, which is also called the “China-Central Asia West Asia Economic Corridor”, Turkey will play a critical role in the cargoes to be transported between Asian countries and European countries.

This means new markets and growing export volume for Turkey. The project, which also provides an opportunity to develop political, economic and social ties with Asian countries, has critical importance to Turkey. Within the scope of the project, it is planned to reduce the shipping time in Turkey’s trade with China from 30 days to 10 days.

China and Turkey Relations

Although the history of relations between Turkey and China dates back to 3000 BC due to geographical borders, the relations between the two countries began to develop positively, especially as of the 1970s. The relationship between China and Turkey, which has important economic and political cooperation, has revived the liberal economy model adopted as a result of the “Reform and Opening to Foreign” policies since 1978. With the aim of increasing Turkey’s exports to China, the “Asia-Pacific Strategy” between the two countries in 2005 and the “Trans-Caspian-Central Corridor” project, which completed the northern line from China to Europe in 2015, was carried out with the One Belt One Road Project. A “Memorandum of Understanding” was signed to harmonize it.

Since 2000, when bilateral trade volume exceeded 1 billion dollars for the first time, significant momentum has been recorded in Trade relations. As of 2021, China has managed to reach the position of Turkey’s second largest commercial partner worldwide. Although the total amount of investment made by China in Turkey is over 4 billion dollars, the sectoral distribution of the investments that have been increasing recently is in the fields of energy, infrastructure, logistics, finance, mining and telecommunications.

The Belt-Road project will facilitate trade from and to China

Vice President of the International Transporters Association (UND) Mr. Fatih Şener stated that: If there is an export target in the supply chain, it is necessary to pave the way for the goods to be exported. For this reason, China has undertaken serious infrastructure investments in different areas from Africa to Europe and Central Asia, such as the construction and rehabilitation of highways and railways and the purchase of ports on the routes that center China and flow westward in a multi-armed manner, although it is called One Belt One Road.

Although all these were announced by particularly the USA as a project to realize China’s imperial goals, in fact, very important logistics investments were made in this context. The fact that all of the infrastructure investments in the on the route were made by China brought some criticisms that these countries were indebted by China. However, in essence, the project aims at investments that facilitate all routes in trade from and to China. Just as the historical Silk Road carried trade between the West and China before the discovery of America, it draws attention as a supply chain project that aims to increase the competitiveness of Chinese products by transporting Chinese goods to Europe faster, easier and cheaper.

China wants to Strengthen the Supply Chain

It is seen that China’s target with this project, especially the countries that hold the supply chain in the world, actually play an important role in world trade. Many of the world’s global logistics brands originate in Germany, and in this context, Germany ranks first in the World Bank’s logistics performance index. Because logistics plays a leverage role in front of trade.

Germany is one of the countries where transportation and logistics are the easiest and the transportation infrastructures are the strongest. In fact, China also wants to pave the way for its supply chain in the international market by improving infrastructure investments in its hinterland and on the routes where its target markets are located. At this point, the pandemic had negative impacts on the project. In particular, the fact that the pandemic emerged in China first, the disruptions in the production of Chinese products and the fact that Chinese products are not preferred by the West brought down expectations for the Belt Road Project. Apart from these, of course, the ongoing container crisis, the increase in freight prices and the Russian crisis led the West to seek alternative production centers to China. At this point, Turkey and the Balkan countries came to the fore.