China, the world’s biggest gold producer, has set up a gold sector fund involving countries along the ancient Silk Road which is expected to raise $16.1 billion.
- The fund, led by Shanghai Gold Exchange (SGE), is expected to raise an estimated 100 billion yuan ($16.1 billion) in three phases and is said to be the largest fund set up by China.
- In February 2015 China had also created a $40 billion infrastructure fund for Silk Road Initiative.
Silk Road Initiative:
The Silk Road, or Silk Route, is a series of trade and cultural transmission routes that were central to cultural interaction through regions of the Asian continent connecting the West and East by linking traders, merchants, pilgrims, monks, soldiers, nomads, and urban dwellers from China to the Mediterranean Sea during various periods of time.
- The new project is an initiative by China to resurrect the ancient maritime Silk Road. It is perceived to be an attempt by China to ameliorate relations with South and Southeast Asia
- The new initiative is a pet project of President Xi Jinping for connecting Asia with Europe along a land corridor, with China as its hub.
- Under the new Silk Route, the Chinese want to open up the transportation channel from the Pacific to the Baltic Sea, from which would radiate rail and road routes, which would also connect with East Asia, West Asia, and South Asia.
- The Silk Road strategy’s ambitious vision aligns with Beijing’s goals much more closely than the Trans-Pacific Partnership (TPP), which is a reflection of the U.S. international trade model writ large.
- The Silk Road strategy aims to facilitate large-scale infrastructure construction, energy sale and transport, and relocation of manufacturing industries.
- This initiative aspires to deepen linkages between China and its neighbours via trade, investment, energy, infrastructure, and internationalization of China’s currency, the renminbi.
Indian and Silk Road Initiative:
- Aware of India’s sensitivities regarding the perceived expansion of Chinese influence, a Beijing-Kathmandu-New Delhi trilateral development partnership is proposed as a confidence building step.
- Relations between China and India are mutually reinforcing. From a historical point of view India is the converging point of the Maritime Silk Road and the Silk Road on land.
- Based on that, the Chinese government believes inevitably that naturally India is one of the important partners to build one belt and one road.
- India also benefits from at least reasonable ties with most stakeholders in the New Silk Road, including Iran, where India has invested heavily in the Chabahar Port. But India must also make serious efforts to strengthen its links with Southeast Asia, and for this it must develop stronger ties with Bangladesh.
- India will also need to work towards a manageable relationship with Pakistan, which would not only facilitate pipeline projects like TAPI, but also enable access to Afghanistan and Central Asia.
- India needs to change its approach towards border regions, and not allow security to cloud its overarching vision. One of the important cornerstones of China’s Silk Road vision has been its emphasis on utilizing border regions, while also making use of their strategic location.
Sources: The Hindu, Wiki.