“The New Silk Roads” by Peter Frankopan is the sequel to “The Silk Roads” & delves into the concept of globalisation, exploring how it is changing the world as we know it. Western countries seem intent on a more isolationist stance whilst the east is drawing closer together. Written pre-Covid, of course the world has changed a lot since 2018, but the analysis still holds water.
Table of Contents
New Opportunities in Trade and What is “The New Silk Roads” All About?
Globalisation is a term that is frequently thrown around, but not everyone understands what it means. Simply put, it is the process by which the world becomes more interconnected, allowing for the exchange of goods, services, and ideas. Peter Frankopan’s “The New Silk Roads” delves into the concept of globalisation and explores how it is changing the world as we know it. Frankopan, an author and researcher at Oxford, is well-equipped to tackle this topic.
His book has been hailed as one of the top works of non-fiction in recent times, and it’s not hard to see why. He’s objective and applies the analytical skills of an academic whilst still being accessible to read. In “The New Silk Roads,” he traces the history of globalisation and examines how it has impacted our world as well as looking at the challenges ahead for modern trade routes. As we move forward into an increasingly globalised world, it is important to understand the implications of this process, and Frankopan’s book offers valuable insights into this complex topic.
Intro to Peter Frankopan
Peter is Professor of Global History at Oxford University, where he is Director of the Oxford Centre for Byzantine Research. He is UNESCO Professor of Silk Roads Studies at King’s College, Cambridge. Peter is a member of the Advisory Board of the Sevgi Gönül Center for Byzantine Studies at Koç University, Istanbul.
A Fellow of the Royal Historical Society, the Royal Society of Literature, the Royal Asiatic Society, the Royal Geographical Society, the Royal Society of Arts and the Royal Anthropological Institute, Peter is President of the Royal Society of Asian Affairs.
Context of the Book
Published in 2018, “The New Silk Roads” was written against a background of Trump as US president, and in the aftermath of the Brexit referendum in the UK (but before the UK actually exited the EU). Much has happened in that time: a global pandemic, practically civil war in Myanmar, Russia invading the Ukraine and more recently the violence in Gaza in retaliation for Hamas attacks on Israel in October 2023, as well as an ongoing trade war between the US and China. Additionally, there have been huge technological advances in that 5 years, most publically in the field of AI.
The only constant is change, especially amongst the countries that make up the Silk Road. Resources have always shaped the world, and this is especially true in this region. Rudyard Kipling described the situation at the beginning of the 20th Century as a “Great Game” where the powers competed for position and resources, and were bound together by a series of mutual assistance treaties that eventually resulted in the First World War.
Today there is a series of “Great Games” taking place, over competition for influence, for energy, for natural resources, for food, water and clean air, for strategic position, even for data. The outcomes will have a profound effect on the world we live in in decades to come.
Peter Frankopan
Understanding how those changes will affect us, will help us to prepare for the changes to come. The book is structured into 5 “roads”, yet all are interwoven with one another:
- The Roads to the East
- The Roads to the Heart of the World
- The Roads to Beijing
- The Roads to Rivalry
- The Roads to the Future
Roads to the East
Assuming that certain demographic and economic trends persist, Asian politics and culture are projected to dominate the 21st century, leading to the term “the Asian century”. That doesn’t mean that the west will somehow implode, but simply that the growth is coming from the East. Demand in Europe or North America for goods and services fires demand in Asia leading to increasing wealth. The rise of Asia depends on the west, but isn’t at it’s expense. The difference though is in the attitude to change: in the eastern countries change is greeted with optimism and a certain openness, whilst in the “old World” there is pessimism, anxiety, scepticism and division.
Power to influence or destabilise
The rise of the East can be seen in big ticket investments: look at the ownership of UK premier league football teams, the capital poured into cities such as London, Vancouver or Singapore especially into real estate. Aspirations are evolving as purchasing power increases and this drives domestic demand in the markets of the New Silk Roads.
A change in consumption patterns in China has the potential to destabilise world markets. Take the example of infant formula in 2013/14: shelves in Europe, Australia and the US were often empty as Chinese buyers literally scoured the shelves empty.
The readiness of consumers in India or China (or South East Asia) to embrace technological developments and adopt new methods of managing their lives may allow them to get ahead in this space in the future. (After all, these markets offer the greatest test data sets for new ideas). However, the flip side of that is the threat to cybersecurity – see the Russian involvement in the US elections as well as the Brexit referendum. And of course there is the topic of the monetisation of data.
Roads to the Heart of the World
Increased collaborations in Central Asia have Russia and Iran playing a central role, although there are also many bilateral agreements within the region. These often seem to have more “high level talk of strategic collaboration” than actual substance, but there is a certain amount of progress. For example the conference in Samarkand in November 2017 where senior leaders met to discuss how to deal with terrorism, religious extremism, organised crime in the region or the drug trade.
It certainly doesn’t mean that everyone are best friends though. All of the progress can’t disguise the fact that there are structural problems, rivalries and personal animosities amongst the leaders. Still, generally there is a recognition that working together is more beneficial than not. Nations in the region watch carefully what is happening in Afghanistan, and pull closer to their neighbours to avoid descending into that kind of chaos or being pulled into religious extremism and tribalism. The unpredictability remains though.
Talk of the revival of old connections across the spine of Asia mask the fact that many of the countries and regions linking east with weat are poorly connected, economically underdeveloped & in some cases geographically daunting… Most if not all have poor human rights records, limited religious freedom and suffer from poor social mobility. Nevertheless the fact that they are resource rich means that those with access to their natural wealth and control of the networks that allow those resources to reach hungry and wealthy markets play an important role in shaping the regional and global future.
Peter Frankopan
Much of the unpredictability comes from US pressure on various countries in the region: bullying tactics rarely have the desired effect & are more likely to lead to increased unity within a state. It’s also important to not underestimate not only the immediate consequences of any actions but also the ripples that travel out across the region. Especially when the line from Beijing is one of collaboration, & up until the pandemic at least, offering funding for major projects that allowed for the messaging to be moulded as required to meet domestic requirements in say Uzbekistan or Turkmenistan.
I’m not saying that one side is bad and the other good because that would be far too simplistic as well as untrue. However shutting down dialogue in complex situations is never the way to a solution, and that is how the US often portrays themselves to the outside world.
Roads to Beijing
China is, despite all of their present economic challenges, the world’s 2nd largest market and likely to become number 1 within a decade. Whilst that may be to the Chinese restoring the status quo to what it was prior to the 18th century, many in the west perceive this as a threat to world democracy, not to mention peace and their economies.
Realistically the CCP retains power in China by offering the people on the one hand stability and on the other improving living standards. That means that food security is a prime concern, so there has been a spate of buying land and all the stakeholders in those verticals in order to protect the integrity of supply for China.
Chinese companies also were buying up companies in key industries around the world, and whilst for example the EU complains about the risks of this, there were often no alternative buyers. Take the port of Piraeus: the EU insisted that the Greek government sell it off in the course of the EU bail out, but no European companies would touch it. Instead it was bought by China who came up with the cash.
There’s also a new confidence and sense of national pride in China, this goes hand in hand with concern about control of the South China Sea and guaranteeing uninterrupted trade. Taiwan isn’t the only border dispute – almost every country in the region has differences of opinion with China on borders.
The Belt and Road Initiative
China’s Belt and Road Initiative (BRI), launched in 2013, has been widely criticised in many quarters as a kind of hidden way to gain a hold over the countries involved. An analysis by the World Bank published in 2018 concluded though that the BRI “can substantially reduce shipment times and trade costs for BRI economies (up to 3.2 and 2.8 percent, respectively) and for the world as a whole (up to 2.5 and 2.2 percent, respectively)”. That is an indication of the massive scale and scope of the projects involved.
Many regions in Asia or Africa need infrastructure in order to be able to grow and as Chinese economic growth slowed pre-pandemic, China had overcapacity and cash to spare. The Chinese had also had positive experience of how improving infrastructure can help power the growth to lift substantial numbers of people out of poverty.
That all sounds great, but of course these projects are not all being funded by the Chinese state, but partly also by enterprises (encouraged to do so by the state). Critique has arisen when the recipients haven’t been able to service their debts (eg. when Sri Lanka defaulted on their debt repayments in 2022 leaving China running the Hambantota port). It’s not just a matter of financing though – in the case of Sri Lanka, neighbouring India is concerned that having a port under Chinese control directly in front of their back door could become a problem should China decide to station troops or naval vessels there.
It’s estimated that around 60% of Chinese foreign loans are in countries who may have difficulties to service the repayments. If there were to be a series of defaults that would have massive potential consequences for the world’s economy.
In 2023 it’s obvious that China has started to majorly slow the rate of any further investments seeing as some of the ongoing projects have been proven to be unfeasible – either due to poor due diligence at the planning stage or also corruption. Many nations would have been happy to carry through their projects with other sources of money, but the Chinese were the only ones who came forward. And the Chinese money didn’t have such inconvenient strings attached as that from many other sources regarding sustainability of projects, open tender processes or human rights in the target country, nor did it come with any form of interference in internal affairs.
The weaknesses of the initiative are the ambiguity around who benefits from some projects, environmental concerns, the risk of debt traps and the lack of open rules based tenders. On the other hand, China has been wooing hearts & minds in Africa with emergency food aid if required, agricultural programmes and university scholarships. And US or European behaviour in Africa is hardly known for being altruistic…
The Roads to Rivalries
Again let’s start with China. Heavy investment in Pakistan in Gwadar and the projects surrounding the China-Pakistan Economic Corridor combined with border tensions make India understandably uneasy, as there’s a feeling that these could easily escalate. Then there’s the Chinese military and naval base in Djibouti which is a clear sign of escalating rivalry with the US, be it military, economic or technological.
Donald Trump made a point of demonising China at every opportunity in his 2016 presidential campaign, saying the Chinese “want to take your throat out, they want to take you apart”. (I should probably add, that in a different speech he also stated, “The EU is possibly as bad as China, just smaller. It’s terrible what they do to us”).
When Henry Kissinger asked about how the US should respond and cope to the challenges presented by China he stated in an interview in 2015, “We’re not good at it, because we don’t understand their history and culture.” That sentence could probably also refer to a whole slew of nations as far as the US is concerned. However Iran, Russia and Syria as well as Iraq and Afghanistan are all nations who either believe in US unreliability or have examples of US interference destabilising their internal situations.
Under Trump, the US approach to international affairs gained them an even greater reputation as an unreliable partner who could turn into a bully at any moment and impose sanctions, sending currencies falling in developing nations. One study published in 2019 reported that voters in France or Germany felt that the US was more of a threat to peace than Xi.
By virtue of the “my enemy is your enemy” principle, Russia has become the greatest oil and arms supplier to India. India looks at what is best for the Indian population rather than allowing themselves to be pressured into certain behaviour by the US, so even following the invasion of the Ukraine in 2022, India continues to draw oil from Russia. This helps the economic situation keeping prices more stable than in most western markets, who are still suffering (especially in the energy sector) from the sanctions imposed on Russia. Whilst India and China are rivals who happen to be neighbours, rather than friends, there are still some attempts at collaboration where pragmatism can win the day.
External pressure serves more to unite internally than it does for “changed behaviour” – this has certainly been the reaction within Iran to US pressure. And pushing Iran away from the US means potential alignment with Russia as well as discussions of a collaboration with India. Iran’s investments in the port of Chabahar in India could also mean new routes to market being opened for the Central Asian states, including possibly Afghanistan in the medium term.
The Roads to the Future
Europe (incl. UK)
Even post-pandemic it feels that Europe and the UK have turned their energy and focus inwards. The discussions are based around the energy crisis prompted by sanctions against Russia, and internal political strife. Many companies are more interested in getting their employees back into the office and discussing 4 day working weeks than having a close eye on what’s happening in Asia or exporting their way out of crisis. There’s no clear vision for the next 25 years (unlike in Russia, Central Asia or much of ASEAN).
Whilst Asia talks about connection and collaboration, Europe seems more concerned with recreating barriers and “taking back control”. Of course many Eastern European countries are also focused on the war going on on their borders and dealing with the knock on effect of that, while keeping a wary eye on Russia for any signs that their borders could be the next to be crossed.
USA
During the Trump era the US lost record numbers of career ambassadors, leaving more power effectively with the president and less competent decision makers involved in the processes. This has consequences, especially when countries see that for example Saudi Arabia gets special treatment (look at the value of arms supplied, the relations with Iran and the fact that a blind eye is turned when enough money/oil is involved). This despite the fact that the KSA also buys from Russia and has a deepening relationship with China. Indeed, Saudi Arabia seems to have realised that they can’t rely 100% on the West so have started to look East.
US pressure serves to push nations into one another’s arms – see eg the strengthening relationship between Russia and China even before 2022. Other ways that many Asian countries see the US as being unreliable include:
- using their energy to demonise China
- contributing to the continuation of the war between Russia and the Ukraine by not trying to push at least the Ukraine to be open for peace negotiations
- a complete lack of constructive engagement in Africa
- leaving Afghanistan to descend into chaos and religious extremism (in everyone’s backyard) after interfering for decades
Russia
Both Kazakhstan and Turkey were clear in 2017 & 2018 that Russia had increasing military intentions.
The Black Sea has almost become a Russian lake. If we don’t act now, history will not forgive us.
Erdogan, 2016
Sanctions by a limited group of Western nations are not having the choke hold effect that the US might wish for in efforts to force Russia to give up in the Ukraine, and the pragmatists in other regions, most notably India and China have been buying Russian oil. Neither nations especially like Russia or Putin but need energy to fuel their own growth.
China
All in all, China is presently experiencing a weakened economy post-Covid. There’s a lot of media discussions about economic collapse, but that weaker economic growth is still around 5% – a figure most European economies can only dream of. Having said that there is a certain amount of structural weakness within the Chinese economy with high levels of credits, a real estate bubble and over exposure to many BRI projects that may default on the debts.
However China has clearly recognised that money talks and buys political influence in regions such as the Balkan states, where scarcely an infrastructure project is started without Chinese investment. This of course is also a region which traditionally has been strongly under the influence of Russia.
Topics such as AI, the blockchain, the space race and of course climate change are also major challenges where China is determined to excel (& of course also India).
The Winds of Change affect Modern Trade Routes
With the rapid technological developments in the East, especially China and South Korea, it can seem that Europe has gone back to “fiddling whilst Rome burns”. Both governments and companies are slow to react to the rapid advances being made in other jurisdictions in eg electric vehicles. In our globally interconnected world it’s unrealistic to believe that you can detach as a country from other countries so you may move your factory to say Mexico, but chances are that your components will still be coming largely from China.
Military organisations around the world have been focussing on how technology can assist with keeping casualties to a minimum whilst still winning a war so cybersecurity is becoming an ever more important theme. And during the course of history, little has pushed technology to advance so rapidly as an ongoing war. So whilst the concept and the ability to execute on that are completely different things, it seems sure that there will be massive leaps in the coming years.
I fear our 70 year holiday from history may be over.
General Sir Nick Carter (chief of defence staff to the British army), 2018
Like it or not, we’re moving towards a multipolar world although what role Russia will play in that remains to be seen. Politicians now have to accept though that their partly smug assumptions of 2018 (in Europe) that our generation somehow has a monopoly on peace and is better at diffusing tensions was just a dream.
It feels like the old world has suddenly had their eyes opened to the new world which has been forming for decades, which is actually the previous old world powers being reborn. The west is becoming less relevant and can no longer shape the world in their own image.
It’s time to question the assumptions which are especially prevalent in the US that
- China growth is automatically bad for the US
- Beijing will at some point seek active confrontation with the West (even if the forecast of an economic, political or military clash is correct, this still begs the question whether imposing tariffs and pursuing the recent US policy is the right way forward)
- is China really a worse investment than other private financial options? (Piraeus! & many other ports around Europe)
The US remains blind to their own destabilising influence be that in Syria, Iraq, Afghanistan, but also Turkey and Pakistan. There’s lots of “pot calling the kettle black” with regards to other nations faults…
There’s no one-size fits all permanent solution to any of these issues, but without dialogue there can be no progress. Change is also inevitable and the solutions which worked yesterday will no longer be adequate tomorrow.
Globalisation has led to increased interconnectedness between nations, which has resulted in greater economic growth and cultural exchange. However, there are also significant challenges, such as the displacement of workers and the widening income gap. Technology may be able to assist in some cases, however the role of politicians to change the direction of “international travel” shouldn’t be underestimated.
In a world where borders are becoming increasingly porous, companies must adapt to a new reality where their potential customer base spans beyond their domestic market. You need to look beyond your own borders if you want to profit from new opportunities in trade. To thrive in the post-pandemic global economy requires companies to have a deep understanding of the world, its history, and its people, as well as the ability to adapt to changing circumstances. In short, businesses need to be as nimble as the silk traders of old, who traversed the ancient Silk Roads in search of new markets and opportunities.
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You can find my review of the Silk Roads here: https://kathrynread.com/the-silk-roads-peter-frankopan/
To purchase the book in paperback or for kindle, check out the link below. As an Amazon Associate I earn a small amount from qualifying purchases at no additional cost to yourself.
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Kathryn firmly believes that business is done between people, and therefore places her focus on building strong relationships that form a solid foundation for doing business.
When she's not travelling around the world, Kathryn enjoys playing clarinet in her town's wind orchestra or sharing her love of the outdoors with her Scout group.