Contents

Ⅰ　General Report

1　The Construction Capabilities, Challenges and the Corresponding Countermeasures of

　　the “21st Century Maritime Silk Road”【Zhu Cuiping】／001

　　1.Introduction／002

　　2.The Concept and Route of the “21st Century Maritime Silk Road”／006

　　3.The Strategic Connotation of the “21st Century Maritime Silk Road”／011

　　4.The Building Capabilities of the 21st  Century Maritime Silk Road／014

　　5.The Preliminary Achievement of the “21st Century Maritime Silk Road”／019

　　6.The Main Challenges Faced by the “21st Century Maritime Silk Road”／022

　　7.The Main Risks of the “21st Century Maritime Silk Road”／025

　　8.The Countermeasures of China／028

　　9.Conclusion／031

Abstract: This article focuses on the connotation, capabilities, challenges, risks and the corresponding countermeasures of the 21st Century Maritime Silk Road (MSR). This article states that the core of the MSR strategy is the cultural concepts of “balancing convergence and divergence” and “inclusive development” as well as the moral concepts of “mutual benefits” and “Do not do unto others what you don’t want others to do unto you”. The strategy will uphold the basic principle of “open cooperation, harmonious inclusiveness, market operation, and mutual benefits.” Practical cooperation and joint building of the MSR will always be in the primacy of the strategy. Emphasis must be put on leveraging the comparative advantages of China and the countries along the MSR to let them coordinate with each other and reach consensus through “joint consultation” and form joint effort through “jointly” building the MSR. Countries can only achieve cooperation and mutual benefits and promote rebalancing of the regional and global economy through sharing each other’s strengths, risks and interests. The MSR strategy is composed of various economic cooperation projects between China and the countries along the MSR. However, it is also influenced by certain political and security factors and thus has geopolitical implications. But in the end, what connects the far-away regions is the economic interest. As a base and examplar, Southeast Asia is an important region for the MSR strategy.

Keywords: China; 21st Century Maritime Silk Road; Construction Capability; Challenge; Countermeasure

Ⅱ　Strategic Reports

2　India’s China Policy under the Influence of the “Strong Government” Mentality

　　— Concurrent Discussion on India and the “Belt and Road” Strategy【Ye Hailin】／033

Abstract: It is generally believed that under the leadership of Modi, India has entered an era of “strong government” with increasingly progressive foreign policies, stronger intent to compete with China for the global great power status and more salient “strong government” mentality in foreign policy. This article discusses the causes of the “strong government” mentality of India and its possible effect on Sino-Indian relation, focusing on the “strong” mentality of India and its effect on the Sino-Indian border issue and the “Belt and Road”. This article argues that the strong mentality of Modi does not derive from the change in the power of India, not even the change in the comparative power of India, but the change in the psychological level when India promotes its foreign policies. Based on the reality of diplomacy, India is still a follower of the international systems but not the creator of orders. The actual international status of India is not upgraded with Modi assuming power. What is upgraded is just India’s confidence and the expectation of some Western countries on India. When dealing with the relation with India, china must consider the long-term possibility of India’s development and the structure factors which will determine the direction of its development, instead of only focusing on its dazzling performance in the short run, esp. the so called impression of strong government given by India.

Keywords: India；Foreign Policy；Relation with China；Strong Government

3　The Change of the Political Situation in Sri Lanka and the Initiative of Rebuilding the “21st

　　Century Maritime Silk Road”【Wu Zhaoli】／049

Abstract: After Sirisena was inaugurated as the president, he made the pledge to implement the “Hundred Days’ Reform” and has uphold the balancing diplomacy in foreign policy. Negative Trends present in the domestic and external environment of Sino-Sri Lankan relation. However, the promotion and implementation of the “21st Century Maritime Silk Road” initiative closely align with the development strategy of Sri Lanka. Sino-Sri Lankan relation is faced with a major development opportunity. China and Sri Lanka will upgrade mutual trust, strengthen their ties in trade relations, accelerate cultural exchanges and have signed multiple framework documents in the development of bilateral relation, which will lay a solid foundation for the future development of Sino-Sri Lankan relation. Meanwhile, the geopolitical reality of the South Asian region and the deep influence of India on Sri Lanka also compose actual challenge to the development of Sino-Sri Lankan relation. The adjustment of Sri Lanka’s foreign policy will have duel effects on the development of Sino-Sri Lankan relation and significant implications to China’s promotion of the “21st Century Maritime Silk Road” initiative. First, the pro-China policy of Rajapaksa will in the long run have more disadvantages than advantages to the “Maritime Silk Road” strategy of China due to the unsustainable political ecology and geo-factors. Second, the balancing diplomacy will be the diplomatic status quo of Sri Lanka and China must adapt to the adjustment of Sri Lanka’s foreign policy adjustment and take into consideration the “comfort level” of the corresponding countries. Third, the future development trend of the external environment of Sri Lanka is unfavorable to China, and China should have clear judgment on it. Fourth, the new government of Sri Lanka halted the Chinese cooperation project with the excuse of environmental impact and approval document for construction. This is an inevitable consequence of the new president of Sri Lanka trying to live up to his promise. The real goal is to settle the so called corruption of the former president, to crack down certain political powers within Sri Lanka and also to show “good will” to the external powers of India, Europe and USA. It can be predicted these behaviors are only temporary.

Keywords: Sri Lanka; Change in Political Situation; Balancing Diplomacy; Sino-Sri Lanka Relation;  “21stCentury Maritime Silk Road”

4　The “21st Century Maritime Silk Road ”and China’s Indian Ocean Strategy:

　　An Analysis Based on Cooperation Security【Zhang Jiegen】／067

Abstract: The strategic importance of the Indian Ocean has been rapidly increasing and the construction of the “21st Century Maritime Silk Road” has be upgraded to the level of national foreign policy. In this background, China will need a more clarified Indian Ocean strategy. This article takes the perspective of cooperation security analysis and argues that China should promote the security cooperation of the whole region and safeguard the security of the Maritime Silk Road of the Indian Ocean by participating in the existing multi-lateral cooperation mechanisms of the Indian Ocean, making efforts to create new multi-lateral security cooperation mechanism, joining hands with the main great powers within and outside of the Indian Ocean region, and engaging in uncompetitive cooperation in security. The key of the promotion of the “Belt and Road” strategy is to achieve “policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bonds”. This is also closely related to the sea route security of the Maritime Lifeline of the Indian Ocean which is an important component of our country’s interest in the Indian Ocean. China needs to implement its cooperation security strategy from the following 4 aspects: first we need to actively participate in the existing multi-lateral mechanisms and arrangements of the Indian Ocean region; second, we must try to establish new multi-lateral cooperation mechanisms; third, we must promote the security cooperation of the Indian Ocean through great power cooperation and coordination; and fourth, we should take advantage of the uncompetitive security regions as the first step of cooperation.

Keywords: China；Maritime Silk Road；Indian Ocean；Cooperation Security

Ⅲ　Special Reports

5　Accelerating the Connectivity Construction of the Southwest to Support the Development of

　　the “Belt and Road”【Chen Lijun】／096

Abstract: The “Belt and Road” construction is a significant strategy of the Central Committee of China raised in the new background of new domestic and external situation. Currently, various provinces in China are actively participating into the construction of the “Belt and Road”. How to fully exert the comparative advantages, find out the proper orientation of the strategy and jointly build and share the “Belt and Road” has become the main task for the provinces of China. The promotion of the Belt and Road calls for the strengthening of the infrastructure connectivity. And transport is the most basic infrastructure and should be developed first. Southeast Asia and South Asia have the key emerging economies in the world and China needs to strengthen the connectivity construction of Southeast Asia and South Asia which are the neighborhood of the Southwest of China to promote the “Belt and Road”. However, there are many problems in the infrastructure construction between China and South Asia and Southeast Asia. For example, the overall connectivity level is quite backward; the land transport is quite weak; there lacks the funding for the construction and development of the transport infrastructure; the border ports have backward infrastructure; the level of transportation facilitation is quite low; and there is not much mutual trust between China and the neighboring countries and there is no joint efforts;and the neighboring regions of the Southwest China is quite complicated and changeable. As the “Belt and Road” construction is a complicated system project, it cannot be built in one day and needs to be pushed forward from easy projects to difficult projects with the development of nodes cities promoting the development of areas. We must take multiple measures to implement the strategy in stages and to form the regional cooperation of greater scope. The main measures include: taking advantage of the existing international cooperation mechanism to promote connectivity construction,and improve overall planning and coordination, comprehensively accelerating the connectivity construction, upgrading the transport resource integration and operation capability; raising fund for construction through multiple channels; and increasing trust and dispelling suspicion of the neighboring countries.

Keywords: Belt and Road；Infrastructure；Connectivity；Yunnan

6　The Construction Model of the “Belt and Road”: Mechanisms and Platforms【Zhu Li】／143

Abstract: The “Belt and Road” initiative has been highly recognized by many countries in Asia, Europe and Africa which progressively participate in the initiative. The “Belt and Road” initiative is the continuation and upgrading of the ancient Silk Road and is also the public goods China provides to the world. It is not an enclosed road, but an open and inclusive road. It is not the solo of one country but the chorus of all the countries along the “Belt and Road”. By upholding the cooperation principles of “joint building, joint consultation and joint sharing”, the construction of the “Belt and Road” will effectively promote the formation of a new paradigm of mutual benefits and common development for the countries along the “Belt and Road”. From the initiative to the issuance of the Vision and proposed actions outlined on jointly building Silk Road Economic Belt and 21stCentury Maritime Silk Road by Chinese government and the establishment of the Asian Infrastructure Investment Bank, the practical promotion of the “Belt and Road” construction has become the consensus of all countries along the “Belt and Road”.

The construction of the “Belt and Road” will be based on the principles of promoting policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bonds and feature cooperation, openness, economy and mutual benefits. The initiative of “Belt and Road” does not seek to build new mechanism. It only gives full play to the existing mechanisms under the current bilateral, multilateral and regional cooperation framework, integrating the building of the “Belt and Road” into the development process of the countries and the region to promote the common development of the regional economy as well as regional security and stability. At the same time, the construction of the multi-layer cooperation platform including the “Belt and Road” International Summit must be accelerated through which the joint consultation, joint building and coordinated development of the countries and regions will be achieved and the mechanism will be improved and developed in the cooperation.

Keywords: Belt and Road；Initiative；Mechanism；Platform

7　The Theory and Reality of the “21stCentury Maritime Silk Road”: Orientation, Production

　　Network and Mechanism Building【Yang Yishuang】／159

Abstract: The Ancient Maritime Silk Road was a complex and multi-cultural trade network which stretched across three continents. This decentralized trade network offered a well-functioning economic system, extending far into inland, connecting the domestic markets and production networks, shaping the “world economy” system in the Indian Ocean region. However, after the Western colonizers showed up in the Indian Ocean, they completely changed the nature of the Maritime Silk Road, making this network a permission-required waterways and a tool for colonial economic system. Regions of Maritime Silk Road were transformed into the peripheral region of the European economy. Therefore, one of the main targets for Maritime Silk Road is the collective revival of these regions. This revival will surely be rooted in the changes of production systems and production networks. In recent decades, marginalized Asian countries had once gradually integrated into the global value chain due to the Asian production networks. However, this process was imbalanced and of obvious vulnerability. Many countries and regions have yet to be incorporated into a genuine production network. Out of the need of further improving and expanding the Asian production network, a platform which could enable marginalized countries and regions to rise more quickly in trade and production systems is increasingly needed. In this sense, “21st Century Maritime Silk Road” can also be regarded as an effort to reshape the Asian production networks.

In order to build the 21st Century Maritime Silk Road, China’s strategic goals also should be adjusted accordingly. The main purpose of this initiative is to share the fruits of growth of China with its neighboring countries. Thus the trend that China becomes the supplier of regional public goods and let neighboring countries to be the “free rider” is taken for granted. China should always adhere to the principle of “pluralism, diversity, openness” and China will never become the new overlord of the Maritime Silk Road. Maritime Silk Road was not，and will be never controlled by any particular country. It will always belong to a more fair and rational international economic order.

Keywords: Maritime Silk Road；Trade Network；Asia；Production Network；International Mechanism

8　The Construction of the Cooperation Mechanism of the “21stCentury Maritime Silk Road”

　　【Liu Peng】／184

Abstract: The 21st Century Maritime Silk Road is a regional cooperative mechanism and it will provide public goods for the countries in the region. The 21st Century Maritime Silk Road is a process with the features of joint building, sharing and openness. Joint building of the 21st Century Maritime Silk Road means countries in the region share the responsibilities of providing public goods while China as a big country may provide bigger share of public goods and share the public goods with countries in the region. As an open mechanism, the 21st Century Maritime Silk Road welcomes other countries to join the “club” to share the responsibilities and obligation. As a new mechanism, the 21st Century Maritime Silk Road is faced with 7 problems, including: the high trade volume between China and the countries along the Maritime Silk Road, the trade imbalance between China and the countries along with Maritime Silk Road, low level of institutionalization, easily effected economic relations by political or security relations, failed states along the Maritime Silk Road, piracy in the Indian Ocean, and difficulties in connectivity. These problems represent the necessity and difficulties of Maritime Silk Road. The construction of the cooperative mechanism for the 21st Century Maritime Silk Road includes five platforms: trade promotion and trade disputes settlement platform, connectivity platform, finance platform, official development aid platform, and foreign investment platform. The elevation of Cooperative Mechanism for the 21st Century Maritime Silk Road can be achieved from the dimensions of effectiveness and legitimacy.

The 21st Century Maritime Silk Road is proposed by China and should be beneficial for the national interests of China while it is worth noticing that the interests of Maritime Silk Road as a cooperative mechanism are not necessarily identical with China’s national interests. With the increase in the number of members of the Maritime Silk Road, the dilemma between effectiveness and legitimacy will become significant which requires more delicate design.

Keywords: Maritime Silk Road；Function Orientation；Effectiveness；Legitimacy

9　The Analysis of Trade and Investment between China and the Regions/Countries along

　　the “Maritime Silk Road”【Li Yanfang】／212

Abstract: The basic step in implementing and promoting the “21st century Maritime Silk Road” and the “Belt and Road” initiatives is to study the economic and trade relations between China and the regions and countries along the “Maritime Silk Road”.

Based on historical documents and previous studies, this paper attempts to define the regions and countries along the “Maritime Silk Road”, and conducts dynamic analysis on the importance of trade, level of openness of a region and the economic and trade relations／potential with China of the whole region, the five main regions and major countries respectively.

We do believe that there are still great potential and space for the cooperation between China and these regions/countries. However, the cooperation is also faced with some problems such as the slowdown in economic growth of the regions, the decline in global trade and economic status, the imbalance of regional development, and the gap in the development of economic and trade cooperation with China and the low achievement in trade potential.

Therefore, we need to conduct in-depth research on the cooperation motivation, mode and model.

Firstly, we need to think about the initiation of and sustainable driving force for cooperation. We must focus on the desire of sustainable development of the countries and find the solution to those problems, which will not only provide sustainable driving force for China and the regional cooperation, but also bring greater cooperation centripetal force to meet the development needs of these regions;

Secondly, we should design and realize regional empirical cooperation mechanism and eventually form the ideal model of a pan-regional cooperation. That means we need to do different collaborative planning based on different levels of development;

Thirdly, we should consider first promoting connectivity and developing finance. Based on the port cities of the countries in the five major regions, we can build the network infrastructure in national hinterlands and even throughout the main cities of the regions;

Fourthly, China should take the opportunity of cooperation initiatives to plan new foreign investment patterns. We must consider a more harmonious, environmentally friendly and sustainable way to invest long-term in the host countries and solve the problems in China’s foreign trade or even deeper problems in industrial restructuring.

Keywords: China；“Maritime Silk Road”；Economic and Trade Relations；Trade Potential；Pan-regional Cooperation

Ⅳ　Appendix

10　Chronicle of Events in the Indian Ocean Region【Hu Wenyuan】／259