The New Silk Road – Real and Virtual

Previously, I noted that some more time will be spent looking at China.  Part of this extends from the recent interest of a Chinese investor group in acquiring Opera.  While not privy to those discussions, in my frequent meetings with members of think tanks, like Odessa’s own Nikolai Holmov, China is receiving greater and more frequent attention.  The nature of Chinese business activities are of a magnitude that warrants broader awareness, even if the implications are not specific to the mobile world, but of which the mobile world is certainly part.

One Belt, One Road – The New Silk Road entails a land-based and sea-based trade belt starting in China and stretching through the Middle East, into Europe and Africa.   While the list of countries to be formally included in the investment and development already in progress is not fully defined, it could include up to 40 or more countries.

Prospective countries (land and sea):  Afghanistan, Armenia, Brunei, Cambodia, Democratic People’s Republic of Korea, Egypt, Georgia, Indonesia, Iran, Iraq, Italy, Japan, Jordan, Kazakhstan, Kenya, Korea, Kuwait, Kyrgyzstan, Lebanon, Madagascar, Malaysia, Mongolia, Mozambique, Nepal, Oman, Pakistan, Philippines, Qatar, Russian Federation, Saudi Arabia, Somalia, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan.

As’s Helen Wang poignantly quoted from the,

If the sum total of China’s commitments are taken at face value, the new Silk Road is set to become the largest programme of economic diplomacy since the US-led Marshall Plan for postwar reconstruction in Europe, covering dozens of countries with a total population of over 3bn people.

A few noteworthy points regarding the scope of the New Silk Road:

  • Expected to reach $1 trillion in investments (from all parties) by 2020, with the Asian Infrastructure Investment Bank having already allocated $100 billion.
  • Will logistically connect roughly 70% of the world’s population.
  • Countries along the route represent about 55% of world GDP.
  • Aims to net $2.5 trillion (for China, alone) in additional trade over the next 10 years.
  • Logistical and infrastructure investments in road and rail networks, power grids, internet networks, pipelines and port projects.
  • Reduce delivery times from China to Europe by as much as 80%.

To say it is a “big thing” is an understatement, ranking right alongside (and above) the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) – the “other” two major free trade agreements in the process of being formed.   It is appropriate to note that 1) China is not (presently) involved with the TPP and 2) the United States is not (presently) involved with the New Silk Road – though there may be some businesses from each country actively involved with projects associated with each.

Obviously, there are geo-political interests at stake, too – beyond the scope of this article, but one hypothesis is that economic development will serve as a catalyst to political and social stability (i.e. fewer wars and less terrorism).

So, what does the Silk Road mean to you?

First off, the New Silk Road is a major investment and development project, spanning hundreds (potentially thousands) of smaller projects for many years to come.  It is being done, it is continuing – so you can follow its development to see when, where and if you can fit in for a variety of contracts.  Knowing, also, that some areas presently lacking reliable internet access will (in the not too distant future) have reliable internet access provides opportunities for those who get in on the ground floor.

The broader implications are that China is poised to soon be the largest economic power and is beginning to challenge the predominantly “western” mega-corporations on several fronts, from oil to agriculture, but also in tech.  Word came out this week that Ali Baba is now the world’s largest retailer, surpassing and Walmart.  Fundamentally, many developers have mainly focused on the western market for profitability, but more and more eyes will be looking eastwards for potential volume.

Overall though, with three major “free trade vehicles” in motion (New Silk Road plus TTP/TTIP), the world is about to get more competitive, faster.

Project Manager at the Opera Mobile Store providing Sales-Marketing support. Content development and research.

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