At BiznesAlert.pl, from the very beginning, we have been examining the initiative of „One Belt, one Road”, called the New Silk Road. Can Poland make money on this initiative so as not to harm itself and the transatlantic community?
China needs the market and Poland needs money
The idea to build an infrastructure route from China to Europe was announced in 2013. It takes into account several potential routes on land and sea, which infrastructure investments co-financed from the Middle Kingdom should take. The Chinese need this to oversupply industrial products, such as steel and coal, which they have in excess. Among other things, the Chinese economy, known for its mad rush, began to slow down. The route could increase the number of orders for Chinese companies that need foreign orders in the period of weakening state investments. It is also an attractive vision for non-G20 European countries that are counting on a new development impulse. Is it right?
In July 2017, we described the Polish-Chinese Forum for „Belt and the Road” for Infrastructure Cooperation. The visit of President Andrzej Duda to the PRC in November 2015 opened a lively cooperation between China and Poland. Then, President Xi Jinping visited Poland in June 2016. In April 2017, the then Prime Minister of the Republic of Poland, Beata Szydło, visited China. – For two years, both countries have become closer. – Today’s meeting confirms that Poland is part of the “Belt and Road” initiative, while the Chinese side expressed a desire to support the Polish government in various initiatives, such as the construction of the Central Communication Port – said then Mateusz Morawiecki, then Minister of Development and deputy prime minister, currently prime minister.
– Poland is ready to participate in this process, on condition of equal benefits and inclusion of Polish companies in the investment processes, which could subsequently gain the ability to compete on the European and CEE and Central Asia markets. We should use this opportunity to significantly increase the competitiveness and scale of operations of our companies. We want to encourage the creation of joint ventures and the joint undertaking of large investment projects – said then Deputy Minister of Development Paweł Chorąży.
The Central Communication Port is the concept of building an air-rail hub in the Baranów commune, on which in November 2017 the Council of Ministers adopted a relevant resolution. The new node would replace Chopin Airport in Warsaw. The government assumed that construction could start in 2019 and end in 2027. The estimated costs range from PLN 12 to 35 billion. Some of these measures could be provided by China, although specific solutions are not yet available.
There are no details
In December 2017, the 16 + 1 summit took place in Budapest with the participation of China and the countries of Central and Eastern Europe. Its fruits have been critically evaluated by interlocutor BiznesAlert.pl. – In the political sense, our region was higher on the agenda of Chinese foreign policy. We are more important than just a few years ago. Dialogue is also more intense at many levels. Scientific and business circles from the “sixteen” and China meet more often. The Chinese “learn” the region thanks to such type of meetings – admitted Justyna Szczudlik, Asia and Pacific program manager at the Polish Institute of International Affairs.
However, she adds that the meeting lacked details. China has announced an investment of $ 2 billion in Central and Eastern Europe. – Chinese investments are based on loans, which then have to be repaid. For the EU countries, it is also unacceptable that the Chinese loans are based on state guarantees of the country where the projects are implemented, because in case of an investment failure, the risk is transferred to the “receiving” state – she pointed out.
Polish silk road
The topic came back during the Europe-Ukraine Forum, where the minister of infrastructure, Andrzej Adamczyk, was present.
– Trade and goods exchange between Poland and China, between China and Europe, has already taken place. It is now a reality – said Minister of Infrastructure Andrzej Adamczyk. – In 2016, we accepted the first train from China with the participation of Presidents Xi Jinping and Andrzej Duda. It came proudly to the PKP Cargo station in Warsaw. The line has been opened, and the trains run and carry goods.
Three freight lines run from Chinese Chengdu to Europe: northern to Moscow, south to Istanbul and middle to Łódź in Poland. PKP Cargo has a significant share in the implementation of the latter. The goal of the development of railway routes is the independence of Chinese exports from maritime transport, and thus increase the weight of cities located in the center of the country. It is not known whether the New Silk Road is needed for the development of this cooperation.
– Many concepts of the One Belt and One Road are perceived as an investment of the Middle Kingdom and a great capital that can be used. I have a different opinion. It is important to engage the Chinese side, but the most important thing is to create communication corridors running through Asian countries, which will allow intermodal transport of goods. These trails will be a leash for it. That is the point in all this – summed up the minister. In his opinion, the investments of the New Silk Road may in the future serve better transport integration of Poland and Ukraine, not only China. In an interview with BiznesAlert.pl, he stressed that Warsaw must implement this idea in a “careful and prudent” manner. – Every country must take care of its interests. It must care for its economy, his entrepreneurs. Today, we will either be a very active participant in this undertaking or this trail will pass us by. We choose the first one because it is a project that will benefit our economy. Of course, we must take care to secure our interests, he said.
The Deputy of the Civic Platform, Stanisław Żmijan, warned against excessive optimism. At the Europe-Ukraine Forum, he emphasized that “turnover with China is 1 percent of our turnover, and with Germany it is 26 percent.” – We can implement a trade exchange as an idea on a bilateral basis. When it comes to business ventures, it’s worth remembering that China is a demanding partner. They can use their economic strength and implement their selfish interests at the appropriate moment – warned the MP.
You can also read about the threats related to the New Silk Road in BiznesAlert.pl. We are writing that this may be a project of a soft power of political influence, it can be used to use energy infrastructure in order to run counter to the interests of the European Union and NATO. For this reason, a reserve is recommended for the project, which from the Polish point of view is still devoid of particulars, for example in the form of agreements.