Since East Asia and Europe are far apart, one idea being floated to galvanize the sluggish economy in both regions is to bring them closer -- physically. Against this backdrop, the construction of “Silk Roads” of the 21st century has suddenly become the new buzzword. Korea and China are now pursuing, with vigor and sincerity, their respective national projects of new Silk Roads.

Korea’s Silk Road plan is the “Eurasia Initiative” that started in October 2013 with President Park Geun-hye’s keynote address at an international conference, where she advocated the creation of a unified system of transport and energy networks across the Eurasian continent. A signature project of the initiative is the construction of Trans-Korean Railways to link to the Trans-Siberian Railways. New sea routes are also being drawn through the Arctic passages. Once completed, trains will run from Busan to Russian cities and all the way to European destinations. Cargo vessels from Ulsan and Busan will navigate through the thawing icebergs in the Arctic to reach Hamburg.

For its part, China’s Silk Road project was initiated one month prior in Kazakhstan, when President Xi Jinping revealed the grand plan of “One Belt One Road” during his state visit to Astana in September 2013. This is a project to expand China’s presence in Central Asia through the construction of a land-based “Silk Road Economic Belt” and the ocean-based “Maritime Silk Road.”

Interestingly, the two national projects have many commonalities. In terms of geographical coverage they aim to cover basically the same areas -- the vast region of Central Asia and Eastern Europe. On top of that, they place their focus on the construction and operation of infrastructure in the region. The financial resources needed for “One Belt One Road” are supposed to be provided by the Asian Infrastructure Investment Bank introduced in 2014. So, the two projects largely overlap both geographically and substantively.

The overlapping coverage may indicate a possible synergy effect if the two national projects can manage to coordinate. At the same time, the overlapping coverage may also raise concerns that Korea’s initiative, being smaller in many respects, would pale in comparison to the larger Chinese project. Worse yet, Korea’s initiative could be gobbled up by China’s twin projects and could end up with a small “alley” to the main artery of the new Silk Road. In terms of the magnitude of financial resources and the massive inflow of human capital, China’s project may turn out to be a black hole absorbing the light from the new Silk Road in Central Asia.

In any event, the idea of building new Silk Roads at this juncture is certainly laudable. Indeed, “connection” or “connectivity” is what is needed among East Asia, Central Asia, the Middle East and Europe to pool their respective resources for a longer-term common prosperity. This connection or connectivity is a feature critically missing in the widespread free trade agreements being concluded these days. While an FTA introduces a legal framework in which one nation can penetrate the other nation’s market and expand its presence there, it is silent on how to get to the foreign market in the first place -- you need trains, ships or trucks. When general infrastructure is missing, access to a nearby foreign market is critically limited. The new Silk Road projects purport to fill this gap. If conventional FTAs are about software, these new projects are about hardware. The new initiatives are therefore largely complementary to the existing trading regime -- creative approaches, indeed.

But again, the question is how to avoid unnecessary competition between Korea’s Eurasia Initiative and China’s One Belt One Road policy, and how to induce an environment for a synergy effect. Perhaps one example would be a combination of Korea’s advanced IT technology and China’s vast capital for infrastructure projects, but there should be more.

By Lee Jae-min

Lee Jae-min is an associate professor of law at Seoul National University. -- Ed.