Southwest Geopolitical Situation and the “Southern Silk Road” New Strategy(王志民)
2014-10-14
Southwest Geopolitical Situation and the “Southern Silk Road” New Strategy
WANG Zhimin 1
1 Institute of Globalization and Chinese Modernization Issues, University of International Business and Economics, Beijing 100029
Abstract: China, as a geo-economic political power across the “heartland” and “rimland” and make the two connected, Southeast Asia (the
“fringe”), and South Asia (both “heart” and “fringe”) has shown geopolitical economic and political interconnectedness and co-development.
For China, Southeast Asia and South Asia has both the value of existing resources and geopolitical values. While for Southeast Asia and South
Asia, they can take advantage of China’s “heart” geopolitical advantages and development potential to realize their own unique geo-economic
and political interests. Economic integration based on geopolitical relations has been promoting economic cooperation between China and
Southeast Asia and South Asia, thus expanding Chinese economic development. Construction of “Southern Silk Road” economic belt to open up
Southwest channels has become major strategic decisions for Southwest China opening up.
Keywords: Geopolitical Economy And Politics, Southwest Surrounding Regions, “Open Belt” Along Borders, “Southern
Silk Road” Economic Belt, Economic Corridor
CLC No.: F114.46
Article ID: 1003-7411(2014)01-0094-(12)
Received on October 20, 2013
Funding: Ministry of Education Humanities and Social Sciences Special Project (Type 1 Project, Grant No. 11JD710001);
Biography: Professor Wang Zhimin is the director of Institute of Globalization and China’s Modernization of University of International Business
and Economics. He is a senior fellow in China Center for Economic Development Studies of University of International Business and Economics.
He is also the vice chairman and secretary general of Beijing Collegiate of International StudiesrStudies
The “rebalancing” strategy, which the United States has implement after “retuning to the Asia Pacific Region” in a lofty tone,
has led to a few neighboring countries, including Japan and Philippines, to contend with China and seek advantages over the
dispute on ownership of islands. Some neighboring countries also attempt to bet on both sides to maximize their benefits by
“relying on China for economic development and depending on U.S. for security.” Facing the multiple challenges to China’s
economy, politics and security posed by the U.S. strategy shift, some scholars proposed that China, which is situated in the
center of the Asia Pacific Region, should refrain from limiting its attention to the coastal territories and existing competitors
and collaborators, and diverse strategic plans to “advance westward” Some scholars suggested that “opening to the west” is a
more appropriate publicized external strategy for the country than “advancing westward” and that “opening to the west” requires
full coordination from the foreign affairs government entities. [2] Some other scholars propose that China should adopt
the geo-strategy that features “firming up the north, stabilizing the west, securing the east, and developing the south.” [3] From
the perspective of China’s current geopolitical situation in its economic and political development with Southeast Asia and
South Asia, the author will discuss the strategic choices of opening up China’s southwestern region.
1 Southwest Surrounding Regions Feature a Complicated Geographical Environment and
Broader Space for Development
China cannot develop in isolation of the world, nor can it develop in isolation of the neighboring countries. China’s economic
development not only propels fuels the growth of the world economy, but brings about good opportunities of economic advancement
to its neighboring countries. China’s economic transformation further creates significant potential in demand and
enormous market size for the whole world and surrounding regions. In 2012, the country’s foreign trade volume reached
USD 3.86676 trillion and cargo trade volume ranked 2nd in the world, only USD 15 billion less than that of U.S. and with the
highest cargo export volume. China has become the biggest trade partner with 128 countries. According to an authoritative
estimate, by 2020, purchasing power of the Chinese market will skyrocket to CNY 64 trillion. [4] During a keynote speech
titled Working Together Toward a Better Future for Asia and the World in the 2013 annual conference at Boao Forum for
Asia, President Xi Jinping pointed out that “China will continue to promote friendship and partnership with its neighbors,
consolidate friendly ties and deepen mutually beneficial cooperation with them and ensure that its development will bring
even greater benefits to its neighbors. China will vigorously promote development and prosperity in both Asia and the world.
Since the beginning of the new century, China's trade with its neighbors has grown from USD 100 billion to USD 1.3 trillion.
China has become the largest trading partner, the biggest export market and a major source of investment of many of many
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neighboring countries. … It is projected that in the coming five years, China's import will reach some USD10 trillion, its
outbound investment will reach USD 500 billion and the number of its outbound tourists may well exceed 400 million. The
more China grows itself, the more development opportunities it will create for the rest of Asia and the world.” [5] Indeed, areas
adjacent to China have benefited from the geographic proximity and most countries have established a mutually beneficial
economic partnership with China.
Peace and development are the main themes of the world nowadays and of China’s surrounding areas as well. Adjacent to
Southeast Asia and South Asia, Southwest China is located in a relatively complicated and sensitive geopolitical environment
among all neighboring areas of China. However, the overall development trend within China’s peripheral security environment
is “no war in the region”. Southeast Asia plays a critical role in the geopolitical strategy of China’s rise. The Association
of Southeast Asian Nations (ASEAN) is crucial to China’s geo-strategies, whereas China provides ASEAN an alternative
choice to the United States and Japan, leaving ASEAN countries certain wiggle room of flexibility during their interaction
with big countries. And ASEAN’s strategy of “The Power of Balance” has made it impossible for them to take China as an
enemy. China is the largest neighboring country to the South Asian Subcontinent, which includes countries that have territorial
disputes or even resulting in wars with China (such as India) as well as countries maintain long-lasting all-weather
friendship with China (such as Pakistan). Both as large developing countries and members of five major emerging national
economics (“BRICS”), China and India have established several multilateral collaboration mechanisms and have great potential
of bilateral cooperation. With other South Asian countries, China has maintained traditional friendship and is seeing increasingly
tightening economic relationship, with in-depth collaboration yet to be explored. No matter from the perspective of
geo-economics or geo-politics, the interrelationship between Southeast Asia, South Asia and China is based on geographic
proximity. “No country is able to move its geographic location; nor can any country steal any territory from another and escape.”
[6] This unique geographic feature is not changeable and mutual cooperation and interaction is independent
of human will. Even though some countries can choose to leverage external powers (such as the United States) to restrict
China, this restriction imposed by U.S. on China‘s neighboring countries and regions depends on the geostrategy of U.S.,
which is more strategic than geographic. The United States is not a neighboring country of Asia in a geographic sense, thus
its geostrategy for Asia is not permanent and will change with its national power, international status and foreign strategies.
At present, China’s comprehensive national strength and international influence are undergoing a new phasic change. China
is confronted with complex geo-economical and geopolitical circumstances, whereas, Southeast Asian countries and South
Asian countries are still expecting to see significant opportunities.
1.1 Accelerated growth of integration of China’s Southwestern Region and Southeast Asia
Located in southeast of China, Southeast Asia belongs to the “fringe” of the Eurasian Continent. Adjacent to South China
Economic Circle, it is a springboard for the development of export-oriented economy in China. As an entire entity, ASEAN is
playing an increasingly important role in regional and international affairs. Developing countries as they are, China and
Southeast Asian countries are highly complementary with each other in economy and trade. Southeast Asia accounts for 85%
of the world natural rubber production, 55.6% of the world tin reserves. In particular, the rich timber resources in Indonesia
and Malaysia, fossil fuels in Indonesia, potash ore in Laos, rich phosphate, iron and copper mines in Vietnam and copper in
Philippines are among those that China needs. In the meantime, China can provide grain, vegetable and minerals such as zinc
and lead which ASEAN relies on import. Even though both China and ASEAN mainly manufacture labor-intensive products,
a complementarity in product structure exists, where ASEAN imports general machinery and electric appliances as mechanical
and electrical products from China and China imports electronic component products from ASEAN. China and ASEAN
also complement each other in areas such as labor service and tourism. With a complete industry system, China possesses big
advantages in conducting basic science research. In 2011, number of domestic patent applications in China reached No. 1 in
the world. In 2012, export volume of high technology products from China ranked No. 1 in the world. Currently, China and
ASEAN have initiated the collaboration in science and technology by establishing joint committee for collaboration in science
and technology, science and technology training center, science and technology research and service center. In 2012,
China-ASEAN Science and Technology Partnership Program started and “China-ASEAN Technology Transfer Center” was
established. In 2013, the first Forum on China-ASEAN Technology Transfer and Collaborative Innovation was held with the
theme of “Joint Innovation, Common Development.” China has been introducing advanced techniques in agriculture to
ASEAN and technical personnel from ASEAN, including Vietnam, Myanmar, Laos, Philippines, Cambodia and Indonesia,
come to China to learn growing techniques of sugarcane and rice every year.
On the backdrop of ASEAN-China Free Trade Area (ACFTA), various types of institutionalized cooperation platforms
further propel the process of regional integration. China-ASEAN Expo has become an important platform for economic collaboration.
Every year, the Expo has an investment collaboration topic and organizes a series of investment facilitating events
for domestic provinces in China and the 10 countries in ASEAN, including promotion seminars, project matching sessions for
investors and financers and project information briefing. On March 24, 2010, Chiang Mai Initiative Multilateralization
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Agreement took effect and a USD 120 billion regional foreign currency reserve pool and a USD 700 million investment credit
guarantee fund were established.① Since 2011, ACFTA has entered the second phase (from 2011 to 2015), that is, the full
completion of the free trade zone. The policy of zero-tariff rate for the majority of traded goods is expected to extend between
China and the four new ASEAN members, Cambodia, Laos, Myanmar and Vietnam. In 2012, trade volume between China
and ASEAN has reached its historical high of over USD 400 billion. Currently, China has become the largest trading partner
of ASEAN while ASEAN is the third largest trading partner of China. The joint statement issued at the 10th Anniversary of
ASEAN-China Strategic Partnership proposed that both parties will strive to increase bilateral trade volume to USD 500 billion
in 2015 and USD 1 trillion in 2020 and make ASEAN-China two-way investment of USD 150 billion in the next 8 years.
China and ASEAN have decided to improve the level of trade facilitation and deepen industry collaboration to create an “upgraded
version” of ACFTA.
A stable and harmonious geopolitical relation provides guarantee for geo-economic collaboration. China is the first
non-Southeast Asian country that joined the Treaty of Amity and Cooperation in Southeast Asia. China has also signed with
relevant ASEAN countries the Declaration on Conduct of Parties in the South China Sea, dedicating to the peace and stability
in the South China Sea region and resolving regional issues in a peaceful way. The Chinese government has sincerely indicated
that China will continue to have dialogue and negotiation with ASEAN to enhance mutual trust and strive to reach the
“code of conduct in the South China Sea” on the basis of consensus. [7] So far, China and ASEAN have established five Sino-
ASEAN parallel dialogue and cooperation mechanisms, including ASEAN-China senior officials’ consultations, business
councils, Joint Cooperation Committee, joint economic and trade committees and joint science and technology committees of
China and ASEAN. In 2011, ASEAN-China Center was established to push forward practical cooperation in all fields between
China and ASEAN. In October 2013, during a speech at the Indonesia Parliament, President Xi Jinping pointed out that
China and ASEAN are good neighbors, good friends and good partners who would share prosperity and security and stick
together through thick and thin. By making joint efforts, we will build a more closely-knit China-ASEAN community of
common destiny so as to bring more benefits to both China and ASEAN and to the people in the region.
Indeed, some countries among ASEAN have territorial disputes with China in the South China Sea. The “China threat”
theory has been fairly popular among Southeast Asian countries. And the United States “returns to the Asia Pacific region” to
implement the so-called “rebalancing” strategy. Some Southeast Asian countries pin their hopes on the U.S. to ensure their
security by returning to East Asia and they take the U.S. as balance to counteract China. But when it comes to resolving security
issues, ASEAN has been persistent in pursuing their own “ASEAN way,” where majority of ASEAN believe in and advocate
for “the Balance of Power” strategy and hope China and the U.S. to restrict each other, leaving bigger room for
ASEAN development. ASEAN tries to lead regional economic collaboration in East Asia, which would not be possible without
China’s support and cooperation. And China is also happy to see ASEAN take the leadership role in East Asian regional
economic collaboration. Faced with the challenge from TPP (Trans-Pacific Partnership Agreement) in particular, China is
actively involved in RCEP (Regional Comprehensive Economic Partnership), which is advocated by ASEAN. In line with the
interest of all countries in this region, RCEP will include the 10 ASEAN countries and their 6 free trade partners, including
Australia, China, India, Japan, South Korea and New Zealand. If RCEP is implemented successfully, it will push economic
integration in Asia and accelerate the process of international economic shift from the West to Asia.
1.2 Southwestern China and South Asia have enormous potential for development in integration
Not only does South Asia have a unique position in China’s geo-economics and -politics, but countries in the region have
very complicated geopolitical relations. South Asian Association for Regional Cooperation (SAARC), consisting of India,
Pakistan, Bangladesh, Afghanistan, Sri Lanka, Nepal, Bhutan and Maldives, has become an important force among emerging
counties. The whole territory of South Asia is the estuary for the “Heartland” countries of land powers to the Indian Ocean
and bears dual geopolitical value of “Heartland” and “rimland.” The Arabian Sea which South Asia is adjacent to, and the
Indian Ocean which South Asia holds a strategic position to, are both important energy transportation channel at sea and have
a significant regional strategic position. [8] South Asia is one of the areas that have the richest natural resources in the world
and its resource reserves and types are largely complementary to those in our country. Both as big developing countries, China
and India have strong complementarity in their economies and have a broad base for collaboration. India has a
well-developed software industry and China has advantages in equipment manufacturing and hardware industry. India has
decided that within 5 years after 2010, it would make an investment of multitrillion dollars in infrastructure construction,
①On March 24, 2010, treasurers and central bank governors of ASEAN, China, Japan and South Korea (also known as “10+3”) and President of Hong Kong Monetary Authority of
China jointly announced that Chiang Mai Initiative Multilateralization Agreement officially became effective. The Agreement suggests a multilateralization scale of $120 billion,
with the core goals of (i) resolving regional balance of payments and short-term liquidity difficulties and (ii) supplementing the existing international financing arrangement.
Through currency exchange transactions, it will provide funding support for participants of the Agreement that are faced with balance of payments and short-term liquidity difficulties.
4 Northeast Asia Forum No.1 2014
which has offered opportunities for Chinese companies to get involved. However large-scale economic cooperation entails
guarantee from good political relation between the two countries. Trade volume between China and India has been growing
rapidly in the recent years. In 2011, trade volume reached USD 73.92 billion. China has become the largest trade partner of
India and India is now China’s important trade partner (ranked 13th in China’s foreign trade volume). India is a main supplier
of iron ore, with a trade volume of CNY 61.8 billion, according to the data on the website of Ministry of Commerce. India
has become China’s third largest supplier of iron sand. BRICS countries have been actively planning on monetary cooperation
to establish a diversified international currency system, which provides an institutionalized platform for the collaboration
between China and India. Of course, disputes over territory and water resources exist between the two countries and India has
been hyping up the so-called “China Threat Theory” domestically. It is particularly concerned with the collaboration between
China and Pakistan. However, strategists from both countries believe that there exist mutual interests, with peace leading to
mutual benefits and war causing both to suffer. Vicious competition between China and India will undoubtedly bring risks to
the peace of Asia Pacific Region and the world as well. [9] During his visit to China in October 2013, Indian Prime Minister
Singh made it clear that friendship with China is a priority for India’s diplomacy and both countries’ premiers’ first exchange
of visits within one year since 1954 is indicative of an increasingly better relationship and broad prospects. [10]
Pakistan is China’s geopolitical all-weather partner and the biggest investment destination in South Asia as well as an important
oversea project contracting market. In 2012, bilateral trade volume between the two countries exceeded USD 12 billion.
China and Pakistan have been seeing consistent advancement in collaboration in infrastructure construction, water conservation,
agriculture and telecommunication. Due to the multi-year anti-terrorist war, Pakistan is faced with many difficulties
in economic development. The country’s economic growth and improvement of people’s living standard will not be possible
without the cooperation with the all-weather partner China. With Pakistan’s rich human resources and the obviously advantage
in English language capability of its high-end talents, Chinese companies investing in setting up factories in the
country will effectively advance Chinese companies’ internationalization, increase employment opportunities and raise
standard of manufacturing. [11] The traditional friendly and cooperative relationship between Pakistan, Bangladesh, Sri Lanka
and China will counterbalance India’s effort to use South Asia as base to contend China on one hand, and extend China’s influence
toward South Asia on the other hand. Pakistan is the first country of South Asian to recognize China’s market economy
status and sign free trade agreement with China. However, its unstable political situation and pressure of anti-terrorism
in the front line not only cripple the country’s economic development but weaken its regional influence. It should definitely
be China’s fundamental strategy to launch all-around development of full-range collaborative relationship with South Asian
countries based on all-around economic cooperation.
Most of South Asian countries have a weak industry foundation and are currently at an accelerated development stage,
with heavy reliance on the import of large amount of machinery and equipment in energy, transportation, communication and
other infrastructure industries. Chinese products are suitable for these countries’ consumption level, creating a good environment
for China’s export of mechanical and electrical products, farm machinery, transportation equipment and especially
complete sets of equipment to the region. [12] South Asia has a big population but trade volume within the region is less than
3% of its total trade volume. This offers a good opportunity for Chinese products to enter the South Asian markets. Except for
India, South Asian countries generally are with weak industry bases and poor in manufacturing capacity. The region’s reliance
on import of most industrial products has made Chinese products, which are known for their high quality and affordable
price, highly competitive. [13] It is the entry point of China’s South Asian geo-economic and geopolitical strategy to deepen
cooperative relationship with South Asia based upon the cooperation mechanism with SAARC. In July 2006, SAARC Council
of Ministers officially invited China to be an observer of SAARC. In 2011, China decided to contribute another USD 300
thousand to the SAARC Development Fund. [14]China has listed economy and trade, agriculture, infrastructure construction,
environmental protection, human resource training and poverty and disaster alleviation as key areas to conduct pragmatic
cooperation with SAARC and has a negotiation on the establishment of a more pragmatic and effective cooperative mechanism.
The series of cooperation initiatives will significantly advance the progress of cooperation and accelerate the process of
economic integration between China and South Asian countries.
The special geo-economical and geopolitical environment of Southwest China provides China with general conditions to
lead development initiatives within the surrounding regions and enormous potential of innovation in the opening models. The
opening up of Southwest China is now blessed with many historical opportunities, such as establishing a regional international
center, setting up an economic open-up zone along the border, endowing a new connotation to Greater Mekong Subregion
(GMS) cooperation, building “Southern Silk Road” economic belt, opening up the southwest corridor and creating the strategy
of “gaining direct land access to both Pacific and Indian Oceans.” These opportunities have become significant strategic
decisions for the opening up of the southwestern region.
Northeast Asia Forum No.1 2014 5
2 Establishing “Open Belt” along Borders on the Basis of Regional International Center
Establishing regional international center can reach the goal of both economic cooperation and political integration. In 2011,
some scholars proposed the idea of regional international center, which has now been incorporated into the draft of National
Land Plan. Consisted of an international city, node cities and frontier cities and radiating into the surrounding regions, a regional
international center will promote a win-win situation for neighboring countries, propel coordinated economic development
in Eastern and Western China, integrate surrounding geo economic resources, and advance the process of regional
integration, especially subregional integration. A regional international center functions as a bridge through connecting internal
and external parties and conducting aided reconstruction. And the collaboration between China’s southwestern border
areas and those of neighboring countries does not involve core interests and is thus a suboptimal choice of China’s open-up
strategy. It not only promotes the economic development of our southwestern neighboring countries, but helps facilitate the
great country strategy. As far as economic cooperation is concerned, the regional international center currently only involves
certain areas and the economic field of relevant countries, and thus serves as an experiment and a window for China's cooperation
with its neighboring countries. It encourages mutual benefits and win-win situation with adjacent countries and accelerates
the integration process. As for national security, it consolidates the key interest in the heartland and strengthens the
urbanization in the rimland to increase China’s geographical advantages by connecting the heartland and the rimland. Not
only will it promote cooperation with subregions of neighboring countries, but integrate geographical resources in the surrounding
regions to establish a security mechanism of mutual trust.
2.1 Establishing a regional international center with Kunming of Yunnan Province as an international city
A regional international center has an international city in the center and node cities in the periphery. It radiates into the areas
of China’s neighboring countries that are adjacent to the border through frontier cities, forming a regional international center
within integrated subregions. If a regional international center is established with Kunming as an international city and radiating
into adjacent continental areas in Southeast Asia and South Asia, Qujing, Yuxi and Chuxiong can be the node cities and
Ruili, Wanding and Hekou can be the frontier cities. Kunming is an essential pole for economic growth in the Nanning, Guiyang
and Kunming area. It is also one of the important centers of tourism, trade, science, education, information and goods
and material distribution in west China, as well as one of the critical bases for high technique development in biotechnology
and information technology in China. The Nanning, Guiyang and Kunming economic zone is in close proximity to Thailand
and Cambodia and connected with Vietnam, Laos and Myanmar by mountains and rivers. As a hub on the international corridor
from China to Southeast Asia and South Asia, Kunming is also a connecting point for three big markets of China, South
Asia and ASEAN. An Overall Plan for Yunnan Province to Accelerate the Construction of an Important Bridgehead Open up
to the Southwest (2012– 2020) has been approved by the State Council. According to the Plan, a strategic position will be
determined to develop objectives, regional distribution and key tasks and move forward the construction of Yunnan “bridgehead”
in an orderly way. [15] The Yunnan urban economic circle, which Yunnan Province is currently building, will consider
“one region, two zones, four cities and multiple points” as an organic whole, with “one region” being its core, “two zones”
being two wings, “four cities” being the ties and “multiple points” being the foundation.①The unique location grants Yunnan
the geographic advantages to participate in multilateral outward regional cooperation. In 2011, the trade volume between
Yunnan and ASEAN was USD 5.99 billion, a year-over-year increase of 30%. Export was USD 3.55 billion, a year-over-year
increase of 22.4%, and import was USD 2.4 billion, a year-over-year increase of 43.3%. Among others, both the import and
export of Yunnan with Thailand, Malaysia, Philippine, Vietnam experienced a growth of over 50%. Yunnan’s small-amount
border trade volume with Myanmar, Laos, and Vietnam totaled USD 1.78 billion, which was 34% of its total trade volume
with ASEAN. Trade volume with Myanmar accounted for around 40% of total trade volume with ASEAN. Kunming, as an
international city, with other border cities (such as Wenshan, Honghe, Pu’er, Xishuangbanna, Lincang, Dehong, Baoshan,
Nujiang, etc.) as nodes, constitutes economic radiation into Vietnam, Laos, Myanmar and other countries. In the meantime,
Yunnan has formed scales in terms of “attracting internal investment”. The cooperation with Yangtze River Delta, especially
with Shanghai and Zhejiang, has also become Yunnan’s new growth point in attracting investment. In 2011, Yunnan effectively
obtained a total of CNY 34.09 billion from Yangtze River Delta, accounts for 19% of total available funds from external
sources during this period. Among this, 4.65 billion was from Shanghai, registering an average annual growth rate of
65%. The economic and social collaboration between Shanghai and Yunnan keeps growing steadily. In September 2012,
Yunnan government decided to approve Malipo (Tianbao), Gengma (Mengding), Tengchong (Houqiao), Menglian (Menge),
①“One region” refers to Yunnan new industrial district; “two zones” refer to Kunming-Qujing Green Economy Demonstration Zone and Kunming-Yuxi Tourist Culture Industry
Economic Zone; “four cities” are Kunming, Qujing, Yuxi and Chuxiong, the main body of the Yunnan new industry district; “multiple points” are 42 towns (cities, districts) under
4 counties’ jurisdiction, the foundation for Yunnan new industrial district.
6 Northeast Asia Forum No.1 2014
Lushui (Pianma) and Mengla (Mohan) to be provincial border economic cooperation zones and actively worked to get them
approved as national border economic cooperation zones by the central government. Establishing this regional international
center can not only practically achieve mutual benefit and economic win-win effect, but help enhance cohesion of some areas
of neighboring countries toward China, which may further influence their central governments.①
2.2 Establishing Greater Southwestern “Open Belt” along borders to radiate toward China’s surrounding
regions
Even though the economic development of Guangxi Zhuang Autonomous Region, Yunnan Province and other border provinces
is lagged behind that of the inland, it is far ahead of the economic development of the adjacent border areas in Southeast
Asia countries. In addition, people living in those areas have similar ethnic backgrounds and speak similar languages to people
living on China border, thus it is completely feasible to establish an open economic belt along the southwestern border.
Borderline open economic belt interconnects with the internal regional international center to connect domestic and foreign
resources, serving as a bridge between the east and the surrounding countries. Taking Beibu Gulf in Guangxi as an example,
with over 1,600 kilometers of coastal line, the Gulf is quietly rising as a new platform for international regional economic
cooperation. The advantages of Beibu Gulf lie in its capability to facilitate interaction among eastern, central and western
regions in China and its accessibility to 11 foreign countries. Having its back on the greater southwestern region, adjacent to
Guangdong, Hong Kong and Macau, and situated in the junction of the economic circles of South China, Southwest China
and ASEAN, Guangxi enjoys the unique geographic advantage of being the only region to share land border and marine access
with ASEAN. [16] In 2011, the GDP of Guangxi Beibu Gulf Economic Zone was CNY 386.233 billion, a year-over-year
increase of 15.9% and 3.6 percentage points higher than that of Guangxi. Three cities under its jurisdiction, Qinzhou, Beihai
and Fangcheng port, are the top three fastest growing ones in the region. Six cross-province and cross-border highways from
Beibu Gulf to Vietnam, Yunnan, Guizhou, Hunan and Guangdong have been completed. High-speed train railroad to Guangdong,
Hunan and Yunnan are picking up their speed of construction. A “one-hour traffic circle” is taking shape in the Beibu
Gulf economic zone. In 2011, the 10th China-AEM (ASEAN Economic Ministers) Consultation passed Pan-Beibu Gulf Economic
Cooperation Feasibility Study Report, a substantial progress of Pan-Beibu Gulf Economic Cooperation. At present, the
countries in the Pan-Beibu Gulf are formulating Pan-Beibu Gulf Economic Cooperation Action Roadmap and preparing to
jointly build an industrial park. Special planning initiatives that are also under discussion include Special Planning for
Pan-Beibu Gulf Port Logistic Cooperation and Special Planning for Nanning-Singapore Economic Corridor Transportation
Infrastructure. Neighboring provinces, including Yunnan, Sichuan and Hunan, are planning 6 over five square kilometers
coastal industry parks to seek collaborative development in the form of “enclave economy”.[17] In June 2013, due to the
geo-economic and geopolitical situations that Pingxiang of Guangxi province is located on the main channel of trade between
China and Vietnam, China decided to establish Pingxiang Border Free Trade Cooperation Experimental Zone in Guangxi, in
order to elevate standard of cooperation on the border and promote leapfrog development in the border areas. According to
the plan, the 11 square kilometers Pingxiang Border Free Trade Cooperation Experimental Zone will be located within the
area between Pingxiang Friendship Pass, Puzhai, Nonghuai in Guangxi, China and Dong Dang borderline in Lang Son, Vietnam.
The experimental zone will implement a model to allow free trade in a close operation across borderline in the special
zone and achieve freedom in personnel, cargo, trade, investment and clearance. [18]
2.3 Giving a new connotation to Great Mekong Subregion Cooperation and promote development along
with related countries
Lancang-Mekong River, known as “the east Danube”, flows through China, Vietnam, Myanmar, Laos, Cambodia and Thailand.
Total area of GMS (the part in China is Yunnan Province and Guangxi Zhuang Autonomous Region) is 2.5686 million
square kilometers, with a population of 320 million. Economic cooperation in GMS started in the early 1990s. Chinese government
pays close attention to the economic cooperation in GMS. In 1994, Chinese government established “National
Lancang-Mekong Pre-development Research Coordination Team”. In April 2000, Ministers of Transportation of China, Laos,
Myanmar and Thailand officially signed Lancang-Mekong Commercial Navigation Agreement and later signed a related
memorandum of understanding. In 2001, the four countries formally achieved direct transportation. China has also collaborated
with ASEAN to conduct the “Trans-Asian Railway” project and completed The New Channel Planning Scheme for
Cross-border Railroad in Yunnan Province. As a major country in GMS cooperation, China has been actively utilizing its
advantage of being the biggest economy to advance the process of subregional integration.
①If the new Myanmarese government stopped the construction of Misong hydropower station, which was contracted to a Chinese company, this can have some special meaning for
its relation with China. If Wa State and the Kokang Region within Myanmar benefit from economic exchange with Southwestern China, considering the special historical reasons,
it will bring significant influence to the Myanmarese government and achieve big impact with relatively small effort.
Northeast Asia Forum No.1 2014 7
First of all, an institutionalized cooperation mechanism in the Greater Mekong Subregion needs to be strengthened. Currently,
there are three major cooperation platforms through which China has participated in cooperation mechanism in the
Greater Mekong Subregion: Greater Mekong Subregion Economic Cooperation Program initiated by Asian Development
Bank, ASEAN Mekong Basin Development Cooperation (AMBDC) and Mekong River Commission (MRC). The highest
decision-making entity for GMS Cooperation is the leaders’ meeting, which takes place every three years, and is hosted by
member countries in the alphabetical order of their country names. The ministerial conference is held once a year, with special
topic forums and working groups set underneath each conference. As the largest economy in the region, China should
actively promote the standardization of each collaborative mechanism, create more relevant collaborative projects, and accelerate
economic integration among the countries in GMS.
Second, collaborate with relevant countries to push forward subregional integration. The Greater Mekong Subregion Economic
Cooperation Program Strategic Framework (2012–2022) lists three strategic goals for the next 10 years. They are:
pushing forward process of subregional integration and promoting prosperous and fair development; creating a good policy
environment for cross-border trade, investment and tourism on the basis of completion of infrastructure that facilitates communication
and interaction,; paying close attention to natural environment and social factors and encourage sustainable development
in the subregion. China and the other 5 countries in the Mekong river basin not only have close economic and
trade ties but complement each other well and have significant potential to develop. For example, the climate and geographic
factors are suitable for growing rubber and this can offset the shortage of rubber in China. In 2011, China issued Country Report
on China’s Participation in Greater Mekong Subregion Cooperation to strengthen the economic and trade collaboration
with relevant countries and promote joint development. China can also have GMS and ACFTA facilitate and support each
other.
Third, enhance the cooperation with the GMS countries in connectivity to complement the China-ASEAN highway network
and railroad network. The connectivity within GMS has been receiving significant attention from countries in the region.
On October 21, 2013, ASEAN East Asia Economy Institute and Thai Commerce Ministry jointly organized the “Executive
Leaders’ Summit 2013” and set the theme as “Connectivity in Greater Mekong Subregion: Key to Future Growth.” The
development of infrastructure connectivity within GMS will be the key to economic growth in the region. Thailand even
proposed that the future plan on connectivity be focused on the connectivity of Laos, Myanmar, Thailand, Vietnam and Malaysia
with Yunnan of China. [19] China has always been actively participating in and promoting integration of transportation
in GMS. In terms of highway transportation, in 2012, China and Vietnam signed China-Vietnam Highway Transportation
Bilateral Agreement, and opened 5 international transportation routes, including one for passenger and cargo from Kunming
to Haiphong, one for passenger and cargo from Nanning to Hanoi, and one for cargo from Shenzhen to Hanoi. From 2000 to
2004, Chinese government invested to renovate part of the water channel on Lancang-Mekong River.
Fourth, China and Mekong Basin countries are having effective collaboration and gradually realizing institutionalization in
fight against crimes. In October 2011, “Naw Kham Group”, a large armed drug cartel in Southeast Asia, colluded with several
Thai soldiers to shoot to death 13 Chinese crew members after failing to collect “protection fee”, causing the extremely
tragic “Mekong Massacre”. After that, Myanmar, Lao, Thailand and Chinese governments collaborated and extradited key
members of “Naw Kham Group” to Kunming to be tried and later subsequently convicted. On October 31, 2011, Mekong
Basin Law Enforcement Security Cooperation Conference of China, Laos, Myanmar and Thailand issued Joint Statement on
Law Enforcement Cooperation along the Mekong River. On December 9, 2011, China, Laos, Myanmar and Thailand Combined
Operation Center for Cooperation in Patrol and Law Enforcement were established. As of October 2013, the four countries
have performed 15 joint law enforcement patrols to ensure the security of the waterway on Mekong and promote an orderly
development of GMS cooperation., building “Southern Silk Road” economic belt, opening up the southwest corridor
and creating the strategy of “gaining direct land access to both Pacific and Indian Oceans.” These opportunities have become
significant strategic decisions for the opening up of the southwestern region.
3 Building “Southern Silk Road” Economic Belt and Promoting the Strategy of “Gaining Direct
Land Access to both Pacific and Indian Oceans”
Building the “Southern Silk Road” economic belt and opening the southwestern corridor are objective needs for China’s
opening up to the world and realization of the strategy of regional integration as well as the basis and premise to promote the
strategy of “gaining direct land access to both Pacific and Indian Oceans”. In May 2013, Premier Li Keqiang visited India
and proposed the idea of Bangladesh-China-India-Myanmar Economic Corridor. If combine China's strategy to develop its
western region with India's Look East policy, the corridor will greatly advance the extensive cooperation in information, en8
Northeast Asia Forum No.1 2014
ergy, resource, infrastructure, science and technology, agriculture and other fields between the two countries, which will
promote close linkage between the markets of China and India, foster new paradigms for cooperation in Asia, and create new
drivers for the world economy. On October 24, 2013, during a keynote speech titled India and China in the New Era at the
Party School of the Central Committee of Communist Party of China, Indian Prime Minister Singh emphasized: “old theories
of alliances and containment are no longer relevant. India and China cannot be contained and our recent history is testimony
to this. We both know that the benefits of cooperation far outweigh any presumed gains from containment. We want to draw
upon China's strength in the manufacturing sector. India, for its part, has strength in services, innovation and certain manufacturing
sectors, which can benefit China. China rises through manufacture and India surges via service. The two countries’
advantages can be complementary.” [20] Professor Bi Shihong, professor at Southeastern Asia Research Institute at School
of International Relation Research Academy at Yunnan University, analyzed that China-India-Myanmar-Bangladesh
Economic Corridor is directly related to not only Yunnan Province in China, but Bangladesh, Myanmar and pradeshes in
Northeastern India such as West Bangal and Bihar. The Corridor covers a total area of approximately 1.65 million square
kilometers, with a population of 440 million. Occupying a favorable geographical position, the Corridor radiates directly toward
the big markets of East Asia, South Asia, Southeast Asia and Central Asia. Chardson, Director of Department of International
Relation at University of Yangon in Myanmar, exclaimed that “the building of China-India-Myanmar-Bangladesh
Economic Corridor will bring economic impact to Myanmar, which is undergoing a transition period of opening up its
economy.”[21] During the visit to Pakistan, Premier Li Keqiang suggested enhancing strategic communication and long-term
planning, exploring collaboration in new areas such as interconnectivity and ocean, starting to create long-term vision of the
China-Pakistan Economic Corridor, and steadily advancing the building of the Economic Corridor. In July 2013, Pakistani
Prime Minister Sharif said during his visit to China that a new economic corridor connecting West China, which is rich in
resources, with the strategic portal city Gwadar Port is with the potential to change the region’s destiny and will become the
“Game Changer” in the region. China and Pakistan have decided to establish a joint cooperative committee to draft the
long-term vision and short-term action plans for the China-Pakistan Economic Corridor, and focus on the construction of
pivot projects, such as transportation infrastructure and economic development zone along the corridor, which play a key
supporting role in actively exploring energy collaboration in an orderly fashion.
It is now a top priority to establish the Bangladesh-China-India-Myanmar Economic Corridor and China-Pakistan Economic
Corridor and open up the Southwestern Corridor. Bangladesh-China-India-Myanmar Economic Corridor and China-
Pakistan Economic Corridor are also known as the “New Ancient Tea Horse Road”, “New Southern Silk Road”, “New
Hump Route”. Infrastructure takes the lead in economic development and economic cooperation. Some scholars have suggested
that there be three key focuses during the first phase of Bangladesh-China-India-Myanmar Economic Corridor construction.
The first one is connectivity, particularly the preliminary research work on land transportation infrastructure, which
is conducted to study relevant facilitation measures. [22] The construction of the Southwestern Corridor is already a top priority.
The target model of the Corridor should be a complex network structure of highway, railroad, waterway, aviation, inland
waterway and modern communication facilities that connects each station in the zone. Realization of this long-term goal requires
not only collaboration with relevant countries but effort to be made by these countries on their own territories. [23]
Yunnan is the shortest land route to South Asia. It is just 300 kilometers from Houqiao Port in Tengchong to Eastern India
through Myitkyina, Myanmar. At the “International Day of Peace 2013 & China-South Asia Peace and Development Forum,”
Vice President Li Yuanchao pointed out that Yunnan and South Asian countries are in geographic proximity, have close
blood relationship, feature similar cultures, pursue connected business opportunities, and share mutual benefits. … (We
should) continue to push forward and explore connectivity in highway, railroad, aviation and telecommunication, advance
expedition of customs clearance, and have smooth transportation and communication facilitate exchange and collaboration in
all other areas. [24] Yunnan Provincial Party Committee Secretary Bai Enpei proposed that Yunnan will accelerate building the
international corridor and creating an international channel and hub of transportation, communication and logistics that connects
Southeast Asia, South Asia and Indian Ocean coastal countries. The next step for Yunnan is to proactively establish an
industry base for characteristic advantage industry and build Yunnan into a resource deep processing base, a new clean energy
carrier industrial base and a special product production and processing base. Yunnan should also continuously optimize
the open platform for cooperation and actively merge into ACFTA, in order to elevate level of GMS Cooperation and Bangladesh-
China-India-Myanmar Economic Cooperation and constantly deepen all-around cooperation with Southeast Asia and
South Asia. [25] Yunnan is taking full advantage of its land passage and expedites the transportation infrastructure construction
of highway, railroad, aviation, water transportation, oil and gas pipelines in order to change Yunnan into a fast and convenient
international transportation corridor that “connects to the coastal areas in Guizhou and Guangxi in the east, to Central
China through Sichuan and Chongqing in the north, to Singapore and Malaysia through Vietnam and Laos in the south, and
to India and Pakistan through Myanmar in the west”.[26] In terms of highway construction, the focus is on “three longitudinal
Northeast Asia Forum No.1 2014 9
lines and three latitudinal lines” and “nine major corridors.①” In terms of railroad construction, the middle and west part of
Pan-Asian railway has been put onto the agenda. In terms of air transport, Kunming new airport construction is aimed to become
the major international airports orients to Southeast Asia, South Asia and national wide. In terms of construction of
waterway transportation infrastructure, the focus is to further improve the navigation conditions of Lancang-Mekong River,
elevate the grade of waterway, and launch international shipping on Red River. In addition to the transportation infrastructure,
information infrastructure should be further enhanced to expand the scale of communication network and improve the
capability of standard of technical equipment and information services. [27]
The cooperation idea of Bangladesh-China-India-Myanmar Economic Corridor was originally proposed by China Yunan
academia in the late 1990s and was later responded by India, Myanmar and Bangladesh. The four countries held the first
economic cooperation conference in Kunming, Yunnan in 1999 and signed Kunming Initiative, which stipulates that the conference
should be held once a year. Neighborhoods of the four countries are major hubs connecting with various subregions
in Asia, with inward access to the vast hinterland in China, India and Myanmar and external exchange capability via famous
ports including Kolkata, Chittagong and Yangon, which is an obvious geographic advantage to connect to South Asia and
Southeast Asia. [28] Currently, China, India, Myanmar and Bangladesh are in the critical phase of economic and social development
and all the four countries hope to be engaged in regional or subregional cooperation so that they can explore their
own potential to complement with each other and seek joint development. In the meantime, Bangladesh-
China-India-Myanmar Economic Corridor will combine China’s Western Development strategy with India’s development
plan for the Northeastern region. On May 20, 2013, the 18th clause of the joint statement issued by the People’s Republic
of China and Republic of India pointed out that both parties appreciate the ongoing progress of subregional cooperation
under the framework of Bangladesh-China-India-Myanmar regional cooperation forum. Due to the successful holding of
Bangladesh-China-India-Myanmar Auto Rally in February 2013, China and India agreed to discuss with both other parties to
establish a joint working group to study on enhancing connection and communication in the region and to encourage economic
and trade cooperation and cultural exchange. The two parties also advocate for building the Bangladesh-
China-India-Myanmar Economic Corridor. [29] Bangladesh-China-India-Myanmar Economic Corridor will undoubtedly
connect the market of China and that of India together. Although the regions where the Corridor is located belong to the four
countries’ border areas, which is poor in infrastructure, yet, the region will have wide prospect for development and significant
potential due to the national strategies. Since this subregional cooperation does not involve core interests, it is thus the
suboptimal choice of the opening up strategy of the four countries. This will boost economic development in China, India,
Myanmar and Bangladesh and advance the great power strategy. The purpose of China-Pakistan Economic Corridor is to
enhance connectivity between the two countries by strengthening exchange and cooperation in transportation, energy, ocean
and other areas, and finally to promote joint development. The planning of China–Pakistan Economic Corridor not only covers
the building and opening up of the “channel” , but, more importantly, facilitates collaboration in multiple fields including
major projects, infrastructure, energy and resource, agriculture and water conservation, information and communication along
the Corridor and establishment of more industrial parks and free trade zones. According to the draft budget for the fiscal year
2013–2014, Pakistani government will make a total investment of INR 72.588 billion to support highway construction. The
funding will be used on the existing 35 projects and some newly initiated projects, including the Karakoram Highway Rerouting
Project. The construction of highways will have a positive impact on developing relevant industries as well as construction
of oil storage facility and gas pipelines. Pakistani government hopes to explore and build new trade areas and hubs
with China, Central Asian countries, India, Iran and western countries. [30] The connectivity between China and South Asia is
not only influenced by relatively complex geographic environment, but impeded by the lack of mutual trust with India.
However, the early development of China and other South Asian countries in connecting and communicating will definitely
encourage India to do the same with China. In December 2012, the Delivery and Acceptance Certificate of China-aided
Syafrubesi-Rasuwagadhi Highway Project was signed. The highway is linked to the Resuoqiao project at Gyirong Port and
will further advance the economic cooperation of mutual benefit between Nepal and China and cross-border economic and
trade relationship. The 2013 China-India joint statement pointed out that both parties agree to discuss with the other parties to
establish a joint working group to study how to enhance connection and communication in the region and promote economic
and trade cooperation and cultural exchange.
①“Three longitudinal lines”: the first line is from Yibin in Sichuan Province in the north to Shaotong-Kunming-estuary of border river between China and Vietnam in Yunnan and
belongs to National Highway 213, 324 and 326; the second line is from Dukou in Sichuan Province in the north to Yongren-Wuding-Kunming-China and Laos border in
Xishuangbanna in Yunnan and belongs to National Highway 103 and 213; and the third line is from Yanjing in Tibet in the north to Deqin-Zhongdian-Dali-Lincang-Qinhai-China
and Myanmar border in Daluo in Yunnan and all belongs to National Highway 214. “Three latitudinal lines”: The first line is from Panzhihua in Sichuan Province in the east to
Huaping County-Lijiang-Jianchuan-Lanping-Liuku (Nujiang Prefecture); the second line is from Guizhou Province in the east to Shengjingguan-Kunming-Dali-Baoshan-China
and Myanmar border in Ruili in Yunnan and belongs to the mainline of Shanghai-Ruili National Highway; and the third line is Guangxi in the east to Luocunkou-Kaiyuan-Jianshui
and Yuanjiang-Pu’er-Jinggu-Lincang-China and Myanmar border in Qingshui River in Yunnan and belongs to National Highway 322. The nine major corridors refer to (i) the five
corridors that connect neighboring provinces in China: corridors between Nanning, Beihai in Guangxi and Kunming, Guiyang in Guizhou, eastern and central provinces and Kunming,
Kunming-Shuifu-Chengdu and Central China, Kunming-Panzhihua-Chengdu and Central China, Tibet and Kunming, (ii) the four major cross-border corridors that connect
with Vietnam, Laos, Myanmar and other Southeast Asian and South Asian regions: Kunming-Mohan-Bangkok and Kunming-Daluo-Bangkok corridors, cross-border corridor from
Kunming, Ruili into Myanmar, cross-border corridor from Kunming, Hekou into Vietnam, cross-border corridor from Kunming-Tengchong Heinitang into Myanmar and India.
10 Northeast Asia Forum No.1 2014
Becoming a marine power is a given strategic choice for China. The marine economy has become an important support for
China’s economic development and marine economic strategy and marine channel strategy are desperately needed. In 2012,
China’s Gross Ocean Product (GOP) reached 10% of its GDP, whereas in the United States, coastal-based economy and marine
economy account for 75% of total employment and 51% of total GDP. The marine economy has become a new growth
point for China’s economy. The importance of the marine industry can be indicated by the following three data. First one is
the comprehensive survey of land and sea, where geographic area of Zhejiang Province expands from 100 thousand square
kilometers to 360 thousand square kilometers; second one is that marine engineering equipment manufacturing in the world
has been growing at an average rate of 113% in the past few years; third one is that China will make a total investment of
over CNY 250 billion on marine engineering equipment manufacturing in the “12th Five Year Plan”. During the “11th Five
Year Plan”, China’s fishery production grew at an average annual rate of 4%. In 2012, the fishery production reached 59.06
million tons, and the total output of aquatic production ranked the top in the world for 23 consecutive years. According to the
statistics from China’s State Oceanic Administration, in 2012, the GOP exceeded CNY 5 trillion, with an added value of
CNY 2.9397 trillion to the marine industry, among which coastal tourism accounted for 23.7% and thus became an important
pillar industry in the marine economy. In 2012, China’s accomplished shipbuilding was 60.21 million deadweight tons, its
ship export volume reached USD 39.2 billion, and the international market share was registered at 41.41%, all these three
figures being the top ones in the world. The 18th National Congress of the Communist Party of China clearly pointed out that
“(China needs to) improve capability of developing marine resources, development marine economy, protection marine ecosystem
and environment, safeguard China’s marine interests, and build a marine power.” [31] A marine power is a country that
has a strong comprehensive strength in marine development, protection and regulation.
China’s economy has become an export-oriented one that heavily depends on the sea, with increasing reliance on marine
resources and marine channel. However, over a long period of time, our country has relied solely on the Pacific Ocean to interact
with the external world. During the cold war, the United States developed three Pacific island chains in order to restrict
China and turn it into a landlocked country. In recent years, U.S.’ attempt to “return to Asia Pacific” and support Japan and
certain countries around the South China Sea to seek “rebalancing” with our country on some issues with East China Sea and
South China Sea serves to counteract China’s big marine power strategy. As a result of this, China must actively foster stability
and peace in East China Sea and South China Sea and ensure the freedom of navigation on both Seas and the security of
China’s biggest trade channel, especially the energy channels.① In the meantime, China must explore and form the strategic
thinking of obtaining direct land access to both the Pacific Ocean and the Indian Ocean in a timely manner and coordinate for
the interaction between the accesses to both Oceans. China needs to structure the strategic interaction situation of “gaining
direct land access to both Oceans,” break down the dilemma of Strait of Malacca, and further improve the security of China’s
marine channels. Alfred Mahan, “Father of the Sea Power Theory,” suggested over 100 years ago that “whoever controls the
Indian Ocean dominates Asia. The Indian Ocean is the key to seven seas and the destiny of the world in the 21st century will
be decided in these waters.”[32]
From a geopolitical perspective and the condition of port, China is likely to leverage Gwadar Port in Pakistan, Chittagong
in Bangladesh, Yangon Port and the under planning Rakhine Port in Myanmar. [33] In the meantime, land access to the Indian
Ocean and connection of Myanmar-China oil pipelines further ensure China’s energy security. The China-Myanmar energy
pipeline starts in the west from Kyaukpyu City, a west coastal city of Myanmar, enters China in Ruili, Yunnan and the oil and
gas pipelines separate in Anshun, Guizhou and goes to Chongqing and Guangxi respectively. After completion, the pipelines
will transport to China 22 million tons of crude oil and 12 billion cubic meters of natural gas. The Myanmar-China energy
pipeline opens up an energy transportation channel that circumvents Strait of Malacca. It not only ensures China’s energy
security, but reduces cost of oil and achieves an economic win-win with Myanmar. China should also choose Gwadar Port in
Pakistan and Chittagong in Bangladesh as development projects and conduct research and planning on them together with
both Yangon and Rakhine in Myanmar. With the strategy of “first easy things and then tough things” and incremental progression,
efforts should be made it achieve the overall lineup of the main corridor accessible to the India Ocean in order to
ensure China's access to the world and achieve its peaceful rise. [34] In this way, China is able to consolidate its key interest in
the heartland and strengthen the urbanization in the rimland and expand geo-economic and geopolitical advantages to get
through the two major zones, laying foundation for the realization of the dream of reviving the Chinese nation.
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cooperation situation, which starts from marine scientific research and environmental protection, connectivity, navigational safety and rescue, and combating transnational crime
and expands to other areas.
Northeast Asia Forum No.1 2014 11
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(Translated by ZHANG CD)
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