HUG Magazine 2016 EN - Issue №3 by PAIGEO - Pallas Athene Innovation and Geopolitical Foundation

HUNGARIA N G EOPOLITICS

HUG 2016 3

2016 / III.

György Matolcsy – Hungary – A key state on the Silk Road Attila Grandpierre – Relationships of The Folk Music Corpora of the Silk Road Katti Zoób – An Invisible Bond with Silk Ádám Gbúr – On The Silk Road by Motorbike Viktor Eszterhai – The Geopolitical Significance of One Belt, One Road from a Historical Perspective

FOREWORD

Dear Readers, The Silk Road, stretching from China to the Roman Empire more than 2,000 years ago, played an extremely important role in the commercial, cultural and political dialogues between Asian, European and African countries. The Silk Road was not a specific, paved, ancient highway, but a continuously changing, multifunctional network, which existed on the parallel maps and personal relationships of caravan leaders, soldiers and explorers. At the beginning of the 21th century the Silk Road revived. Railways and sea routes, gas pipelines, diplomatic channels, cultural and educational collaborations encompass the Asian continent all the way to Europe and North Africa. The main priority of Chinese diplomacy obviously is to launch the implementation of the “One Belt, One Road” strategy, that is, to create the New Silk Road Economic Belt. China does not respond to the questions of the world but of its own: more rails, more vessels, more pipelines, more Silk Roads, instead of big games. The flow of workforce, capital and technology significantly enhances the effectiveness and competitiveness of the countries of the New Silk Road. Newcomers should join existing active hubs, strengthening the hubs belonging to a network – also accelerating the development of new centres. The Chinese Silk Road may be a role model, tempting Member States to join, and regional major powers to build their own networks (e.g. Eurasian Union, EU-US Free Trade Agreement, the group of Latin American countries around Brazil, the Four Asian Tigers). Long-term investments, infrastructure and knowledge sharing, multi-level and parallel network systems as well as mutual trust form the basis of the modern Silk Road – and all these are embraced by a comprehensive global strategy concentrating on local problems.

Not only may the Silk Road model be applied in global political decision making, but it may also be useful in the corporate sector, in state and “Business to Business” (B2B) affairs, or even in personal networks. These are the reasons why we are focussing on the new Silk Road in the third edition of HUG. We are finding out how this trade route, stretching across four empires and being the place where state-of-the-art technologies and the most important quality products of the age were exchanged, evolved more than 2,000 years ago; what role Hungary played in the explorations of the Silk Road; who those courageous travellers were whose explorations created lasting value in mapping the regions of the Silk Road; why silk is the ancient substance of the future; how Hungarian folk music is linked to the music of the Far East; and how silk threads interweave these regions. What maritime and continental infrastructural developments have been launched in the creation of the gigantic Silk Road, how has the economy of China changed, and what new challenges must be faced in the next decades? Education, technology, knowledge, economy, infrastructure, geo-economics, collaborations, the rise of the East, peaceful edification in the 21th century – these are the most important key words. Enjoy travelling and exploring. Yours faithfully:

Norbert Csizmadia Pallas Athene Geopolitical Foundation Chairman of the Board of Trustees HUG Editor-in-Chief

TABLE OF CONTENTS 6

One Belt, One Road

The Historical Silk Road

Hungarian Explorers of the Silk Road

Relationships of The Folk Music Corpora of the Silk Road

Silk, the Ancient Material of the Future

An Invisible Bond with Silk

New Explorers of the Oceans

80 84

The Geopolitical Significance of Piraeus Port to China Silk Road in East-Central Europe

Hungary on the Silk Road

102

Xi Jinping – a Leader’s Profile

108

The Structural Transformation of the Chinese Economy

116

Security Challenges of One Belt, One Road

124 130 140 148 150

The Asia Infrastructure Investment Bank China’s Cutting Edge: Research China’s Start-Up Incubators Tsinghua University – China’s MIT Accessible Knowledge

154

Belt And Road Summit, Hong Kong

160

On The Silk Road by Motorbike

168

Silk Road Book Reviews

174 180

Fusions and Encounters Music Along the Silk Road TOP 10 Hungarians in the Global Forefront

One Belt, One Road

The Geopolitical Significance of One Belt, One Road from a Historical Perspective Author: Viktor Eszterhai

The ambitious goal of One Belt, One Road is to change the course of world history by casting Eurasia into the role of the centre of economic, cultural, etc. life again, breaking the century-old dominance of sea powers. However, the changing geopolitical situation prompts the countries of Europe – including Hungary – to re-evaluate their position in the world. For Hungary, a country regarded as periphery for a long time due to its separation from seas, One Belt, One Road presents the opportunity to play the role of the bridge.

The term ’Silk Road’, coined by German geographer Ferdinand von Richthofen in 1877, creates a mystical and fabulous impression in people even today. In fact, the old Silk Road used to be the most extensive commercial network of the world, which, as the axis of world economy, linked the most important civilizational and economic centres on Earth until the dawn of the great explorations. By today, however, its economic and cultural significance has vanished, even though its certain sections were in use until the 20th century. But in recent decades its revival has been on the agenda again, and has been given fresh impetus by Xi Jinping, President of the People’s Republic of China, who placed it officially at the heart of his foreign policy in 2013. THE OLD SILK ROAD AND ITS HISTORICAL SIGNIFICANCE The old Silk Road evolved from the interconnections of regional commercial routes – mainly marked by the geographical environment (river beds, mountain

passes, etc.) – around 2nd century BC. The two central branches of the routes stretched in the east-west direction, connecting the Mediterranean region with China, and in addition, it also reached out to the Hindustani Peninsula, Central Asia and Africa. It is a relatively new discovery that beside the intercontinental transport route, a maritime commercial route existed between China and the Persian Gulf, named as the Maritime Silk Road. Not only did the Silk Road have a commercial and economic role, but it also served as the meeting point of the great civilizations of the West and the East. It was a channel which gave the opportunity to exchange information, thoughts, ideas, religious doctrines, artistic styles and technologies. In ancient times, Eurasia and the closely linked North African zone, in economic terms, basically meant the axis of world economy. The great continental agricultural empires were the centres of the world economy, and they had had very sparse contact with each other before the regional routes were

THE DECLINE OF THE SIGNIFICANCE OF THE OLD SILK ROAD AND ITS GEOPOLITICAL EXPLANATIONS

connected. The importance of the great agricultural empires lies in the fact that their agricultural production resulted in a significant concentration of population, creating the most significant market of the world. Their ever-growing cities gave birth to developed and specialised crafts. The Silk Road ensured the exchange of the specialised products of the different regions by connecting markets and producers. The intermediate regions (e.g. oasis towns) also became rich, thanks to trade. It is no coincidence that the major centres of power tried to take control as great part of the Silk Road as possible. However, there was not one power which completely succeeded in this pursuit.

The Silk Road, which was thriving for more than a thousand years, gradually lost its global significance during the great discoveries, and was soon forgotten. But what lies behind this drastic change? According to a popular opinion, the emergence of the Ottoman Empire was a decisive factor; it successfully conquered the western half of the Mediterranean region. Although the Court in Istanbul levied grave taxes on long-distance trade, it would not have caused the decline of the significance of the Silk Road. The real

Europe was one, but not by any means the most important, centre of this economic belt created by the Silk Road. In these times, it was not Western Europe but the Mediterranean region and, in particular, the Italian city states (e.g. Venice, Genoa) – playing a much larger part in commerce – which meant the economic centre of gravity in the continent. For geographical regions, the significance of Eastern Europe was also by far greater than today; Hungary could be regarded as an integrated part of the system, through the commercial route of the Balkan, which greatly contributed to its status of being a major power of the age.

reason was that maritime navigation grew stronger, thanks to new technologies, such as the compass, safer ships, etc. The revolution of maritime navigation fundamentally reshaped the geopolitical map of the Earth. US Admiral Alfred Thayer Mahan explained the advantages of sea over mainland in his geopolitical work entitled The Influence of Sea Power upon History, 1660-1783, published in 1890. Any point in space can be connected on sea. In addition, it is possible to transport a great volume of goods in an inexpensive manner, and thanks to the technical development of maritime navigation, it could be done much more safely from the 16th century. For all these

The main transport routes of the ancient Silk Road

features, sea was particularly suitable to facilitate the emergence of the capitalist market economy, at the heart of which lies the exchange of wealth produced according to supply and demand patterns. Maritime trade could ensure the exchange of surpluses between different regions, on a global level and in a relatively inexpensive manner, and incomparably more cheaply and in greater volumes than the Silk Road, which meant mainly overland trade. As a result, the global capitalist world economy started its conquest.

“The matter of rising maritime trade was closely connected with the question who could exercise power over maritime transport routes.” The matter of rising maritime trade was closely connected with the question who could exercise power over maritime transport routes. Due to its vast dimensions, the sea seems to be difficult to be ruled. However, Mahan argued that for geographical reasons one did not need to completely cover the oceans in order to rule them. Maritime trade routes did have critical points (straits, certain ports, etc.). A sea power had nothing else to do but control the strategic points. By establishing naval bases and continually ensuring maritime routes, the way opened to build such an empire whose power exceeded even that of the great continental ones. Naturally, it did not primarily mean the occupation of territories, often just the behaviour of other states was controlled or the acceptance of the rules were compelled. The profit generated by the exchange of goods through maritime trade and the control over maritime routes gave European countries unprecedented power. First the Portuguese and the Spanish, then the Dutch, and finally the English extended their sphere of influence. Their power resulted in opening the great continental empires and involuntarily altering their traditional social-economic systems. China in the Quing era was the last victim, and was brought to its knees with the smuggling of opium and

minor spot attacks. The British Empire was the first global hegemonic power over the oceans, directly ruling one-fourth of the world’s population. Its power was considerable enough to defend its interests anywhere in the world. By the beginning of the 20th century the ponderousness of Great Britain had wavered, while other continental powers, such as Germany and Russia, were developing dynamically. As a result of the second industrial revolution (second half of the 19th century), railways were spreading rapidly, transforming the transport links of the world. For the people of the time it reflected the fact that the time of sea powers was over. It is no coincidence that Halford J. Mackinder, challenging the supremacy of sea powers, later regarded as the father of geopolitics and is still one of its greatest representatives today, concluded in his book published in 1919, “Who rules East Europe commands the Heartland; who rules the Heartland commands the World-Island; who rules the World-Island commands the world.” Mackinder’s theory reflects on the unity of Eurasia and Africa as a World-Island again, where control over the geographically central area (he named it first as Pivot, later as Heartland) is crucial. Continental major powers, however, could not impose their rule on the World-Island: first Germany (World War I and II), then the Soviet Union failed to do so. It was partly the outcome of the politics of sea powers (Great Britain and the USA), and, on the other hand, the consequence of the inability of railway transport as well as the appearing road and air transport to become a real competitor of sea transport. While railway and road transport had become significant on a regional level, at long distances sea transport remained the most effective way of transport. Great Britain’s hegemonic status had collapsed by the middle of the 20th century. Its position was successfully taken over by the United States of America. Although the USA – due to its economic potential – has become a leading power in all areas of geopolitics (air force, cyberspace, etc.), its role played in world politics is primarily owing to exercising power over the oceans. In addition, for most of the countries in the world, the power of the USA is not a mere constraint but has numerous advantages. It is the USA which ensures the global framework of capitalism – mostly at the cost of the US state (global public good). It has become more profitable

The Geopolitical Significance of One Belt, One Road from a Historical Perspective

to play by the rules imposed by the USA than to take action against them. This is also demonstrated by the example of the Soviet Union and China. While the former one failed to take on the challenge posed by the economic dynamism of the USA, China’s “reform and opening” policy introduced by Deng Xiaoping in 1978, reflected the willingness of the Far Eastern state to play by the rules of the USA. It earned its rewards: China’s coastal regions integrated into world trade extremely successfully, and the fastest economic catching-up process in the modern history of mankind has begun.

“Who rules East Europe commands the Heartland; who rules the Heartland commands the World-Island; who rules the World-Island commands the world.”

THE RISE OF CHINA AND THE ONE BELT, ONE ROAD China’s extremely successful integration into world trade and the rapid increase of its power resulted in a delicate situation, since it increasingly presents a challenge to the most significant power of the world, the United States of America. The issue is not lacking in piquancy: China has grown stronger and become a potential global major power and a rival just by following the rules of the USA. Since China’s leadership feared that sooner or later the USA would prevent the rise of the country in some form, they exercised remarkable restraint in their foreign policy. It embodied in the foreign policy of keeping a “low profile” in international affairs, launched by Deng, the aim of which was to hide China’s fast growth. The financial crisis of 2008 revealed the change in the regional role of China, and forced the United States, considered to be the leading power in the region since World War II, to act. The USA came up with a new geopolitical concept in October 2011, which became known as the “Pivot to Asia”. The Pivot made a sweeping change in the foreign policy of the US by the commitment of the Unites States to maintain the status quo in

East Asia as well as its own regional leading role. Essentially, the Pivot is a geopolitical scheme including military, political and economic goals to balance China’s ambitions. Within the framework of the Pivot, the USA reinforced its alliances in the region, and equipped the states considered to be China’s most important rivals (the Philippines, Japan, Vietnam) with modern military instruments. It also started to deploy a significant part of its military potential to the region. In parallel, the aim of establishing the Trans-Pacific Partnership (TPP) was also announced, which would mean a free trade zone in the region, excluding China. With the Pivot, the USA encircled China in such a strategic ring out of which it must break out by any means. China is in a delicate situation: in order to continue its emergence, it still needs a peaceful international environment, and to avoid conflicts with the USA. Since it would need a more powerful fleet to curb the enhanced presence of the USA in its traditional East and Southeastern Asian sphere of interest, China had to seek new opportunities. This is the aim the One Belt, One Road scheme is dedicated to fulfil, and it also marks the end of the foreign policy of keeping a low profile, and means such an international activity which is on a par with China’s new position of power.

Annual GDP output of the USA and China (nominal and purchasing power parity value) 25,000

20,000

15,000

10,000

5,000

USA China (nominal) China (PPP)

2008

2010

2011

2012

2013

2014

2015

14,719.6

14,418.7

14,964.4

15,517.9

16,155.3

16,663.2

17,348.1

17,947.0

4,798.6

5,294.9

6,296.4

7,777.7

8,767.3

9,817.9

10,697.9

11,222.6

10,378.8

11,383.4

12,741.5

14,228.6

15,592.9

17,050.1

18,565.0

20,004.1

The Geopolitical Significance of One Belt, One Road from a Historical Perspective

According to Beijing’s plans, the New Silk Road (or as it was later named, One Belt, One Road) project launched by Xi Jinping, President of the People’ Republic of China in 2013, would establish such an economic belt encompassing more than 60 countries within one or two decades which would redefine China’s network in Asia, Europe and Africa. The first, large-scale construction phase will coincide with the period of the 13th five-year plan (2016-2020).

“…it is a project which aims at shifting the axis of the world economy from the oceans back to the mainland. The promise lying at the heart of One Belt, One Road is to restore the former economic, political, cultural, »historical« role of Eurasia.” The belt consists of connecting new and existing networks of roads, railways, oil and gas pipelines as well as optical networks, adding cooperating industrial parks, logistical centres and seaports, rearranging the traditional relationships between the production centres, markets and sources of raw materials of this vast region. On top of infrastructure, the programme is completed by commercial, investment and financial collaborations. Similar to the old Silk Road, One Belt, One Road places great emphasis on – in addition to the economic aspect – cooperation in the fields of culture, research and development, and education, providing scholarship and exchange scheme for students, experts, researchers, supporting tourism, etc. The continental belt consists of six “economic corridors” in total, which can be perceived as the arteries of the new economic belt. What is exactly the New Silk Road? Although the Chinese government firmly rejects that One Belt, One Road is referred to as a geopolitical scheme (according to the official wording: changyi, which approximately means an initiative to act for

common good), in fact it is a project which aims at shifting the axis of the world economy from the oceans back to the mainland. The promise lying at the heart of One Belt, One Road is to restore the former economic, political, cultural, “historical” role of Eurasia. One Belt, One Road claims to be able to connect the economic centres, which are currently mainly connected on sea, via its economic corridors. However, it does not mean a complete refusal of the sea. It is also demonstrated by the fact that the 21th -century Maritime Silk Road forms an important part of the scheme. However, overland links enjoy greater attention, which, from a historical point of view, means a break with the “sea-focussed” era persisting from the 16th century. In a political sense, with the One Belt One Road scheme China attempts to eliminate gradually the Pax Americana, and to introduce the era of Pax Sinica in Asia. According to the definition of international relations, the characteristics of a hegemonic power include economic and military power exceeding competitors, and the control over the interstate system via international institutions. China has undoubtedly fulfilled the first criterion within Asia, and we can actually see that the attempt to transfer the international institutional system has also begun. With a start capital of 100 billion US dollars, the Beijing-based Asian Infrastructural Investment Bank (AIIB) has come into operation, supplemented by the Silk Road Fund and the New Investment Bank of the BRICS group, which will also have a currency fund of 100 billion US dollars by 2020. International collaborations supported by China, such as the Shanghai Cooperation Organisation, the Boao Forum, etc., also join in. However, eliminating the Pax Americana, despite critical tones, will happen gradually, in line with China’s strategic traditions of avoiding direct conflict, and including several elements of the existing system. Pax Sinica will be successful if China manages to make friends as well as allies. However, it is still subject to debate within Chinese leadership, since alliances do not comply with the principles of the foreign policy of the People’s Republic. Nonetheless, Pakistan, one of the key states of the New Silk Road today, de facto may be regarded as China’s ally.

the geopolitical challenge of one belt,one road As examples from history demonstrated, earlier continental powers were not able to break the power of maritime hegemonic powers. Basically, it had two main reasons: the politics of sea powers and the level of technology, which was unsatisfactory for overcoming geographical factors. The New Silk Road presents a real threat to the American power-based interests because it attempts to feature China in such regions (South Asia, Central Asia, the Middle East) where the presence of the USA under the Obama administration has weakened, partly due to the new Pacific focus of the US foreign policy. Although the USA itself had launched a Silk Road scheme, its scale is no match for the Chinese one, and it is still not clear whether the American leadership has a strategy to prevent the One Belt, One Road scheme. On top of American positions, the Chinese scheme impacts Russian positions as well, first and foremost in Central Asia. China’s economic presence, which in recent years has intensified in a region traditionally considered as a Russian sphere of interest after the dissolution of the Soviet Union, is further intensified by One Belt, One Road, and Russia, struggling with economic problems due to international sanctions and the low price of hydrocarbons, is increasingly unable to impede it. In addition, the Russian-Chinese relations are continuously improving, primarily owing to Russia’s isolated position after the Crimean conflict. But help from China costs dearly: Russia is increasingly becoming a secondary participant and more and more China dependent.

For India One Belt, One Road presents opportunities as well as challenges. While it is reluctant to enter the scheme due to the China-Pakistan Corridor and China’s potential appearance on the Indian Ocean, it is still interested in being an active participant of the project because of its lack of capital and infrastructural development. Finally, also the European Union is given an important role in the Chinese plans. The international order following World War II could be radically changed by joint rapprochement made primarily along economic interests. Some of the doubts arising in relation to the implementation of the One Belt, One Road scheme - beyond the cultural, political, economic diversity of the region, and often colliding interests – are of a practical-technical nature. Many believe the commercial and trading goals set in the New Silk Road scheme are impossible to reach due to geographical barriers, and, in many cases, security hazards, and it will never be competitive with sea routes in the transport of great volumes of goods. However, the Chinese hope they are in the possession of such financial and technological resources which will enable them to overcome geographical barriers. The Chinese plans do not build on currently available technologies, since they wish to establish the economic corridors step by step, on a time horizon of even several decades. Furthermore, they do not necessarily wish to provide an alternative to large-scale sea transport, but their aim is to serve the economic needs of the future.

The Geopolitical Significance of One Belt, One Road from a Historical Perspective

OLD SILK ROAD 2nd century BC

POINT OF INTEREST

NEW SILK ROAD 21th century

FORMATION

8,000 km

15,000 km

DISTANCE How long is that?

DANUBE

NILE

2,860 km

6,853 km

GREAT WALL OF CHINA

FLOOD CONTROL SYSTEM (HU)

6300 km

4220 km

MEANS OF TRANSPORT

2 - 10 Rome - Xiâ&#x20AC;&#x2122;an

4 years

2 years

EMPIRE/ COUNTRY

END POINTS

London - Bejing

35-48 days

(Marco Polo)

1-2 days

21 days (Chinese freight train)

X CAMEL

12 3

CHINESE FREIGHT TRAIN CAMEL TEAM

= CARAVAN

160 - 500 kg

max. 4,000 tons

max. 14,000 tons

= X

42 000 15

Economic Corridors of One Belt, One Road One Belt, One Road encompasses the following main routes. The New Eurasian Land Bridge Economic Corridor started its operations in April 2014, and is primarily based on the railway connection existing from 1991 (the so-called Second Eurasian Land Bridge). The goods leave China on the Kazakh border, partly through the crossing point in Alashankou, and another one in Khorgas, which has been operating from December 2012 and with higher capacity. Both routes arrive in Poland after crossing Kazakhstan, via Russia and Belarus and then run to the major economic centres of Europe. Currently delivery timeframe between China and Germany is 14 to 17 days. By 2016 all major Chinese industrial cities have had European connections, and trains leaving on a weekly basis are not rare. From the viewpoint of the Silk Road, the real progress lies in the introduction of the process that goods leaving China are inspected only once, thus they do not have to stop at each border. Furthermore, gauge change has also speeded up: on the Chinese-Kazakh border it has decreased to less than an hour. The planned high-speed train developments between Moscow and Beijing will allow the existing routes to be used chiefly for the transport of goods. Most of the Chinese section of the high-speed train has been finished (and will be completed by 2017), and the section between Moscow and Kazan is in the planning phase. The complete Beijing-Moscow section is expected to be finished by 2030. The China-Mongolia-Russia Economic Corridor is currently in the planning phase. In Ufa in July 2015, the three parties signed the plan to implement the economic corridor in a medium-term, which includes, beside the railway – the Trans-Siberian Railway and its renewal – and road developments, Mongolia’s Steppe Road initiative, and cultural, touristic, etc. viewpoints. The Chinese-Pakistan Economic Corridor is under construction now, and it is expected to become reality within a couple of years. China and Pakistan agreed upon an investment and credit facility amounting to more than 46 billion US dollars in April. Its declared goal is to establish the Chinese-Pakistan Economic Corridor, which connects the city of Kashgar with the strategically located Indian ocean port of Gwadar, operated by China, on roadway and initially partly by rail. The goods are forwarded by ship from here through

the Suez Canal. In relation to its expansion, China and Egypt agreed on the expansion of a jointly operated special economic belt in January 2016: the Egypt-China Suez Economic and Trade Cooperation Zone will mean 10,000 new workplaces and roughly an investment of 2.5 billion US dollars. The ships will eventually arrive in Piraeus, (according to the agreement of January 2016, soon completely) operated by China, which is already one of the ten largest container terminals in Europe. The goods are put on rail in Piraeus and arrive in Europe across the Balkan. The railway from Budapest to Belgrade, planned to be suitable for both passenger and cargo transport and funded by Chinese loans, will form an important element of this transit line. Works are being carried out of a value of 18 billion US dollars in the projects related to the China-Pakistan Economic Corridor. By the end of 2015, 850 km of roadway had been finished. One of the first projects of the AIIB, the construction of a double four-lane motorway between Shorkot and Khanewal (Punjab province) will also be carried out in Pakistan. An airport has been inaugurated in Gwadar, and the development

In 2015, China and Kazakhstan agreed upon investments of a total value of 50 billion US dollars, but investments of merely 1.2 billion US dollars have been realised yet; however, they were enough to make China the greatest foreign investor of the country. Among the planned projects, there is an agricultural development of a value of 1.9 billion US dollars, the construction of a tram line in Astana, but there are projects of a considerably larger scale, such as constructing a special economic zone exceeding 5,000 hectares in Khorgos, which is on the Chinese border, and a port development in Aktau, on the bank of the Caspian Sea. The longest railway tunnel of the region (Kamchiq) was inaugurated in Uzbekistan in 2016, but this section is part of a much larger railway development, connecting Uzbekistan, Kyrgyzstan and China and to be constructed from Chinese loans. However, the construction of the Kyrgyz section is behind schedule because of the controversies around funding. In recent years, a high-capacity gas pipeline network from Turkmenistan across Uzbekistan and Kazakhstan to China has been completed, as part of the regional developments concerning the energy sector. Three of the four lines of the network have been inaugurated, while the construction of the fourth one has been temporarily frozen due to the low prices of hydrocarbons.

Economic corridors of One Belt, One Road

Legend ports cities major overland routes 21th Century Maritime Silk Road Economic Corridors China-Mongolia-Russia Economic Corridor New Eurasia Landbridge Economic Corridor China-Central Asia-West Asia Economic Corridor China-Pakistan Economic Corridor Bangladesh-China-India-Myanmar Economic Corridor China-Indochina Peninsula Economic Corridor

of the port and the connecting road network is under way. A total of 5,344 MW power plant capacity is under construction (e.g.. Port Qasim Power Plant, Thar Power Plant, HUBCO Project, Sahiwal Power Plant), which are planned to be finished by the end of 2017. The first project of the Silk Road Fund, Karot dam, is one of the energy projects. The construction of the high-speed data transmission optic cable between the two countries has also been launched by using 44 million US dollars; it is supposed to be finished by 2018.

which, as a first step, means upgrading the existing transport network and a connecting the missing sections. Furthermore, China is conducting negotiations with Iran and Turkey as well as the Central Asian states. China hopes that a fully interconnected highspeed railway network will be established between China and Europe by 2030, where passenger trains will rush at a speed of 230 to 300 kilometres per hour, while cargo trains will speed at 120 kilometres per hour from one continent to the other.

China-Indochina Peninsula Economic Corridor In December 2014, the countries involved agreed on establishing a modern transport network, industrial cooperation, coordinating a sustainable social-economic development and establishing a fund required to finance all these. The scheme is related to the transnational transport corridor planned and being built on the Indochina Peninsula with funding from the Asian Investment Bank. As a part of this project, the motorway connecting the border cities, and the Nanning-Hanoi railway have already been finished. The Kunming-Bangkok railway, providing the main transport axis of the region, will be started in 2016 and is expected to be finished by 2020 (as a part of the Kunming-Singapore section), on which both passenger and cargo trains can operate at top speeds of 160 to 180 kilometres per hour.

India and China agreed on establishing the Bangladesh-China-India-Myanmar Economic Corridor in May 2013. Subsequently, in December of the same year the first study group concluded their first meeting in Kunming, and they agreed on the required infrastructural improvements (on the Kunming-Mandalay-DhakaCalcutta main roads), the method of investments and trade, as well as exchange programmes.

Central Asia-West Asia Economic Corridor In the China-Central Asia Cooperation Forum held in June 2015, the parties agreed to establish the corridor,

In February 2016, the first “Silk Road train” arrived from the Chinese coastal province of Zhejiang in Tehran. The 10,000-km route, however, runs on an existing railway line, and not on the newly built one. China participated in the construction of the high-speed railway worth of 4,1 billion US dollars between Istanbul and Ankara; its most important element, the connection beneath the Bosporus was inaugurated in 2016. The consortium of Cosco Pacific and China Merchants Holdings has acquired a majority stake in Turkey’s third largest container terminal, Kumport Terminal in Istanbul, for almost one billion US dollars. 17

THE HISTORICAL SILK ROAD 19

THE HISTORICAL SILK ROAD

The artery of long-distance trade and the flow of Eurasian cultures Authors: Zoltán Horváth, Attila Kiss

The Silk Road is a network of long-distance trade routes through which Chinese silk got across the nomadic empires of the Eurasian steppe and the cultural regions in the south speckled by high mountains and deserts to the basin of the Mediterranean Sea. The caravans, loaded with the luxuries of the West, headed from here back to the Far East. However, on top of premium products, innovations, cultural and artistic influences as well as religious systems travelled thousands of kilometres from China to Rome, and from the Eternal City to the Celestial Empire – on land and sea. The research of the Silk Road has significant Hungarian implications. It was discovered, archaeologically excavated and verified by Sir Marc Aurel Stein, a British scientist with Hungarian origins. He is considered the “archaeologist of the Silk Road” by the scientific community.

It is an interesting aspect in the history of science that the term “Silk Road”, a well-known notion seeming ancient and almost classical, was coined not so long ago. It was Baron Ferdinand Freiherr von Richthofen, one of the most important figures in German geography, who defined the notion of the Seidenstrasse in 1877. As soon as his work had been published the mirror translations of the word spread in the world languages: Silk Road (Silk Route) in English, La route de la soie in French, and Šëlkovyj put’ in Russian. Richthofen named an economic, geographic, historic and cultural complex which had already existed for more than 2,000 years then. Legates, soldiers, merchants, monks walked, fought, traded and pilgrimed on the route network for a long-long time. However, most of them could not recognise that the routes connecting two neighbouring cities comprised a system connecting Europe with the remotest parts of Asia, constituting a vast, organic unit. Thus, it was impossible to give the route they used one single name, understood by everyone. It was only at the end of the 19th century, at the birth of the science of modern geography when it happened. It is also the implication of this “partial knowledge” that very few people

travelled along the whole length of the Silk Road. A rare exception is Marco Polo; not only did he travel all along the mainland section of the Silk Road, but he also sailed its sea route, and left his reports to the after-ages. Even Richthofen himself used the term he coined for a narrower region, the Central Asian section of the route network. Albert Herrmann was the one who extended the scope of the Silk Road farther west, towards Syria in his doctoral thesis in 1910. Richthofen’s terms is just as appropriate as misleading. Although the valuable fabric was indeed one of the main products of this trade network, and, as a kind of “continental currency”, it was its drive as well, apart from silk many other products were exchanged along the routes, including chinaware, tea, spices, precious and semi-precious stones, glassware, nonferrous and noble metals, weapons, other fabrics, etc. The special fabric had lost its exclusive status in the world trade conducted on the Silk Road by the end of the Middle Ages, since it was being produced almost at choice outside China as well. Therefore, there was no reason in the Western world to purchase it so far away. Silk trade did not depend on mysteriousness

and exclusivity then, but the difference between production and transport costs. On the contrary, in market outlets any price was paid for products which were impossible to get in other ways – such as spices and gems. The wide verticum of commercial articles has always been changing dynamically. This extremely sensitive system has reacted promptly to the drop-out of market participants and the changes in the needs of the market as well as local peculiarities. We should remember that the Silk Road was the main artery for commercial articles and, at the same time, for culture, languages, art, religious and philosophical doctrines, information and innovations between Asia and Europe. As Sir Aurel Stein put it, “For centuries, it was the transport artery of contact between ancient India, China and Western Asia, penetrated by Hellenistic culture. It is a fascinating chapter in cultural history.” Indeed, this is the factor that makes the history of the Silk Road an extremely important chapter in the cultural history of mankind. Hearing the name of the Silk Road, most people evoke the image of loaded camel caravans trodding slowly in a single file on barren land. In contrast, it is less well known that the Maritime Silk Road was at least as important as the overland route network.

Naturally, the two route networks were closely connected and organically interrelated. In different eras one route network was busier than the other. But the great majority of the goods reaching Persia, Rome and China saw horse- and camel caravans as well as the underdecks of even several ships. Silk, for example, covered the distance between Asia Minor and Rome by ship on the Mediterranean Sea most of the times, but the Parthian Empire could be avoided either on the steppes in the north or across the Indian Ocean and the Persian Gulf. Therefore, the Silk Road, often named as the “Spice Road”, was not an independent trade route but formed an integrated part of a network of Eurasian scale. CONTINENTAL SILK ROAD The continental route of the Silk Road also included several natural barriers. These radically different geographical features, such as high mountains, deserts, large rivers divided the road into natural sections. These high mountain ranges often coincided with the political and administrative borders, and with the scope of the economic operations of caravans, too. At the contact point of two different areas, such as a desert and a high mountain range, the caravan, having crossed the desert or the mountains, arriving from the east or the west, was unloaded. A new

China’s ancient map

caravan took over the transported goods, and the first caravan turned back with the goods carried from the opposite direction. Naturally, it is not a rule that goods should be exchanged at such – in a geographical sense – remarkably differing points. For example, on the edge of the Taklamakan Desert, thanks to a range of towns caravans did not have to go all along the desert, and within a couple of hundreds of kilometres the goods could be exchanged several times. This geographical segmentation allowed these sections to become the basis for the geographical division of the Silk Road. On this basis, latest researches divide the route of the continental Silk Road into four major sections. Starting from the east, the first section is the segment crossing China in the strict sense, i.e. the inner regions of China. In most of the ancient times and the Chinese Middle Ages, the Empire – being either united or divided – was managed from two capitals, Chang’an and Luoyang, located on the fertile plain of the Huang He. It is not surprising that traditionally Luoyang and Chang’an, or as it is called today, Xi’an, are considered the starting points, or the endpoints, of the Silk Road. The Silk Road led from Chang’an across the central areas of China, Shaanxi and Gansu, to the funnel-shaped Gansu-corridor

and its endpoint, the city of An’xi. An’xi used to be the border city of China in a narrow sense, thus it closed the first section of the Road. From An’xi, the fertile lowland drastically changes: on the west, the barren Lop desert blocked the ways of caravans heading for west.

“The continental and maritime route network of the Silk Road was located on a vast east-west axis crossing Eurasia.” Here, where the Gobi and Taklamakan Deserts meet, commences the second, and the most exciting long section of the Silk Road, crossing the heart of Asia, the extremely dry, desert and semi-arid areas of Central Asia, enclosed by the Kunlun and the Tian Shan mountain systems. The second section is interesting mainly for scientific researchers, since this is the region where the mixing of different cultures can be detected at its best. Central Asia used to be the

Xi’an – Starting point of the Silk Road

THE HISTORICAL SILK ROAD

Xi’an

most important meeting point of the Greek-Roman, Iranian, Indian, Chinese and Central Asian nomadic cultures. This is well highlighted by the archaeological researches led by Stein in the archaeological sites of the Tarim Basin. In addition, in the course of time, these Central Asian areas did not just ensure transit traffic but actively participated in the production of the goods transported on the Silk Road, thanks to the mining and the industry evolving locally. For instance, silk was surely produced in Central Asia in 3rd century AD, but we can also think of the extensive trade of jade exploited around Khotan. Basically, the caravans could follow two directions from An’xi: they either bypassed the Lop Desert from the north via Hamin and Turfan, or they turned southwest, and headed for Dunhuang. After Dunhuang the “southern” road split into two again: the one going farther north passed Lake Lop Nur and the ancient city of Loulan and then reached Korla, where it met the northern route leaving Turfan and Karasahr. The more southward one passed Miran, and led to Khotan and then even farther west towards Jharkhand and Kashgar across a string of oasis towns, such as Endere, Cherchen, Niya, Keriya, fed by glaciers and located on the southern rim of the Taklamakan Desert, where the desert and Kunlun met. One or

more routes branched out towards Tibet from this southern route, and farther west several other routes branched towards the Indian subcontinent. The goods could reach the Indian Ocean in the latter direction, through such important ports as Barygaza (Bharuch); but this was also the route on which the Indian culture entered Central Asia. The section passing Hami also split into two at Turfan: one of the roads ran to the northwest, in the direction of Urumqi in East-Turkestan amidst the northern slopes of the Tian Shan mountain system and the Altai Mountain Range towards Lake Issyk-Kul and Kokand. The other route running to the southwest passed Karasahr and then reached Korla, where it met the route coming from Lop-Nur. The united route passed Kucha, Aksu and TumSuk and running on the northern edge of the Taklamakan Desert reached Kashgar, where it joined the great southern route. The western endpoint of the second section here was the region of two other high mountain ranges, the Pamir and the Hindu Kush. It is already the third section of the Silk Road which starts to the west from here, encompassing the areas of present-day Pakistan, Afghanistan, Kazakhstan, and the Iranian and Iraqi regions to their west.

An important road ran from Kashgar in the northeastern direction, across the northern areas of the Pamirs all the way to Kokand, where it unified with the northernmost route coming from Urumqi. Then the road, after having passed Samarkand and Bukhara, reached Merv, exactly at the point where it met the route running further south from Kashgar to the southwest through former Bactria. A route started towards the north from Bukhara, and proceeded in the valley of Amu Darya across the area between Lake Aral and the Caspian Sea (although according to some ideas this route diverged as early as at Kokand and bypassed Lake Aral from the north), then, after having crossed the South-Russian steppe,

Vietnam, Cambodia, and the Mekong delta, then ended at the long, tapered end of the Malaysian Peninsula, in the Strait of Malacca. Some of the ships sailed up to this point only. The commercial articles were taken over new merchants and new ships here, adding the sought-after goods of South-Eastern Asia to their freight. In the Strait of Malacca, the ships turned north west and along the island of Sumatra, touching the Nicobar and the Andaman Islands, reached the open waters of the Bay of Bengal. Some of the merchants got to the estuary of the Ganges from here, on the coastal waters, passing the Irrawaddy river delta. Others cut through the Bay of Bengal, heading toward the southeast coastal areas

reached the Azov Sea, where the goods got to Constantinople and from there to Rome by ship.

of India and the island of Ceylon. The second, larger section of the road ended here. Departing from the highly important centre of sea trade, Sri Lanka, the ships got to such centres of commerce, important for centuries, like Calcutta or Mangalore on the other, western side of the Indian Peninsula, along the Malabar Coast. In the western basin of the Indian Ocean seasonality, characteristic of shipping, even more enhanced, primarily as a result of the strong monsoon effect with the wind direction changing in approximately every six months.

The caravans proceeded on their journey from Merv by passing Nishapur and Ray. From Ray they got to the Black Sea either to the northwest, toward Tebriz and Trapezunt, or they arrived at the Euphrates by using the former Achaimenida “imperial road” via Ecbatana, Ctesiphon and Baghdad. The fourth, and last section of the Silk road started roughly here. The Silk Road split into several branches to the west of the line of the Euphrates and several lines crossed the Middle East and Asia Minor toward the most important ports of the Mediterranean Sea, which, of course, changed from century to century. Goods were transported to – depending on the era – Ephesus, Tyre, Antioch, Acre, etc. Finally, the commercial articles made the last section of the long journey on sea to Rome, and later to Byzantium or Venice. THE MARITIME SILK ROAD The maritime route network of the Silk Road was similar to the continental one in complexity, and also some of its sections were determined by geographical criteria. The coastal areas of China were the easternmost endpoint of the maritime Silk Road. Although the power ranking of the port cities changed from time to time, there were some centres which could maintain their significance during ancient and medieval times. Such cities included Hangzhou next to the Grand Canal or Guangzhou, located farther south. The ships loaded with goods set sail in these ports towards south, the South-Chinese Sea. The first section of the route passed the island of Hainan, along the coastal areas of present-day

At the Malabar Coast, the network of the maritime Silk Road split into two again: ships either sailed along the shores and reached the region of the Persian Gulf after touching Gujarat, Sindh and Makran, or taking advantage of the monsoon winds, they turned west and reached the “horn of Africa”, that is the areas of present-day Ethiopia, Somalia and Yemen across the Arabic Sea. After having stopped at Aden they sailed along the Red Sea. The Suez region in Egypt (Myos Hormos, etc.) and the great commercial centres of the Persian Gulf became the two western endpoints of the maritime Silk Road on the northern coast of the Red Sea. In the context of the maritime Silk Road, it makes sense to recall Chinese sea shipping, and China’s special relationship with the sea in general. The ancient and medieval Chinese Empire was fundamentally a country of an agricultural-bureaucratic nature. Consequently, the centre of gravity of power was in the inner regions of the mainland, while the coast, in comparison, was peripheric. In early days, rival powers were threatening from the sea, which further increased an aversion to the sea. Naturally, coastal shipping and coastal trade were pursued,

THE HISTORICAL SILK ROAD

Marco Polo’ route along the Silk Road

but the Chinese ventured on farther expeditions only in certain, relatively short periods. Under the Mongolian Yuan dynasty (1271–1368) China’ sea power and trade – as part of the Mongolians’ attempt of global expansion – became more and more important. When the purely Chinese Mings came into the throne, this tendency continued but with different emphases: the new dynasty called for the policy of “national pride” after their liberation from the Mongolian rule. The main aim of the Mings was to found the reputation of a China driving out foreign conquerors and regaining its dignity as the greatest power of the Far East. This target was well served by those seven consecutive enterprises during which the Chinese government set off a naval expedition on the Indian Ocean all the way to the shores of Eastern Africa and the Arabic Peninsula in the early Ming era between 1405 and 1433. The enterprises aimed at establishing colonies, obtaining (or forcing) commercial rights, and putting vassal local governors in favourable positions. These expeditions transported all kinds of different goods to and from: the underdecks of the Chinese vessels were full of – in addition to the admired luxury products of the Celestial Empire (silk,

blue and white Ming chinaware, spice and perfumes, etc.) – golden and silver objects, copper and iron instruments, and on their way back home they were full of exotic gifts sent to the emperor’s court. This kind of expansive and simultaneously, open policy did not last long. The members of the Ming administration preferred the policy of isolation: China closed up again, and long-distance trade also came to a halt. The Chinese ships anchored only on Java and Sumatra, and later coastal shipping was also forced back by the proliferation of Japanese piracy. In a political sense, the fact that the capital of the Empire was relocated from southern Nanjing located by the river to northern Beijing meant the essence of all these. Coastal cities, despite their relatively high levels of development, were doomed to have a subordinate status against continental China. This phenomenon is a real paradox in the history of China, since they were the ones who invented the compass, essential to sailing, and they also excelled at ship-building until the 15th century. Under the Manju Ching dynasty this continental anti-maritime attitude further strengthened, in certain periods those who ventured on sea voyages were threatened with capital

Naval expeditions

punishment. This approach determined the attitude of the court toward the European merchants arriving from the 15th century on. However, all this could not prevent the development of internal and – at times, “smuggling-like” – external trade; Chinese emigrants to South Asia became important participants in it. NAVAL EXPEDITIONS The above mentioned seven great naval expeditions undertaken in the first third of the 15th century were the swan-song of the maritime enterprises of the old Chinese Empire. They had such volume that it is worth outlining their directions and courses in a few sentences. In 1405, Zheng He, a eunuch born to Muslim parents in the southern Yunnan province in 1371, was appointed as admiral of the Chinese fleet. Together with the San-bao tai qian (Great Eunuch of the Three Treasures) title, Zheng He also was given a fleet no one had seen since Kublai Khan. The dimensions of the specific ships were imposing: the larger ones stretched 150 metres in length and 70 metres in width, and had up to nine masts, while the smaller ones were 45 metres in length, 20 metre in width, and had five masts.

In the summer of the same year, the ships were set afloat near Shanghai, and after having waited until the winter monsoon at the end of the year was over, they set sails towards south. [1.] Sailing along the shores of Cambodia, Siam and the Malay Peninsula they reached the Indian Ocean and anchored at the Nicobar Islands. They proceeded to Ceylon, and here the fleet split into two groups: one of them headed for India’s Malabar Coast, while the other one headed straight to Aden, sailed up the Arabic Sea, reached Hormuz, and from there turned to India. The fleet was united again, sailed up the Bengal Bay, down to the Andaman Islands, along the Burmese coast and finally returned to the southern ports of China in October 1407 – after having visited the island of Sumatra and destroyed the base of Chen Zuyi, the pirate commanding a fleet infesting the seas of Southeast Asia. [2.] The long, two-year voyage was followed by a shorter expedition to Malacca, Sumatra and South India at the beginning of 1409. On Ceylon, the Chinese had to fight, because the king of Sri Lanka – referring to using his territorial waters – did not want to let the imperial fleet go. However, the admiral landed with two thousand warriors, took the palace, and king of the island was taken in shackles before the Chinese emperor in the autumn of 1411. [3.]

THE HISTORICAL SILK ROAD

The third expedition was undertaken between 1412 and 1415, and targeted the island of Java. [4.] The fourth voyage was conducted in 1416 – the Great Eunuch sailed as far as the African shores. The Chinese had already been trading with the ports of Mogadishu, Brava and Malindi, where they sent “tribute” to the Emperor in 1415. Zheng He arrived home in August 1419, accompanied by African legates. [5.] The aim of his fifth voyage was to take them home in 1421-ben. [6.] The admiral’s sixth voyage was a short return to the most important commercial centre of Sumatra, the port of Palembang to inaugurate the new governor in 1424. [7.] His last, seventh expedition set off in 1431, and anchored in twenty countries in the next two years, including Arabia. The admiral died on the journey home, in the middle of the ocean. The great imperial fleet returned to its homeport in 1433, and never set sail again. The ships rotted on the embankment. But it was not only the fleet that perished: the officials opposing maritime expansion destroyed all the notes of Zheng He in the archives to prevent any enterprises following the admiral’s example. In spite of all these, the voyages can be considered successful. From a commercial viewpoint, longdistance trade began to develop quickly. However, it is difficult to see the effect the expedition had on the economy, because there are no reliable accounting data about the complete financial actions. The delegations arriving at the imperial court were allowed to trade in the capital under strict circumstances. They had five days only, they could do business exclusively accompanied by an official, and were not allowed to buy weapons or metalwork. The voyages were successful on diplomatic terms as well. The Mamluk Empire in Egypt is a good example: they sent two delegations to Nanjing in the first half of the 15th century. The enhancement of China’s influence in South-eastern Asia was down to the voyages of Zeng He. The sea voyages wished to expand Chinese influence by peaceful means, and this foreign policy also included the construction of an enhanced defence on the southern borders. Quite obviously, the imperial court intended to monopolise sea trade in order to control maritime traffic. The foreign countries benignly tolerated all these aspirations for power, since they were afraid of military retaliation, and they could also see great profit in Chinese trade relations.

The continental and maritime route network described in this article are a kind of “common denominator”, embracing different eras, since the routes, the major posts and commercial centres mentioned above never co-existed. For example, no matter that Loulan or Niya was an important post on the Silk Road, in the 3rd and 4th centuries, the Buddhist monk-traveller, Xuanzang could not see them in the 7th century. Or no matter that the fortress of Miran and its surroundings was populated 300 years later, the most Marco Polo could see of it was ruins. Similarly, not only the routes changed, but also the ethnic composition of the population of the Silk Road, as it was one of the main scenes of the migration and ethnic processes of Eurasian nomadic peoples. In parallel, the nomadic empires controlling extensive parts of the Silk Road and profiting from it formed and disappeared one after the other. THE DIVERGING SILK ROAD The lines of the Silk Road were very volatile and might have changed even week by week within a region. In the case of ships, for example, they depended on the wind direction, while on the continent, they depended on the opportunities of getting drinking water or the changes of natural barriers – landslides, snowfall, snowbreak, sudden floods, earthquakes, etc. But it was also very sensitive to the tottering of the political and administrative situation. They were immediately ready to change the transport routes to bypass a politically unstable region if it was posing risks to the safety of caravans or ships. For example, they abandoned mainland transport and after having approached the sea on the shortest route possible, they loaded the products on ships, and conveyed them in that way. Later, when the political situation settled, the caravans could return onto their original paths. At times, the insecurity of maritime routes might have resulted in shifting the products onto continental routes. Due to this kind of volatility, marking the exact route network of the Silk Road on a map is an impossible enterprise. During its history of several hundreds of years, trade was pursued on several dozens of routes at the same time, but there were periods when some routes were closed, and trade could be continued through one single channel. As a matter of fact, a series of maps would be needed to draw a more authentic picture either in the Han era or the era of

Tibetan conquest, or of the approximate locations of the routes used in the 14th century. Another implication of this volatility is that it is extremely difficult to assess the accurate length of the continuously changing routes - in a metric sense as well as the length of time a journey took. Thus, it is almost all the same whether we assess the entire length of the Silk Road eight or ten thousand kilometres; the line drawn between its two endpoints cannot reflect the vast distance which characterised the undoubtedly longest commercial route of the ancient and medieval times, and which the goods transported on it had to take in reality. Basically, the continental and maritime route network of the Silk Road was located on a vast east-west axis crossing Eurasia, but answering the question what was the “main” direction of the Silk Road, that is, in which direction was trade more intense, is far from being easy. Although it seems that caravans and ships transported silk and other valuable articles of China from east to west, but naturally they did not turn back empty, but loaded with the valuable products of the western world. The outflow of noble metals and the financial deficit attributable to it primarily affected the western world – and as such, the Roman Empire – but a similar deficit could be detected at the eastern endpoint of the route network, in China as well. Due to their special approach to economy, they regarded silk as an instrument required for “presenting” neighbouring or distant peoples, the outflow of which was not counterbalanced by the inflow of any product of similar value, or noble metals. With regard to the fact that Greco-Roman art and philosophy, Nestorianism, Manicheism, and, in a certain sense, Buddhism proceeded from west to east, that is, to China, the weights of the scales level off. EPOCHS OF THE SILK ROAD Again, the periodisation of the history of the Silk Road is not an easy task. Even the accurate timeframe of the beginning of the Silk Road is not known. According to some opinions, Romans first saw silk on their military campaign against the Parthians led by Marcus Licinius Crassus in 53 BC. However, the silk findings in Egypt and the Middle East dating from much earlier times seem to contradict this theory. Although the circumstances under which these got here are subject to serious debates, many people highlighted that trade could commence much earlier on maritime routes than on continental ones.

It is absolutely sure that certain sections of the Silk Road, which were not interrelated at the time, were in use in the Neolithic era (new stone age). Later the migration of peoples speaking Indo-European languages could also affect certain sections of the Silk Road. Thanks to the expansion policy of the Persian Achaimenida dynasty, the vast area stretching from the eastern shores of the Mediterranean Sea to the Hindukush got into one hand by 5th century BC. But neither the Persians, neither Alexander, the Great, who overthrew their empire, did not get farther east on the later route of the Silk Road. It is an entirely different matter that later the internal road networks developing in the western half of Asia at that time joined the newly opened Central Asian sections of the Silk Road without any considerable difficulty. The situation changed dramatically under the Parthian Empire replacing Greek rule. But the situation in China also had to change for this. After the Qin dynasty managed to unite the Celestial Empire at the end of the 3rd century BC, the Han dynasty succeeding them started fast expansion. Military campaigns conducted against the nomadic peoples (Asian Huns, Xiongnus) attacking from the north andnorthwest, in order to secure the borders of the empire, played an important role in the expansion. Initially, the goal of this policy was to open the way across the Tarim Basin to the vast area of the Oxus region. This and making alliances against the Asian Huns were the reasons why the Han court dispatched imperial envoy, general Zhang Qian to the west, who returned from his long and adventurous journey thirteen years later, and made reports of distant western lands and famous commercial articles. He was the first person to reveal to the Chinese that over the ring of barbarian tribes great, educated nations live. His travel opened a new era regarding the economic and political relations of China with the external world. When periodising the further history of the Continental Silk Road, we can generally conclude that the history of the abovementioned regions of the continental Silk Road greatly differed, but practically the four big regions can be divided into two halves. While the political history of the Central Asian section of the Silk Road was tied up with the history of China with a thousand threads, it was much more independent from the political changes in the regions to its west, over the Pamirs. However, the third section of the Silk Road, the region of present-day Afghanistan, Iran,

THE HISTORICAL SILK ROAD

Ferdinand von Richthofen names the Silk Road

Trans Siberian Express

Zheng He and the Chinese Treasure Fleets

Vasco de Gama reaches India by going round Africa

Ibn Battuta Muslim scientist travels to China

Marco Polo in China

Eurasian infrastructural developments

Baghdad along the Silk Road is the capital of the Abbasid Caliphate

Friar Gregory is the first Hungarian in China

Genghis Khan

Pax Mongolica

Nestorian Christians in China

Spread of the Islam in the east

Turkic kagans rule the Silk Road

The Silk Road is protected and developed by the Roman, the Parthian and the Chiense Empires

Buddhism reaches China

Silk is in fashion in Rome The Persians build the Royal Road

Silk findings in Egypt

China starts manufacturing silk

The prowls and trade of Scythian nomads connect Asia and Europe in the north

The Chinese lose the secret of silk to the Koreans

Trade is flourishing on the Incense Road in the south The empire of Alexander, the Great

4 religions, 4 empires The Historical Silk Road connected four empires: the Roman Empire, the West Asian Parthian Empire, the Central Asian Kushan Kingdom and the East Asian Chinese Han Empire. Deep-sea sailing, which started to develop, played a more and more important role after the 9th century AD as the political order of the Asian and the European continent transformed. It was Hungarian-born Aurel Stein (1862-1943) who first set out to search for the lost civilisations along the Silk Road. Those who wanted to travel on the Silk Road in ancient or medieval times had to have at least one skill: the ability to assess or to ignore dangerous places. It was easy to lose way in the snow-covered mountains or the unfriendly deserts and on the endless seas, and enterprises often ended in death.

Caravan on the Silk Road The caravans travelling overland did not change at all until the construction of railway lines. A caravan consisted of fifty, a hundred or even a thousand camels, because merchants formed groups to defend themselves together if they were attacked by robbers. The richest had their own team of bowmen to accompany them, and the poorer ones paid a certain fee to travel under their protection. The heavy bundles of silk, and the precious packets of gems, incense and spices were almost an irresistible temptation for the barbarians. The merchants carried gold and precious stones on their own persons, knowing full well, however, this would avail them nothing if they fell into the hands of brigands. A man’s life was nothing to them; they would kill for a handful of gold, as casually as a merchant would abandon an exhausted pack animal. If you fell behind it was no good expecting it wait for you. The loss of a couple of days might mean finding a pass blocked by the snow in the meantime, or a river in flood. Or perhaps the water was running out and the nearest well was thirty-hours’ march away. When the journey was going according to plan, a halt might be used for pasturing the camels, and tending to the horses, donkeys and mules. Their raw backs and damaged hoofs would soon heal, and they would rapidly put on weight. The men, too, would also have a rest, examine the condition of their goods, repair their felt boots and fur clothes, clean their weapons. Sometimes they had to find a new guide or buy some animals. When all was fine again, they set off on their journey. Those who hit the road to the land of silk exposed themselves to a thousand hazards. How many beasts, ruthless brigands and evil spirits had to be luckily avoided along the way? Wasn’t it discussed that mysterious voices and haunting ghosts, earthly sirens amused themselves with misleading travellers who then inevitably perished in the sea of sand? And

the ravines of mountains, the savage tribes lurking at passes, and the deathly vapours of miasmal marshes!" (Boulnois, Luce: Silk Road, excerpts) In addition to the exchange of goods, this was the route that diplomats, travellers, missionaries used. The peoples and cultures of the two endpoints often did not know of each other and could rely on vague and dim pieces of information. Distance, which was hard to cover due to harsh natural conditions, was one of the reasons. Travelling on the mainland meant crossing deserts, high mountains, uninhabited areas. A voyage on sea could last up to two years if the monsoon did not help. Between the two endpoints, Europe and China, certain peoples – the Jews, Khazars, Arabs – or sometimes empires – such as the Persian or the Byzantine Empire– specialized in intermediating expensive articles. The products, spices and silk acquired in long-distance trade were very much sought after. In addition, china, tea, gemstones and handicrafts were also important objects of commercial exchange. Since the Silk Road evolved all civilizations have been interweaved With the help of the network of the Silk Road, people could come and go from west to east or from east to west. They brought valuable products of animal origin, jewellery, perfumery, glassware, gold and silver coins to China. In addition, they also spread Central and West Asian music, dance, cuisine and fashion in China. With the help of the Silk Road, Chinese products and technologies were taken to the west, namely silk products, lacquer-ware, chinaware, gunpowder, compass, some cultivation methods, sericulture, the method of making paper, and the technique of printing books. The Silk Road played an important role in the development of the world’s civilisation. In the UNESCO’s project examining the Silk Road, it is also called the road of dialogues, which has promoted the relations and the communication between the East and the West. 31

Iraq, etc., rather formed one cluster with the fourth section, that is the Middle East and the Eastern Mediterranean, in terms of political history.

ensure the continuity of trade even in the most difficult times, despite being badly shaken at times (for example, by the Islamic expansion).

Another important aspect is the phenomenon of centre and periphery, which has been a constant feature of the entire history of the Silk Road. Due to its length and nature, the Silk Road ran through several centre areas, for example China and the Persian Empire. At the same time, its majority stretched across the peripheral areas of great empires (Rome, Byzantium, the Parthian and the Sassanid Empire, the Khalifat, the Kushan Kingdom, Tibet). Although the great empires continuously claimed these peripheries,

Hence the periodisation of the history of the Silk Road before the 13th century can be very haphazard

but most of the time they managed to extend their power over these areas for short periods only. As a result, however, these bigger state formations hardly ever became direct neighbours or got involved in serious, permanent conflicts â&#x20AC;&#x201C; except for the Euphrates region and the Middle East. In addition, on these peripheries a whole series of states of different sizes existed and prospered (often as independent city states) which recognised the nominal supremacy of the closest major power, such as the Sogdian city states, Palmyra, or the Shanshan Kingdom. Hence if we want to divide the history of the Silk Road into epochs based on the history of the great empires, we will certainly get a distorted result, given the fact, for example, that the regions of the Silk Road tried to

since very often there was no alignment between the political, social and economic changes taking place at its two ends: the rise of the Sassanid dynasty happened parallel to the decline of the Han dynasty, and nevertheless, the Silk Road worked very well. Thus more recent research puts much more emphasis on the continuity in the flow of trade, culture and information instead of forcing a detailing periodisation of political history. There was only one single period during which almost the entire Silk Road got into the hands of one major power for a couple of decades: it was the period of the Mongol Empire. Although the wars accompanying the formation of the empire provoked a severe crisis in the life of the Silk Road, pax mongolica descending later enabled an unprecedented flow of goods and people. However, the end of the Mongol period and the great discoveries starting from Europe marked the end of the history of the continental Silk Road, and trade almost completely shifted to maritime routes, bursting apart the traditional frameworks of the maritime Silk Road as well.

The real drive of the Silk Road was the market of luxury items, where different products were exchanged between the East and Europe.

TO THE EAST

SPICES

CERAMICS

SILK

TO EUROPE

HORSES

COTTON

GLASS

THE HISTORICAL SILK ROAD

The last stab was made by European industrialism, which flooded the market with cheap European silk produced in Lyon and at other places. By the 16-17th century, the Silk Road turned into what it used to be before Zhang Qian’s journey: the scene of trade between Asian areas and smaller regions. REVIVAL OF THE HISTORICAL SILK ROAD – THE NEW SILK ROAD Today the People’s Republic of China thinks the time has come to open the “New Silk Road” manifesting the new dimension of long-distance trade. A gigantic project called „One Belt, One Road” is linked with this, which is the summary name of two gigantic enterprises. One of these, the “Silk Road Economic Belt” would connect China and Europe by interlacing the countries of the vast area in between into one coherent and interoperable zone with infrastructural investments, commerce, cultural relations – naturally with Chinese management. The other one, the “Maritime Silk Road” would connect China, South and South-eastern Asia and Europe in a similar way. In practice its realisation would mean that within the framework of joint projects, businesses with Chinese dominance would construct roads, highspeed rails, pipelines, ports and airports with Chinese money, through which goods could flow much faster and without administrative hurdles. The Asian Infrastructure Investment Bank, established with a capital of 100 billion US dollars and Chinese management, and the 40 billion US dollar Silk Road Fund, set up by Beijing, are to provide the jump-start

the projects need. Naturally, much more money will be required in the long term, but this amount seems to be sufficient to launch the project. For China, the scheme has several benefits. First, China has lots of free capital, which is worth investing. Second, it is equally important that in the PRC such construction capacities were created that the setback of Chinese constructions would entail closing thousands of construction companies and laying off millions of employees. Third, the continental Silk Road would run through the poorest provinces of China, inhabited by (also) ethnic groups, and it could contribute to their economic recovery. China’s greatest commercial partner is the EU, and China is the second largest partner of the Union, thus if the regions form one economic belt, it would, as calculated by China, contribute to maintaining economic growth in the Asian country. For different Asian countries, China is already a more important economic partner than Russia. It has particularly good positions in Iran, and strong presence in several countries of the Middle East. The plans reach out as far as the Balkan. The “Belt” would include the much talked-about Beograd-Budapest high-speed railway as well. It cannot be foreseen yet what will be realised from the planned investments, but the Chinese government seems to take the task set seriously, and even the implementation of some of its elements may tailor the traditional zones of influence, which may change the fate of entire countries. But we can conclude that “One Belt, One Road” will be the greatest enterprise in modern Chinese history – if it is completed.

HUNGARIAN EXPLORERS OF THE SILK ROAD

Author: Ráhel Czirják

In the past centuries, the exploration of the prehistory of the Hungarian people prodded several excellent travelers and scientists to set off on a mysterious but often very dangerous journey to the East. Others were attracted into the region by its physical geography and the peoples of distant countries. These travellers are the representatives of various scientific fields: they are linguists, art historians, ethnographers, geographers. In our present collection, although it is not exhaustive, we will describe the lives of outstanding Hungarian travellers whose work can be related to the Silk Road. The discoveries made bay them played a crucial role in the exploration of the Silk Road, almost unknown for the Western world until then. Today, when China’s role is becoming more and more prominent, due to its economic policy the Silk Road is becoming an important geopolitical axis again, which adds value to the memories of the Hungarian explorations again. FRIAR JULIAN Little of the life of Dominican monk before 1235 is known. According to historical sources, Friar Julian had become the member of the order expanding under the leadership of Paul of Hungary, who studied in Italy. For the order, Hungary was the easternmost bastion of western Christianity, and the Dominicans arrived in the country with a very ambitious plan: they sent their missionaries to the east, to the Vltava region and Wallachia, but their longer-term plan was to catholicize the Russian state and to establish papal domination over the steppes stretching to the Volga. In order to achieve this, the Dominicans sent several expeditions eastward. The first one set off in 1231 and was led by Brother Otto who, upon arrival, broke the news about Hungarians living in the eastern steppes. Friar Julian set off on his first journey with three other monks in 1235. The expedition of four people left from Újfalu, near Esztergom, for Constantinople, where they crossed the Black Sea by ship. They anchored at present-day Taman, where they headed east and reached the Alan town of Torgika. They were stranded there for six months but they could not find any Hungarians. Two members of the expedition gave up the hazardous journey and went home. But Julian and Gerard continued the journey to the

north along the Volga; here the last fellow traveller of the Hungarian monk died. Then the Dominican monk had to become the servant of an imam in the Muslim region. Finally, his luck turned because in a Bulgarian town he met a Hungarian woman who told him useful information about the whereabouts of the Hungarians. The monk arrived in Magna Hungaria in the spring of 1236. He spent a month there, studying the life of the Hungarians remaining behind in the homeland, and the complicated political situation of the world of the steppes. The report on Julian’s first journey was written by Riccardus, the prefect of the Dominican order, which was discovered by Márton Cseles in the archives of the Vatican in 1695. The travelogue gave a detailed account on the life of the Hungarian living in Magna Hungaria, who practiced a pagan religion and pursued a nomadic life. Volga Hungarians were excellent warriors who even defeated the Tatars, and, having entered into alliance with them, conquered several countries. Returning home, Julian gave account on his experiences to his superiors in Rome, including news on the invasion on the Holy Roman Empire and Europe, which the Tatars planned to carry out after a military campaign against the Persians.

The route of Friar Julian’s travels

In 1237, Friar Julian set off on a second journey but he was not able to find the Hungarians because the troops of Batu Khan and Subotai had devastated the region along the Volga and the inhabitants had been either slaughtered or kidnapped and taken to Central Asia. The journey of the monk was not unsuccessful, though; he gathered a lot of information about the Mongols, and he also carried a letter of ultimatum to King Béla IV., in which the Mongol ruler demanded unconditioned surrender from the Hungarian king. Unfortunately, the message fell on deaf ears, and four years later the Tatars, keeping their “promise”, brought about unprecedented destruction in the Carpathian Basin. Friar Julian was the first of a series of Hungarian explorers who left eastwards looking for the native homeland, and the only one who could meet our relatives living along the Volga.

FRIAR GREGORY In the 14th century, Friar Gregory (also known as Gregory of Hungary) travelled as a member of the pope’s embassy to what is present-day Beijing to

the great khan, becoming the first Hungarian who visited the Far East. In 1338 Pope Benedict XII sent an embassy led by Giovanni Marignoli to East Asia. The mission went via Constantinople, then sailed to Caffa in Crimea (its current name Feodosia), and crossing the territories of the Kipchak Tatars arrived at the headquarters of Öz Beg Khan. They passed the winter of 1339-1340 in the city of Serai on the Volga and they proceeded to the east when spring came. At the end of 1341 they arrived at the great khan’s place, in Khanbaliq, i.e. present-day Beijing, where they enjoyed the hospitality of the Mongols. The embassy spent 5 years in the Yuan Empire and they left for home in 1346. On their way back home they crossed the Yellow River, Hangchou, today Xiamen, and Qilon in India, where they embarked and passing Hormuz, Mosul and Cyprus they returned to Avignon in 1353. Although we cannot learn much about Friar Gregory from historical sources – since they are primarily focused on Marignoli – they still prove that Gregory was the first Hungarian who got to the regions of present-day China and India.

HUNGARIANS WHO CONQUERED ASIA EGYPT, IRAN, AFGHANISTAN, TIBET, INDIA

CENTRA-ASIA TURKEY, PERSIA, AFGHANISTAN, KARAKUM

MAGNA HUNGARIA LEVEDIA ETELKÖZ

A !

FRIAR JULIAN 1235-1238 MONK DIPLOMAT MISSIONARY

A 38

linguistics

SÁNDOR CSOMA DE KŐRÖSI 1784-1842

ÁRMIN VÁMBÉRY 1832-1913 2

LINGUIST LIBRARIAN TIBETOLOGY (FOUNDER)

ORIENTALIST UNIVERSITY PROFESSOR

major discovery

religion, culture

research at home

CHINA HIMALAYAS TRANSHIMALAYA

HUANG HE (YELLOW RIVER) YANGTZE (BLUE RIVER) MANCHURIA

TIEN-SAN LÓCZY PEAK CHOLNOKY PEAK

LAJOS LÓCZY SR. 184 849-1920 84 20 GEOLOGIST, GEOGRAPHER, UNIVERSITY PROFESSOR, ARCHAEOLOGIST – PALAEONTOLOGY ETHNOGRAPHER

INDIA

GYULA PRINZ 1882-1973

JENŐ CHOLNOKY 1870-1950

GEOLOGIST GEOGRAPHER ETHNOGRAPHER

GEOGRAPHER ETHNOGRAPHER UNIVERSITY PROFESSOR WRITER

outstanding outstan and and n career as university professor

polymath

ERVIN BAKTAY 1890-1963 WRITER, LITERARY TRANSLATOR PAINTER ART HISTORIAN ASTROLOGER, ORIENTALIST

original homeland 39

SÁNDOR CSOMA DE KŐRÖSi

(KŐRÖS, 27 March 1784 – DARJEELING, 11 April 1842)

The famous Hungarian traveller, linguist and the founder of Tibetology was born in Kőrös, Transylvania into a poor family of minor nobility serving with the border guards. He commenced his studies in the local village school, but after he finished school he did not join the border guards but, through his father’s intervention, continued his studies in a boarding school, the Bethenianum in Nagyenyed (present day Aiud) from 1799. The school granted him free education in return for manual labour. He spent more than fifteen years in the boarding school of Nagyenyed. He learnt – among others – Greek, Latin, German and French, as well as theology and philosophy. As a reward for his outstanding scholastic records, he was granted a scholarship from the prince and was offered a teacher position in lower grades. During the years spent here, he got acquainted with the various theories about the prehistory of the Hungarian people, including the theory of the Uyghur relationship, which played a significant role in his later journey to search for the original homeland of Hungarians.

He finally arrived in Teheran at the end of October, where he spent a longer time in the company of the British ambassador, Henry Wilcock, and his brother, George Willock, while he was improving his Persian and English knowledge. In the spring of 1821, Csoma decided to continue his journey eastwards, leaving his passport and papers behind. But his plan failed because the war raging in the Afghan mountains blocked his route. Therefore he headed south and let for Panjab province in India across present-day Pakistan, but, finding the journey extremely expensive and life-threatening, he turned back on the border of the Ladakh Kingdom. On his journey back he met William Moorcroft, who played a crucial role in Csoma’s research, because it was Moorcroft who encouraged him in his Tibetian studies. The appearance of the Hungarian scholar just fit the British expansion plans, and Csoma was probably hoping for finding some information about the prehistory of Hungarians in Tibetan sources even if he could not make it to Central Asia. HIs JOURNEYS IN TIBET

He continued his studies with a scholarship in Göttingen in 1815. Here he could learn from such excellent orientalists as Johann Gottfried Eichhorn, who also taught him Turkish and Arabic. He met the Uyghur theory again in Göttingen, a newer version of which was developed by Heinrich Klaproth, a professor in Göttingen. According to this theory, all Ugric peoples – including Hungarians - are relatives of the Uyghurs. In 1818-ban he returned to Nagyenyed, where he started to plan his Central Asian expedition, the goal of which was to find the original homeland of the Hungarians. His idea was received very skeptically by many, but nothing could dissuade him from his decision. BEGINNINNG OF CSOMA’S JOURNEY In the autumn of 1819 Csoma left Hungary for good with a local border traffic permit. He intended to go to Istanbul and then Alexandria to improve his knowledge of the Arabic language, but he was forced by a plague outbreak to modify his itinerary. Thus he travelled to Aleppo via Cyprus, Beirut, Tripoli and Latakia. There he joined a caravan and he reached Baghdad.

With Moorcroft’s approval and financial support Csoma travelled to Zangla. There he spent more than a year mastering the Tibetan language with the help of his master, Sangs-rgyas-phun-tshogs, whom he called lama, and started to get acquainted with Tibetan literature. He compiled a glossary of 30,000 words, which later served as a basis for his dictionary. For unknown reasons, he had to leave the monastery in Zangla in 1824, and went to the city of Subathu, where he checked in at the British military station. To his astonishment, the British did not know about his agreement with Moorcroft and were very distrustful – they suspected him of being a spy. After the British had made sure the Hungarian researcher had not been spying for either the Russian or the Sikh, and Csoma had managed to persuade the British government of the usefulness of his researches, he received a monthly stipend of 50 Rupees and was sent on his second journey. In 1826 Csoma went to Tibet, where he continued his research in a lama monastery in Tetha, and then in Kanam from 1827 to 1830. He created the first

HUNGARIAN EXPLORERS OF THE SILK ROAD

Tibetan-English dictionary, compiled an English collection of Buddhist technical terms, and systemized Tibetan grammar. In 1830 he was sent to Calcutta by the Asiatic Society of Bengal, to systemize the vast number of Tibetan books sent by the ambassador of Nepal, Brian Houghton Hodgson, as a librarian. He was continuously publishing in the journal of the Society, the Asiatic Research. His two masterpieces, the Tibetan grammar and dictionary were published in 1834. He received several honors in this period: in 1833 he was elected a correspondent member of the Hungarian Society of Scientists and in 1834 he became an honorary member of the Asiatic Society of Bengal. He set off on his last journey to Tibet in 1842. His destination was the library of the Dalai Lamas in Lhasa, then the northern part of China – the land of Mongols and Uyghurs – but he got no farther than Darjeeling in Sikkim, where he died of malaria. Overviewing Csoma’s life, it may seem he drifted very far from his original objective, finding the original homeland of Hungarians, but the ultimate aim of his Tibetan researches was to find information about the origins of Hungarians. Although he did not manage to achieve his original goal, his arduous work resulted in creating a new discipline and exploring a culture hardly known before to the Western world.

The grave of Sándor Csoma de Kőrösi in Darjeeling

ÁRMIN VÁMBÉRY

(SZENTGYÖRGY, 19 MARCH 1832 – BUDAPEST, 15 SEPTEMBER 1913)

Ármin Vámbéry was born in Szentgyörgy (Upper Hungary, now Slovakia) into a Jewish family originating from South Germany. Since in those days birth certificates did not have to be issued to Jewish residents, his exact date of birth is unknown; he posteriorly designated 19 March 1832 himself as his birthday. His father fell victim to the Hungarian cholera epidemic in 1831-32 and died before his son was born. When her mother remarried, the family moved to Dunaszerdahely. Vámbéry grew up in terrible deprivation, and beside going to school, he had to work from his childhood. But it did not keep him from achieving excellent results at school. He started his schooling at the Jewish school in Dunaszerdahely, then he was put into the Protestant elementary school. In the first two years of grammar school he studied in Szentgyörgy, and continued his studies in the Benedictine grammar school of Pressburg (Hungarian: Pozsony; now Bratislava in Slovakia) but he had to leave school before the final exams due to difficult financial circumstances. He chose self-study for the rest of his life, acquiring an extensive knowledge of literature and languages. He moved to Pest in 1851 where, as in previous years, he tried to make his living as a tutor. By his own account, he could speak seven languages then: German, Hungarian, Hebrew, Latin, French, Slovak and Italian. Having left Pest, he took jobs at several different points of the country, and during this period he learnt Croatian and Russian. Encouraged by his own

Ármin Vámbéry’s journey in Central Asia

language knowledge, he went to Vienna to take on a clerical job, but his plan failed without proper recommendations and relevant work experience. Still, his journey to Vienna proved to be important regarding his later career: he met Baron Joseph von HammerPurgstall, the famous researcher of Turkish history and literature, who encouraged Vámbéry to intensify his Turkish studies. After Vienna, he returned to Pest, and worked as a tutor at several points of the country. In this period he spent 10 to 12 hours a day on linguistics – learnt

Ármin Vámbéry

a selyemĂşt magyar felfedezĹ&#x2018;i

Samarkand 43

Turkish and Arabic – and he met, among others, János Garay, Mihály Vörösmarty, Mihály Teleki, Mór, Ballagi and Zsigmond Kemény, who saw great potential in him. Thanks to his talent and his liaisons, Vámbéry’s longcherished dream of a journey to the East became within reach in 1857, owing to mainly the support of Baron József Eötvös. He went to Istanbul and spent 4 years there. He improved his knowledge of the Turkish language, got closely acquainted with the Muslim-Turkish culture and customs, and thanks to his knowledge and open-minded personality, soon he had free entrance to the highest circles of the Turkish political elite. He was even interpreting for Sultan Abdul Mejit on one occasion. Having appropriate liaisons and experiences, he assisted the Foreign Office of the British Empire as a consultant. The Austro-Hungarian Monarchy, however, did not require such services. During his years spent in Istanbul he received the name Reshit (walking on the true path) Efendi; he then used that name in the Muslim world. Between 1857-1861 he achieved significant results in his researches as well: he visited libraries on multiple occasions researching the Hungarian aspects of Turkish historical sources, in Istanbul he compiled a German-Turkish dictionary, and several of his

Across Central Asia, dressed as a dervish

HUNGARIAN EXPLORERS OF THE SILK ROAD

Bokhara

writings – including several translations – were published in Hungarian journals. He was elected a corresponding member of the Hungarian Academy of Sciences in recognition of his work in 1861. During his years in Istanbul his intention to search for the origins of the Hungarians by means of linguistics became deliberate. In the second half of the 19th century, the discourse embracing the prehistory of Hungarians was characterized by the “Ugric-Turk War”. Of opposing opinions, Vámbéry advocated the Turkic origin, and went on his second journey to Asia in order to prove it. He returned to Istanbul in 1861 to prepare his journey to Central Asia. In 1862 he set off eastwards to Teheran joining a caravan. He disguised as a Sunni Turkish, and as such, he had to experience the hostility of Shiites. In Persia maintaining his pretenses, due to his excellent command of the language and his composure, saved his life. From Teheran, he travelled to the southern part of Persia – towards Ispahan and Shiraz –, from where he returned to the capital of present-day Iran in early 1863. In the spring of 1863 he joined a band of pilgrims and set off to his original destination, Central Asia, across the Turkmen Desert to Khiva, and then on his way back via Samarkand

towards the western part of Afghanistan, where he turned south, and in Herat he joined a caravan heading for Meshed. Eventually, he returned to Europe via Teheran and Istanbul. The representatives of the states of the old continent were greatly interested in his journey. The British and the Russians wanted information from him, since Vámbéry travelled across areas which were the targets of the expansion of these empires, but Vámbéry, in accordance with his political views, refused to meet the Russians. The implications if Vámbéry’s results are very diverse: he had outstanding achievements in the field of linguistics – Turkish philology –, ethnography and history, but he is also noted as a strategic analyst and a publicist. In 1865 he was granted professorship in the Department of Oriental Languages of the Royal University of Pest, where he lectured until his death. He participated in founding the Hungarian Geographic Society and he was its chairman in 1889-90. In 1884 he was awarded an honorary doctor title at Trinity College of Dublin. In 1868 he married Kornélia Rechnitz-Arányi and had one child, Rusztem Vámbéry, who became a famous lawyer. Ármin Vámbéry died in Budapest, on 15th September, 1913. His tomb can be found in Kerepesi Cemetery.

SIR M. AURÉL STEIN

(PEST, 26 NOVEMBER 1862 – KABUL, 28 OCTOBER 1943. Aurél Stein was born into an intellectual family of merchants and factory owners in Pest on 26 November 1862. He commenced his studies in Budapest, and with the scholarship of the Hungarian state, he studied arts, Indology and Iranistics, at the university

Aurel Stein’s map of Central Asia

of Vienna, Leipzig and Tübingen. He received his Ph. D. from the University of Tübingen, and later continued his post-doctoral studies in London, Cambridge and Oxford. He spent his compulsory military service at Ludovika Academy in 1885-1886, where he acquired surveying and cartographic skills, which proved to be very useful during his later expeditions. From 1887 he was the Registrar of Punjab University in India, and taught Sanskrit. In addition

HUNGARIAN EXPLORERS OF THE SILK ROAD

to his linguistic activity, in summer he set off on minor expeditions to Kashmir to identify the venues included in the chronicles of Kashmiri rulers, gaining a foothold in the field of geography. The fact that his family knew Ármin Vámbéry well, who personally told secondary school student Aurel about his travels, also played a significant role. At the turn of the 19th and 20th centuries, he shifted his attention toward archeology, because in those

days, thanks to the prowls of treasure hunters, lots of written records of unknown origins were found in East Turkestan, the site and authenticity of which had to be verified. He set off on his first expedition (1900-1901) with this goal in 1900, from Kashmir across the Hindu Kush and Tagdumbas Pamir to the region of Khotan – on the rim of the Taklamakan Desert -, where he examined the region from geographical, ethnographic, anthropological and

Aurel Steinâ&#x20AC;&#x2122;s school notebook

linguistic aspects, on top of his archeological researches. Until 1916, he led two more archeological expeditions in Central Asia (1906-1908; 1913-1916), during which he uncovered the relics of the Silk Road. In addition to his archeological activity, he made accurate cartographic surveys of the areas he covered, filling lots of blank spots on the maps of the time. He conducted his later researches in Iran, Syria, Transjordan and Kashmir. Stein continued his scientific work within the British Empire: he lived in India from the 1880s until his death, and worked in education, and later he was appointed as Inspector-General Of Education and Archaeological Surveyor of the Archaeological Survey of India. In 1912 he was promoted to Knight Commander for his service. But he never forgot about his homeland, which he regularly visited until 1938 and had a close relationship with many figures of the Hungarian scientific life, including his close friend, Lajos LĂłczy. The Hungarian Academy of Sciences elected him a member in 1895. He worked actively all his life, and he died shortly before his 85th birthday, when his biggest dream was about to come true: he was given permission to carry out research in Afghanistan, in the territory of ancient Bactria. He died in Kabul on 26th October, 1943.

HUNGARIAN EXPLORERS OF THE SILK ROAD

LAJOS VON LÓCZY SR.

(PRESSBURG, 4 NOVEMBER 1849 – BALATONFÜRED, 1920. MÁJUS 13.) Lajos von Lóczy Sr. was born in Pressburg (Hungarian: Pozsony; now Bratislava in Slovakia) into a noble family originating from Gömör county, where his parents fled running away from the Vlachs during the war of independence. After the war, they moved to Pécs and then back to Ópálos, where his father had acquired a vineyard. He attended secondary grammar school in Arad (now Oradea in Romania) and from 1869 he studied geology at the University of Zurich from professors Escher von der Linth and Albert Heim. He usually spent school holidays in the Alps, where he collected fossils and studied and mapped mountain folds. In 1874 he graduated as an engineer. Having finished his university studies, he returned home and got a job in the Mineral and Fossil

Repository of the National Museum. His outstanding professional performance raised the attention of his superior, Ferenc Pulszky, and when count Béla Széchenyi organised an expedition in Asia, Pulszky and E. Suess geologist-professor in Vienna recommended Lóczy, who spoke several foreign languages and had academic qualifications, as a member of the expedition. Although he achieved several significant professional results during his life, the Asian expedition earned him world fame at a young age. The expedition lasting from 1st November 1877 until 1st May 1880 was led by Count Béla Széchenyi, and its members included Gábor Bálint linguist-ethnologist, Gustav Kreitner, Austian cartographer, first lieutenant and Lajos von Lóczy geographer. The team embarked on a steam ship in Trieste, and they first went to Calcutta. Here, during his research in the library of the Asiatic Society of Bengal, Lajos von Lóczy found the autobiography of Csoma de Kőrös, which was believed to be lost.

Lóczy (Lhotse) Peak in the Himalayas

From Calcutta, the members of the expedition split, and the young geographer went to the Eastern Himlayas, where he also climbed the 4,423-metre tall Jelep Pass. Here he prepared the geological map of the border junction between Bhutan, Sikkim and Tibet, also called as Triplex. The most significant geoscientific achievement of the expedition, the discovery of the plate tectonics of the Himlayas is related to his research there. On the basis of his theory and his field experiences he concluded that the strata he called Transhimalayas were ranging to the north of the Himalayas. Later their existence was proven in practice by Swedish Orientalist Sven Hedin. During the expedition, the team led by Széchenyi explored South China; from Shanghai they shipped to Hankou and from here they got as far as the Irravaddy Plain. They explored the eastern part of the Gobi Desert, adjacent to China, and conducted researches on the eastern banks of the Quing Hai Lake and around the Yellow River. They could not accomplish their complete plan to travel around entire Asia from east to west due to the turbulent situation in Turkestan, but – chiefly thanks to Lóczy’s work – the expedition created memorable value. The scientific summary of the journey took almost 20 years. The book entitled Scholarly Results of the Eastern Asian Travel of Count Béla Széchenyi (1877-1880) was finally published in three plus one volumes in Hungarian in 1890 and in German in 1899. This work laid the foundation for the research into the geomorphology of Central Asia and West China. After having returned home, he worked in the Hungarian National Museum until 1882, but in 1883 he became a geologist at the Hungarian Royal Geological Institute and worked on the geological mapping

of the Mountains of the Banat region. Between 1908 and 1919 he was the director of the Hungarian Geological Institute and in this period the institution achieved a very high scientific level: it employed many young professionals, increased the number of the publications of the institution, and harmonised the work of geologists working in the same field, organising joint expeditions for them. In 1886 the Joseph Royal University of Technology invited him to be the professor of geology, and in 1889 he started to lecture geography at the Science University of Budapest, where he was a lecturer for almost 30 years. In his courses, special emphasis was put on gaining practical experiences in addition to in-depth theoretical instruction. He organised several study tours in Hungary and abroad – for example, in Italy, Russia, Finland, Bulgaria –, in which a high number of foreign students also participated after a while. With his educational activity, he placed Hungarian geographical science in the international forefront. He educated such excellent professionals like geographers Count Pál Teleki, Jenő Cholnoky, Gyula Prinz and geologists István Vitális, Dezső Laczkó and Ferenc Nopcsa. In 1888 the Hungarian Academy of Sciences elected him a correspondent member. His research into Lake Balaton is also outstanding in his career. This work was supported by 60 excellent professionals for almost three decades. The results of this extensive and in-depth research are summarised in his work entitled Results of the Scientific Study of Lake Balaton. At the end of his life, he retreated to his estate by Lake Balaton. He passed away on 13th May 1920, surrounded by his wife and his three children. 51

Ervin Baktay

His most important books: • On the Top of the World. Following the footsteps of Sándor Csoma de Kőrös in West Tibet (Budapest, 1930, 1934) • I ndia I–II. (Budapest, 1931, 2000) •T he Country of the Happy Valley. Travels in Kashmir (Budapest, 1934) •W anderer of distant lands. Sándor Csoma de Kőrös in India and Tibet (Bp., 1934, 1960) •M y years in India I-II. (Budapest, Révai, 1938., 1939.) •B ook of astrology (Budapest, 1942, 1943, 1945,1989, 2000) • Wisdom of India (Budapest, 1943, 2000) • Art of India (Budapest, 1958, 1963, 1981) • Astrological prognosis (Budapest, 2001) • E xploring and Conquering India and Indonesia (Budapest, Révai, 1938)

ERVIN BAKTAY

(UNTIL 1925: ERVIN GOTTESMANN; DUNAHARASZTI, 24 JUNE 1890 – BUDAPEST, 7 MAY 1963) Ervin Baktay painter, art historian, orientalist, astrologist, writer, literary translator. His father was Raoul Gottesmann, his mother was Antónia Alojzia Martonfalvi. He studied painting at the Academy of Fine Arts in Budapest, then in Munich from Simon Hollósy. He served at the front in Word War I. He knew that József Ágoston Schöfft met Sándor Csoma de Kőrös on his journey in India and made a drawing of him. In the early 1920s he tried to popularize Indian culture by publishing translations and books. Between 1926 and 1929, he studied Indian religions and culture in India. In 1928 he tracked down the places Sándor Csoma de Kőrösi once stayed at, and his relics. In 1929 he returned home, infected by malaria. Around the beginning of 1931 he founded an Indian tribe and established a camp first on the island of Kismaros, then in Verőce, opposite the ancient Roman ruins. It was kept after his death on 7th May, 1963. Between 1930 and 1944 he was one of the editors of the

Földgömb (“Globe“ in Hungarian) magazine. In 1933 he received a Doctor of Humane Letters at the University of Debrecen. From 1946 until 1958 he was the deputy director of the Ferenc Hopp Museum of East Asian Art and a temporary lecturer at Eötvös Lorand University. In 1956-57 he made another study tour in India at the invitation of the Indian government: he was one of those seventeen non-Buddhist people who were invited to the series of monumental celebrations organized for the 2,500th anniversary of Buddha’s birth in 1956. In 1959 he participated in the preparation of the exhibition entitled The Art of Asia, organized in the Museum of Applied Arts. After he retired, he gave lectures on the art of India in several foreign countries (e.g., U.K., Sweden). His sister was Marie-Antoinette Gottesmann, who married the son of the raja of Shimla, Umrao Sher-Gil; their daughter, Amrita Sher-Gil, became one of the greatest modern painters of India.

HUNGARIAN EXPLORERS OF THE SILK ROAD

JENŐ CHOLNOKY

(VESZPRÉM, 23 JULY 1870. – BUDAPEST, 5 JULY 1950)

Jenő Cholnoky was born in Veszprém, as one of the eight children of lawyer László Cholnoky and Krisztina Zombath. He went to secondary school in Veszprém and Pápa. He was interested in geography, but his father did not enroll him at the Science University but the University of Technology, because he did not want his son to become a poor teacher. He graduated from the University of Technology with a degree in Hydraulic Engineering, and he got a job there as an assistant lecturer. He met the world-famous orientalist and geographer Lajos von Lóczy in those days. Lóczy invited him to be his assistant in the Geography Department of the Science University in 1894, with which Chonoky’s career as a geographer commenced. This was a decisive step for Cholnoky’s later career, who is noted by posterity as an outstanding student of Lóczy. As a geographer, he could make good use of his engineering knowledge and his relevant drawing skills. His eastward travel was conducted in 1896, when he went on a study tour in China, on Lóczy’s recommendation and a scholarship. His mentor assigned him the task of exploring the delta region of the Chinese Plain. He had to discover the reasons why the Yangtze and the Yellow Rivers shifted their beds, and its mechanism. As a result of his research work of almost two years, he prepared the hydrogeography of the delta, discovered a basalt plateau of 100,000 km2 in Manchuria, and collected lots of materials for ethnography. He made drawings of hydraulic buildings

and the geomorphological characteristics of the area in his diary. He wrote a book about his journey in China, entitled In the Country of the Dragon. Returning home from Asia he was promoted to senior lecturer at the Science University. In addition to philosophy, he obtained his second doctorate, and was habilitated as the associate professor of descriptive geography. In 1905 he was appointed as the head of the Geography Department of the University of Kolozsvár (now Cluj-Napoca in Romania), and he filled this position for 15 years. During his leadership, academic-level geography education reached a very high standard. In the meantime, he studied the physical geography of Transylvania in detail. In 1919 he had to flee from the occupying Romanians, moved back to Budapest, where, as a geographical expert, he was assigned as a member of the group preparing peace talks. In 1920 the Hungarian Academy of Sciences elected him a correspondent member, and in 1921 he inherited the head of department position at the University of Budapest from Géza Czirbus. Owing to his hard work, the neglected department rose to an international level again, and such excellent geographers graduated as Béla Bulla, László Kádár or Andor Kéz. He retired in 1940 but remained active until his death. His scientific activity included hydrology and climatology as well as geography. Among others, he developed the classification of river section types, described the rules of movement in drift sand, and participated in the scientific study of Lake Balaton. He created outstanding value in the education of geography, too, since he published almost 50 books and nearly 1,000 scientific publications and publicity articles.

A tájképfestő Cholnoky

RELATIONSHIPS OF THE FOLK MUSIC CORPORA OF THE SILK ROAD

Author: Dr. Atilla Grandpierre

The evolvement of the Silk Road is one of the greatest achievements of history, because it opened up new horizons for development by creating close links between the greatest ancient cultures. Remarkably, the region of the northern Silk Road is the primary home of pentatonic music. We are going after this relationship in our article. Long-distance trade routes always evolve between two interested parties. We know that China was the starting point of the Silk Road. If China was one of the parties, what was the other party? Which was the other, similarly developed civilization with which China was happy to trade? As far as we know today, there were four ancient civilizations: China, India, Mesopotamia and Egypt. None of these is mentioned in connection with the main route of the Silk Road. The excellent Russian archaeologist, Elena Kuzmina, writes in her book “The Prehistory of the Silk Road” published in 2007, that the most important, northern route of the Silk Road was the one which stretched across the Eurasian steppe and, starting in China, it linked Central Asia with the northern coast of the Black Sea for several millennia. What sort of an ancient high culture existed at the other end of the main route of the Silk Road? For us, it is particularly remarkable that pentatonic music is the most characteristic on the Eurasian steppe ranging to the Carpathian Basin on the west, around this important, northern branch of the Silk Road. Pentatonic folk music may be a very important guide to the exploration of this ignored ancient high culture. The Eurasian steppe does not stretch to the northern coast of the Black Sea but to the Carpathian Basin, and pentatonic music survived much more here, in the Carpathian Basin than at the northern cost of the Black Sea. Might an ancient high culture, which has been ignored up to this day, have existed in the Carpathian Basin?

John Noble Wilford wrote in the New York Times in 2009, ‘Before the glory that was Greece and Rome, even before the first cities of Mesopotamia or temples along the Nile, there lived in the Lower Danube Valley and the Balkan foothills people who were ahead of their time in art, technology and long-distance trade. New research, archaeologists and historians say, has broadened understanding of this long overlooked culture, which seemed to have approached the threshold of “civilization” status. To some scholars, the people and the region are simply Old Europe. The settlements maintained close contact through networks of trade in copper and gold and also shared patterns of ceramics. A few towns (…) grew to more than 800 acres, which archaeologists consider larger than any other known human settlements at the time.” The “Old Europe” culture evolved in the Carpathian Basin. It supposedly existed in the period between 6,000 B.C. and 2,400 B.C. Blagoje Govedarica, Professor of Archaeology in Hamburg proved that from 5,100 B.C. the archaeological culture characterised by burying with sceptres had created cultural centres by the Lower Danube, the northern coast of the Black Sea, in the Volga-Kama Interfluve and in the Caucasus. These cultural centres lived in peace with each other, and had close contact with the regions to the east of the Ural Mountains. In recent decades, it has been revealed that metallurgy was invented in

Old Europe, in the Balkan-Carpathian metallurgical province around 5,5000 B.C. For thousands of years, Old Europe was the European centre of agriculture, metallurgy, housing, refined pottery and high-level stone working. Their descendant peoples were the pre-Scythians and the Scythians. In the last millennium B.C. Ancient Greeks called the entire region of the Eurasian Plain the empire of the Scythians and later that of the Sarmatians, akin to Scythians; Chinese called it the empire of the Huns. In recent decades, we have learnt more and more new information about the extraordinary antiquity, world-class goldsmithery, fascinating zoomorphic art, and legendary wealth of the Eurasian Scythian-Hun civilization. It is getting more and more obvious that in the first millennia BC, there was a civilisation on the Eurasian Plain, which was on a par with the ancient Chinese, Greek, Indian and Egyptian civilisations, and it was even more developed at handicrafts.

This “Old European” culture evolved in the Carpathian Basin. In ancient times, when people did not modify their natural environments substantially, physical geographic conditions played a primary role in the development of early civilisations. Fundamental facts of physical geography support the idea that the Eurasian Plain and its surroundings, stretching from the Carpathian Basin to the Pacific Ocean are a particularly favourable area for the birth of civilisations. The northern Silk Road is the artery of the world’s largest, most fertile, temperate, ecologically coherent region, the Eurasian Plain, which is several millions square kilometres in extent. This vast area encompassing a distance of about 10,000 kilometres, 14 time zones, numerous large rivers from the Carpathian Basin to the Pacific Ocean along the parallel 45° north, provides similar biogeographical conditions for wildlife. The similar fauna, flora and climate provide similar conditions for mankind. The ecological consistency of fauna and flora provided fundamentally coherent and favourable conditions for the development of humans and the ancient culture. The plain was relatively easy to pass, which facilitated the maintenance of long-distance relationships and the development of culture. It was supported by the

Similar patterns from the ancient cultures of the Carpathian Basin and China. Peculiar archaeological artefacts demonstrate the commercial and/or cultural relationship between the culture of Old Europe and China’s Yang Shao culture. On the left, a clay vessel with a tubular base and interlacing spirals, originating from the archaeological culture of Old Europe can be seen. This archaeological culture is the Erősd-CucuteniTrypillian culture; it ranges from Transylvania to the north coast of the Black Sea and the Balkan, and existed from 5,100 to 2,400 B.C. On the right, a very similar clay vessel, decorated with interlacing spirals, can be seen; it is from the Yang Shao culture, which existed at the bend of the Yellow River, around Ordos, the starting point of the Silk Road, from 5,000 to 3,000 B.C. The distance between the two sites is more than 7,000 km. greatest achievement of the ancient civilisation, the domestication of the horse, which also evolved in the western half of the Eurasian Plain in the 5th century BC. Transport was revolutionised by the invention of the spoked wheel and the coach – these inventions are also related to the Eurasian Plain. Since, in addition, metallurgy, pottery, large animal husbandry and wholesale cereal production reached the highest degree of development in this region, the surroundings of the Silk Road, from the Pacific Ocean to the Carpathian Basin, seems to be the most developed culture of mankind before the millennia BC. The entire Eurasian Plain lies in the temperate zone. A significant portion of its soil is extremely fertile black or brown soil, which is the best soil in the world. The weather conditions on the Plain improve from east to west, toward the Carpathian Basin, where they are the most favourable: Mediterranean, Atlantic and continental climates prevail, but none of them outweighs the other. Here, the more extreme, drier climate is replaced by a wet continental one. While the most of the steppe is a plain with bushes and fields but no trees, the Carpathian basin is rich in

plants and very frequently spotted by trees, groves, forests. The protecting, unifying and balancing effect of the mountains around the Carpathian Basin, which are very rich in minerals, and the two large rivers, the Danube and the Tisza running near each other, the top soil with high humus content, which had formed on a loess cover of 200,000 square kilometres, created favourable conditions for biogeographical factors. Peoples of the steppe therefore tended to migrate westward along the plain, to its more fertile and richer western regions, Encyclopaedia Britannica notes. At the same time, at the other end of the Eurasian Plain, the region of Ordos, almost surrounded by the bend of the Yellow River, provided the best-quality pastures in the East Asian loess region, and it contributed to the significant role that this region played. In addition, the central location of the Carpathian Basin within Europe creates the possibilities of very diverse interactions, both for in- and outflows. The largest, temperate areas rich in loess and nurtured by rivers can be found on the Eurasian steppe, in Central

Europe and China, especially along the Yellow River and the Danube Valley â&#x20AC;&#x201C; exactly at the places where the pentatonic scale is predominant. RESPECT FOR NATURE, RELIGION, PENTATONIC SCALE - COMMON ELEMENTS IN THE CULTURES OF THE PEOPLES ON THE SILK ROAD The greatest significance of the Silk Road and its predecessors lies in the spread of ideas culture and technology. We can talk about fundamental similarities as well as significant differences in both the material and intellectual cultures of the different regions. As we look back in time, the culture of the Eurasian steppe and that of East Asia prove to be closer and closer to each other. In 1st millennium BC, until 6th century AD, one single religion prevailed in this vast region: the nature religion, or with a modern name, shamanism, or as it was called in its days, the religion of the Magi, which has a history of tens of thousands of years. All signs indicate that before 6th

Jewish community Jewish pilgrimage site Christianity (325 AD) Christianity (cca. 600 AD) Monophysite Christianity Nestorian Christianity Nestorian community Spread of Nestorian Christianity Christian pilgrimage site Zoroastrianism Hinduism Spread of Hinduism Hindu shrine Hindu pilgrimage site Buddhism Spread of Buddhism Buddhist shrine: cave shrine Buddhist religious centre Taoism Confucianism Shintoism

Map of religions in Eurasia in the period from 6th century BC to 6th century AD

RELATIONSHIPS OF THE FOLK MUSIC CORPORA OF THE SILK ROAD

Legend usual in some area rare

Occurrence of pentatonic folk music in Europe

The culture of Old Europe and its relationship with Asia

Legend Distribution of Altai regions with folk songs similar to Hungarian ones Homelands of ethnic groups with folk songs similar to Hungarian ones Distribution of Han pieces similar to Hungarian folk songs

Occurrence of ethnic groups in China whose folk music is similar to Hungarian

Based on map I, II and III of Du Yaxiong’s Relationship between Hungarian and Chinese Folk Music (1998)

century BC this ancient religion embraced an even larger area, since Buddhism spread in China from 4th to 2nd century BC, and Taoism managed to preserve ancient traditions. Even before the dawn of the Chinese religion (!) the religion of the Magi might have had an organised clergy (de Groot, 1982, VI, II:1187). In the millennia BC, the Magi had a leading role on all levels of the Chinese religion (Schafer, 2005, 234). Folk music is often more permanently preserved than religion. The region of the nature religion stretching from Scandinavia and the Danube Valley to Southeast Asia apparently corresponds to the region of pentatonic folk music. Bence Szabolcsi concludes that “the scattered and faded traces of the vast musical language chain (of the pentatonic scale) can be tracked from the Lapp Peninsula and Transdanubia and from the Caucasus and the Volga regions down to the coasts of East and Southeast Asia.” PENTATONIC FOLK MUSIC IN EUROPE It is often said that pentatonic music can be found all over the world. Consequently, we could think that the pentatonic nature of Hungarian folk music is not

a Hungarian peculiarity. But this would be misleading. On the one hand, in Europe pentatonic music is common in the Carpathian Basin, in present-day Slovakia, Transylvania and, regarding children’s songs, in Russia, with some of it ethnic groups. Furthermore, it was preserved in Irish, Welsh and Scottish folk music – but it is not common anywhere else. The development of the pentatonic scale, according to latest research, is closely related to archery. The single-stringed musical bow developed into doublestringed then multiple-stringed musical bows, harps and other stringed instruments. The simplest version of the musical bow has one single string, and the oral cavity of the musician serves as the soundbox. The first harps had a bow-shape. The first known depiction of the instrument can be seen in one of the drawings on the walls of the cave in Les Trois Frères, Southern France. It was made approx. 15,000 year ago. Today, similar ancient images are found in Siberia, China and India. The bow has a history of at least 40,000 years, according to archaeological finds discovered in the Carpathian Basin, in Istálló-kő and Upper-Hungary.

a selyemút népzenéinek rokonsága

Tien-san

The region ranging from the Carpathian Basin to the Pacific Ocean was the primary habitat of bow people, which corresponds to the primary regions of shamanism where the idea that music has cosmic magical power is rooted. It was proven that ancient Mesopotamian and Egyptian harps were pentatonic. Five, more than 30,000-year old bone flutes, able to produce five sounds, were found in the cave of Istállós-kő in the Carpathian Basin (László Zolnay). Along the Yellow River in China, in the Jiahu site next to Ordos, a more than 9,000 year-old flute made of a bird’s hollow bone has been recently discovered. The flute demonstrates a high level of tonality and mathematical knowledge. The people of Jiahu knew the sound scales and were able to shape the holes of the flute to produce the appropriate pitch (Zhang et al., 1998). It can play the pentatonic folk song “Little cabbage”, still popular in North China; its Hungarian counterpart is the folk song “Orphaned bird” (Yaxiong 1998, 34). A pan flute from 8 th century BC, found near Przeczyce, South Poland (Silesia), also played the pentatonic scale (Hegyi 2012)..

PENTATONIC FOLK MUSIC IN CHINA China is one of the most ancient homelands of pentatonic music. Bence Szabocsi concluded, that at the bottom of the history of Chinese music there seemed to be minor-pentatonic tunes (“Yu-Chou” scale system). Apparently, the old “Si King” contained a high number of minor-pentatonic tunes. (Szabolcsi Bence 1934). According to Chinese tradition, it was LingLun, one of the wise men of Huang Di, who brought this nature-based musical system of the pentatonic scale from the northwest in 3rd millennia BC. According to Chinese records, Yu, that is the la-pentatonic key, also fundamental in Hungarian folk music, was very predominant in the northern part of China in 5th century BC. (Du Yaxiong 1998, 11). It has long been known that the oldest-seeming strata of Chinese and Mongolian music might have a relationship with the tunes of the Volga region and Hungary. Yang Yinliu, professor of the Central Conservatory of Music in Beijing, considered it very likely that the minor pentatonic scale (the “la-mode”, as he called it) had radiated more powerfully from

the northeast into Chinese music. The style of northeastern Chinese music was called the “Gansu music dialect” (Gansu is a Chinese province including much of the Ordos district and areas to its northwest). The Hungarian tunes in Chinese folk music form a part of it. The pentatonic scale without semitones is indigenous in the Carpathian Basin, with the TurkicTatar peoples living on the Russian steppe and in China (Kodály 1982, 24). We should remember that the relationship between Chinese and Hungarian folk music is much stronger than the relationship between Chinese and Japanese folk music (ibid, 50). Lu Hongjiu concluded that the folk music of Ordos was rooted from the Huns. According to Chinese tradition, the music system of the Ordos region is based on the nature-based theoretical system already known 5,000 years ago (Szabolcsi 1934). Regarding the relationship with Hungarian folk music, we can distinguish three districts in North China, where the folk songs of the inhabitants, namely the ethnic groups living in China, the Altai peoples, and the Han people, are similar to those of Hungarians: The existence of the common source of Chinese and Hungarian folk music is confirmed by the latest results of comparative ethnomusicology. Zoltán Juhász distinguished more than 1,000 types of folk songs by a computer-based analysis of more than 50,000 tunes collected from 44 ethnic groups, on the basis of the melody contours. He found six cultures of folk music based on the frequency distribution of the different melody contours, within which the musical types of the various ethnic groups are about ten times closer to each other than the types of the different cultures are to each other. Out of the six folk musical cultures, the “Ancient Language” culture can be found in 50 tune types of the Chinese, Volga, Sicilian, Turkish, Karachay, Hungarian, Romanian, Dakota, Andean, Kazakh, Szekler folksongs; the “Oriental” culture is included in 70 tune types of the Chinee, Mongolian, Volga, Sicilian, Andean, Kazakh and Hungarian folk songs. The “Oriental” culture range from China to the Volga region, while the “Ancient Language” one from China to Asia Minor and the Carpathian Basin. The computer-based analyses showed quantitatively and explicitly that the same musical principles underlay the musical system of the Carpathian Basin, the Volga region and China (Juhász 2008, 84). Of all folk music cultures, the only folk music culture with which Chinese music has direct relationship is the Hungarian (Juhász 2006,

141). There are only an insignificant number of types in the folk music of China and the Volga region which the Hungarian folk music lacks; the other way round, however, the common melody types of the folk music of China and the Volga region are richer in Hungarian folk music, and form a more complete system. The direct relationship between Chinese and Hungarian folk music, manifesting in so many melody types, is possible only if a significant group of our ancestors permanently lived in the neighbourhood of China (Juhász 2006, 146). The folk music of the Hungarian people, which is related to that of the Chinese, Turkish, Chuvash, Tatars, Maris, Karachays and Indians, serves as the fundamental strata of the “Ancient Language” folk music culture. The highest proportion and diversity of this fundamental strata occurs in the Szekler database and among Hungarian type melodies. (Juhász 2016, 232). For archaeological, genetical and historical reasons, Juhász supposes that this “Ancient Language” folk music culture, including 50 melody types, is more than 12,000 years old. Pentatonic folk music still plays an important role in China, Hungary, Slovakia, Romania, Russia, Mongolia, Kazakhstan, with the Khakass living in the Minusinsk Basin, the Maris (Cheremis) living by the Volga, in Tuva, with the Caucasian Karachays and Balkars, in Southeast Asia, with the Kalmyks, in Chuvashia, the Nogay Tatars, in Korea and Japan. COMMON ELEMENTS ALONG THE SILK ROAD IN THE MUSIC CULTURES OF TODAY’S PEOPLES The Silk Road has a history of several thousand years. In this vast, ecologically coherent area, where the fauna, the flora and the climate are fundamentally the same, man-made world springs from a common slant of life and mindset. The high-level culture about which we can have a more comprehensive picture with the help of traces emerging in recent years, has common roots. This fundamentally common natural environment resulted in the development of an extremely rich common musical world in folk music, to express the slant of life. It is a fact that this is the region where pentatonic music was born and has been flourishing for millennia, from the Carpathian Basin to the Pacific Ocean and North India. In his book entitled “The Five World Religions” (1975, 141), Helmuth von Glasenapp writes, that the basic idea behind Chinese ideology is the harmony of the sky, the Earth and man. One of the most beautiful

a selyemút népzenéinek rokonsága

sections of the Shujing (I, 4) says, “There is the most intimate relationship between the Heavens up and the men down, and who recognises this in its entirety is really sage.” This cosmic ideology is reflected in ancient folk music as well. According to the ancient Chinese concept of music, music is the gift of the Heavens, its basic principles derive from the laws of the Universe and is capable of having immense impact on people. Béla Bartók writes, “Folk music is a phenomenon of nature that evolves with the organic freedom of other living organisms in nature: flowers, animals, etc.” – and as we could see, the fauna and flora form one unit in this vast area being the largest coherent region of the world, just like the ancient strata of pentatonic folk music. “Real peasant music is transformative work of a natural force operating unconsciously in peoples not influenced by urban culture” (Bartók 1925, At the sources of folk music). The same drive makes the songbirds sing and creates folk music in people: the instinct to create music, which penetrates nature and implies high-level intellectual activity. Béla Bartók recognised that the pentatonic nature of folk music is a natural phenomenon. The pentatonic scale is a natural phenomenon, it is an important, although not exclusive, characteristic of birdsongs. Ornithologists have shown that the non-exclusive but extremely frequent features of birdsong include: the minor pentatonic scale, fifth transposition, descending melody line, choriambus. Interestingly, these are also the main characteristics of the ancient strata of Hungarian and Chinese folk music, that is, they do rely on natural principles. The woodlark sings melodies of a chromatising tone system and with fifth transposition. Pentatonic, diatonic and other “human” tone systems have also developed in the avifauna. A hermit thrush often sings minor pentatonic songs. It is not only the pentatonic scale which connects the folk music of the Silk Road and the pentatonic nature of birdsongs. We can find a whole series of elaborate matches if we get acquainted with birdsongs. Our ancestors paid close attention to Nature for millennia, during the entire unfathomable past, until the dawn of becoming humans. In his book entitled “The Origins and the Three Worlds of Music”, Péter Szőke birdsong-researcher showed that the emphasised role of the fifth transposition, the descending tone, the sharp and drawn rhythms, the pentatonic scale

without semitones, the four-line verses and the descending melody line and the harmonic dominanttonic relationship, well-known in European a folk music were also displayed in birdsongs. A series of avian musical facts, proven by experiences, confirm that no matter how developed human music is, the basic creative principles of human folk music can be detected in the music of the birds, and this is evidenced by a multitude of samples from avian music (Szőke 1982, 69). In addition, the extraordinary phenomenon of the folk song threshold also connects Hungarian and Chinese folk music. Approximately half of the North Chinese folk songs still contains the folk song threshold (xing), known to the Chinese for at least 3,000 years, according to the “Book of Verses” (Du Yaxiong 1998, 44). The threshold, which is characteristic of both Hungarian and Chinese folk songs, means that at the birth of such folk music a phenomenon of Nature found an intimate echo in the soul of the singer, and this inner echo initiates the birth of the folk song. It means that such folk songs were born from an intimate perception of Nature. All these signs together indicate that ancient Eurasian folk music was born not only from the instinct to create music, which penetrates the avian world as well, but from an essentially deeper apprehension, intimate experience and respect of Nature. On his tour of collecting folk songs in Szeklerland in 1907, Bartók suspected the identical tone of the ancient Chinese and ancient Szekler folk music. The work of the subsequent decades supported his suspicion. In 1937 Kodály wrote, “such striking substantial similarities of the melodic structure, phraseology, and rhythm cannot be sheer coincidences. We should suppose contact or a common source here.” Kodály’s standpoint in 1947 demonstrates how deeply he saw the fundamental role of folk music in our national self-identity: “To sustain the unbroken ancient Hungarian spirit manifesting in old melodies, to refresh where it languishes: the whole problem of the survival of Hungarians can be condensed into this single task” (Kodály 1949). The world-famous Kodály method was created for these reasons; its pedagogical concept was regarded as a nation-saving programme by Kodály. The similarly sounding melodies along the Danube, the Volga and the Yellow River, over fifteen hundred years and many thousands of kilometres, convey the same message to us: “we live until we remember who we are” (Kodály 1942).

SILK, THE ANCIENT MATERIAL OF THE FUTURE

Author: Fiorenzo Omenetto

Silk is a new, old material that continues to amaze us, and that might impact the way we think about material science, high technology - and maybe also do some stuff for medicine and for global health and help reforestation. This material actually has some traits that make it seem almost too good to be true. It's sustainable and biodegradable. It's edible; it's implantable in the human body without causing any immune response. It's technological, so it can be used for things like microelectronics and photonics This material is clear and transparent â&#x20AC;&#x201C; this is silk. The silk worm uses just two ingredients, protein and water to make a material that is exceptionally tough for protection like Kevlar. And so in the reverse engineering process that we know about, and that we're familiar with, for the textile industry, the textile industry goes and unwinds the cocoon and then weaves glamorous things. We want to know how you go from water and protein to this liquid Kevlar, to this natural Kevlar. Fiorenzo Omenetto studies how you go from water and protein to this liquid, natural Kevlar. Proteins are extremely smart at what they do. They find their way to self-assemble. So the recipe is simple: you take the silk solution, you pour it, and you wait for the protein to self-assemble. We can store information that's film with water and protein. We can store images in silk, we can create films of silk, and even a hologram. Silk can follow very subtle topographies of the surface, which means that it can replicate features on the nanoscale. So it would be able to replicate the information that is on the DVD.

We can do microneedle arrays made of silk, but you can do gears and nuts and bolts. You can use that liquid Kevlar if you need something strong to replace peripheral veins, for example, or maybe an entire bone. You can do electronic pieces that fold and wrap. Or if you're fashion forward, some silk LED tattoos. Silk is biodegradable and biocompatible. You can implant it in the body without needing to retrieve what is implanted because it gets reintegrated in tissue. Silk, during its self-assembly process, acts like a cocoon for biological matter, so it makes the materials environmentally active and interactive. So the thread of discovery that we have really is a thread. We're impassioned with this idea that whatever you want to do, whether you want to replace a vein or a bone, or maybe be more sustainable in microelectronics, perhaps drink a coffee in a cup and throw it away without guilt, maybe carry your drugs in your pocket, deliver them inside your body or deliver them across the desert, the answer may be in a thread of silk.

AN INVISIBLE BOND WITH SILK 66

AN INVISIBLE BOND WITH SILK Author: Katti Zoób

Silk is the miracle of transformation, the fine thread of protective cocoon, the fibre of vital force. The silk thread provides the textile industry endless possibilities for processing, it is woven with a thousand kinds of methods, and gives birth to several fabrics: organza, muslin, satin, taffeta, shantung, duchess, bourette, georgette, crepe, or the famous cady. It is made into velvet, and thick brocade, may be jacquard or devoré, crisp twill, humble poplin or even frothy boucle. The different sorts of silk fabric, cultivated during the millennia, present inspiring challenges and opportunities for fashion designers. Silk has a thousand faces. It gives a unique character to those wearing it, and its diversity makes collections variable.

t was the wardrobe of my grandmother, in which she kept, like treasures, the wonderful silk relics of her vanished past, that opened my silk road. She ignited my imagination with strange tales, making my fingers soak the touch of silk clothes. In 1994, after my first show the use of this material attracted special attention although I am still afraid to recall the circumstances under which I came by the materials of the collection made mostly of silk. Enchanted by black georgette and taupe crepe de chine, I was searching for old clothes, silk camisoles and nightgowns in flea markets, and then these hardwon pieces were used as raw materials and took new shapes as parts of the collection. I still regard attributing new meanings to materials and objects with a history a boundless game of my creativity. Naturally, the procurement of silk has changed in the last 20 years, today famous companies producing the raw material come and show their novelties. Italy’s silk roads opened up for me first, than the circle broadened with Cyprian and Spanish handmade silk, and, thanks to trickery of life, it was me who brought the silk to China for the collection made for the Shanghai Fashion Week.

For me, silk has never been about fashion; it is much more than that, it is a real invisible link between me and silk. TOUCH Having accepted the invitation of Donghua University, I was standing on the pulpit in Shanghai and giving a lecture to eager students on European fashion, the special techniques of Hungarian handicraft, my own works and the feeling about the everyday life of a creative person in Europe. At the end of the two-hour lecture I was shocked to realize that my audience had no idea where Hungary was. Their curiosity and attention was paid to a European person, who lived in a mystical, distant, enviable culture, in the abundance of great opportunities. Suddenly I got confused since during my life my great task had been how I could find my place in Europe. The big question had always been whether I could produce on the oversupplied European market such products which got into the blood circulation, and whether I could integrate into international flows. My confusion grew even greater when a boy from the audience was talking about me, the “world-famous fashion

“For me, silk has never been about fashion; it is much more than that; there is a real invisible link between me and silk.” designer” standing in the limelight of my success, and he asked me to tell them what they could do to become as successful and happy as I was, and which of my experiences they could use. They passed on our leather embroidered clothes and the eosin jewelry made together with the Zsolnay manufacture with mystical respect. I will never forget what an elevating feeling it was to see the curiosity and then the amazement as they could touch them with care. Whenever we have showed up abroad I have received such genuine interest and appreciation which gives me more and more impetus to open newer and newer gates. We need to pull down boundaries in ourselves to enjoy boundlessness. The base for a

self-value conscious existence is appraisable performance, may it be small or great; an active person will find their task and their receptive community. Maybe what we should learn is to be as interested in each other at home as the world is interested in us. SILK IS LIFE ITSELF Silk, as a fabric, silk, as the keeper of Oriental secrets, is tradition and the embodiment of 21thcentury modernity, everyday elegance, passion and tranquility. Within the historic walls of the Hungarian National Museum, new and internationally renowned Chinese fashion designers as well as the Katti Zoób Fashion House presented their collections entitled “The Silk Road”, made for the occasion and inspired by Chinese culture, in the spring of 2016. ‘Silk is like life. Without silk, there is no fashion industry, for this material knows every past secret and presents all the possibilities of the future’, believes Kati Zoób, the heart and soul of the Katti Zoób Fashion House established 20 years ago, the “grande dame” of Hungarian fashion. ‘It is also used in Chinese medicine: those wishing to heal are wrapped

AN INVISIBLE BOND WITH SILK

in silk. In an austere, relatively stimulus-free room, calmness overcomes the unwell through this fine, soft and somewhat slippery material, which seemingly flows off the human body. It relaxes the muscles and assists in releasing tension. This meditative relaxation represented by healing silk is completely in contrast with the role it plays in fashion. There it is the tool and embodiment of excitement, voluptuousness, glamour and wildness.’ The exceptionally long, fine, flexible threads of silk, its weaving methods and patterns are the fruits of a culture that is thousands of years old. By itself, it is a raw material but it has as many variations as many processing techniques exist. It can be made

into winter coats, duvets, blankets and cushions, or satin, organza, muslin – everything you need for pomp. Unfortunately, owing to its cost, this material cannot be a part of everyday life. But Katti Zoób thinks, ‘a black georgette jacket or an elegant black georgette dress never goes out of fashion, thus everybody should have at least one in their wardrobe.’ ‘I am a passionate enthusiast of eastern decorative arts, especially hand-crafted textile decorating techniques. I have been to Chine quite a few times and I have had the chance to work together with figures of the traditional fashion industry, who could make such miracles we can hardly imagine. It was a tremendous gift for a creator to work on such

Láthatatlan kötelék a selyemmel

a theme, at such a venue and in such constellation. I can hardly wait for the exhibition’, said the fashion designer about her approach to the unique invitation. ‘Silk is so diverse and has such a rich history that it also makes the life’s work of those who can grasp this rich.’ Before Katti Zoób’s creations, internationally renowned Chinese fashion designers including traditional designer Xiaoyun Lin as well as Youjina Jin and Lulu Liu display their works. ‘What I show is how you can insert traditional processing such as silk jacquard or georgette into a contemporary mood and modern lifestyle, and how future-proof this fabric is. What interests me in the works of Chinese designers is what a contemporary young designer thinks of silk, whether they consider it at all, and whether they add something new. We are connected by this material; but the designers’ ideas and our collections should be as multifaceted as diverse and multifaceted silk is ‘, Katti Zoób explained.

In China, innovative design is very strongly present in fashion. Nearly all major cities have a fashion university with a separate silk department. From the 1980s, the institutions have been inviting European textile and fashion designers, first to deliver individual courses and summer university sessions, and later for entire academic years. They started to train competent teachers, fashion creators and consumers as well. Just as the Chinese are leaders in the development of technical materials used in sport and the production of telecommunications product, China is knocking on the doors of Europe with good reason in the field of fashion, too’, the fashion designer thinks.

“Silk is so diverse and has such a rich history that it also makes the life’s work of those who can grasp this rich.” 73

CHINA AND THE ST 21 CENTURY NEW MARITIME SILK ROAD

CHINA AND THE 21ST CENTURY NEW MARITIME SILK ROAD Author: Péter Klemensits

One of the major elements of the One Belt, One Rod initiative launched by China in 2013 is the concept of the 21 st Century Maritime Silk Road. The aim of this mega project is to revolutionize deep-sea trade from Southeast Asia through Africa to Europe, and to put the participating countries on the track of economic development with the help of the infrastructural developments along the coastline.

In the autumn of 2013 China furnished another proof of its intensifying global role when it launched the One Road, One Belt project, with an aim as ambitious as to revive the traditions of the old Silk Road. Beijing committed itself to build and upgrade transport networks following the traces of the one-time caravan routes connecting Europe and Asia, and, naturally, to boost the regions concerned economically. Basically, we can talk about a long-term international development scheme managed (funded) by China, which also satisfies the geostrategic goals of Beijing by linking the remote regions with major trade routes. The One Belt, One Road initiative includes two mega projects: one of them is the Silk Road Economic Belt, and the other is the 21 st Century Maritime Silk Road. The former links China with Central Asia, the Middle East and Europe on land, while the latter unites the major maritime trade routes of Africa, Europe and Oceania as well as South and Southeast Asia. The two schemes are inseparable, and the aim is their parallel implementation. Although the significance of high-speed railways and motorways is unquestionable, maritime transport still plays a primary role regarding the volumes of transport. Therefore, in a global sense, the Maritime Silk Road has an even greater significance than the “economic belt” encompassing continents.

COLLABORATION FOR MUTUAL PROSPERITY? The world could first hear about the plan of the Maritime Silk Road early October, 2013 in a speech which was delivered in the Indonesian Parliament by Xi Jinping, the President of China. The head of the Chinese state committed himself to the necessity of building a modern maritime infrastructure and developing transport routes, primarily between China and the ASEAN states. Since Southeast Asia had already been considered as the centre of longdistant trade, this region plays an especially important role in the project for China. The venue and time of the announcement was not a coincidence, either. The Chinese government had launched the One Belt, One Road project just a few weeks earlier, of which, in addition to the continental one, the maritime silk road forms an organic part, since the two schemes mutually complete each other. And of all the ASEAN countries, it was Jakarta which showed the greatest enthusiasm toward the Chinese plans, since modernising the maritime infrastructure of the island state is one of the most important political goals of Indonesian President Joko Widodo “Jokowi”. According to China’s National Development and Reform Commission, the One Belt, One Road initiative is in line with the 5 principles of the UN: mutual respect, mutual nonaggression, mutual non-interference,

equality and mutual benefit, and peaceful coexistence. Consequently, the new Maritime Silk Road – similarly to continental projects – is expected to extend beyond “mere” infrastructural developments funded by China (for example, constructing ports and shipyards). Its real aim is to promote regional collaboration, financial integration, free trade and scientific cooperation. Naturally, the largest merchant nation of the world did not forget about financial conditions, either. The planned investments will be funded by the Asian Infrastructure Investment Bank and the Maritime Silk Road Bank. In the case of the former institution, China provided half of its equity of US$100 billion, and as for the latter one, its entire equity of US$16 billion was provided by the state. In addition, the Chinese government deposited US$40 billion for the Silk Road Fund. According to Professor Yang Baoyun at the University of Beijing, “just like the historical route hundreds of years ago, the new Maritime Silk Road will bring tangible benefits to neighbours along the route, and will be a new driving force for the prosperity of the entire East Asian region.” LEGACY OF THE GLORIOUS PAST China’s attachment to the past and the remembrance of ancient times resonates throughout the One Belt, One Road scheme. But how did the Maritime Silk Road look like centuries ago? In geographical terms, we can talk about two main routes: one of them connected China and the Korean Peninsula, and the other crossed the South Chinese Sea along the shores of South and Southeast Asia as far as the Persian Gulf. Maritime routes were already used several thousand years ago, well before the continental routes evolved. In China, greater attention has been paid to sea trade since the Han dynasty (209 BC – 8 AD), and since the 7th century, when the role of the Arabs intensified, maritime routes were preferred for security and financial reasons. During the 15th century, the voyages of Admiral Zheng He symbolised China as the maritime great power; Chinese sailors got to the coast of Africa, promoting the extension of political-economic relationships. Regarding their significance, these enterprises may be considered as the precursors of today’s concepts. For centuries, the maritime silk road enabled the peaceful interaction between different cultures and civilisations, contributing to the development

of long-distance trade as well as ensuring the creation of a new international economic and political system, in which China’s leading role was indisputable. The concept of the 21st Century Maritime Silk Road – building on the successes of the past - is attempting to emphasise the positive effects of globalisation, and argues for mutual benefits, peaceful collaboration and the sustainable development of the maritime world. A GEOSTRATEGIC GAME According to the Chinese government, the sole objective of the new Maritime Silk Road and the entire One Belt, One Road initiative is of economic nature, namely “win-win cooperation”, to ensure common development and prosperity, furthermore, to promote economic and cultural integration between China and the states involved. In fact, there is much more than that, since there are serious diplomatic, economic and strategic considerations in the background. Indisputably, the development of trade, the reduction of costs, the assurance of the safety of trade routes are equally important for China as well as its partners. From the viewpoint of internal affairs, the slowdown of Chinese economy and its planned restructuring demand the opening of new markets, therefore major foreign investments (such as the construction of ports) are vital for Chinese giant companies. In addition, developing countries may be the newest market outlets of Chinese import. Although the “help” from China means several benefits for these countries, at the same time, Beijing may establish its economic and, where appropriate, political dominance in the region. But the Maritime Silk Road has great significance also in a diplomatic sense. It is not a coincidence that lately it has become the decisive element of Chinese foreign policy. Southeast Asian countries have been considered as the most important potential partners from the beginning, since the scheme primarily aims at their appeasement, against the recent aggressive foreign and defence policy of China. Although China says that infrastructural investments do not imply political constraints, the concentration of interests is obvious. In the case of ASEAN countries, we should not forget a greater strategic goal: reinforcing China’s influence in the region in the field of both economy and politics enjoys priority, due to the

rivalry between China and the United States. Certain South and Southeast Asian countries (Pakistan, Sri Lanka, Malaysia, Cambodia) are committed beyond doubt; with them the objective is to ensure long-term cooperation. In respect of geostrategy, the objective of the Maritime Silk Road project is to guarantee Beijing’s control over the most important sea trade routes and uninterrupted import of raw materials. In this, the specific ports have particular significance. In November, 2015, China established its first foreign naval base in Djibouti, which provides great help in the military operations against piracy off the cost of East Africa. Some analysts see chiefly military ambitions in the background of the Maritime Silk Road, which can be best summarised by the “string of pearls” theory. Its main point is that in accordance with China’s strategic interest, China will establish permanent naval bases from the Middle East to China, like a string of pearls. However, the way events are developing currently does not support the relevance of the theory; military considerations do not feature in the Silk Role project, and, for the present, the emphasis is on enhancing economic interests. ROUTE ON THE SEA, ROUTE OVERLAND In recent years, China has tried to do everything it could to obtain the approval of foreign countries for the implementation of the scheme. In 2014, the Maritime Silk Road, and in 2015, its joint creation was the central theme of the China-ASEAN Expo. The foreign travels of the leaders of the states also fit into this pattern. On the whole, most of the countries concerned reacted positively to the Chinese initiative. Until today, more than 50 states and organisation, including the European Union and ASEAN, have reassured China of their support. According to the original plans, the main branch of the Maritime Silk Road leaves from Kanton and then goes along the Asian shores; its main stops are Kuantan, Jakarta, Colombo and Calcutta, and via Mombasa, on the Red Sea and the Mediterranean Sea, it reaches Europe, where the destination is Athens. The other branch passes Southeast Asia and then continues toward Pacific islands. Naturally we can hardly speak of concrete routes, because – apart from current investments – the political position of the countries concerned has not been clarified yet.

However, there is one great difference between the Silk Road Economic Belt and the Maritime Silk Road: the routes outlined by the Maritime Silk Road have been operating with full capacity for a long time, thus developments would limit to the construction of new ports, and would aim at increasing the volume of trade through them. On the continent, roads and railways, at best, exist, but the construction of railway lines is still pending at most places. We should not forget that the continental and maritime component of One Belt, One Road are closely related, during which the priority is the construction of ports, and the construction of railways into the mainland only comes second. “BUILDING” THE MARITIME SILK ROAD After China, the second most important region of the Maritime Silk road is Southeast Asia. The Malacca Straits and Singapore are of strategic significance, but due to the power of the city state, Chinese influence may be considered minimal here. That is the reason why China mainly tried to engage Malaysia and Indonesia in the investments. Under the agreement, China will implement infrastructural investments of a value of almost US$2 billion in the port of Kuantan, located of the eastern shore of the Malaysian Peninsula. Some concepts even consider connecting the Thai Gulf and the Andaman Sea with a canal realistic. There is even greater harmony between Indonesia and China: according to President Jokowi’s concept, Indonesia wishes to become a kind of “coastal axis” between the Pacific and the Indian Sea, and Chinese plans are completely adapted to this idea. For China it is enormous business, since Jakarta wants to build nearly 30 ports all over the country in the near future, mainly with the help of Chinese companies. In order to decrease the dependency from the Malacca Straits, China is also interested in the cooperation with Myanmar. The parties have agreed upon the construction of a deep-sea port and an industrial park in Kyaukphyyu. Negotiations on a new port have been ongoing for years in Bangladesh, but no agreement has been reached yet, despite all China’s endeavours. In South Asia, the main partners are Sri Lanka, the Maldives and Pakistan. Sri Lanka welcomed the “Colombo Port City” project of US$1.4 billion two years ago, which would mean a 20 billion dollar Chinese investment during 20 years in the future, due to the

CHINA AND THE 21 ST CENTURY NEW MARITIME SILK ROAD

port in Hambantota and the new quarter to be constructed around it. Although the process was slowed down by the change of government in Sri Lanka, the investment has been given the green light. During Xi Jinping’ visit in 2014, the Maldives committed themselves since a contract on constructing a bridge linking the capital and Hulhule Island was concluded, in addition to developing the airport and the road network. Pakistan has a central position China’s One Belt, One road initiative. Although the China-Pakistan Economic Corridor – concentrating on the development of the road network – may primarily be regarded as an organic part of the Silk Road Economic Belt, it also means an important link with the new Maritime Silk Road. Pursuant to an agreement made last year, China will implement developments of US$1.6 billion in the port of Gwadar, partly providing an alternative to the trade routes crossing Southeast Asia. Initially, China also expected India to take part in the Maritime Silk Road, since Manmohan Singh’s government supported the concept from the very start. The new Prime Minister, Narendra Modi, – and his stonewalling tactics – however, made it obvious for everyone last summer that India was not enthusiastic about the idea at all. In fact, the Indian government believes that the Chinese expansion violates their own geostrategic interests, because it decreases their influence in the surrounding regions (Sri Lanka, Bangladesh, the Maldives), and it would give China an advantage in the rivalry between the two major powers. DESTINATIONS: AFRICA AND EUROPE The next strategically significant station of the new Maritime Silk Road is the coast of Africa. Senegal, Tanzania, Djibouti, Gabon, Mozambique and Ghana are all included in the Chinese investment plans. Like other regions, the development of ports, roads and railways are closely connected here as well. China’s enhancing economic presence on the continent may lay the foundation of Africa’s long-term development. At the end of 2015, China obtained the 10 billion US$ project aiming at the development of the Bagamoyo port in Tanzania, which is one of the greatest investments on the continent. If the plan succeeds,

Bagamoyo will be the largest port in Africa, ensuring connections with several East African countries. In Djibouti, renting a naval base for US$100 million per annum serves military as well as economic purposes but first and foremost, it is dedicated to guarantee the safety of the Maritime Silk Road. In Mozambique, China has undertaken development projects of a value of US$1.4 billion, of which the upgrading of the port in Maputo also forms a part. In Ghana, a new port will be built at Atuabo for US$600 million by Chinese companies. Egypt – due to the significance of the Suez Canal – is also participating in the Maritime Silk Road. The Chinese are primarily interested in upgrading the port of Port Said and increasing the capacity of the canal. The destination of the Silk Road in Europe can be found in the port of Piraeus in Greece. Last summer, the Chinese company, Cosco purchased the majority of the shares of the port, and committed itself to significant developments. The total value of the business reached €1.5 billion. Piraeus, however, like Africa, cannot be regarded the end of One Belt, One Road, since it main role is to create a link between the remote parts of the European mainland through the high-speed railways to be built. WITH THE SILK ROAD INTO THE FUTURE? The One Belt, One Road initiative, and the new Maritime Silk Road therein, is considered an exceptional enterprise from several aspects and unprecedented in history. The ambitious plan – providing proof of China’s growing global role – mainly focuses on the interests of the wold’s most populated country, but promises profit to all participants in the long term. The new Maritime Silk Road will certainly open a new chapter in the history of sea trade, since it places the system of regional diplomatic and economic cooperation onto a new basis. Beijing was right to recognise that in the globalised world only such multilateral solutions are appropriate which allows cooperation and cultural interaction between distant regions. To the countries of Europe, Africa, South and Southeast Asia, the 21st Century new Maritime Silk Road means an enormous opportunity, but a lot must be done in order to take it; or, using the metaphor of Wang Yi, Chinese Minister of Foreign Affairs, in order not to play the joint “symphony” out of tune.

THE GEOPOLITICAL SIGNIFICANCE OF PIRAEUS PORT TO CHINA

THE GEOPOLITICAL SIGNIFICANCE OF PIRAEUS PORT TO CHINA Author: Fanni Maráczi

COSCO, the Chinese state-owned company has been operating the Greek container port since 2008. In April this year it acquired 67% of its shares. The agreement is important both for Greece and China, due to stimulating the Greek economy and its role in the Chinese New Silk Road initiative. By purchasing the busy port, China can connect its maritime trade routes crossing Southeast Asia and running along the shores of Africa with the cities of Europe.

BRIDGE TO EUROPE

DETAILS OF THE AGREEMENT

Within the framework of China’s “One Belt, One Road” policy, China tries to intensify its relationships with the countries which once lay along the Silk Road, or near its route and are important from China’s viewpoint. In the network, which is divided into several continental and maritime routes, the so-called 21st Century

The China Ocean Shipping Company (COSCO) purchased Piraeus port in Greece in the spirit of the Maritime Silk Road plan. State-owned COSCO is the world’s fourth largest container shipping company and the second largest port operator. The antecedent of the agreement is a contract concluded in the presence of General Secretary Hu Jintao in 2008, in which the Chinese party acquired the management rights, but not the ownership, of two of the three container terminals at the Port of Piraeus for thirty-five years. The agreement included provisions about the construction of a new dock, with new cranes installed, increasing the annual container traffic to two and a half million. The cargo volume of two container terminals operated by China exceeds the one left under Greek management, the capacity of which is not used properly, and which is obsolete compared to the Chinese one. Since 2009, the cargo volume of the container terminal has increased fivefold, and general commercial activity has tripled.

Maritime Silk Road is important to Greece. It starts in China, crosses Southeast Asia and India, and after having passed the eastern coast of Africa and crossed the Red Sea, arrives in Europe, in the Greek port city of Piraeus, which has had key importance in history. The European Union is China’s most significant commercial partner, thus ensuring trade routes has obvious advantages for it. The ports of Greece mean a direct route onto the continent, especially if the planned railway connecting the port with Beograd and Budapest is built. China has ambitious plans concerning the region, but first the route into it must be provided, and its European “gate” is Piraeus port.

The new agreement was signed in the presence of Stergios Pitsiorlas, the President of a privatization fund named Hellenic Republic Asset Development Fund, Feng Jinhua, Cosco’s financial executive, Alexis Tsipras, the Prime Minister of Greece and Xu Lirong, the President of COSCO on 8th April, 2016. The amount agreed is €8 billion, which includes €500 million dedicated to building new facilities in the port, an annual fee payable to the Greek state, future investments and the interest to which Greece will have access later. China has acquired 67% of the state-owned company named Piraeus Port Authority.

future, the countries along the Road will be connected by way of railways, roads and pipelines. China will develop ports on Sri Lanka, in Pakistan, Bangladesh and Kenya – all being parts of the project. The expansion of the Suez Canal will also greatly facilitate trade in the region. The port of Piraeus will also fit in this system, and is extremely important because it would connect the maritime section of the Silk Road with the continental one. The Chinese already expressed their intention to invest in the Greek state railways as well, and the acquisition of the port of Thessaloniki is also on the agenda, and may be realised in 2017.

THE GREEK VIEWPOINT Although Greece’s left-wing government objected the privatization in principle, the country had to comply with the conditions of the third bailout package and by 2016 they have to reach the 4 billion privatization threshold. Because of the objection from the government and the mayors of Piraeus the business was divided into two. Upon signing the agreement, COSCO received 51% of the company, and will receive the remaining 15.7% in January 2021 once it has completed the planned investments. In return for the privatisation, COSCO commits itself to investments worth at least €350 million in the next ten years in order to upgrade the port. These include the construction of a multi-story garage, a cruise port and a shipyard repair zone. Greek people, however, could not see only the opportunities in the agreement. The Chinese takeover of one of the most important ports in history evoked strong reactions. Local people felt aggrieved at the fact that the country would lose control over an extremely important area. In Athens the workers of the docks went on a strike, disrupting the work of the container terminal. They felt the agreement was jeopardising their livelihood. PROSPECTS According to some estimates, Piraeus may become the largest port of the Mediterranean region by 2020, but the purchase of the container port may be dwarfed by the planned investments and developments. The objective of the further infrastructural developments planned is to intensify the commercial relations between the region and China. In the near

Despite the miserable state of Greek economy, the country is a valuable partner to China. Greece has the largest fleet of commercial vessels, and 60% of China’s export goes through the country. In addition to the agreement on Piraeus, Chinese banks provide loans to the Greeks to enable them to have ships made in China. They also cooperate in maritime research and development programmes at their universities. Another state-owned company, Fujian Shipbuilding Trade Company, is active in the region: the agreements made with the Greeks created 190,000 workplaces, and Beijing could obtain new technologies through them. China has invested nearly US$7 billion into the development of the port of Athens, and $1 billion into the construction and operating of the airport on Crete. Greece-bound tourism has also increased: 70% more, that is, more than 100,000 Chinese tourists visited the country in 2014. The port of Piraeus, as well as the Greek airports present an excellent opportunity to China to get a foothold in Europe. As part of the Silk Road scheme, the construction of a railway connecting the port and Central Europe is also planned, which would be jointly funded by the European Union and China. With this new, high-speed railway the distance between Budapest and Beograd would be covered twice as fast, and, according to the plans, it would be completed by 2017. Upgrading the commercial routes of the region could not increase only Greece’s GDP but the infrastructural investments will have a positive impact on the economies of the countries in the region, including Hungary, as well. Trade with European countries, and ensuring the routes it requires, is one of China’s priorities. This is why the acquisition of the port of Piraeus is so important.

SILK ROAD IN EAST-CENTRAL EUROPE 84

THE PLACE OF EASTCENTRAL EUROPE ON THE SILK ROAD Author: Viktor Eszterhai

Recently, the relationship between the East-Central European region and China has improved rapidly, which is also symbolized by the fact that an institutional framework has been established for the cooperation. Basically, this mutual opening-up is in the interest of each party as well as the European Union. For the region, including Hungary, the One Belt, One Road initiative means that their historical position will change: they may shift from the periphery of the EU into the centre of the Eurasian continent. CHINA AND EAST-CENTRAL EUROPE AFTER 1989 The most important historical basis of the relationship between the People’s Republic of China and East-Central Europe is the shared socialist past. Although the good relationship between China and the European countries under the influence of the Soviet Union had soon deteriorated by the 1950’s – owing to the estrangement in the relations between China and the Soviet Union – a kind of common ideological “fraternity”-consciousness has been kept. Therefore, the regime change in 1989 can be regarded as the greatest break-point in the relationship between the region and China. The relationship between China and East-Central Europe can be divided into three periods. In the first period, from 1989 to 1998, China and the region were quickly drifting from each other and most interestingly, the Western world had become a more important external partner for both parties. For the countries of East-Central Europe, a rapid economic and political transformation (shock therapy) and, as its symbolical gesture, joining the NATO and the EU as soon as possible was a priority. In the case of China, Deng Xiaoping’s “reform and opening” announced in 1978 (and his southern tour in 1992) grounded the pivot to the western states so that china should obtain market, capital and technology. Chinese leadership, however, set the short-term goal of transforming China’s economy, and as a result, such

ideological conflict evolved which alienated China from the East-Central European region. Although interstate relations weakened, numerous Chinese small companies arrived in the region in those days, because, owing to the grave crisis accompanying the economic transformation, they found an important market outlet for their cheap products. In the period from 1999 to 2008, the position of both China and the East-Central European region consolidated in the international system. Due to its dynamic economic growth, China gradually became a major power with a global sphere of influence, the symbol of which was China’s accession to the World Trade Organization in 2001. With this, China had completely integrated into the global economic system operating by western rules. This period was also decisive for the East-Central European region. NATO was expanded in two phases, and the first round of the EU accession of eight Central and Eastern European countries also took place. As a result, the geopolitical situation of the region consolidated, and it became an integrated part of the western world. The European tour of President Hu Jintao in 2004 indicated that China, becoming a more and more important international participant, cannot ignore the East-Central European region any more. Although most of the Member States of the region committed themselves to establishing a solid “partnership”, the East-Central European countries made contact with China within the framework provided by western institutions. Although relations

CEE member country

Site of CEE meeting

Suzhou, Jiangsu province Nov 24-25 2015

2014 trade: $60.2 billion

Warsaw First meeting, 2012

Belgrade 2014

Bucharest 2013

2010 trade between China and CEE countries: $43.9 billion

Investment by Chinese companies CEE countries: $5 billion

Investment by CEE countries in China: $5 billion

Source: Xinhua-China Daily

States of the "16+1 cooperation" and the economic KPIs of the relations intensified thanks to economic interests slowly breaking through the ideological walls, they did not become really significant to either party. The third period has been on from the financial crisis of 2008 until today. The most important characteristic of this period is that China and East-Central Europe are rapidly converging. By 2015, bilateral trade reached US$56.2 billion, which means an increase by 28 percentage points compared to 2010. The aggregate investments of Chinese companies in Central European countries exceeded US$5 billion, and were typically significant in the fields of finance, green energy, telecommunications and the chemical industry. The main reason for all this is that the East-Central region, which is unilaterally dependent on Europe, was badly hit by the global financial crisis. Pivoting toward dynamically growing China can be regraded a natural phenomenon, because it increased the diversification opportunities of the relations of the region. The significance of the East-Central region has grown for China, too. On the one hand, the level of economic development in these countries is closer to China’s, thus it is considered appropriate pilot area for Chinese companies intending to invest in the European Union. The EU membership of the East-Central European countries enables Chinese investors to evade trade restrictions and operate their subsidiaries

here as assembly centres. Finally, the fact that the companies of East-Central Europe mean excellent acquisition targets to Chinese companies, owing to the financial crisis, should not be underestimated, either. Another advantage is cheap workforce, and the competition between small states for foreign investors, which mean considerable state subsidies for Chinese companies. The rapid development of the relations with China is demonstrated by the increasing frequency of visits of high-level delegations into the region. In his official visit to Hungary in 2011, Prime Minister Wen Jiabao said that China was committed to developing its relationship with the region. A year later, China and the East-Central European countries established in Warsaw a political platform named “16 + 1 Cooperation”, dedicated to coordinating and establishing the institutional framework for the relations between China and 16 Central and Eastern European countries. The “16+1” formation is characterized by comprehensive but loose institutionalization concerning several fields, in order to develop economic, scientific, touristic and cultural relations. The meeting of the Prime Ministers of the “16+1 Cooperation” are held annually; it was hosted by Belgrade in November, 2013, by Bucharest in December, 2014, and by Suzhou in China in 2015.

16 + 1 COOPERATION It is argued that “16+1 Cooperation” is one of the most important diplomatic achievement of China’s European policy, which may be exemplary for others as well. But others question the feasibility of the cooperation, due to the different pasts and the different political situations of the 16 countries (some are NATO and EU members while others are not). In addition, not all major international participants are happy about the rapprochement between China and East Europe. The deepening of the relaHamburg tions was interpreted by the western half of the EU Minsk Berlin Rotterdam / Warsaw as China’s attempt to drive a wedge within Europe Antwerpen and, by applying the principle of “divide and rule”, to Kiev London unravel it. Some extremist opinions regard the “16+1 Cologne Lille / Brussels Nuremb. Pardubice Chop Cooperation” the Trojan horse of China. However, its Budapest Salzburg Paris Vienna role is actually overestimated. The small states of Münich Salzburg East-Central Europe are still relatively divided and Belgrade are rarely able to form one unified block within the Skopje EU. Furthermore, Est-Central Europe still firmly Sofia supports the western world order and its relations Istanbul within Europe are incomparably closer than that with China. Venice

Kirov

Moscow

Alterau (New Sarai)

Ankara Yerevan Tabriz

For China, maybe the most important reason why the East-Central European region has acquired such significance is its key role in Beijing’s large-scale vision of foreign policy, One Belt, One Road. The region is involved in three of the Europe-bound and mainly railway-based economic corridors which are intended to decrease the excessive sea-dependency of China’s foreign trade. The China-Mongolia-Russia (Eurasian Land Bridge) Economic Corridor connects China’s northern and northeastern regions and the Far Eastern regions of Russia with Poland and Western Europe via the Trans-Siberian Railway. The New Eurasian Land Bridge Economic Corridor (also called as the Second Eurasian Continental Bridge) connects China’s eastern provinces with Europe via Xinjiang, Kazakhstan, Russia and Ukraine. The partially finished railway link joins the Trans-Siberian Railway at the moment. According to plans, it will reach the EU across Ukraine in the long term, via Hungary (Záhony) and Poland. Because of Ukraine’s situation, the development of this line is not on the agenda now. 88

Teheran

Antiochia

Rome

THE EAST-CENTRAL EUROPEAN REGION AND ONE BELT, ONE ROAD

Damaskus

Bagdhad

Cairo

The Central-Asia Western-Asia Economic Corridor would connect the eastern coast of China (primarily Guangdong province) with the EU via Xinjiang province, Central Asia, Iran, Turkey, the Balkan and Hungary. Plans are ready for creating the appropriate-level railway link (between Iran and Turkey, and in Central Asia). China hopes that by 2030 a completely connected high-speed railway connection will have been created between China and Europe, on which passenger trains will be able to run at a top speed of over 250 to 300 km/h and freight trains at more than 120 km/h. ECONOMIC CORRIDORS OF ONE BELT, ONE ROAD IN EUROPE Currently, the New Eurasian Land Bridge Corridor fulfils a central role in the relations between China and East-Central Europe. In October, 2011 the first “Chongqing-Xinjiang-Europe” freight train left from Chongqing and arrived in Duisburg, Germany via Eastern Europe. In October, 2012, the first

Basra

Perm

“Wuhan-Xinjiang-Europe” freight train started its Hungary (line 150). The entire cost of refurbishment regular transportation of goods to Prague. In April, amounts to about US$3 billion, 85%of the invest2013 regular transportation of goods commenced ment would be funded from a Chinese interstate from the city of Chengdu to Lodz, named “Chengduloan. The Hungarian segment is anticipated to cost Europe Express”. In July, 2013 a regular freight train HUF 472 billion, for which the Chinese Export-Import Yakulsk started its operation from Zhengzhou to Hamburg. Bank would provide a loan. Under the agreement, The competitiveness of rail freight transport is rethe main contractor would operate as a non-profit flected by the fact that the abovementioned trains joint venture: Hungarian State Railways would have run regularly, even several times a week. In the past a stake of 15%, while China Railway International years, it has been a frequently voiced view that EastCorporation would have a stake of 85%. Északi korridor Yekaterinburg Tayshet Krasnoyarsk with Skovorodino Central European states compete each other for Novosibirsk Omsk Chinese investments. One Belt, One Road designates The Hungarian section is especially important for Chita the most important states on a physical geographithe Chinese party because it would be the first Heihe Sevelskaya Irkutsk Gawan cal basis. In the north, Poland plays a key role, since time that Chinese companies build a railway track Astana Khabarovsk Ulaanbaater Manzhouli its location is of key importance both for the Chinain an EU Member State, which later could be used Aktogay / Mongolia-Russia Corridor and the New as a reference in the case of other European infraAlataw Economic Pass Suifenhe Eurasian Land Bridge Economic Corridor. Hungary structural developments. Thus, it is rather obvious Saksaulkaya Harbin Vladivostok Középső korridor Erenhot and Serbia are also located at strategic points, lying that the Belgrade- Budapest railway is important Ürümqi Turpan on the natural transport lines of goods arriving from to China. However, the question Changchun arises: why is it a Bejing / Jlayuguan / Fushun the direction of the Balkan. East-Central European worthwhile enterprise forShenyang Hungary? The investment Tianjin Samarkand Tashkent countries are complementary and not competitors in is clearly not risk-free. First, costs are extremely high, Lop Nor and the return of the construction is very doubtful. Khujand implementing One Belt, One Road. Wuwei Niya Lanzhou (Kokand) Second, the failure or any delay in the construction Holan (Kholan) Xian HUNGARY’S POSITION IN THE ONE BELT ONE other (Serbin, Bulgarian, Greek) sections of the corLianyungang Taxila Balkh (Bactra) ROAD INITIATIVE the construction in Hungary. Xuzhou Tianshu / ridor would jeopardize Mashhad Zhengzhou Guyvan Nanjing of the railway segment However, the modernization Shanghai At least one of the economic corridors involving Euhas significant advantages. First and foremost, the Wuhan rope – the Central Asia-West Asia Economic Corridor two capitals could be reached more easily after the Changsha / – but in the long term (when the situation in Ukraine modernization of the segment. In addition, sooner or Zhuzhou improves) even two economic corridors may include later its refurbishment will be inevitable, although Déli korridor Hungary, owing to its central position filled in the the line is not included in the European core railway southern part of the region. The Central Asia-West network. The hopes that Hungary may become a Karachi Asia Economic Corridor can be expected to be built European-level logistics centre would most probably Shenzhen / only in the long term, but through a Tamluk half continental, reinforce its central role in the region. The developed Hanoi Hong Kong Barygaza half maritime connection, it may reach our country railway link will increase Hungary’s ability to attract earlier. From the port of Piraeus, the majority stake capital, which, combined with cheap workforce, may Masulipatam of which is owned by China, the goods can arrive in attract Chinese assembly plants into Hungary. There Hungary via Macedonia and Serbia by rail, and then might be a fair chance of that in the future if Chinese can go to the most important economic centres of wages continue to increase and transport costs can Europe across Hungary. Upgrading the Belgrade-Bube reduced. Furthermore, with the help of the railway dapest railway line is a key element of this segment, link, not only Chinese goods could arrive in Hungary on which a decision was made in the summit of the but it would provide more opportunities to export “16+1 Cooperation” in Bucharest, at the suggestion domestic products. One should not consider the of the Chinese party. The distance of nearly 350 km Chinese market only; by One Belt, One Road other is currently covered by trains in 8 hours. After the regions (e.g. the Middle East, the Caucasus, Central modernization – thanks to the electrified, double- Asia, etc.) can be reached more easily. In terms of track line suitable for a top speed of 160 km/h – the economy, participation in One Belt, One Road may Singarpore journey time is expected to drop to 2 hours and 40 open new prospects for Hungary, decrease its unilatminutes. 159.4 km of the line to be refurbished are in eral dependency and increase its role as a bridge.

90 kép: MTI

HUNGARY ON THE SILK ROAD

HUNGARY – A KEY STATE ON THE SILK ROAD Author: György Matolcsy, Governor, Central Bank of Hungary

The Silk Road is the future of globalization. The network of silk roads, One Belt, One Road is a Chinese concept, almost a philosophy. I believe that opening toward the Silk Road will give Hungary the opportunity to catch up with Austria, Baden-Württemberg or even Lombardy and Bavaria.

EDITED VERSION OF THE OPENING PRESENTATION DELIVERED AT THE 54TH ANNUAL MEETING OF ECONOMISTS ON 15 SEPTEMBER 2016

There is a Hungarian town, Kecskemét, which had implemented its own turnaround before the national elections in 2010. It had focussed on the renewal of their approach to the local economic policy and a local tax reform. With a brave but risky decision, the leadership and the community of the town anticipated the turnaround in the economic policy and the tax reform adopted on a national level after the subsequent change of government. Kecskemét – together with a series of other Hungarian towns, within the framework of the excellent scheme of the government – is on the right track to become a modern, 21th century “Smart City”. A Smart City, the concept of which quite obviously bears the hallmark of Kecskemét. In China, twenty Smart Cities are being built. In South Korea three have already been built. The President of India has set up a scheme of establishing a hundred Smart Cities, and we, Hungarians also know that our modern towns will soon be Smart Cities. But it is not only Smart Cities through which we can connect with the Far East. This region – and China in particular – is the answer to the question what can make domestic GDP double, what the source of the second one-hundred billion-euro gross domestic product is. For Hungary, this is not an ordinary

question. How can we become rich and developed? The future of globalization assists, and the Silk Road is the future of globalization. The network of Silk Roads, since it is the Chinese concept, almost the philosophy of One Belt, One Road. I believe that opening toward the Silk Road will give Hungary the opportunity to catch up with Austria, Baden-Württemberg or even Lombardy and Bavaria. HUNGARIAN HEALING, GREEK DISEASE Where are we now in the catch-up process? In terms of history and the history of economy, Hungary and the Central European region lag behind Western Europe. Hungarian GDP is €100 billion, the Austrian is €300 billion, that of Baden-Württemberg is €460 billion, the Bavarian one is €500 billion. The difference is great, and still, it is reasonable to talk about the idea of implementing a sustainable catch-up turnaround and process in the next 30 years. Sustainable catch-up is within reach, because we have avoided Greece’s path. We have chosen our own path. Mingling traditional and untraditional instruments of economics, we implemented successful crisis management and a complete turnaround of the economic policy. Without this, we would be exactly in the same situation as Greeks are.

As we were extremely similar in terms of fundamental macroeconomic problems and the signs of the crisis in the spring of 2010. Remember, the Greek financial crisis erupted then. The Hungarian financial crisis would have arisen then as well if the change of government had not intervened. But it did, and these two countries are in very different positions now. Can you remember that Greece almost left the euro, and the Eurozone almost excluded Greece? We can see that the Greek patient has not recovered ever since but we cannot talk about the Hungarian patient any more.

the autonomy of our economic policy. In Greece, they responded to the deteriorating balance with a traditional, orthodox, restriction-based economic policy, which resulted in the slowdown of growth, and later decelerating budget revenues. By contrast, in Hungary we put structural reforms in place. It triggered the growth in employment and the decrease of unemployment immediately, in August, 2010. The employment turnaround had already started when crisis management just commenced. With time, economy reinvigorated and a solid budget evolved.

Where did these two countries start from, what were the common conditions? The budgetary position was

These are two completely opposite paths. The path forced by the troika narrowed Greece’s room for

extremely unfavourable in both countries, government debt sharply increased, the current account had an enormous deficit, employment was very unbalanced – owing to the poor economic policy pursued in both countries from 2003 to 2008. In addition, Hungary’s economic growth dropped below 1 % as early as in 2007-2008, that is, we were in a slightly worse situation than the Greeks were and we did not have the safety net of the Eurozone, either. Who tried to solve the situation and how? The Greeks went down an orthodox, traditional, conventional path of economy policy forced on them by the “troika” (IMF, European Committee, European Central Bank). We chose a specifically Hungarian path, focusing on structural reforms, and we were able to preserve

manoeuvre. The way we chose broadened Hungary’s room for manoeuvre. Later it became obvious to everyone: in the eyes of our opponents and of our friends expressing their doubts. What did the Greeks do? They raised income tax, introduced property tax, the policy was accompanied by lay-offs and pension cuts. The minimum wage was lowered and they tried to implement privatisations. What did we do? We cut income taxes and the taxation balance was shifted to turnover and sectoral taxes. We introduced public employment and the career model. Our structural reforms were included in the first and second Széll Kálmán Plans. I think we successfully applied this traditional instrument in our economic policy mingling traditional

Stable budget

Deteriorating balance Room for manoeuvre

Dropping incomes

Greek debt spiral Growth slowdown

Austerity measures

Room for manoeuvre

Structural reforms SZÉLL KÁLMÁN PLAN

Hungarian growth turnaround

Economic recovery

Increasing activity

Source: MNB

and untraditional instruments since all economists agree structural reforms are necessary. Yes, they are; but they do not work if restrictions are added. We avoided the social explosion with structural reforms. In the Central Bank, we regard fifty structural reforms crucial in the successful implementation of a fiscal consolidation after the political and economic turnaround. These fifty reforms are responsible for the fact that Hungary has been progressing on the Hungarian path, and not on the Greek one, and has

been doing so successfully and not doomed to failure. It is worth having a look at the data of unemployment. The Hungarian curve did not increase significantly after crisis management. The Greek figure, however, rose sharply, and the restriction-based economic policy did not manage to reduce this rate under 20%. The pace of growth had slowed in both countries before the crisis, the price of failed economic policies soon appeared. The Greek policy is still slipping further into the depth, cannot really steady itself, is

HUNGARY â&#x20AC;&#x201C; A KEY STATE ON THE SILK ROAD

Source: MNB

near zero. Ours, although to a modest extent, is continuously in the positive range. Let us take a look at the budgetary positions: we used to be in a very similar situation in this respect as well before the crisis, then, due to two very different economic policies, we found ourselves in completely different situations in the years following 2010. We firmly keep the level of government deficit around 2 percent, which is a fantastic achievement. Hungary is one of the three best performers in the European Union regarding public debt reduction, and Greece is one of the five worst performers, despite the outstanding efforts it took to improve the situation. But the result speaks for itself! POLAND WON THE REFORM COMPETITION In conclusion, the two countries were in very worrying situations before the crisis. One of them, Hungary, left it. We managed to exceed the baseline situation in all respects, except for competitiveness. And this latter one is very important, there is a lot to learn from Poland about it. In the past 20 years, the Polish have been the best in the European Union. With their annual GDP growth of 4% lasting for twenty years, they glided, slid over the crisis of 2008-2009 and there was not a downturn. There is a reform competition going on in the entire region. The Polish are in a better position because they introduced structural reform 10 years earlier, at the beginning of the 2000s, when we indebted. What did these reforms include? With

their measures, the Polish basically responded to the Agenda 2000 Programme of the German Chancellor and the did so immediately. The direction of the Polish reforms and the Hungarian transformation commencing 10 years later was the same. For example, the rates of income tax and corporate tax were lowered, the tax base was merged and simplified. The Polish won the competition between 2000 and 2010. There are two or three similar countries in the European Union, such as Germany, where the global financial crisis did not toss the economic performance into the depth. But why had the Polish introduce the reforms ten years earlier? Because they were in a crisis then. They were motivated to the reform policy by the challenge. In line with John Maynard Keynes, we, economists recommend governments should accrue budgetary savings in a boom cycle and in times of steady growth. And that is what the Polish did: growth was strong, and they introduced a strict budget. But we did just the other way round. An upside-down economic policy â&#x20AC;&#x201C; that is what Hungary had from 2002 to 2010. We lost the reform competition against Poland in the 2000s, but since then we have been standing firm. We could present tables and graphs for each tax which demonstrate the Polish took the right step. They had taken seriously that, structural reforms should be the answer to, first, the crisis, second,

POLISH REFORMS 2000 Simplification of the tax system

Significant reduction of the top rate of PIT Helping private entrepreneurs operating as PIT-payers by tax rate allowance Expansion of circle of excisable goods, raise of excise tax rate Increasing taxes related to environmental protection Comprehensive labour market reform

Permanent and significant reduction of the corporate tax rate

Raising the retirement age

Transformation of the public education system

Establishing a more Transformation efficient public of financing the administration healthcare system

Source: MNB

the German competitiveness programme, third, the challenges posed by the countries in the region, such as the Visegrád Group. And we can draw another sad conclusion from the comparison of Poland and Hungary: the differences measurable in education. For example, the ratio of graduates in higher education has dropped 10 percentage points between the two countries in just nearly ten years. It also indicates that structural reforms shall be implemented in education as well. It is important to see that the Polish reforms did not stop despite the good results they produced. On 16thFebruary, 2016 the Polish Deputy Prime Minister announced a 25-year economic development programme of US$250 billion which will produce an investment rate over 25% and concern five main fields, including re-industrialisation. REFORM POLITICS AFTER SUCCESSFUL TURNAROUNDS Hungary implemented a fiscal turnaround, a successful budgetary consolidation from 2010 to 2013. Then, from 2013 to 2016, the Central Bank of Hungary – relying on the fiscal results of the government – implemented a comprehensive monetary turnaround. And these two resulted in a turnaround in growth. And what we still need is a turnaround in competitiveness. Within the framework of the fiscal turnaround, we shifted the focus of tax revenues onto turnover and the consumer sector. Today, the surplus of VAT

revenues derives from whitening the economy. Economy has already understood what should be done differently than before. The resources from the EU should not primarily be poured into iron or concrete, but brains and hands. It is a significant change that now 60% of the funds received from Brussels are spent on the development of the economy; it was only 16% in the previous cycle. Our credit rating has improved, although credit rating agencies do not always accept the methods we apply. The turnaround of the monetary policy has embodied in the Funding for Growth Scheme, the cycles of interest rate cuts, the conversion of FX consumer loans into forints and the self-financing scheme. We have now added some new programmes, including a programme supporting growth. The turnaround of the monetary policy could promote approximately the half of the GDP-growth from 2013 to 2016. Thirty-four thousand micro, small and mediumsized enterprises have taken part in the Funding for Growth Scheme. Who will produce the second €100 million of the Hungarian GDP? They will, to a significant extent. And those who have not been even born. We have launched our new loan scheme, and we expect it to boost credit growth in the micro, small and medium-sized sector by 5 to 10%. It alone can increase the pace of GDP growth by 0.5 to 1 percent. In addition, the soaring Hungarian base rate lowered to the ground, as part of the monetary turnaround. Within government debt, the ratio of loans

HUNGARY â&#x20AC;&#x201C; A KEY STATE ON THE SILK ROAD

Source: MNB

taken out domestically has grown significantly, and the ratio of foreign currency-based loans has decreased significantly, and this process is still going on. We converted FX loans into forints, and we did so in time. We read the minutes of the European Central Bank and we became suspicious that something was going to happen in Frankfurt, that is why we brought the necessary steps forward, and took them in autumn. I thank MihĂĄly Patai, President of the Hungarian Bank Association, on behalf of the entire Hungarian community of economists.

Without him, the secret arrangement quickly putting an end to FX loans could not have been made in that foggy afternoon. Now a turnaround in competitiveness should come. Like structural reforms, competitiveness also requires a brand new, powerful and dynamic wave of reforms, a new reform policy. If we could decrease the duality of Hungarian economy, it alone would increase the level of domestic GDP by four percent. Today there is a striking difference between productive and less productive sectors.

Source: MNB

HUNGARY – A KEY STATE ON THE SILK ROAD

György Matolcsy’s presentation at the 54th Annual Meeting of Economists in Kecskemét on 15th September, 2016

SILK ROAD: 64 COUNTRIES, TWO-THIRDS OF WORLD POPULATION It is also important that all our schemes must be prepared concentrating on three big centres of world economy. First, naturally, we must pay attention to Europe, since we are members of the European family. North America is significant. But Northeast Asia and East Asia are also significant, since new markets are created in emerging countries.

The second €100 million of the Hungarian GDP can be found in Asia. How? Through German companies? Yes. We take part in globalisation mostly through Germany. But parallel, there are other channels through which we can get to Asia. However, we should pay attention to Germany’s self-developed programme, Industry 4.0. We should consider it because China considers it. When we intend to find new markets on the Silk Road, we must study the plans of economic development and economic policy China has until 2025. It wants to build four kinds of competitive

4 COMPETITIVE ADVANTAGES

based on German Industrie 4.0

Source: MNB

market

companies

strategy

talents

advanced information technology

automatization and robotics

aerospace and aeronautical industry

high-tech shipping

rail transportation

energy equipment

new materials

bio-pharma and advanced medical products

agricultural equipment

new-energy vehicles

MEDIEVAL

Hungary on the SILK ROAD

Source: MNB

power in the market, regarding companies, strategy and talents, and highlights 10 industries, based on the German Industry 4.0 programme. We should pay attention to the world. The Chinese do so. And I suggest we should pay attention to the Silk Road because it is where the second €100 million can be achieved. But what is this New Silk Road? It encompasses sixty-four countries, including China, two-thirds of the world’s population, and currently only 40 per cent of the global GDP. But there are development programmes ready, and the required financial institutions are available. This Silk Road will connect the participants constituting the new, 21st century phase of globalisation. It can already be seen that the network of the Silk Road consists of a northern, a middle and a southern branch. The southern branch is the railway Silk Road. There is a maritime Silk Road which is especially promising. There was no northern route on the ancient Silk Road. But there is one now, and enters the European Union through Poland. But there is another interesting thing here. Medieval Hungary had already been once on the Silk Road. But opposite to medieval and ancient Silk Roads,

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Hungary and the Silk Road Significance of the Budapest – Belgrade route • faster than by ship (e.g. Venice, Genoa) • the other transport routes are overloaded (e.g. passes of the Alps) • it is easier and cheaper to build and buy infrastructure satisfying the needs of China (e.g. port of Piraeus and Burgas) Why Hungary? • they consider several routes, a safe road network • the southern centre of the East-Central European region is here • it is close to Germany, the heart of the EU • labour is more expensive in the west Role of the Central Bank of Hungary • real economic benefits • closer financial relations • Rembini bonds • Personal meetings • Renminbi programme of the Central Bank • Swapline • RMB portfolio • publications • PBoC agency agreement • Renminbi initiative in Budapest • RQFII quota • Clearing

HUNGARY – A KEY STATE ON THE SILK ROAD

The maritime and continental routes of the New Silk Road

Source: MNB

the maritime Silk Road does not come to anchor in Venice but in Piraeus, Athens. From Asia’s and China’s viewpoint, there are three key countries in the Silk Road network heading towards Europe: Poland in the north, Greece and Hungary in the south. We could find interesting answers if we asked the question although I do not recommend that – why the Greek and Hungarian economic policies have been attacked from 2010. Hungary is on the Silk Road, and its location is special. Ultimately, there are two Silk Roads running through us. One of the is the southern railway route: Athens, Beograd and Budapest. The Maritime Silk Road is related to this; it arrives in Piraeus, the port of Athens, and then becomes a railway and road route. We know that transportation costs are the most important for the Chinese. Waterways are the cheapest, railway and road transport are both four times more expensive than that, and air traffic is four times more expensive than road transport. That is why maritime and railway routes play such an important role in building the Silk Roads.

Why is Hungary a key country? There are several reasons for this. For example, the fact that we are close to the heart of the EU, the German market and a Central European economic hub is really evolving, as Poland is considered one in the north. The Central Bank of Hungary has already taken the first steps on the Silk Road. We established effective cooperation with one of the largest financial institutions of the world, the Bank of China. After the United Kingdom, we were second to sign an agreement with the People’s Bank of China – China’s central bank – and since then we have been using a lot of creative, innovative instruments within this framework. We want to understand what steps they take and why, and we want to take part in this process. Thus, Hungary is on the Silk Road. Hungary can create and find its welfare, prosperity and development in this evolving Silk Road network. The Hungarians must scrutinize the Chinese development programme the same way as the Polish scrutinized the German one.

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xi jinping

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Xi Jinping at the G20 summit in 2016

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xi jinping Author: Viktor Eszterhai

President Xi Jinping is regarded as the most powerful leader of China since Deng Xiaoping, whose power, as opposed to his predecessors, is coupled with large-scale visions of home and foreign affairs, and not inconsiderable personal ambitions. Simultaneously with Xi assuming office, China has become the second major power of the world, and, as a result, the East Asian country more and more openly challenges the USA-dominated world order.

BIOGRAPHY AND EARLY POLITICAL CAREER OF XI JINPING Xi Jinping (15th June, 1953, Fuping, Shaanxi province), may be classified as a “prince”, that is, the child of influential Communist parents, since his father, Xi Zhongxu was one of the founders of the Chinese Communist Party (CCP), later vice-premier and vice chairman of the National People’s Congress. Young Xi Jinping studied chemical engineering at Tsinghua University, and later took a degree in Marxist philosophy and ideological education. In 2002 he obtained a Doctor of Law (LLD) degree, covering fields of law, politics, management, and revolutionary history. His political career started to rise in 1982 when he became the secretary of Geng Biao, Minister of National Defence of the time. In accordance with the practices of the CCP, he continued his career in the countryside, where he held local party posts, and, as it was expected, an office in the Chinese People’s Liberation Army. In 1992 he became member of the Chinese Parliament, the National People’s Congress. He was the Secretary of Fujian from 1995, of Zhejiang from 2002 and of Shanghai from 2007. At the 17th congress of the CCP in October, 2007 he was appointed to China’s most important governing body, the Standing Committee of the Central Political Bureau. He has been the General Secretary of the Chinese Communist Party and Chairman of the Central Military Commission since 15th November, 2012, the 18th National Party Congress, and the President of the People’s Republic of China (PRC) since 14th March, 2013..

INTERNAL AFFAIRS The “China Dream“ In 2013, Xi announced the President’s quasi-official ideological programme, in the limelight of which there was the implementation of the “China dream” (zhongguo meng). According to the traditions of Chinese politics, all party leaders are supposed to announce it. Hu Jintao’s programme, for example, was the “Scientific Outlook on Development”, while Jiang Zemin’s was the “three represents”. There is not an exact definition of the “China dream”, but its approximate meaning may be summarised as the collective hope of China’s society for restoring China's national greatness (fuxing), in which the citizens living in sustainable welfare are satisfied with their situation and are able to make their own dream come true in harmony with the community. The collective Chinese dream consists of four parts: • strong China: – economically, politically, diplomatically, scientifically, militarily; • civilized China: – equity and fairness, rich culture, high morals; • Harmonious China: – amity among social classes and segments; • beautiful China: – healthy environment, low levels of pollution, attractive cities, innovative arts.

In order to achieve the goals, China has to resolve the tensions and problems accumulated during the last decades, such as the restructuring of the economy, alleviating social disparities, pollution, corruption. By addressing the problems, Xi thinks,

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The word cloud of the speech on the “Chinese dream” made by Xi Jinping on 17th March, 2013 (adapted from Chinese into English) the “two hundred-year dream” of the CCP to create a “moderately prosperous society” (xiaokang shehui) can be achieved by 2021, the 100th anniversary of the founding of the Chinese Communist Party and China can be turned into a fully developed country by 2049, the 100th anniversary of the proclamation of the People’s Republic. There are many ideas about the origins of the term “China dream”; it was definitely inspired by the American dream, especially in the light of Xi’s overseas trip. Journalists had used the term earlier and several books had been published under the same title, which might have affected Xi’s vision. The difference is, however, that while the American dream is of individual nature, its Chinese counterpart is collective and based on the unity of people. Not only the ethnic groups and classes of China must join forces in order to achieve it, but they have to be in strict accordance with the leadership of the CCP. President Xi’s reforms described below concerning internal affairs can be regarded as important elements of the “China dream”. “Comprehensively Deepening Reforms” An early and recurring element of Xi Jinping’s internal policy is to continue the reform process commenced by the policy of “reform and opening-up”, which is mentioned by the Chinese press as the “Comprehensively Deepening Reforms (quanmian shenhua gaige)". The programme provides for major reforms in the fields of economy, jurisdiction and politics. The economic element forms the most substantial part of the

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reforms. The market shall be the decisive factor in the operation of the economy. Consequently, the gradual reduction of the role of the state, the restructuring of state-owned companies (increasing their profitability and closing down the ones making the most loss) and, in order to create more intense competition, the greater involvement of the private sector as well as foreign companies within the Chinese economy have begun. China’s leadership is committed to the fiscal and tax reforms, in order to alleviate social injustices and promote a more efficient use of resources (for example, for innovation, R&D). The reform of the jurisdiction aims at enhancing the rule by law (fazhi) in order to reduce corruption and the political intervention both on state and local level – for example, by setting up regional courts and supervisory authorities – and to increase constitutional surveillance. Xi urged to increase transparency in judicial proceedings, involvement of citizens in the legislative process and “professionalism” in jurisdiction. Xi believes the constitution, on the whole, should have a greater role in the operation of the state.

The Chinese President thinks Confucian values provide a way out compared to the empty and overly material values of the Western world. The reforms have affected politics as well: Xi calls for deepening the Chinese deliberative democracy, which is different from western democracy as the people exercise democratic decision-making in the form ensured by the CCP. The Chinese President’s strong commitment to reforms is well reflected by the fact that on his first trip to Beijing he went to Guangdong, where Deng Xiaoping established the first Special Economic Zone, and he called attention to the importance of the continuity of reforms on his famous “Southern Tour”. “Comprehensive and in-depth reforms include” combatting corruption. Xi announced an 8-point guideline in which he pledged to bring down both “tigers” and “flies”, which means CCP will hold not only low-ranking bureaucrats but also high-ranking members of the political, military and economic elite accountable.

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Renewing China’s culture In recent years, emphasising traditional Chinese culture has been given an increasingly prominent role in the life of the People’s Republic of China and the Communist Party. The ambivalent relationship is well reflected by the fact that under Mao Zedong the Party committed itself to modernism, and openly supported destroying China’s traditional values; under Xi Jinping, however, it seems obvious that China’s past appears as a kind of source of legitimacy, and its preservation has become an important task of the Party. Xi interprets the Opium Wars as the crunch point of the Chinese world, and only the CCP was able to overcome these problems, ensuring China’s continuity and the revival of the tradition. The Chinese President thinks Confucian values provide a way out compared to the empty and overly material values of the Western world. Xi often quotes Confucius and other Chinese classics, and following the example of former emperors, he visited Qufu, Confucius’s place of birth in November, 2013. The President’s message is obvious: those who reject the CCP, also reject the traditional heritage of China. Xi, however, regards the preservation of China’s socialist heritage -together with its Chinese peculiarities - as well as the traditional culture important. The Chinese President emphasises the political principle of the Maoist mass line: the people are the drive which shapes world’s history, thus the task of the CCP is to represent the people. For Chinese leadership, these hybrid Confucian-socialist values may offer an alternative to western values. FOREIGN AFFAIRS A new type of peaceful rise: national interest vs peaceful rise The Xi Jinping-era has brought about one of the most radical changes in Chinese foreign policy. The new direction puts an end to the foreign policy pursued by Deng Xiaoping, characterised by low activity, the aim of which is to restore the major power status of the country in the least prominent manner possible and seemingly in full compliance with international regulations. Xi says China is still committed to peaceful development announced by Hu Jintao in 2005, but the power of the country enables it to make a stand more vigorously for defending national values. Among others, it means that China refuses to accept any conduct which conflicts with the national interest of the country or undermines its sovereignty,

security or development interests (fazhan liyi). China’s development interests, however, also include protecting its interests abroad, which are becoming more and more important to the economy. At the BOAO Forum in 2013, the Chinese President asserted: China does not intend to follow the peaceful path on its own but it also expects the external world to have regard to Chin’s interests and to contribute to the peaceful environment. Asian countries have to work on new solutions, a new order to promote cooperation and guarantee peace.

The word cloud of Xi Jinping’ speech delivered at the BOAO Forum in 2013 (adapted from Chinese into English) A “new type” of international relations In his speech delivered in the Moscow State Institute of International Relations on 23th March, 2013, Xi Jinping called the attention of the audience to the fact that the world had changed and a “new type” of international relations should be established. In his speech, he argued for the following values: harmony, (peaceful) development, shared benefits, all of which together shall be the guiding principles in the relations between countries in the future. He also highlighted that China regarded the legal equality of countries, non-intervention in each other’s internal affairs and the rejection of hegemony important. He believes that instead of the problems of the past the countries should look at the future, and this way relations could work harmoniously. Greater and richer countries should assist smaller states, but fundamentally, each country should determine for itself the path of its own development. A greater and more powerful state may not dictate. When putting principles into practice, the emphasis should be placed on cooperation, which means stronger economic relations and getting to know each other as comprehensively as possible – by way of fellowships, exchange programmes, cultural agreements, etc.

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STRUCTURAL TRANSFORMATION OF THE CHINESE ECONOMY

Author: Eszter Polyák

The processes taking place in the Chinese economy are watched either with fear or hope. This decade can bring about great changes in the country called the engine of world economy, since the current economic system obviously cannot maintain the population of 1.4 billion. The problems of the more and more evidently polarising society must be addressed; without this, it is impossible to stabilise and develop the economy. With a balanced policy, however, the Chinese government may be able to stabilise and develop not only its own economy but also that of the region. INTRODUCTION - WHY IS STRUCTURAL TRANSFORMATION TIMELY? Since the early 2000s all kinds of information was told about the Chinese economy: the news was about the Chinese economic miracle, a diving stock market, a decline pulling down the rest of the world. Naturally, no extreme phrasing can cover the full picture; on the whole, however, we can say that China’s economy has been subject to serious changes in the last fifteen years. In the early 2000s they were on the threshold of reforms enabling integration into the world economy, and today the world is being driven toward the new economic order by the New Silk Road. However, to accomplish the ambitious plans, a solution for internal problems must be found, and currently it is the transformation of the economic structure. Our analysis examines the problems of this transformation and the solution opportunities. ANTECEDENTS OF CHINA’S ECONOMIC TRANSFORMATION It was not unprecedented in the 20th-century history of China that the country had to implement economic reforms in time of crisis. The antecedent of announcing “reform and opening” in 1978 was a

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strange crisis, hitting China only: the cultural revolution. Although the Communist Party fundamentally wanted to achieve an ideological renewal, the situation ravaging the whole country also battered the economy just recovering from the Great Leap Forward. Eventually, the Chinese political leadership successfully repaired the damage caused, in which, in addition to the opening of the country’s economy, the comprehensive reforms of the 1980s and 1990s played a significant role. The revolution of the countryside was launched first, which focused on the transformation of agriculture. A decentralisation process began, diversification of production was encouraged, commercial rules were relaxed. In 1984 the second phase of reforms started: it was urban renewal, which was organically built on the previous phase. On top of renewing inefficient state-owned companies and industrial developments, attracting foreign capital was emphasised, and 14 major cities were opened before foreign companies. The end of the 1980s, however, brought about tottering and a two-digit inflation rate, which was reflected in the public opinion preceding and enhancing the events on Tiananmen Square. After the political situation had relaxed, a market reform could begin in 1993, resulting in the evolvement of the socialist market economy. At the turn of the 20th and 21st

century, a deeper integration in wold economy meant the deepening of reforms, the peak of which was obtaining WTO membership. In the light of the above-mentioned reforms, we can say that China has been implementing reforms for nearly forty years and their success demonstrates that China is able to overcome temporary crises. It is one reason why we should examine the steps with which China will undertake a radical new enterprise again and even further deepen the reforms also decisive for world economy. It is particularly important because China will remain the primary engine of global economic development: in the case of the growth of 6.7% forecast for 2016, China will contrib-

“New Left” expects the state to assume a more significant role in the resolution of social problems, which could mainly be embodied in the expansion of the social care system. One of the by-products of Chinese development is a growing wealth gap, and structural changes may offer solutions to numerous social problems as well.

ute to global GDP growth with 1.2 percentage points, which far exceeds the 0.8 percentage point of the USA, the European Union and Japan together.

a very difficult situation. In addition, the environment of Chinese currency reserves as well as consumer savings became very unstable. Consequently, China took a new role and greater responsibility in world economy to avoid its own collapse as well as the world’s. The Chinese state contributed considerably to the rescue funds and quickly extended its currency reserves, now possessing 30% of the foreign-held government debt of the USA.

The ideological background of the reforms is supported by two groups of opinion formers which are welldistinguishable in the Chinese pubic life of the 2000s and influence the prevailing mindset both in politics and economy. During Chinese political reforms, the wing of the Communist party urging for change could count on the intellectuals’ support, among whom disagreements arose only in the 90s. The directions, which have become known as the “New Left” and the New Right”, imagine the economic and social policies ideal for China fundamentally differently. In the process of economic development, ideas represented by the “New Right” have come into prominence since they primarily turned toward capitalism and fastest economic development possible, neglecting the issues of the social care system and income disparities. Naturally, it is not surprising in the phase of initial rise; even Deng Xiaoping himself asserted that some would get rich sooner than others. The new challenges, however, are urging for a change of mindset, and at the door of structural reforms the economic issues of social justice also arise. The

CHINA AND CRISIS MANAGEMENT The crisis of the past decade may be regarded as the trigger of the reforms. China was also affected very sensitively by the global financial crisis of 2008 because its export markets, especially the USA, got into

In order to balance declining demand, China began providing loans to foreign markets, but it also had to bail out declining domestic demand with a rescue package. The rescue package following Keynesian logic meant an unprecedented financial injection of a value of RMB 4,000 billion ($586 billion) for the country. Local governments, which were usually indebted, also received a significant amount, and apart from debt relief, they were given quite large allocations to develop their social services. Aiding the victims of the earthquake in Sichuan in 2008, which demanded thousands of lives, and the reconstruction of the region were also issues of great importance. The enormous amount spent on the development of the infrastructure, land reform and social welfare programmes also demonstrates that curbing inflation is not a priority for Chinese leadership any more, since the seemingly unstoppable decline of economic growth has become a much more urgent problem. It was also prominent among the global bailout packages, since the package amounting to 15% of the annual output of China’s economy far exceeded several similar measures of greater economies, for example the USA’s recovery package of $100 billion and that of Germany of $65 billion. However, it was just a temporary solution, which will raise further problems in the future.

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STRUCTURAL TRANSFORMATION OF THE CHINESE ECONOMY – XI JINPING AND SIX AREAS TO BE REFORMED China’s current President, Xi Jinping has joined in the process of crisis management. New economic solutions were sought very early during his presidency and the aftermath of the rescue package, as well as the structural problems of the economy becoming more and more evident made the announcement of the “New Normal” inevitable. The determined ideal pace of growth alone, however, is not sufficient to resolve numerous problems deriving from the structure of Chinese economy. By 2013, the ratio of investments within the GDP had reached 50%, which is extremely high compared to similarly Asian countries with a similar level of industrialization. China has been investing mainly into real estates, infrastructure and assets required for an export-driven economy. In recent years, however, the rate of return on investments sharply dropped, which increased the risk of non-performing loans. Savings are traditionally high in China but since the middle of the 1990s the household savings rate has increased by more than 10%. At the same time, consumption is low because it is safer to save the income than spending it due to the scarce capacity of the social safety net. However, it makes the shift to the targeted economic model more difficult. The current scenario was formulated by the 13th five-year plan, which was the first plan put forward during Xi Jinping’s presidency. The plan submitted to the Fifth Plenum of the Communist Party sets goals for “economic and social development” for the period from 2016 to 2020. The catchwords referring to the direction of development appear therein: “innovative, coordinated, green, open and inclusive”. In his Fifth Plenum speech, Xi described his approach as “problem-led and goal-driven”, and for the first time since 1995, “common prosperity” is targeted in a fiveyear plan In the light of the announced reforms, this statement also reflects on the changes supported by the “New Left”. On top of that, it also acknowledges that disparities pose a serious problem within society. As for precise figures, Xi has set the goal of doubling the GDP of 2010 and average wages by 2020. In addition, with a 6.5% target set for annual GDP growth, China’s “new normal” of slower economic growth has been accepted, emphasising that the focus of

Due to the pressure of reforms, the Chinese leadership has identified six key areas, where in the near future changes have to be introduced: • The reform of hukou, that is, the household registration system intends to ensure a freer flow of workforce and seeks solutions for urbanisation problems. Its aim is to make the cities of the western half of the country develop, and prevent employees from losing their social benefits due to changing their place of residence. • The land reform tries to resolve the greatest problems of rural areas, i.e. the appropriation and unreal pricing of lands, and also intends to stabilise the incomes of agricultural workers. • Regarding administration, deregulation and decentralisation are the main aims. • In the field of financial reform, the financial market needs to be whitened, resource allocation should be subject to market forces, and competition should be encouraged by letting more private and foreign capital in. • The reform of the tax system would resolve the problem of resource allocation between local and central governments and the whitening of taxation. • The reform of the prices of resources intends to create a more balanced situation for companies, and to render resources management sustainable. The role of environmental protection is the most prominent here.

China’s economic growth would be less on speed but more on the quality. Owing to the reform pressure, Chinese leadership determined the six major areas in which they are compelled to make changes SMALL STEPS OF RESTRUCTURING In order to achieve goals, the promotion of consumption plays a central role. Contributions payable on wages are lowered, and they try to channel personal savings into consumption. Furthermore, more and more festivities appear which encourage the society to consume, such as the “Singles Day” on 11th November, which allures customers with enormous discounts and from year to year breaks the record of online sales. The encouragement of consumption similarly appears in the budget of the government, since the amount that they spend on the social care systems has increased. They can parallel react to the reduction of the debts of local governments as well

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as alleviate social tensions. With shifting from an export-driven economy to a domestic consumptiondriven one, the role of the services sector is being revaluated. Currently, the third sector amounts to 44% of the Chinese GDP, which reached its all-time high in Q4 2015. Doubts may arise about the extent to which the increase of the ratio of services can throw back productivity. The predominance of the services sector does not mean that production and infrastructure are stagnating since these cannot exist in a vacuum. Consequently, no drastic change can be expected in the pace of economic growth, and sectors, such as education, technology, finance, insurance and others, which have been operating with relatively low

model that made China an Upper Middle Income (UMI) country. In 2015 GDP hit its 25-year low, the stock exchange fell by 50%. 80% of the economic profit derived from financial services. Bringing productivity to the forefront would increase the GDP by RMB36 billion ($5,6 billion) by 2030, and the income of households could increase by RMB33 billion. There are 116 million middle-class related families in China today, but productivity is extremely low: it is merely 15-30% of the average of OECD members, therefore we can say that China is ready for a productivity revolution. According to the analysts of McKinsey China urgently needs a change otherwise the ratio of non-perform-

intensity but required for the fulfilment of needs on increasing standards, may be reenergised.

ing loans may go up as high as 15%, which may cause a damage of RMB2 billion annually to banks, significantly decreasing the liquidity of lending companies. Despite the steps already taken, we can conclude that structural reform is a long and painful process, even if there is sufficient domestic demand. Both Chinese and foreign economists called attention to the problems which might undermine the results achieved so far. As dedicated reforms also indicate, the indebtedness of local governments might be a serious factor in the structural transformation. Unfortunately, the costs of the shift undermine the previous development areas in numerous Chinese provinces â&#x20AC;&#x201C; Zhang Jun thinks it should be avoided as much as possible, these areas should not be sacrificed for building the new structure.

In a longer term, Chinaâ&#x20AC;&#x2DC;s goal is to get higher on the global value chain, since currently the export-driven economic structure keeps the level of products with relatively low added values. The reforms intend to change this, too; but developing the education and increasing the efficiency of the IT sector are essential. It is a serious problem that only a fraction of the profit on countless products stays in the country, because added value is low. This could be resolved by a high level of state subsidies on innovation, but the partnership of the private sector is also required. Several analysts propose solutions to the state, in which the opportunity to increase productivity is frequently included. In the economy, instead of predominant investments, the increase of productivity may boost the Chinese economy with thousands of billions of dollars by 2030. It was the investment-led

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Challenges are not on a par with the potential purchase power of Chinese consumers, either. The model based on domestic demand works in a much

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more complex way than the mostly export-driven one. There are specific conditions which should be met first and then structural transformation can be successfully implemented. These include, for example, a well-functioning financial system, free and equally accessible market, highly qualified employees and more expenditure on the research and development sector. Zhang regards poor urban design, and the sharp contrast of rural and urban areas as one of the most obvious decelerator of China’s development, since well-organised urban communities and infrastructure are vital for the integrated operation of finance, telecommunications, research and education. One of the above-mentioned six issues requiring reforms, the hukou system forms one part of the problem. The document limiting schooling and social care to the place of residence, which must be the same as the place of birth, hinders social mobility: if the inhabitants of inner provinces move to Shanghai or Shenzhen, they become extremely vulnerable, without any form of state assistance. This social group of approximately 200 million people cannot integrate into the communities of the cities being their place of residence, since their situation is unstable, and leaving their children behind, which is a quite frequent phenomenon, condemns them to live a very special lifestyle. THE INTERRELATIONS OF ECONOMIC CHANGES AND THE NEW SILK ROAD Changing the focus of economic growth has been a part of crisis management in the past decade: instead of export-driven production, the emphasis was placed on the domestic market of products and services. However, China’s integration in world economy will remain of key importance in the future. The “New Normal” received a great deal of public comments, because it may have a serious impact on world economy. At the moment, the Chinese economy does not seem to collapse, in spite of the fact that alarm bells were often rung, but the slowdown has already started to affect several countries. African countries considered as China’s raw material market outlets, especially Nigeria, has felt the declining demand for petroleum. The new situation affected Brazil similarly, but for world economy the gravest problem is the volatility of Chinese economy. At the 2015 IMF summit held in Lima, the unpredictable and unreliable economic policy of the Beijing leadership was highlighted as one of the greatest risks to world economy.

China, naturally, tries to reassure the world economy that it intends to act taking responsibility for the global economy and by keeping the rules. The concept of the New Silk Road has been unveiled in time from the viewpoint of foreign policy, but also in terms of foreign economy it creates the impression that China feels responsible for the welfare of the countries in the region. However, it would be a mistake to suppose an altruist behaviour; the New Silk Road may be a tool to find outlets for China’s investment surplus, slightly contributing to the mitigation of the costs of shifting from the exportdriven model. In some opinions, China’s search for balance will strengthen the position of institutions set up for supporting the Silk Road, i.e. the Asia Infrastructure Investment Bank and BRICS Bank. Politically, assistance granted through an international organisation is certainly more stable than unilateral lending. Taking the surplus produced in the field of infrastructure investment abroad creates a win-win situation for less developed economies, since several countries of South-East Asia as well as India are facing serious problems in this respect. The lack of several billions of dollars of infrastructure might considerably reduce the opportunities of the region, which is further hampered by the fact that these countries have already fallen below the radar screen of the World Bank and other multilateral development banks. That is the reason why China was able to come up with a new participant in the market of international financial institutions, and that is the reason why the Asia Infrastructure Investment Bank has been widely appreciated internationally. In the speeches of Chinese leaders, calling for a new world order, in which China’s role will be even more significant, is a recurring topic. As we could see, China was able to take responsibility in the course of the crisis in 2008, and currently is definitely the top player of world economy. Based on these, it seems fair enough that the country should have a greater say in the processes determining world economy; one step was that the IMF added the yuan to the basket of reserve currencies. In addition to traditionally US-led international organisations, China further builds its own institutional basis, which offers a greater scope and an advantage in the competition with the USA in Asia.

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SECURITY CHALLENGES OF ONE BELT, ONE ROAD Author: Fruzsina Simigh

China’s continuously increasing role in global economy is accompanied by a growing number of challenges concerning security policy, which entails the forced increase of the willingness to make a political or even military intervention. While building One Road, One Belt, China shall ensure a sufficient financial background, or at least a part of it, for the ambitious projects, and not merely through multilateral financial institutions and bilateral agreements.

Technology, telecommunications and economy encourage people to be involved in the relationships they create. In today’s globalised, interdependent world appropriate infrastructure, roads, energy networks, communications networks, internet, etc., are essential for development and enrichment. An isolated, poor country, which closes its borders to investments is most probably to remain poor. Chinese One Road, One Belt and its complementary 21th Century Maritime Silk Road are working on building these missing networks. Parallel to this, however, it is necessary to resolve security problems, otherwise transactional costs might increase. If shifting transport from sea to overland is not worthwhile, and China does not manage to build the transport network, there will be no one to use it. WHAT CONNECTS AND THREATENS The idea that the deepening of economic relations will sooner or later put an end to military conflicts dates back to the 1990s. According to Rosecrance, those states may be successful in the new, emerging world order which ensure a high added value to finished products, supply services and carry out various financial processes. However, since basic production is inseparable from this,

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the opportunity of economic self-sufficiency is impaired. Thus, the evolving mutual dependency of states contributes to replacing territorial, expansionist goals with a cooperative atmosphere ensuring economic growth. It derives from the fact that continuous trade and a free flow of investments required for this growth are ensured in a peaceful, stable, predictable environment. However, appropriate logistic, infrastructural and political coordination and cooperation are also required for making it operate as efficiently as possible, especially because geographical connectivity – including adjoining borders or routes crossing them – increases vulnerability at the same time. The better accessibility of routes, however, is a doubleedged sword. On the one hand, from the viewpoint of security policy, it improves the opportunities of authorities to act. On the other hand, it also provides human, drug and arms trafficking with more opportunities. However, if regional cooperation is successfully extended over the protection of public goods, the improvement of two-way trade, the development of tourism and interpersonal relationships, all these problems will become resolvable in the long term, parallel with the development of the infrastructure.

SECURITY FOR ASIA In his speech delivered at the Conference on Interaction and Confidence Building in Asia (CICA ) in Shanghai in May, 2014, Xi Jinping stressed that “we need to innovate our security concept, establish a new regional security cooperation architecture, and jointly build a road for security of Asia that is shared by and win-win to all.” The Chinese President also pointed out that “development is the foundation of security, and security the precondition for development. For most Asian countries, development means the greatest security and the master key to regional security issues.” It is congruent with the Chinese idea that economic development is the best way of resolving social problems, demonstrated by for example the Chinese “Go West” programme. Within the framework of this programme, Chinese companies are encouraged to relocate their production and operations into the inner, western and, compared to the coastal regions, less developed provinces of the country. They expect this will pacify the Uyghur minority living in Xinjiang province in a very tense situation.

Xi also added that the problems of Asia shall be addressed by cooperation within Asia, with peaceful means and “one cannot live in the 21st century with the outdated thinking from the age of Cold War and zero-sum game.” This is primarily directed against “Pivot to Asia”, since China regards it as a hostile, overbearing policy. First and foremost, it wants to achieve the exclusion of the American military force from East Asia. On top of that, each state has the equal right to uphold its security. “A military alliance targeted at a third party is not conducive to maintaining common security. Every country has the equal right to participate in the security affairs of the region as well as the responsibility of upholding regional security. No country should attempt to dominate regional security affairs or infringe upon the legitimate rights and interests of other countries.” CHALLENGES However, it is rather easy to mistrust this statement, especially if we consider China’s growing assertiveness on the South China Sea. The countries of Southeast Asia are afraid, as a result of the growing projection of power, of the impairment of their freedom of navigation – it is exactly what China ties to ensure for

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its own interest. In addition, although China claims it respects, above all, the sovereignty of other states, the countries have increasing doubts about the investments and the companies implementing them, especially if Chinese companies want to enter such strategically sensitive areas of the states as ports, communications or energy infrastructure. The mistrust of China is further fuelled by the fact that the attitude of the countries in the region is not consistent to the question whether it is worth confronting China either on the South or East China Sea, or it is preferable to stay away from the conflict in order to attract Chinese capital and investments. The question arises whether China actually just intends to strengthen its asymmetric position of economic power with the Maritime Silk Road to such an extent that in time it won’t be a question any more in whose favour regional disputes are resolved. Piracy along the maritime route and terrorism, knowing no borders on the mainland, on one of the most important routes in Central Asia mean a constant problem. This latter one threatens Chinese oil extracting companies and Chinese employees working for them not only in the form of the expansion of the Islamic State but also in Afghanistan, and even at home, in Xinjiang as well. Long-term planning is further hampered by the internal political instability of target countries of investments, owing to which it is not inconceivable that in the case of a change of government, the new leadership will terminate the agreements concluded with China. In addition, civil wars and other armed conflicts are not favourable, either, for the implementation of the Silk Road project. THE SILK ROAD IN CENTRAL ASIA The continental corridors of the new Silk Road have to cross either Central Asia or Russia in order to reach the Middle East and Europe. Swanström, however, notes that this is most indicative of China’s lack of military preparedness to protect its interests. In the Lanzhou Military Region in China’s west has a force of only 220,000 troops distributed over an area of 3.4 million square kilometres. This is arguably insufficient given the geographical features, while China still focuses the majority of its military capacity on its eastern shores. In addition to low levels of preparedness, tensions between Central Asian countries routinely see borders closed, which may threaten the freedom and functioning of transport corridors. Furthermore, central

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government control in countries such as Kyrgyzstan and Tajikistan remains weak with competition between regional elites and fractions undermining stability. In order to resolve this problem, external political and military support is required, which, however, is against the basic principles of Chinese foreign policy and also threatens the sovereignty of the state. But the question arises: if China urges state-building only from outside and orally, but is not willing to provide any political support fearing the consequences of higher-level commitment, how efficient could the investments of the Silk Road be? AFGHANISTAN Parallel to the pull-out of NATO-led forces from Afghanistan, the instability of the country potentially spilling into countries of the region is getting increasingly worrying. During his visit in Kabul in 2014, Foreign Minister Wang Yi pointed out that Afghanistan’s “peace and stability has an impact on the security of western China, and more importantly, it affects the tranquillity and development of the entire region.” The weakening and slow fragmentation of the Taliban, on the one hand, present severe challenges to any meaningful engagement in peace talks, but on the other hand, may contribute to entering the region of the Islamic State. Third, the Taliban has recently cut the power lines from Uzbekistan, Tajikistan and Turkmenistan that provide electricity to Afghanistan. Thus they are openly threatening areas that China intends to develop through the Silk Road. Since the stability of the Afghan state is so closely related to the security of Xinjiang, China stopped urging the pull-out of NATO forces, and even hinted that the pull-out in 2014 might be far too early. The fact that major American forces could not deploy in East Asia during their engagement in Afghanistan also contributed to this. However, it does not change the fact that Asia must act very carefully in Central Asia, since the pull-out and the decline of the Russian economic influence present the opportunity to gain greater influence in the region. However, economic methods will not be sufficient. These challenges may be easier to face if there is cooperation between people, education is promoted and information sharing between countries works, for example through the Regional Anti-Terrorist Structure (RATS) of the Shanghai Cooperation Organisation (SCO).

SECURITY CHALLENGES OF ONE BELT, ONE ROAD

It must be also noted that although this centre has been set up in Tashkent, it has not been able to come up with any specific results. It would be time for SCO to present a sufficient operating mechanism, with which it is able and willing to combat terrorism, separatism and extremism (the “three evil forces”) threatening the region, as well as organised crime. PAKISTAN The China-Pakistan Economic Corridor is the flagship project of One Belt, One Road. But the planned large-scale investments can go wrong. There is a risk that the Pakistani system will be simply overloaded by the volume of investments China intends for the country. This may easily arouse hostile emotions in local inhabitants, or alienate them at the least. Certain poorer provinces, such as Balochistan and Khyber Pakhtunkhawa, accuse the Punjab-dominated government – with Prime Minister Nawaz Shariff in the lead – of expropriating the advantages of development for the centre, Punjab. In contrast, other provinces would rather stay out of Chinese investments because they see them as a threat to their traditional way of life. They are ready to voice their dissatisfaction even with weapons. Already existing militant groups, such as ETIM (East Turkestan Islamic Movement), the Pakistani Taliban or other anti-state militant groups extremely endanger the implementation of projects and the people working on them, as well as the trade of goods later. For this reason, the Pakistani armed forces promised to ensure a contingent of 10,000 people to protect the Chinese people working on the China-Pakistan Economic Corridor project. However, this is no guarantee that the concerns of locals will be soothed in the long term.

China tends to ignore or, at best, inaccurately asses the cultural, ethnic and environmental characteristics of the target countries of investment, in the name of pragmatism and neutralism. Balochistan, where Gwadar port can be found and will be connected with Xinjiang through the China-Pakistan Economic Corridor, is Pakistan’s largest and most impoverished province, and has been under attack by separatists, insurgents, and Islamic militants (now including the Islamic State) for over a decade. Although armed insurgences are not at all a new phenomenon in the province (the inhabitants of Balochistan have been fighting for autonomy since the British colonizing period and then as annexed to Pakistan), China cannot ignore what is going on in the province across which it intends to transport 19 million tons of petroleum to China, and where it plans to build 2,000 km of road and railway infrastructure to Kashgar.

The prospects of the restart are not improved by the fact that in the meantime the United States initiated a legal proceeding against the workers of CGN (China General Nuclear Power Company, the company having a large stake in the Hinkley Point C project), accusing them of spying and conspiring with the Chinese state in order to illegally develop nuclear technology in China “with the intent to secure an advantage to the People’s Republic of China”. In addition, Western Europe, although willing to trade with China, is still afraid of potential security policy implications which would arise from a Chinese infrastructural investment within the European frontiers. LAND OR SEA?

CHINA MAY ALSO BE TRIPPED BY ITSELF There is also a scenario in which the workers of Chinese projects are not faced with external threats but they can hinder implementation themselves. In Western Europe China is regarded a potential security policy risk. The new British government formed after the resignation of David Cameron and led by Theresa May delayed a final decision on a $23 billion project serving the construction of a new nuclear power plant, Hinkley Point C until a review.

The officers and experts of the Chinese People’s Liberation Army (PLA) do not completely agree whether PLA is prepared to protect the New Silk Road with military instruments as well, if necessary. According to Qiao Liang, the PLA does not have the necessary capabilities; but Chinese fighting capacities have to be strengthened to make Chinese armed forces go global. Zhu Chenghu argues PLA is already prepared enough, but the basic principles of foreign policy prevent PLA from asserting interests more emphatically

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abroad. According to Major General Ji Minkui not only the PLA but the Shanghai Cooperation Organisation as well, as a coordinating platform, should have a larger role in protecting the Silk Road. However, there is a consensus that China has to develop a network of places where Chinese armed forces can rely on to extend their operational range in order to protect the Silk Road and strategic Chinese interests.

IS THE “STRING OF PEARLS” TOO TIGHT? The phrase ‘String of Pearls’ was first used in 2005, in a report provided to U.S. Defense Secretary by Booz Allen Hamilton. He alleged that China was adopting a strategy of naval bases stretching from the Middle East to the shores of southern China. The ports include: • Colombo and Hambantota on Sri Lanka; • Gwadar in Pakistan; • Chittagong in Bangladesh; • Meday Island in Myanmar; • Port Victoria on the Seychelles; • China has been lobbying for the development of a deep-sea port at Sonadia Island; • and the latest one, Djibouti. India has been tensely watching all Chinese investments in ports or other infrastructure ever since, being afraid that China is not making measures just to protect oil shipments but also intends to encircle India from the Indian Ocean.

MARITIME SILK ROAD China has considerable exposure and investments in the middle East and Africa. Since “the majority of China’s seaborne energy imports transit through the Indian Ocean region and the South China Sea Beijing attaches greater importance to the security of the Sea Lines of Communication (SLOCs).” According to BP’s Energy Outlook, China's oil import dependence will rise from 57% in 2012 to 76% in 2035, while gas dependence will rise from 25% to 41%. The transport system, however, is vulnerable to disruption at key maritime choke points such as the Malacca Straits or the Straits of Hormuz, and such incidents could block

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energy trade and seriously impact the level and volatility of energy prices and also result in physical supply shortages. Although economic realities suggest that it is more realistic to be afraid of a terrorist attack than of the United States or any other country supervising the specific straits blocking traversing transport, China wants to mitigate the risks to the minimum. Taking military realities into consideration, if we regard China as a developing country, it is completely absurd to suppose it may be capable of actual control over the route of the Maritime Silk Road. The American navy is unmatched. In this light, any kind of Chinese military activity to the west of Singapore can only focus on ensuring free access to maritime routes. In short, it means “China has only two purposes in the Indian Ocean: economic gains and the security of Sea lines of Communication (SLOC)”, Bo Zhou, honorary member of the PLA and professor of the Academy of Military Science argues. By the end of 2013, China had become the largest trader and the largest oil importer in the world, hence the security of SLOCs from Bab-el-Mandeb through the Straits of Hormuz and the Malacca Straits is vitally important for China. Currently, their security mostly depends on two countries, the U.S. and India. The U.S. is the only country that has the full capabilities to cut off the routes at any time, but it is unlikely

SECURITY CHALLENGES OF ONE BELT, ONE ROAD

Djibouti Although China insists these investments all form parts of the Maritime Silk Road, adding Djibouti to the list raises some questions. The Chinese Ministry of Foreign Affairs argues it is not a military base but an establishment enabling the replenishment of Chinese naval units when they participate in antipiracy missions of the UN. Djibouti is a country with a strategic location, on the trade route connecting the Suez Canal and the Indian Ocean. In addition, its political system is rather stable, except for the president stepping up strictly against any attempts toward western democracy. China is getting less and

to exercise such capabilities, unless, perhaps, in an all-out war with China. Despite all friction, India is not likely to cut off China’s oil transport routes, either. For the present, the ports developed by the Chinese serve mostly commercial and logistic purposes, while Christina Lin calls attention to the fact that China does not need to build or operate naval bases outside its borders, as the US does. Nowadays much greater emphasis is placed on accessibility and rights of use than ownership. In addition, since the investments of the New Silk Road would be used mostly by state-owned commercial companies, there is no barrier in front of the Chinese navy to have access to these bases if necessary. Gwadar Although Gwadar port lies in the volatile Balochistan province, it is only 400 km from the Straits of Hormuz. On the one hand, it means that western Chinese provinces will have better access to the oil of the Middle East if the port is successfully built. On the other hand, it also means that the deployment of the PLA may be considerably easier and faster if any problem threatening the import occurs in the Straits of Hormuz.

less capable of protecting its economic interests in Africa without military presence. Several Chinese citizens were kidnapped by Boko Haram in Kamerun, killed in Mali, taken hostage in Sudan and Egypt, and are subject to regular atrocities in Angola, too. Furthermore, the memory of Libya from which 35,800 Chinese citizens working there had to be evacuated on rented vessels is still vivid. This was the first and the largest non-combatant evacuation operation of the navy of the PLA to date. China had had the choice of going it alone in Oman. Instead, Beijing chose to go alongside the American and French bases “in an already cramped space”, indicating the PLA is not hiding anything. Although American experts still disapprove China’s growing military capacities near the American Camp Lemonnier, which is home to 4,000 American personnel - civilians and members of the Combined Joint Task Force - participating in anti-terrorism operations. But China’s presence here offers a better opportunity for European countries to explore and experience cooperation with the PLA during evacuation, non-combatant operations. Despite all these constructions and developments, it is still likely that China will be content with building the ports of the Silk Road for commercial purposes. If it wanted to set up openly military establishments, it would do so in East Africa, where China would have greater room for strategic and diplomatic manoeuvre and the presence of the Unites States is not so intense.

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THE ASIA INFRASTRUCTURE INVESTMENT BANK 124

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THE ASIA INFRASTRUCTURE INVESTMENT BANK Authors: Eszter Polyák, Fruzsina Simigh

In June this year the Asia Infrastructure Investment Bank (AIIB) started its actual operations. The funding of the first projects is ensured now, and those who have been paying attention to the developments related to the organisation since its establishment, can have a more complete picture of the operations of the bank. This article focuses on the circumstances of the founding of the bank, its significance and its operations in the last six months.

Asia’s latest investment bank has been welcomed by many, but several countries have expressed criticism, rarely even aversion to it. The main reason is that many are afraid of Chinese dominance because strict compliance with international norms is not necessarily what the major initiator and contributor Asian country is famous for. The main fear of its American critics was China’s inability to operate a transparent system. The poor public administration of several countries in need of infrastructure in the region, which can lead to rampant corruption extremely easily, should be added, too. The organisation tried to counterbalance this by integrating the establishment of institutions in the supported projects, in cooperation with local governments. SETTING UP AIIB According to a report of the Asian Development Bank (ADB) from 2009, the development needs of the Asian region would amount to $8 trillion by 2020, 68% of which would be used for creating new capacities, 51% for producing electricity, 29% for building roads and 13% for telecommunications. When setting up AIIB, China referred to this report saying the World Bank, with its fund of $220 billion, and ADB, with its $160 billion, existed, but they were not enough to address the needs of the most rapidly

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developing region. AIIB was established with this aim in October 2014 with a capital stock of $100 billion (50 billion of which is provided solely by China). Even when summed up, this amount does not cover the abovementioned need of $8 trillion, but by providing loans to infrastructural investments AIIB will contribute to the fulfilment of needs to a significant extent. CHALLENGER OF THE AMERICAN WORLD ORDER? In March 2015, the application deadline for AIIB permanent members was closed. The 57 founding members include 37 countries within the region (Asia-Pacific) and 20 countries outside the region, including such key allies of the United States as the United Kingdom, France, Germany and Italy, despite all (unofficial) lobbying. It was only the USA and Japan which stayed away from AIIB (the application of North Korea was rejected, with reference to financial and budgetary transparency problems). If we examine the membership of AIIB in the light of the rivalry between American-Chinese diplomacy, we can remember April 2015, together with Lawrence Summers, as “the moment the United States lost its role as the underwriter of the global economic system”.

AIIB members

AIIB alone is not larger than and does not seem a real challenger of either the ADB or the World Bank. Its significance does not really lie in the value of its capital. But from the viewpoint of building an alternative world order, its mere existence and its extensive, inclusive membership are remarkable.

(only the USA has veto power with 17% of votes, while China has only 4,87%) and the American Congress regularly blocks all reform attempts. As for the Japan-dominated ADB, China has only one-fifth of the American and Japanese votes. Since it has significant inner drive and necessary resources, however, it is a logical consequence that China intends to establish an alternative institution of its own, not necessarily to overthrow the current system but to pressurise it, achieving better circumstances and a greater say.

It is a key element of the hegemonic theory that the hegemon (either on universal or regional level) can exercise its political, military and economic power and force the new rules on the international community through an established system of institutions. The situation of the USA and the period of “Pax Americana” originates from World War II. Although the United States has had an economic dominance from the 1870s, the control over naval bases and the world's sea lanes was transferred to the United States in 1941, when the United Kingdom signed the Lend-Lease Act deal. The USA gained a global leading role on both economic and military levels. Afterwards, it shaped the economic order at the Bretton Woods Conference, which was based on the United States' dominant position by setting up the International Monetary Fund and the World Bank, and under the Marshall Plan it assisted to reconstruct war-torn Europe (and turn it into a competent market outlet).

The project named “One Belt, One Road”, or, more commonly, the New Silk Road and often compared to the Marshall Plan, is related to AIIB. It supports the development of the Asian region including the inner Chinese areas, from its accrued currency reserve of $3,8 trillion. The BRICS New Development Bank was set up with a fund of $100 billion for the same purpose. However, this will not be enough to ensure sufficient orders for the Chinese construction industry requiring vast investments, or even the steel industry alone. Based on the operation of the World Bank’s International Bank for Reconstruction and Development, AIIB could pay maximum 20 billion in the next five years, which does not even come close to the volume of Chinese capacities.

However, the rise of China (in 2014 it surpassed the US economy on purchasing power parity) generates considerable tension in this system. In Beijing, China’s underrepresentation in the quota system of the World Bank is the source of increasing frustration

The establishment of AIIB stroke American dominance a heavy blow. However, there is room for argument whether it would mark the beginning of a new era or it would be the preparations for the emergence of a new hegemon.

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AIIB STARTS OPERATIONS AIIB was heavily criticised when it was set up. Many argued that it was the hidden instrument of expanding China‘s interests, especially because it intended to support the development of infrastructure. Others claimed that – following the Chinese pattern - it would not be transparent or ignore all environmental standards. However, as a consequence of the extensive membership of countries with a developed economy, China is not in the position to decide alone to whom it intends to provide loans. The actual start of the operations of the organisation may ease some worries at last. After opening its doors for business on 16th January, 2016, AIIB held its first annual meeting in Beijing, on 25-26th June. It was operational for six months when the first loans were approved. AIIB’s president, Jin Liqun, has promised his bank will adhere to the highest international development standards. There is hope that AIIB – in contrast with several defects of fully Chinese-owned development banks – will aim at transparency and environmentalism. In his speech at the opening ceremony for AIIB's annual meeting, Chinese Vice-Premier Zhang Gaoli said they wished to connect the often less developed countries lying along One Belt, One Road and the opportunities of bank funding. In terms of financing, they would establish a closer relationship with the private sector, since its involvement, as well as the application of various business models, are essential for developing high-quality infrastructure. Furthermore, AIIB would be active on both the demand and the supply side. The main aim will be that countries on different levels of the supply chain should have a share of the bank’s resources by benefiting from their characteristic features. He pointed out that China had assumed a considerable role in mitigating environmental damage, for example, as a supporter of the Paris Declaration or by setting up the South-South Cooperation Trust Fund, which promotes the environmental cooperation of developing and small countries. According to the President’s report on operations, the volume of lending was in line with the business plan and there was a chance that it would exceed the $1.2 billion target. The organisation would be furthered strengthened by international consultants,

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with whom they were to meet in the autumn, and who would provide the expanding management with independent professional advice. During the two-day meeting, the management of AIIB made considerable progress to implement the projects launched as efficiently as possible. It had been raised earlier that AIIB could support less developed member countries in the costs of project preparation. For this purpose, they set up AIIB’s project preparation special fund, which China supported first with $50 million. The fund is expected to be operational in autumn this year. The Chinese contribution is significant because it will further commit the countries receiving from the fund to support China’s leading role. However, it is still likely that other, richer member states will also offer additional contributions. OUTLOOK AND FURTHER PROSPECTS AIIB progresses in line with targets, and after cofunding has started we can say that the world’s development organisations regard the organisation including 46 members and 24 observers as a serious partner. Its appeal is well reflected by the fact that Financial Secretary of Hong Kong’s government, John Tsang was also present, confirming the application for membership of the special administrative region of China. In addition, a growing number of the major countries of the developed world is joining the Bank. The latest is Canada: on 31st August, Minister of Finance Bill Morneau announced Canada’s application for membership in AIIB. Another major partner of the USA decided to strengthen the Chinese-led bank with its membership. Thomas Maier, managing director for infrastructure of EBRD, which is partnering on Tajik projects, said it was the efficiency of the organisation that impressed him, and AIIB was a natural partner because they were willing and able to take risk, such as going into private public partnership structures. From the very beginning, member countries and partner institutions hoped that the bank will adhere to the conventional norms of development funding. As a response, AIIB pointed out its commitment to transparent operations. Another problem occurring at an early stage was that AIIB-funded projecst would leave environmental damage behind if international environmental norms were not adhered

THE ASIA INFRASTRUCTURE INVESTMENT BANK

PROJECTS LAUNCHED The board of directors have approved the first four loans supporting Asian investments of a value of $509 million. The organisation’s distinguished aim is to improve the lives of millions living in the region. In order to do so, they will spend $1.2 billion on supporting various projects, • granting a $165 million loan for a Power Distribution System Upgrade and Expansion Project in Bangladesh. In the project, 2.5 million service connections will be provided to rural consumers, contributing to the social and economic development of the region for the benefit of 12.5 million people; • providing a $216.5 million loan for a National Slum Upgrading Project in Indonesia, expected to be co-financed with the World Bank. The Indonesian government plans to develop the infrastructure of the urban slums in central and eastern parts of the country. The loan partly covers expanding the capacity of responsible ministries, and partly building infrastructure. The improved living conditions and services will impact 9.7 million inhabitants of 154 cities; • granting a $100 million loan to finance the Shorkot-Khanewal Section of National Motorway M-4 in Pakistan, co-financed with the Asian Development Bank (ADB) and the United Kingdom’s Department for International Development (DFID). The missing 64-km long section

to. In this respect, we cannot see clearly now since most projects are in the initial stage, i.e. establishing institutions. Even though the independency of AIIB was emphasised at the meeting, China’s role, as it had been expected, remained decisive. It will be an important question who will carry out implementations. The region is short of appropriate infrastructure, the Chinese construction industry, however, is on overload. For China the greatest challenge is to balance between its own needs and the expectations of the international membership. However, several members think a lot of work must be done to reach the standards of international regulations. The tasks of the management and the board of directors still have to be more precisely defined; in six months, a basic operational practice formed, but there is still a lot to be done in this respect. The

of the motorway in Punjab province will connect Islamabad, Faisalabad and Multan, creating the complete north-south four-lane motorway crossing the country from the economic centre of Torkham, Afghanistan to the port of Karachi. ADB will provide the project with another $100 million, and, as lead co-financier, will also administer the loans. The United Kingdom's DFID also committed to a $34 million grant for the project, which will also be administered by ADB; • providing a $27.5 million loan for the DushanbeUzbekistan Border Road Improvement Project in Tajikistan, co-financed with the European Bank for Reconstruction and Development (EBRD). The project is dedicated to promote mobility in the 5-km long section of the Central Asia Regional Economic Cooperation Corridor, connecting the Tajik capital and the Uzbek border. The main funding partner, EBRD will also provide the project with a $27.5 million loan. • Two other projects are expected to be approved in September: the investment aiming at strengthening the transmission network of Tamil Nadu in South India, and the Tarbela 5 hydropower extension in Pakistan. This latter one may also be co-financed with the World Bank.

same applies to the expansion of the committee’s membership. Up to date, 38 full-time employees work for the organisation, which is a very modest number, compared to the volumes of projects. They plan to be fully staffed by the end of 2018 with 500 employees. The future operations of AIIB should be examined in the light of these necessary internal developments and its capability to adhere to international standards. So far, expanding membership has counterbalanced the initial concerns about China regarding regulations and the development of the organisation. Several professionals have been hired by the bank, who have already proven their competence in other multilateral development institutions. Their expertise and the decisive action of member states together can ensure that the bank can take the place it deserves in the row of investment banks.

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CHINAâ&#x20AC;&#x2122;S CUTTING EDGE: RESEARCH 130

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CHINA’S CUTTING EDGE: RESEARCH Author: Viktor Eszterhai

China today is much more than an industrial major power, since it fulfils an increasingly important role in the scientific and technological life of the world. China’s aim is to catch up with the leading scientific major powers of the world by 2020. China’s R&D (research and development) activity has been developing extremely dynamically recently, and in the middle term it seems to be capable – with active participation of the state - to meet the challenges stemming from its earlier undeveloped status, such as encouraging innovation in private enterprises, reducing the volume of foreign R&D activity, and moving towards quality research. Against this background China’s large-scale plan seem realistic: to rebalance the economy from the earlier export-driven model based on cheap manpower to an innovation-based one. Although China can become beyond doubt the most important centre of innovation in the world in the coming years, improving R&D indicators alone will not be sufficient. The government’s intention is to translate the results of academic research into products that can be produced by the industry and utilised in economy. Accordingly, they attempt to render the low and middle technological level Chinese industry of the past competitive with the high-tech industry of the world’s most developed economies, in which the distinguished support of R&D activities of potentially emerging sectors by the government plays a key role (Made in China 2025 Programme). TARGETS The scientific and technological targets of the People’s Republic of China are included in two documents: the National Medium- and Long-term Program for Science and Technology Development (2006-2020) and the 12th Five-Year Plan (2011-2015) approved by the People’s Congress in March, 2011. According to the guidelines laid down, by 2020 China must rise as one of the world’s leading powers of innovation

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and establish the fundamentals of a knowledgebased society. Furthermore, President of the People’s Republic of China, Xi Jinping said that China should establish itself as a leading innovator by 2030 before realizing the objective of becoming a world-leading S&T (science and technology) power by 2050. The goals of the leadership are extremely grandiose, especially if we regard the fact that until the early 1990s, China was a predominantly agricultural society. However, these goals are not new. The last development stage of the “four modernisations” announced in 1978 included the scientific and technological catching-up with the leading powers of the world (after agriculture, industry and military defence). From the very beginning, the state has had a key role in the process through its responsible institutions (the leaders’ group under the State Council, and the Ministry of Science and Technology). In the following, we will examine what fundamentals China currently has to achieve its goals, with the help of the traditional indicators of research and development (R&D). CHINA’S R&D ACTIVITY AS REFLECTED BY CLASSIC INDICATORS In 2015, the value of Chinese research and development activities was RMB1.422 trillion (approximately $2.133 trillion, nearly $370 billion on purchase value). Annual growth was 9.2 percent, exceeding the annual GDP growth rate (6.9%). Calculating the value on purchase power, China’s R&D spending surpassed that of the European Union in 2014 and came second after the United States. Regarding per capita spending, China is still lagging behind developed countries, but it has a leading role within the group of BRICS countries.

Gross domestic expenditures on R&D by the world’s four leading economic powers: 2000-2014 (US$billion)

500000 450000 400000 350000 300000 250000 200000 150000 100000 50000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 USA

China

Japan

Source: OECD, 2014.

Top nine R&D-performing nations and the EU

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

USA China EU Japan Germany S. Korea France India UK Russia

(Total) R&D 473.4 344.7 334.3 170.8 106.5 91.6 58.4 47.9 43.7 42.6

Per capita value

Year the data are

1,442.51 270.56 657.48 1,344.31 1,313.46 1,518.47 914.54 39.37 677.44 290.21

2013 2014 2014 2014 2014 2014 2014 2011 2014 2014

Source: OECD, 2016.

China’s catching-up is especially spectacular if we look at expenditures on R&D since 2000. While Japan increased its expenditures on R&D by 32.5% from 2000 to 2014, the EU by 38.7%, the USA by 29.8% (from 2000 to 2013), China increased its expenditures on R&D by 838.8% from 2000 to 2014. According to a study published by OECD in 2014, China is expected to surpass the USA in 2019. China will certainly be able to meet the target set in the long-term plan, i.e. to catch up with the centres of world economy in terms of expenditures on R&D by 2020.

If we examine the expenditures as a percentage of the gross national product, China’s expenditures exceeded 2.1% of the gross domestic product, still lagging behind such leading countries as South Korea, Israel, Japan, Finland. However, it has already surpassed the figures of another important centre of world economy, the EU, and is closing the gap with the USA (figure 3). Although China somewhat lags behind the target set in the 12th five-year plan (expenditures on R&D should reach 2.2% of the GDP by 2015), the target set in the long-term plan, spending 2.5% on R&D by 2020 still seems achievable.

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Gross expenditures for R&D as share of gross domestic product 1.94%

EU Netherlands

1.97%

Czech Republic

2.00%

Singapore

2.00% 2.05%

China

2.12%

Australia

2.26%

France

2.39%

Slovenia

2.47%

Belgium

2.74%

USA

2.84%

Germany

2.97%

Switzerland Austria

3.00%

Taiwan

3.01%

Denmark

3.05%

Sweden

3.16%

Finland

3.17% 3.58%

Japan

Israel

4.11% 4.29%

South Korea

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

Source: OECD, 2015 Increase of expenditures spent on research types (RMB100 million)

Basic research

Source: China Statistical Yearbook 2015

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Applied research

Experimental development

3.50%

CHINA’S CUTTING EDGE: RESEARCH

Increase of state and corporate R&D expenditures (RMB100 million)

State sector

Corporate sector

Source: China Statistical Yearbook 2015

RESEARCH TYPES, FINANCING, RESEARCHES AND RESEARCH INSTITUTIONS Within research, expenditures on both basic research reflecting the quality of R&D activities and applied research increased by 189% and 156% respectively from 2010 to 2014. Their joint aim is to obtain knowledge required for developing new products, procedures or services. In addition, a dynamic growth of 189% can be observed in the field of experimental development. There was a significant change in the funding of research in past years. The ratio of state funding has been reduced by the business sector, which is in line with the targets laid down in base documents. From 2010 to 2014, corporate R&D expenditures grew by 194%, while state funding did so slightly more moderately, by 155%. In past years, the number of researchers increased spectacularly (by 45.2% from 2010 to 2014) in the fields of basic and applied research as well as experimental development. In terms of the specific indicator of researchers per million inhabitants which is traditionally one of the most important indicator of the quality of researches – China (2,715 researchers/million inhabitants) is still lagging behind leading countries (e.g. Denmark: 7,265; Finland: 7,188; or the USA 4,019 researchers/million inhabitants), but obviously, a fast catching-up can

be observed here as well. The number of research institutes has been stagnating in past years, which means an increase in quality research (e.g. often more capital intensive basic researches) as well as greater financial expenditure. The centrally managed research institutions are slowly rising which enables a more concentrated spending of R&D, indicating quality changes. As for research projects, a slow decrease can be observed. In 2015, a total number of 3,574 projects under the National Key Technology Research and Development Program and 2,561 projects under the Hi-tech Research and Development Program (the 863 Program) were implemented. Until the end of 2015, there were altogether 132 national engineering research centres and 158 national engineering laboratories. They typically received 70% of the support spent on state R&D, which is in line with the goals of active state participation laid down in the base documents. The role of the state is strengthened by the transformation of 206 investment companies, under the support of State Venture Capital Investment Plans for Emerging Industries, in order to promote industries representing the new technology. Within the scheme, 1,233 venture businesses received RMB55.7 billion. The stagnation of the number of projects, with growing funding, suggests a quality change. The same trend is reflected by large central projects, suggesting the increase of efficiency.

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Increase of the number of domestic and foreign patents in an international context Japan (hazai) (resident) Japán

Japan (nonresident) Japán (külföldi)

China (hazai) (resident) Kína

China Kína(nonresident) (külföldi)

USA (hazai) (resident) USA

USA (nonresident) USA (külföldi)

100

200 2011

300 2012

400

500

2013

600

700

800

900

2014

Source: World Bank, 2016 PUBLICATIONS AND PATENTS The number of Chinese publications increased dynamically in the past, now being ahead of European countries and Japan, closing the gap with the USA. However, the quality indices of the publications (citation/paper; H-index) do not reach the level of developed countries. Regarding the number of scientific publications on engineering topics, considered as a quality index of publications, China has caught up with the USA. China’s surge in the IT field is especially significant; in these indices, it is ahead of most developed countries. As for the absolute number of patents, China has had a leading role in the world for years. Some 2.8 million patent applications were accepted by the State Intellectual Property Office, and a total of 1.7 million patents were authorized (an increase of 31.9 percentage points compared to 2014). Within the number of patents, domestic patents grew extremely dynamically even in an international context. Although the government‘s attention is mainly focussed on the increase of the number of patents (see the targets laid down in the base documents), there is also progress in quality. Insufficient incentives, censorship, and a rigid, test-based school system are regarded as the reasons for the lack of innovation. The number of registered inventions, which can be conceived as a quality index of patents, was 359,000

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in 2015, which increased by a rate exceeding the dynamic expansion of the number of inventions (54.1%). The number of patents per 10,000 people was 6.3, which is almost the double of the target set in the 12th five-year plan, valid from 2010 to 2015 (3.3/10,000 people). Although the number of domestic registered inventions increased by 62.5% in 2015, the ratio of registered invention of foreign companies is still high (28.9%), demonstrating the important role of foreign R&D activity within the Chinese economy. A similarly significant progress can be observed in the surge of corporate patents, but the private sector still cannot fulfil the needs of China, therefore the role of the state, e.g. university R&D, laboratories, remain important. Accumulatively, 206 venture investment enterprises were established under the support of State Venture Capital Investment Plans for Emerging Industries, with a total fund size approaching 55.7 billion yuan, and an investment to 1,233 venture businesses. HIGH-TECH INDUSTRY The traditional indicator applied to assess the technological standard of a country’s economy is the performance of the high-tech industry. In 2014, China was second in global high-tech -manufacturing (27%), just slightly behind the USA (29%). China exports high-tech products of especially high values; in this respect, it is absolutely number one in the world.

Technológiai park Kínában

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MADE IN CHINA 2025 The distinguished aim of the Chinese government is to further strengthen the high-tech industry in order to catch-up with the technological standard of the leading industrial major powers. The state development plan was named “Made in China 2025” (zhongguo zhizao 中国制造2025), which was compiled by including the recommendations of the “Industry 4.0” programme focusing on creating a new generation of the German industry. The characteristics of the development stage regarded as the fourth stage of industrial revolution include smart industrial manufacturing, that is, the combination of IT and production. The key sectors of the “Made in China 2025” programme, which receive significant state subsidy, include: 11) new information technology; 12) numerical control tools and robotics; 13) aerospace equipment; 14) ocean engineering and high-tech ships; 15) railway equipment; 16) energy-saving and new-energy vehicles; 17) power equipment; 18) new materials; 19) biological medicine and medical devices; 10) and agricultural machinery. State companies and the companies of the private sector which conduct activities in line with the state’s guidelines and are selected play a key role in carrying out the new industrial revolution. In order to accelerate their development, these companies are artificially promoted by the Chinese state, to the detriment of society (tax allowances, state orders, etc.) so that China should proceed successfully with its modernisation plan.

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CHINAâ&#x20AC;&#x2122;S START-UP INCUBATORS

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CHINA’S START-UP INCUBATORS Author: Péter K. Gergely

The success of start-ups, which increase their value from scratch to several billions of dollars within a couple of years, has created a new entrepreneurial culture in China. The stories of Jack Ma (Alibaba), Lei Jun (Xiaomi) and other successful entrepreneurs, who have battled their way up and become some of the richest people of the world within a couple of years, inspire millions of young Chinese to establish start-ups all over the country. The generations born after 1990 have grown up in such an economic environment which contains only traces of China’s planned economy past, and they can learn about countless success stories of Chinese start-ups via internet news portals, blogs and social media.

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In this new culture, ambitious Chinese youngsters regard money as the absolute measurement of success, and they assess the extent of political influence based on market influence. The generations born after 1990 allocate greater prestige to the leaders of start-ups than to the directors of large state-owned companies. This is because the leaders of state-owned enterprises are usually promoted along political interests, while the leaders of start-ups become influential due to their successes in market competition. The emergence of the entrepreneurial spirit and the peculiar corporate culture of Chinese stat-ups – which is much more similar to the culture of an American start-up than to that of a Chinese state-owned company – will definitely result in the most talented fresh graduates preferring a start-up as their first workplace.

more Chinese students have come home since 2007 than in previous years. Nonetheless, the lack of the most talented professionals keeps the economy under perceptible pressure. And not just because Chinese companies cannot find appropriate workforce due to brain drain, but also because there are too few enterprising students who would launch start-ups. In 2014, the Chinese government introduced reforms, hallmarked by Prime Minister Li Keqiang, which significantly facilitate the establishment of companies in China: business registration rules were simplified and the minimum amount of registered capital required was lowered, which is very important given that start-ups usually require little capital for starting their operations.

Although the Chinese government makes considerable efforts to develop the infrastructure supporting start-ups, brain drain has remained a serious challenge; so far, they have been able just to slow down this process. The ratio of students not returning to China after finishing their studies abroad is extremely high: a study in 2007 found that seven out of 10 students who enrolled in an overseas university between 1978 and 2006 had not returned to China. As the result of the government’s efforts, the trend appears to be slowly reversing, for example on average, annually 3%

The reason for the attempts of the Chinese government is twofold. (1) The backing of university students to create their own start-up companies would help alleviate a lack of employment opportunities for students graduating from higher education; (2) W ith the slowdown of Chinese economy, the country needs new leading economic sectors, primarily in the high-tech and servicedriven sectors.

Sources of support for start-ups in China, 2015

Uiversities; 17% Central and local governments; 28%

Private investors; 22% The above the combination; 32%

Source: iiMedia According to a survey from 2015, 6% of new graduates planned to start their own business; this ratio is very close to European and American statistics. While only 535 larger start-ups were registered in China in 2005, there were more than 2,000 operating all over the country in 2015. Although the number of start-ups is anticipated to reach 5,000 by 2020, experts expect a powerful market regression in 2016, meaning less available capital, investment and financing, spelling the doom of poorly performing Chinese start-ups. China’s start-up incubators have been managed mainly from state sources in 2016 since the research universities, which promote start-ups the most, are all owned by the state. The state plans to add 45 “national” incubators to these universities. The state‘s plan to make the start-up sector a leading one, and the abundant venture capital injections from the state and the private sector have resulted in a bubble in the financing market by 2016. International analysts think Chinese hi-tech companies are excessively overvalued, since they have pumped too much money into start-ups which are moderately competitive in an international context. It is partly due to the fact that many investors do not have sufficient experiment to judge start-ups appropriately in an early stage of their lifecycle, therefore less competitive companies could also get considerable funds.

The Ministry of Science and Technology appoints some incubators “national”, which means more government subsidy to these organisations. “National” incubators attract the most talented start-ups and investors more easily, since they can receive tax allowances, favourable loans and other support. POSITION OF START-UP-FRIENDLY PROVINCES, CITIES AND QUARTERS In Europe and the USA the myth that Shanghai is China’s centre of innovation still persists, but this has not been the case for years now. Although Shanghai and Kanton province are still very important centres of innovation, Beijing has become the number one hub of innovation in the country. It was not a coincidence that Beijing became a start-up centre: the presence of the elite universities of the country and the bodies of central government resulted in the fact that most Chinese internet companies have their headquarters in Beijing. In addition, in the personal relationshipbased (guanxi) Chinese culture, when state resources are allocated, such incubators are favoured which have proper representation in the capital. THE TORCH PROGRAMME Of all programmes operated by the Chinese government with the aim to support the kick-start of

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Rank

Province

City

Quarter

Bejing

Zhongguancun (Bejing)

Guangdong (Kanton)

Sanghai

East Lake (Wuhan)

Jiangsu

Shenzhen

Zhangjiang (Sanghai)

Sanghai

Suzhou

New District (Chengdu)

Zhejiang

Hangzhou

New District (Zhengzhou)

Source: iiMedia

China’s high-tech industry, the Torch Programme is definitely the most popular and successful initiative. The secret of the success of the programme

state-designated high-tech clusters. 300 hundred of them have been given the “national” attributive, and approximately 20% of these are privately

launched in 1988 is that it managed to break free of China’s rigid bureaucracies; its leadership style and organisational structure is more similar to those of a western incubator than a state-owned organisation. This character has proven to be essential for accommodating the Torch Programme to the rapidly and continuously changing economy of the country successfully.

owned. About 60, 000 start-ups have been housed by incubators, including some of today’s giants, such as Lenovo and Huawei. In addition to technology parks and incubators, he third important element of the Torch Programme is InnoFund, which offers equity investment opportunities and loan interest subsidies on existing development loans. Since 1999 9,000 projects have been approved and $1 billion have been allocated within the framework of InnoFund.

While Silicon Valley has become the centre of American high-tech start-ups in a natural way, China focussed the resources on some geographical locations designated by government programmes. Companies with geographically closely located headquarters form clusters and gain a competitive advantage against isolated companies. In technology clusters, a close relationship is established between companies, as well as laboratories and research institutes. Thus, it is not surprising, that the government designated most of the technology parks in the near of China’s best universities of engineering, fostering the collaboration between companies and universities. The first such centre was Zhongguancun Science Park (Z-Park) in Beijing, which is still called China’s Silicon Valley. Z-Park covers approximately 17% of the capital’s area, including 32 universities and colleges (such as Tsinghua and Beijing Universities) and 84 national key laboratories. The companies of Z-Park account for one-third of the high-tech start-up investments of the country. By 2011 there had been 89 technology parks similar to Z-Park operating all around China. These account for 33% of the total high-tech performance of the country, i.e. 7% of Chinese GDP. By 2011 more than 1,000 start-up incubators had been working in these 89

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MAJOR CHINESE INNOVATION CENTRES AND INCUBATORS

Innoway

Transformed into an incubator centre with a government-backed investment of $36 million in 2013, the 200-meter strip in Z-Park, Beijing, currently houses 40 incubators and 300 start-ups. Start-up culture is strongly present in Zhongguancun because the headquarters of internet giants Baidu and Tencent can be found here. Start-ups in Innoway can enjoy all the advantages of the new infrastructure: in addition to cheap offices and electricity, there are several cafés and bookshops here, which also serve as meeting rooms of start-ups, just like in the American start-up culture. Innoway’s largest incubator, 36Kr selects 30 start-ups each month to work inside the company’s space for 90 days. Beijing Makerspace, also located on Innoway, claims to be the biggest maker space. It has had more than 300 registered members in Beijing by now and has serviced over 30 start-ups as of August 2015. Garage Café, with a space of 800 m², offers working space for start-ups at the price of a cup of coffee. By now, almost 100 teams have landed their investments in the Garage Cafe platform.

CHINA’S START-UP INCUBATORS

Tsinghua x-lab

The incubator programme launched by Tsinghua University functions as a forum for VC investors and the students of the university. Student who manage to get admission into the programme are provided all necessary equipment for the projects free of charge by the university and they have the opportunity to make their idea into a start-up. On top of equipment, the incubator programme provides legal and investment counselling for free as well as access to the design centre of Tsinghua University. In the first 18 months of it operations, Tsinghua x-lab housed about 400 start-ups, 300 of which are still operating, and 30 of them have received substantial funding from external investors. The projects include start-ups engaged in 3D printers, digital healthcare and electric mopeds.

Tencent Public Space Tencent, the maker of WeChat, China’s most popular social media platform, was launched as a start-up in 1998. The story of the company grown to be today’s internet giant greatly contributed to the establishment of the start-up culture dominating China today. In addition to its own products, the company places great emphasis on portfolio building: it acquires successful start-ups a well as supports emerging companies within the framework of incubator programmes. Tencent Public operates incubator centres in several cities including Beijing, where start-ups can rent office space for RMB1,200 per month (cca. HUF51,000), with such added extras as tax exemption for three years and free or very favourably-priced access to Tencent’s products and infrastructure. Furthermore, the company assists start-ups to target government-backed support programmes, since, as an internet giant, it has several ties with the government.

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TusPark

The headquarters of Tuspark, a company primarily engaged in building business parks but also monitoring technological start-ups, can be found next to the campus of Tsinghua University. The company ensures optimum environment for growth for startups: in addition to office space and a high-tech infrastructure it provides human resources management, legal and financial counselling services at a discounted price. TusPark closely cooperates with Tsinghua University, since the incubator programmes compete for the most talented fresh graduates of elite Chinese universities.

Phoenix Plan

The government of the Chaoyang district of Beijing launched a programme in 2010, targeting foreign entrepreneurs and Chinese returnees to launch start-ups in the district. Chaoyang provides an excellent environment for growth-focussed start-ups, since 60% of the foreign companies registered in the capital have headquarters in this district.

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1000 Talents Plan

The 1000 Talents Plan established by the Government of China exists to recruit professionals with high qualifications and considerable experience in one of the governmentâ&#x20AC;&#x2122; high-priority fields from abroad to China. As a result of the 1000 Talents Plan and other incentive programmes, the number of professionals returning has increased, but only 3.2% of them planned to launch a start-up in 2015.

Chinaccelerator

Chinaccelerator is a privately-owned incubator, with numerous foreign mentors in its network. Mentors provide business counselling to selected Chinese start-ups which target the global market with their products instead of the Chinese one. Successful applicants are given an initial investment of $30,000 in return for 6% equity, with an optional $25,000 from the partners of the incubator. The partners of Chinaccelerator include, among others, investment groups from China and the Silicon Valley specialised on start-ups.

CHINA’S START-UP INCUBATORS

POSSIBILITIES OF INTERNATIONAL COOPERATION ChinaEU has been set up to foster cooperation and exchange of information in IT between China and the European Union (EU). As a forum, ChinaEU facilitates communication between Chinese and European IT professionals, and the organisation is an incubator for joint business projects and start-ups between China and Europe. The National Innovation Office (Nemzeti Innovációs Hivatal; NIH) and the State Administration of Foreign Experts Affairs (SAFEA) granted funds to joint Chinese-Hungarian start-up projects at their joint committee meeting held in 2013. The Hungarian party’s contribution amounted to €1 million. 36 of the 59 applicants received a grant from the joint Chinese-Hungarian fund. Although the Science and Technology Attaché Network proposed as early as in 2008 to set up a Chinese-Hungarian incubator with the collaboration of the Budapest University of Technology or Eötvös Loránd University, this incubator has not been set up yet. Involving a Hungarian university in a joint incubator initiative would offer the possibility to create a more sophisticated programme then the current cooperation with the NIH. In addition to financial support, technological, advisory and infrastructural assistance could be provided for the Chinese-Hungarian start-ups. The Asia Pacific Foundation of Canada has collected the experiences of Canadian incubators and startups operating in China, which may be very useful also in the context of establishing a Chinese-Hungarian cooperation. First of all, the companies “growing up” in joint Chinese-Hungarian incubators will be more likely to succeed in the Chinese market, since large Chinese companies tend to have an inclination against risk-taking; it means they are willing to do business with known and tried-and-tested companies. This is especially detrimental to smaller companies unknown in China, but an active Chinese partner may moderate the “outsider” status of startups. Furthermore, it is advisable for the foreign government to have a friendly and positive relationship with the Chinese party so that Chinese-Hungarian start-ups should feel themselves relatively safe even in a changing regulatory and economic environment. Since the 1980s the fast-paced development of Chinese economy has been greatly promoted by the import of foreign technologies but by now it has resulted in considerable dependency. With its

15-year plan for technology and innovation, the Chinese government gradually shifts to supporting the innovation activity of domestic companies in order to mitigate this dependency. It might be counterbalanced by good diplomatic relationships facilitating the operations of Chinese-Hungarian companies in the new political and market environment. The equity capitalisation of the Chinese start-up market has grown considerably over the past years, owing to the state, the universities and private investors. Although some experts expect the market correction of start-up financing in the near future, which will entail the depreciation of Chinese start-ups, the impact on companies will be just temporary. The high volumes of capital and the expansion of the start-up culture in China has triggered the establishment of several state- and privately owned start-up incubators, the majority of which is more like American incubators than typical Chinese state organisations. Support from the state played a considerable part in the success of Chinese start-ups, since they enabled the creation of zones in which start-ups can grow under favourable circumstances. Regarding the promising future of the Chinese start-up market, it is recommended to set up a Chinese-Hungarian incubator in cooperation with the Chinese Ministry of Science and Technology and the related state bodies responsible for start-up incubators. The chances of a market break-through by Chinese-Hungarian start-ups could be improved by the cooperation and coordination between the state bodies, which would facilitate establishing partnerships with large Chinese companies.

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TSINGHUA UNIVERSITY – CHINA’S MIT

The 148entrance of Tsinghua University

105-year old Tsinghua University is one of the most important elite institutions of higher education in China. The institution can be found in Beijing, and its motto is: “Self-Discipline and Social Commitment”, which faithfully reflects its dedication to facilitate academic excellence, the well-being of Chinese society and global development. Tsinghua was established in the north-west of Beijing in 1911, on the site of a former royal garden. Its establishment is related to the United States of America. In the aftermath of the Boxer Rebellion, China had to pay indemnity to the United States; these funds were used,

among others, to establish this institution of higher education. Initially, the institution functioned as a preparatory school for students to be sent by the Chinese state to study in the USA. University training started in 1925. In 1937, due to the second Chinese-Japanese war, the institution moved to Kunming, where it merged with Peking University and Nankai University, and formed the National Southwestern Associated University. After World War II, Tsinghua moved back to its original campus. In 1952 Tsinghua became a university of technology, cancelling the courses in law, agriculture and natural sciences.

Its outstanding faculty of engineering is in the top tier not only in China but also in the world. Thanks to the established faculty, the university is closely cooperating with various companies, as a result of which students find positions more easily in the labour market, and it also generates considerable fund for research. In 1978 the university introduced a multidisciplinary system. As a result, the School of Sciences, the School of Economics and Management, the School of Life Sciences, the School of Humanities and Social Sciences, the Tsinghua Law School were re-incorporated. In 1999, the Academy of Arts and Design also opened. The prestige of Tsinghua is demonstrated by the fact that several members of China’s top leadership graduated from here, for example the current President, Xi Jinping as well as his predecessor, Hu Jintao. Various international university rankings place Tsinghua amongst the best universities: in 2016, Tsinghua was ranked 58th

globally in the Academic Ranking of World Universities, 47th in the Times Higher Education World University Ranking, and 25th in the Quacquarelli Symonds World University Rankings. This university has the largest budget in China – it is almost five times more than the total expenditure of the entire Hungarian higher education system –, providing a high-quality research environment for students and teachers, with more than three-hundred research institutes. The number of students is about 46,000, who are distributed between various training levels as follows: 15,636 students participate in bachelor's degree programmes, 18,661 in master’s degree programmes and 11,903 students in PhD programmes. The university has 14 colleges and 56 departments, working in the fields of natural sciences, engineering, humanities, law, medicine, history, philosophy, economics, management, education and art. 149

ACCESSIBLE KNOWLEDGE Author: Prof. Dr. Zoltan Baracskai

I have never managed to clarify the notion of possession – let me note, others have not, either, since if they had done so I could have someone to learn it from. The possessor installs alarms all over what they think their possession is. “Nobody is going to tell me whom to like or dislike. We have not come to that yet.” (Chaplin)

ABUNDANCE OF READINGS Let’s imagine an educated person who went to school for seventeen years and has been practicing for three years. Half of the knowledge acquired in twenty years becomes obsolete. An educated person can undergo further training from three sources, but this is something everyone does differently. We can learn conceptual models from a teacher at a post-graduate school, practice from each other or a profession from a professional. These all can be attributed to readings. I have seen a video of Umberto Eco’s private library, which consists of fifty thousand books. Despite all kinds of fashion trends encouraging to learn from each other, I believe in books. “This is Not the End of the Books” – this is the title Jean-Claude Carriére and Umberto Eco gave to their book. It may be so one day, since it is easier to read the point of subsidiarity in a book by Charles Handy than to discover it after long contemplation. Once a travelling book agent spread the news if a new book was published. People either bought the pig in a poke or did not. There were some who were reading in libraries. Not many but there were some. Now internet does the same job that the “traveller” did: break the news on the publication of new readings. Naïve readers still buy a pig in a poke, since they do not know what the new readings are about. If they knew what they are about or that there is nothing new in them, they should not be bought.

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An educated person validates the pig in a poke somehow • We cannot know how an educated person validates; we just see them do so, since if they did not validate, they would either buy all readings or none of them. Now let’s have a look at the three different types of readings. • The main point of journals should be presenting a “quick update” on the latest results of the most powerful research workshops. But this has not been the case for the last twenty years. Today the “publications industry” is about the promotion of scientists, that is climbing the ladder of hierarchy. It deserves a separate paper, but I am not even sure whether it deserves it. One must know a lot to be able to find something useful among the countless articles “written under pressure” to circumscribe their problem or suspect a solution. If it happens, then it makes sense to read good journals and learn from them. It is worth subscribing to the accessibility of knowledge. It is no point in searching based on the citation of authors. Who and how many times is cited depends on the institution they are a member of, and which institutions let them publish in their own journals. Only the institutions of science are interested in this result, an educated person with a thirst for new knowledge is not. An educated person undergoing further training cannot be expected to

judge the games of institutions, but can definitely be expected to realise on the basis of a couple of minutes-long extract whether the author is telling something or just talking about something. • Manuals and/or textbooks are guides to solve a special problem. If they are not, they are no good. In his book entitled “Zen and the Art of Motorcycle Maintenance” Robert Pirsig describes the problems of using manuals. Often textbooks and manuals overlap to a great extent. Textbooks also fall into the abyss of teaching unteachable practice. But I could also say that these are unreadable texts full of dubious taxonomies. An educated person undergoing further training cannot be expected to

readings not to think of when and for what you can use the new knowledge in it, installed with no alarms by anyone; just to think about whether it can fit your context. Do not expect guidelines from me or others about validating readings.

judge the quality of the content of manuals and/or textbooks, but they can be expected to recognise if complex things are described too simply. • “Illusion-free positivistic science, over-pursuing its goals, forced philosophy into a defensive position in the 19th century.” A strange idea spread, according to which “classics” should be read by philosophers and “moderns” by practitioners. It is a myth that original texts are hard. It is the other way round: good books taking us along the thoughts of the author are easier to read. There is nothing to fear from the original works of great thinkers. An educated person undergoing further training cannot be expected to judge the quality of the content of a book, but they can be expected to believe that books of philosophy have survived the validation of some generations.

a couple of hundred schemes of the actual lack of knowledge of the person undergoing further training. A practicing educated person has several thousand schemes in their own field. It is the job of providers of further training to invent something new, to offer something new that has not ever been included either in their hundred schemes or the thousand schemes of the person undergoing further training and is relevant.

“Once, Alexander, the Great had to decide about a dubious enterprise. He was told there was a woman who could tell the future. He summoned her to see what he was capable of. The woman told him to make a big fire and future can be read from the billowing smoke like from a book. Nonetheless she warned him of one thing. While examining the smoke, he should not think of the left eye of a crocodile by any chance. He should think of the right eye by all means, but never of the left. Alexander, the Great then abandoned knowing the future. Why? Because if you are warned not to think of something, you cannot help but think of that one thing afterwards. Prohibition begets compulsion. After that it is impossible not to think of the left eye of the crocodile. The eye of the animal is practically burnt into your memories and you soul. Sometimes, like in the above story of Alexander, the Great, the problem, or at times a real drama even, is that people must remember and cannot forget. It is useless to tell when you validate the abundance of

SCARCITY OF ATTENTION Let’s set about it from a distance. In 1971, Herbert Simon wrote, “the wealth of information means a dearth of something else”. And even back then it was attention. We have got used to scarcity and we understand it better than wealth. At best, those who teach educated persons undergoing further training have

The educated person undergoing further training is struggling with an unrenewable resource: scarce time. Providers of new knowledge have plenty of time but are in need of relevant knowledge which is irreplaceable within a short period of time. In the global village, overabundance is a problem. Providers of further trainings are in a difficult situation, since they must filter the rubbish through a couple of hundred schemes, while thy do not know what they should pay attention to in this overabundance. An educated person undergoing further training

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could do this quickly but they do not have time for that because of its scarcity. Consequently, new knowledge is impossible to be found on the internet. Old knowledge can be found on condition that we know the author and the title of the work. It is almost like libraries used to be, but here there are no allknowing nice librarian ladies. The veterinary horse has low and high blood pressure at the same time, diarrhoea and constipation. Those who want to give something to educated people with some practice are walking in more or less the same shoes. In the last 40 years, I have been to at least forty countries. It has never happened that they were not considering the reform of education there and then.

not compare fashionable wiki-articles to “classic” books, since their qualities are immeasurable: it is a dynamic quality. Search based on known key words always lead to obsolete sources. Without knowing the filter of search engines precisely, we can say that frequency is of high importance. Consequently, you can find “obsolete readings”, dubious articles on known key words.

The spread of Polányi’s notion of “tacit knowing” (knowing what cannot be expressed by words) is a typical case in the last decade. Nonaka entered this no-

“But what should we change? Examinations and the system of requirements? If just so little should be changed, it will succeed if they nurture their inner indignation how little our students know about geography, how poorly the read…” Learn, so that we could assess and compare result? Should children go to a good kindergarten and it will be easier for them to go to a good school? After a good school, mummy’s wish is a good university. I ask mothers, ‘What is a good university for?’ ‘Well, so that my child, who is the smartest and the nicest, should get a good job.’ No one has ever told me that they want their children to become well-educated people. If they have a good job, learning may also begin. “You cannot study and learn at the same time.” The author of this graffiti is unknown, but Gabriel García Márquez explained his parents with a very similar logic that he quit university after two years to start his studies. At a workshop in London, British professors were struggling with the notion of “practitioner”. My old fix idea is a parable in which I insist that a group of children sooner or later would work out the Pythagorean theorem. These British professors could not work out what this “practitioner” was. I tried to be a polite guest from a distant country, and I did not tell them then that Donald Schön had already written that. They could have worked out the notion of praxis without reading, but they did not work out what had already been devised and they did not devise anything else, either. “It took a century for chickens to learn not to run across the road. Eventually, this species has accommodated to the new traffic situation.” But we do not have so much time when we are speculating about the use of internet. “Learning how to use” also means “learning when not to use”. There are millions of hits for each key notion. In the present paper, I will

tion – let me note, incorrectly – and since then Mihály Polányi’s excellent invention has been spreading like a virus. Today we have got as far as finding references to Polányi and Nonaka in heaps of papers. If we have a little bit closer look at these papers it becomes obvious that neither Polányi’ not Nonaka’s writings have ever been read by “researchers”. Polányi’s “Tacit Dimension” was published in nine hundred copies in 1983. One of my colleagues bought a copy “in unopened condition” in 2003. How were tens of thousands of citations generated? How did Polányi’s notion of “tacit knowing” transform into “tacit knowledge”, a notion never used by Polányi? There is only one single answer: those who spread the virus have not read the original work. The “Maslow pyramid” used in almost every genre was never drawn by Maslow. What’s more, on the second page of his article published in 1943 he just claimed the opposite. Unfortunately, Polányi could not correct Nonaka. The “Handy models of organizational culture” spread by wiki and never designed by the author is also similar. Once someone made a figure entitled “Handy models of organizational culture”. The titles of the subchapters of Chapter Six of the book entitled “Understanding Organizations”, translated in early 80s, should be learned by heart. Neither the teacher nor the students read Handy, but it was an exam requirement thus it was spreading on the internet in the bunch of “correct answers”. Nothing can discredit innovation more than teaching ideas originating from 1935. I’ll just mention some ideas born later. In 1985, Peter Drucker wrote some interesting things, last time it was C.K. Prahalad in 2003 who had come out with a novelty. The latest speculation on innovation, an article on The Capitalist’s Dilemma by Clayton M. Christensen and Derek van Bever in the HBR. “Learning to be a scientist is not the same as learning science: the former is learning a

S(H)AME

övezet és út fórum, hongkong

culture, with all the related non-rational creation of meaning.” If everyone installed alarms to new knowledge, they would be inaccessible and only Maslow’s and Handy’s never uttered figures would exist. Fortunately, the world is not like this. As of today, I have devised six schools for those who came from praxis and wanted to undergo further training. All of them have been founded on a new concept of the alarm-free thinker. I have never longed for small secrets installed with alarms.

“Great changes were not led by mathematicians or scientists (although they were also present) but playwrights, poets, philosophers, and even music instructors.” The motto of this paper is from Chaplin. “Nobody is going to tell me whom to like or dislike. We have not come to that yet." And this is both true an untrue.

Those who have not betrayed me yet might tell me which philosopher is likable. The writings of Simon, Polányi, Handy were recommended by people who have never betrayed me. I have founded local schools with all humility towards new knowledge to teach the concepts of philosopher-giants. A couple of dozens of people, if we bump into each other on the corner of the street decades later, can still accurately recall the novelties they heard then. And they even know newer ones, which they recommend me now. All students were listening to the same stuff, but they did not hear the same. The point is into what soil I sow the seeds. Let’s take an example. “For me, the main point is not what people say but what I recall when I can hear it. I found out very early that it was too little for me if all I knew was what I could learn”, a director, who happened to be a student at one my schools at the turn of the millennium, told a reporter. It is valid the other way round, too: I am inspired by students who do at their praxis something different from what I teach but they would not do what they do if I had not taught them something different. “Earlier we were convinced globalisation would make the whole world think similarly. The result is just the opposite: globalisation is preparing the fragmentation of common experience.” In learning, let’s be humble towards new knowledge.

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BELT AND ROAD SUMMIT, HONG KONG

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BELT AND ROAD SUMMIT, HONG KONG Author: Anton Bendarzsevszkij

The largest event to date on the New Silk Road, the “Belt and Road” Summit was held in Hong Kong on 18th May, 2016. The conference received much attention in Chinese and South Asian media, and the most important figures of the Asian business sphere attended it, as well as the number three member of Chinese leadership. The main organisers included the Hong Kong Trade Development Council, the Hong Kong Special Administrative Region Government, the People’s Republic of China’s Ministry of Commerce and the People’s Bank of China. The “Belt and Road” Summit had been prepared by Hong Kong Trade Development Council (HKTDC) since the announcement on the New Silk Road made by the Chinese leader, Xi Jinping in 2013. The event welcomed several leaders of China and the other countries concerned by the project, as well as more than a thousand participants. It was special owing to the fact that it was the first time that such high-level Chinese leader had visited Hong Kong since the protests of the opposition in 2012, thus the event was marked by high expectations from all levels. Fundamentally, the Summit had one chief aim: to encourage investments along the New Silk Road, involving as many market participants and countries as possible. In addition to Chinese officials, the world’s largest financial companies, construction, consultancy, legal and logistics firms attended the event and met interested guests in the exhibition area. The organisers can see unique opportunities for Hong Kong in the New Silk Road. The city, hallmarked by “one country, two systems” would assume the role of a business hub, and would be a maritime centre and connection point on the one hand, and would form a bridge between the Chinese mainland and the rest of the world on the other.

National People’s Congress of the People’s Republic of China and deputy head of the National Security Commission. Since no Chinese high-ranking officials had visited Hong-Kong for more than four years, his speech had a symbolic value. Dejiang said the world economy had not recovered yet from the impacts of the international financial crisis, and under such circumstances countries must collaborate and cooperate to restore their growth paths. The New Silk Road, a global project launched by China, had several benefits for the participating countries at the two ends of the project – both in developing East Asian countries and highly developed European states. A large reginal cooperation, with frameworks provided by China, presented a winwin situation for all. Cooperation involved several levels: it did not just concern the economic sphere, but culture, education, arts, sciences, technology, tourism, health and sport as well. The New Silk Road, claimed Deijang, “are not private exclusive roads but wide and open avenues for us all”. The Chinese official said that the New Silk Road concept had taken shape in a specific government scheme when the “Vision and Actions on Jointly Building the Silk Road Economic Belt and the 21st Century Maritime Silk Road” had been adopted in March 2015.

BENEFICIAL PROJECT FOR EVERYONE HONG KONG’S ROLE IN THE NEW SILK ROAD Zhang Dejiang, China’s number three leader delivered a speech at the summit. Dejiang is a Member of the Standing Committee of the Politbureau of the Communist Party of China Central Committee, Chairman of the Standing Committee of the

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Hong Kong has a unique location in the region: connects maritime traffic with the continental one, is close to Shenzhen, China’s innovation centre; has the world’s most developed port system; sits on one

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of the busiest sea routes; has one of the worldâ&#x20AC;&#x2122; busiest airport and well-developed infrastructure. Hong Kong is a world-leader in terms of economy as well: it has one of the freest economy in the world, and maintains close relations with most countries in the world. For all these reasons, Hong Kong has a very important role for China. The Chinese government would provide extensive support for Hong-Kong in the coming years, Zhang Dejiang said. First, they would support building a platform of comprehensive services, making Hong Kong the place which would offer accounting,

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design, consultancy and other professional services to the New Silk Road project. In addition, they would support Hong Kongâ&#x20AC;&#x2122;s shipping industry, and building a multi-functional, 21st century shipping centre for New Maritime Silk Road. Second, they would promote the development of an investment and financing platform in Hong Kong. They would put special emphasis on the development of cultural relations and support the work of different social groups, think tanks and research teams. Finally, the government is giving priority to developing cooperation with the Chinese mainland.

BELT AND ROAD SUMMIT, HONG KONG

Hong Kong could provide great help to the inland regions of China in developing overseas businesses, building a multi-level form of cooperation through the maritime connections.

The bridging role of Hong Kong was also emphasised by Gregory So Kam-leung, Secretary for Commerce and Economic Development of Hong Kong, at the conference. He thinks the economic significance of the city is demonstrated by the fact that out of the world’s one-hundred largest banks more than seventy can be found in Hong Kong. The features that distinguish Hong Kong from the other cities of the region include the rule of law, free ports, low taxes, efficient workforce, and the free flow of investments. There are more than seven hundred shipping-related companies in Hong Kong, and this sector will be further developed in the future. The Belt and Road Summit will also be held next year, on 11th September, 2017 and in Hong Kong again.

Since then, ‘over 30 cooperation agreements were signed’, reported Dejiang. On the other hand, ‘over a thousand container trains have travelled between China and Central Asia or Europe’, proving an ‘international transport mechanism linking the two ends of the Eurasian continent is up and running.’

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ON THE SILK ROAD BY MOTORBIKE 160

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ON THE SILK ROAD BY MOTORBIKE Author: Ádám Gbúr

A young Hungarian professor – who loved motorcycling – decided in 2015 to cross Europe and Asia along the Silk Road. In the Middle Ages, the journey from Istanbul to Beijing took even several years; by motorbike, however, Ádám and his fellow traveller, Li covered the distance of 31,000 km between Budapest and Beijing in 76 days.

I found the video of two German motor-cyclists who started to drive along the Silk Road but turned back when they reached the Chinese border. Seeing them, I took a liking for travelling the same route except that I wanted to continue the journey in China, too. My decision was also supported by the fact I graduated from Eötvös Loránd University with a degree in history and then lived in China for six years, and during this period I did not just learn the language but also the customs, culture and history of the country. I did my Ph. D. at the University of Changchun in the comparison of the history of European and Chinese philosophy. The more thought I gave to the journey, the more crystallized the details of the ride became, and the more seriously I was considering what should be done to be able to set off on such an enormous journey of several thousands of kilometres. The idea was born, and in the meantime fate also ordained that my dream should come true. ACROSS 17 COUNTRIES BY MOTORBIKE I told my plans to a Chinese friend of mine, who was also enthusiastic about the idea. He immediately told me he knew a Chinese businessman living in Hungary, whose range of interest was similar, so he would surely be interested in the journey. That is how I met Li Yude. Things happened very fast, and the substance of organizing the journey began. One of our mutual friends took the financial part upon himself, and since both Hungary and China supported the joint journey, the financial

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background was ensured. The Hungarian government was encouraged by the Opening Towards East Policy to provide financial and moral support to this grandiose enterprise; the support of the Chinese state was enabled by the political, economic and cultural will behind the “One Belt, One Road” slogan, which regarded developing the settlements along the one-time Silk Road and emphasizing the significance of the link still persisting between the continents particularly important

During our journey we wanted to explore the one-time Silk Road, first, to make obvious where and what kind of developments are necessary in the different regions, and second, to help motorcyclists who want to embark upon this adventurous enterprise in the future. The most difficult part of the organization was to obtain the necessary visas to all the seventeen countries we were to cross on the journey. It proved

Route of the expedition

to be difficult owing two things: since Li is Chinese and I am Hungarian, that is, a citizen of the European Union, in some countries we needed different visas. It was even more difficult to synchronize the visas with the itinerary, because we could enter most of the countries if the date of our arrival and leave was communicated in advance, which required accurate planning – such accurate planning, as it turned out later, which was impossible to be done months in advance, in front of a computer, without knowing the terrains and the particular countries in detail, despite all our goodwill. Time and money became increasingly significant factors in planning, since we had to visit all embassies to support our journey in the different countries. And such offices cannot be informed that we were arriving in a time window of several days so they should wait for us patently. Therefor we needed a schedule broken down to days. Later, however, it turned out that we could not keep to such a steppedup plan on a journey of several months, taken in mostly unknown terrains. The term “Silk Road” originates from the 19th century, and it was a German geographer, Ferdinand von Richthofen who first used this name for the trade routes encompassing East, South and West Asia in ancient and medieval times, connecting the region with Europe. The classical Silk Road connected China’s former capital, Xi'an and Byzantium, later Constantinople, or Istanbul as it is called today. Given the massive

changes, it was impossible to designate specific routes in the area of over ten thousand kilometers stretching between the two cities. The Silk Road did not mean a designated route. The travels of caravans carrying mostly dates, saffron, pistachios, frankincense, aloe, myrrh, sandalwood, glassware, silk and chinaware, were mainly determined by avoiding hostile peoples and famine, that is safe transit. But two more or less regularly used routes, a northern and southern one, evolved. The northern route stated from Xi'an and run towards the west, toward Xinjiang, Fergana (today Uzbekistan), Persia (today Iran) and Iraq, along the Yellow River, and then reached the eastern frontiers of the Roman Empire. The southern route was also called the Tea Route and crossed the northern regions of India. The trade pursued in this area enhanced communication between peoples and cultures, therefore it was not only an economic and cultural but also a significant social drive. We chose the northern route, and its most popular segment in particular, thus after six months of making arrangements, could set off on the journey. Organisation required very complex work, but finally we could leave with Li Yude from Heroes’ Square on 7th May. We did not have all our visas, though, but we hoped things would work out. On the other hand, we were promised diplomatic assistance, which we fully received, our enterprise was supported from home, taking off a lot of burden off our shoulders.

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The beginning of the Silk Road

Beijing

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On the road motorral a selyemĂşton

We set off on the journey on BMW R1200 GS Adventure motorcycles. They were completely prepared technically, and we had to test whether they were perfectly reliable on a ride of several thousands of kilometres. First we went to Belgrade, from where we sent back the stuff we thought to be superfluous, because at the beginning of the journey we felt we had planned too much luggage. We could already see at this point that we would not be able to stick to the schedule we planned so carefully at home, since we had a delay of three hours at our second stop, the Hungarian embassy in Sofia. But the real troubles started the next day, at the Bulgarian-Turkish border, when the problems with the visas first occurred. Although we managed to resolve the situation, we could have a foretaste of what kind of situations we would have to resolve on the journey.

THE REAL BEGINNING OF THE SILK ROAD Our arrival in Istanbul was symbolic, since once the Silk Route started from here towards the east, and, as a link with the Roman Empire, it used to be the western collection point of caravans. Our motorbikes were inspected here first whether they were technically fine and we had a day of rest, which we spent with sightseeing. From here, a section of 800km followed to Samsun, and the next day, after having ridden even more, we arrived in the capital of Georgia, Tbilisi. In Tbilisi, we faced one of the greatest problems of our journey: we had not been given the Turkmen visa, which meant we could not go along the originally planned route. Since we had received loads of help both from Hungary and China, we continued our journey toward Teheran optimistically and we hoped the situation will work out in the next few days. Eventually, we were

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stranded in Teheran for five days, which could have meant the end of the trip. But we were determined and found an alternative solution.

the Tajik-Afghan border. But I would not even have dreamt that I would meet the greatest fear of travellers…

A BYPASS OF 4,000 KILOMETRES

PAMIR HIGHWAY

In these five days, we had the chance to get better acquainted with the Iranian people, about whom we had very little prior information. Soon we learnt they were very direct and open-minded, curious about the world and very helpful. The problems with the visas, however, caused a lot of headaches, and since we were not given the permission to enter Turkmenistan, we had to seriously con-

On the terrace of a restaurant in Samarkand, I received a text message from Li that he could not go on this section with me due to some problems with his visa. He had to go across Kirgizstan to China to get there on time. It bit right into my marrow: the Pamir Highway was not only the second highest altitude international highway in the world – going up to as high as 4,617 meters – but also very dan-

sider how to go on. On a trip taking several months, however, one gets used to resolving such problems continually, and since we were several thousand kilometres away from our home, and we had a lot of people backing us, we could not consider to abandon the enterprise. Eventually, I proposed to go round the Caspian Sea from the north, to cross Kazakhstan, finally reaching Uzbekistan. This meant a bypass of four thousand kilometres, but there was no other solution if we wanted to fulfil our commitment. We got to Kazakhstan via Russia, which we had originally planned to visit on our journey back, and from here we reached Uzbekistan, where we visited such historic cities such as Bukhara and Samarkand, which used to be distinguished posts on the onetime Silk Route. In the meantime, I was preparing my spirit for the most difficult section of our ride, the Pamir Highway, designated as route M-41, along

gerous. Almost all over its length, for about 1,800 km, it passes along a swift-flowing river, which must be crossed several times; the road goes along steep cliffs and ravines, amidst strange and often unfriendly peoples, far from civilisation. In addition, it seemed fate did not want me to cross this stretch, either. First, my way was blocked by a landslide, and I had to wait for hours until the road was cleared enough to get through with difficulties. It happened several times that despite the clear GPS signal the road simply disappeared in front of me and I reached difficult terrains, where I could do nothing but trust my map; fortunately, after a while I was on the designated route again. But the real barriers were vulnerability and solitude. I had never felt so little in the world before. I had to cross the river several times without any bridge over it, but with some local people waving

Li Yude and Ádám Gbúr

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ON THE SILK ROAD BY MOTORBIKE

Pamir Highway

enthusiastically on the opposite shore, signalling I could cross safely. Fortunately, I got to the shore without trouble and later I was so happy about the police’s roadside checks than never, because at least I could see some people. Then I bumped into another unexpected adventure when I noticed road signs in which, next to the silhouette of an adult and a kid walking, a big death’s head was painted. They were not very promising. When I reached the next settlement, I found out I had done well not to sit down to rest. A British and two Bosnian men explained they were there, so far away from their homelands, because they were minesweepers, clearing the mines in the area marked with signs. The journey took six days and this section was the most tiring mentally because I could not afford lowering my guard here even for a minute. When I got through the Pamir Mountains, and looked back at the high peaks, my stomach still tightened but it also energised me: if I could do it – and to top it all, alone – I would be capable of anything. I met Li in Kirgizstan again, where we continued our trip to China. We got to Xi’an, the end of the onetime Silk Road, without trouble. From here we went to Beijing to perform our protocol tasks. HOMEWARDS We rode back home across Mongolia. In Ulaanbaatar Li and I parted again, because he had to return to China. I headed to Moscow, to cover almost

ten thousand kilometres to Budapest on my own. In the Russian capital I had my motorbike, with which I had no problems on the trip, fully serviced. By the end of the trip I had changed, too: I had become much more patient with others, and begun to pay more attention to people, even with whom I had had superficial relationships. By the end of the thirty thousand-kilometre journey I had become even a bit indifferent. The route, the landscape itself could not offer new experiences, since in seventy days I got used to the fact that there was always a nicer ravine, valley, forest or mountain. Exploring historical city centres was not so exciting any more, either. I felt that I had seen a lot of them and, in some sense, they were all similar. A good example is my journey home, when I was heading toward the Baltic states, which I had wanted to see for a long time. I walked around the capital of Estonia, but only superficially, because the only thing I can remember is the restaurant. I just visited the service station in Riga, but I had some pangs of conscience, so I pledged myself, by hook or crook, to see Vilnius. Homesickness, however, won because on the motorway I took the first exit toward Warsaw on, thus I must go back to the Estonian-Latvian-Lithuanian triangle one day. Despite not having seen everything I had originally planned, I do not miss anything because I got more than I had hoped. If I had to define this huge enterprise somehow I would say it was a pilgrimage grafted onto a motorcycle tour.

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SILK ROAD BOOK REVIEWS

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SILK ROAD BOOK REVIEWS

Victor H. Mair – Jane Hickman (eds.) (2014): Reconfiguring the Silk Road New Research on East-West Exchange in Antiquity – The ancient Silk Road meant the opportunity to make contact for old Eurasia. But it is worth reconsidering what we mean by Silk Road. This volume consists of lectures given at the conference held at the University of Pennsylvania, describing the intercultural encounters along the ancient route before the age of the “Silk Road before silk” in this region. The volume features the discoveries of new researches on cultural and commercial relations, and maps the influence of economic and social patterns along the Road all over Eurasia and even more remote regions. It includes details on the populations that lived in the Tarim Basin, the advanced state of textile manufacturing and the domestication of horses in the region. The essays, which include lots of colourful details, demonstrate the fact that this site was surcharged with vivacity in the time of Alexander, the Great and the Hellenistic kings as well.

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Vijay Sakhuja, Jane Chan (eds.) (2016): China’s Maritime Silk Road and Asia

Peter Frankopan (2016): The Silk Roads: A New History of the World

China’s 21 st Century Maritime Silk Road is one of the decisive international steps of the Asian country, which would create a water corridor across the Pacific Ocean and the much-debated areas of the South China Sea to as far as Europe. It holds out promises of several benefits for the poorer countries of Southeastern Asia: monetary integration by the yuan, infrastructure development, and a higher degree of connectivity. With their studies, the authors wish to create a full picture, considering the great concept and the related continental routes. Individual opportunities as well as serious problems appear, and their unhidden aim is to mitigate Sinocentrism. A great virtue of the book is presenting an objective picture through the work of experts of various nationalities.

To recalibrate our view of history by ignoring the Europe-based view of the world – this is how the aim of the book can be put. The author’s ambition is to lead the flow of history along one single thread from the rise of the Persian Empire through the birth of Islam until the first global economy, and even beyond, to modern geopolitical games, World War II and the cold war. It is very difficult to connect all these logically but the author attempts to prove that the centre of gravity was always shunted toward Asia all through history. Surprisingly, he interprets the spread of black pox, a tragic circumstance also rooted in Asia, as the rebirth of Europe, since after the epidemic new thoughts were born and the peoples of Europe demanded new rights. The author’s conclusion is about the rise of new Silk Roads, which lead the mainstream of history through Asia again.

Susan Whitfield (2015): Life Along the Silk Road The second edition of Susan Whitfield’s book was long awaited in 2015. The book, which was originally published in 1999 is special because it presents life then through the – ethnically, genderwise and socially diverse – inhabitants of the cities along the 9th and 10th century Silk Road. The author is the leader of the International Dunhuang Project; therefore, she has firsthand knowledge of the fifty thousand original documents. The collection is now available in an internet archive. The twelve stories go beyond the boundaries of several cities of the Silk Road: extends the geographical and the chronological scope all the way to Africa and the maritime route, and links the personal “tales” with historical figures. Whitfield’s ambition was to introduce the manuscripts to the public. Her entertaining and authentic work has achieved this goal, since this is the only book which approached the history of the Silk Road through its travellers.

Ben Simpfendorfer (2011): The New Silk Road: How a Rising Arab World is Turning Away from the West and Rediscovering China China and the Arab world shared a commercial link for centuries – and, the author claims, it isn't a coincidence that Arab business partners have returned to China at the same time that China’s economy is fast rising. The author has immersed himself in both Chinese and Arab culture and has a great understanding of their modern-day relations. The world shunts the mainstream of global trade from America and East Asia toward the region between East Asia and the Middle East, and this new line is tightened not only by mere economic interests but emotional attachments to the symbols of the past as well. This is what the author can see evolving in current international political and economic relations, since Arab businessmen often feel themselves strangers in the USA, they are welcomed as old friends by their Chinese partners.

Felföldi Szabolcs (ed.) AURÉL STEIN (2012): ON ANCIENT ASIAN TRACKS - THREE EXPEDITIONS IN INNERMOST ASIA AND NORTH-WESTERN CHINA (Hungarian edition) Aurel Stein is distinguished from other explorers of the Silk Road, due to his discovery of the scrolls of the cave temple of Dunhuang and his work for their preservation. Thanks to him, we know several details of the history of the Silk Road in the Tang Age, and the documents extant prove that there were active cultural, religious and economic exchanges in this region from the 8th to the 10th century. The explorer, who was buried in Kabul, described many of the recollections of his expeditions. The account is based on a lecture series Stein delivered on his tour in the USA. They are published in English in every 45 years, but it was first published in Hungarian in 2012. He described his expeditions to his audience of the 1930s, and the fascinating lectures are considered one of Stein’s best works.

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SILK ROAD BOOK REVIEWS

Hasan H. Karrar (2010): The New Silk Road Diplomacy: China's Central Asian Foreign Policy since the Cold War (Contemporary Chinese Studies) Due to their geographical proximity, China and Central Asia share a common past, and relations were broken by the estrangement of the Soviet Union and China. Since the cold war, a new chapter has begun in the shared past of the two regions, and Central Asia has become a highpriority issue of Chinese foreign policy. In his book, Karrar describes the relations of the period since the cold war, in terms of both official diplomacy and informal encounters. The Shanghai Cooperation Organisation, which functions as an important multilateral forum for the countries, is given a distinguished role. The foreign policy concept of the new Silk Road is also featured, since historical partnerships have been emphasized in the Chinese rhetoric, and good relations are still important to China in order to maintain “mutually beneficial” regional stability, coupled not least with its successful energy policy. 172

Chris Devonshire-Ellis (2015): China's New Economic Silk Road: The Great Eurasian Game & The String of Pearls Some aspects of the new Silk Road concept seem more elusive than its similarly mysterious historical predecessor, and these great ambitions are often difficult to place in the system of current world economy. Ellis’s book attempts to show the readers the way in the labyrinth of the direction of the Chinese economic policy determining the decade so far, illustrating and explaining it with several anecdotes. Since Chinese President Xi Jinping’s announcement made in 2013, innumerous projects have been launched, and further and further reaching routes were marked on the map of the New Silk Road. The author, who has travelled extensively throughout Central Asia, China and several countries of South-East Asia, covers over 60 countries exploring problems and potential outcomes. Currently, this is the only book that provides a comprehensive overview and assessment of China's emerging economic concept.

Xinru Liu (2010): The Silk Road in World History The book of the Chinese author, published in the New Oxford History series, is an excellent starting point to assess the significance of the Silk Road in world history. Several ideas and goods were exchanged along the route. As for the latter, silk, after which it was named, and as for ideas, Buddhism, of which Liu’s book gives a particularly thorough account, can be highlighted. In addition, in the historical overview the emphasis is mainly placed on the impact of Han Chinese extending from Central Asia up to Alexandria, from the opportunities of prosperity provided by the trade route and the manufacturing of silk until the influence declining in the 11th century. The book makes us sure that long before the modern era a network transmitting economic and ideological patterns was built, affecting a significant area.

BOOK SUMMARY

Wang Yiwei: The Belt and Road: What Will China Offer the World in Its Rise Wang Yiwei is a professor with the

old Silk Road? What objectives does

reader’s attention to the fact that

School of International Studies, di-

the Chinese government have in

united with China, Europe could re-

rector of the Institute of Interna-

view? When will China finish the ini-

gain its global role lost after World

tional Affairs and Director of the

tiative?

War II.

Center for European Studies at Ren-

The book can be divided into four

In the third conceptual unit, the au-

min University of Beijing, and one of

large conceptual units. First, it in-

thor examines the dangers facing

the most important experts of inter-

troduces the One Belt, One Road ini-

the implementation of One Belt, One

national affairs and European-Chi-

tiative, and the underlying economic

Road. Although he describes count-

nese relations in China. What makes

and political drives. It highlights the

less security (terrorism, natural dis-

Wang Yiwei’s book particularly in-

five types of relationships of the new

asters, etc.), economic (e.g. finan-

teresting is, first and foremost, that

Eurasian unity: new infrastructure;

cial risks), legal and moral risks, the

his information and advice reach the

commerce and investments; stand-

author considers the geopolitical

highest circles of politics, therefore

ardized monetary system; common

challenges presented by the United

the book, in fact, reflects the opin-

consciousness

unity

States to be the biggest. However,

ions and ideas of China’s leadership.

and increasing intensity of relation-

Wang Yiwei is optimistic: he thinks

The close relationship between the

ships between citizens (business, ex-

the problems can be coped with by

book and the position of the Chi-

change programmes, tourism). The

the collaboration of countries.

nese government is demonstrated

author puts the initiative into an in-

Finally, in the last part, Wang exam-

by the fact that the Appendix to the

teresting historical perspective, not

ines the theoretical (e.g. the theory

book includes the official document

only describing the significance of

of global integration) and practical

entitled Vision and Proposed Ac-

the old Silk Road, but also detailing

ways of cooperation being the basis

tions Outlined on Jointly Building

its relationship with the develop-

of One Belt, One Road. In the context

Silk Road Economic Belt and 21st-

ment phases of Chinese economy

of a pragmatic approach, he makes a

Century Maritime Silk Road, issued

(reform and opening, going global).

suggestion how the implementation

jointly by the Chinese National de-

He highlights the historical-geopo-

of One Belt, One Road can be meas-

velopment and Reform Committee,

litical significance of One Belt One

ured (e.g. implementation of infra-

the Ministry of Foreign Affairs and

Road (problem of maritime vs. con-

structure, reduction of customs du-

the Ministry of Commerce.

tinental power), drawing a parallel

ties, increasing aid and investments,

The greatest virtue of the book is

between One Belt, One Road and

scientific cooperation, etc.)

that it provides an extensive and

the Marshall Plan as well as the oth-

As a summary, the author concludes

comprehensive overview of the One

er countries’ ideas about the devel-

One Belt, One Road is such public

Belt, One Road initiative. Accord-

opment of the Silk Road.

good which is beneficial for all the

ingly, in the introduction the au-

In Part Two, the book presents the

countries and citizens of the world.

thor asks such questions frequently

opportunities for China, the Asian

Furthermore, the initiative is a good

phrased by the public such as: why

region, Europe and the world of-

basis for the rise of Eurasia, which,

was it given this name? What is the

fered by the implementation of One

the author thinks, is in the interest of

similarity between the new and the

Belt, One Road. Wang Yiwei calls the

China as well as Europe.

political

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FUSIONS AND ENCOUNTERS

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MUSIC ALONG THE SILK ROAD 175

Miklós Both –

A Musical Odyssey Through China (2015) Gryllus Records

“and the end of all our exploring will be to arrive where we started and know the place for the first time." T.S. Eliot

ON ORIENTAL TRACKS Bartók’s and Kodály’s efforts made for Hungarian folk music are known to the general public. For the composers, it had been clear from the very beginning that we would understand our culture in the context of the musical map of the world. The birth of A Musical Odyssey Through China, which is a collaboration between Miklós Both and Chinese musicians, was greatly inspired by these thoughts. Each epoch must respond to new challenges. More than 100 years elapsed since Bartók’s first collecting tour in 1906. In Bartók’s days, emphasis was put on collection itself; today, with the help of recordings, anyone can get acquainted with the music of the wold. Understanding, however, requires personal presence, and recognition derives from the overall impression. Miklós Both’s made his first musical research trip in Syria in 2009, where a Dutch traveller told him, answering his question, that the most interesting country of the world was China. This inspired Both to travel several thousands of kilometres eastwards,

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and familiarise himself with the art of a community standing on fundamentally different musical grounds. It was not the scientific nature which dominated his musical collecting trip but the experience itself, meeting audiences who have completely different ideas about music from the ones we do. The more information we have on the musical approaches of different cultures, the more we learn about our own music. Discovering these differences can promote a better understanding of the world and it also reveals the uniqueness of Hungarian music. In 2012, Miklós Both spent several months in China as part of a totally mystical musical journey, leaving his comfort zone. Later, when meetings with local musicians were arranged for him, he also met Yang Jima, who was a contestant of the talent show, Chienese Idol in the year following this meeting and several millions of people heard her singing. More and more local people showed up at these joint concerts. Yunnan province is particularly a province of artists; a lot of musicians and actors live there. A documentary was made on the meeting, and a CD

Miklós Both

Yangjima

containing 21 pieces of Chinese and Hungarian folk music was recorded as the fruit of the joint music sessions. In the recordings made in a studio in Yunnan, at a school and in the homes of musicians, a total number of nine musicians and a singer were Milós Both’s partners. He plays the electric and acoustic guitar and

sometimes sings, too. Although the album is primarily his record, he does not push himself forward, he seems to regard the entirety of music important. The record is an exciting mix of traditional and folk musical forms, and contemporary musical language. The extraordinary record was presented at a 4-day meeting and concert in Millenáris Park, Budapest.

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Yo-Yo Ma

Silk Road Ensemble – Sing Me Home The world-famous Chinese-American cellist, YoYo Ma has participated in several musical fusions. Critics call him a “real omnivorous” and in fact, he has a much more eclectic repertoire than a classical cellist. For example, he played and recorded

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Baroque pieces on contemporary musical instruments, American bluegrass music (a related genre of country music), traditional Chinese melodies, Astor Piazzolla’s Argentinian tangos, Brazilian music, the soundtrack of Crouching Tiger, Hidden Dragon, Philip

Fúziók és találkozások: Zenék a Selyemút mentén

Silk Road Ensemble

Glass’s minimalist music and together with other musicians, he also worked on the soundtrack of Memoirs of a Geisha. In May, 2005 he received an honorary doctorate in music from Princeton University, and he was elected a United Nations Messenger of Peace in 2006. The famous cellist formed his own Silk Road Project in 1997, which was an attempt to make the fusion of classical music and the folk music of the Far East more consumer-friendly. The Silk Road musical project was later relaunched in a community school of New York as an educational pilot programme, focusing on musical integration and diversity, presenting the music of different countries, regions and peoples. In 2012, Silk Road affiliated with Harvard University, and later partnered with the Stanford Program on International and Cross-Cultural Education (SPICE) and a documentary was made on the orchestra and the programme in advance of the 2008 Summer Olympic Games. At present, 59 musicians from 22 countries participate in the creation of music, who are called one of the most extraordinary ensembles of the 21th century by the Wall Street Journal.

The musicians, composers, arrangers, storytellers and visual artists compose the mix from the stories of the past of a particular region. In addition to the cello, violin, piano, harp we can find oriental musical instruments, such as shakuhachi, the Japanese bamboo flute, Chinese pipa, Armenian duduk, Iranian kamancheh, Mongolian urtiin duu (long song), oud, i.e. the Arabic lyre, Indian tabla and sitar. The performers include such great names as Chinese pipa player Li Hui, Alim Quasimov from Azerbaijan, Kayhan Kalhor from Iran with his bowed string instrument, Dong-Won Kim from Korea and Sandeep Das from India. The Silk Road musical Project is a musical journey on intertwining musical routes of several centuries and several thousands of kilometres. The extraordinary global formation has released seven records so far: Silk Road Journey: When Strangers Meet in 2001; Silk Road Journeys: Beyond the Horizon in 2005; two years later, in 2007 New Impossibilities; Traditions and Transformations: Sounds of Silk Road Chicago in 2008; Off the Map in 2009; A Playlist Without Borders in 2013; and Sing Me Home, consisting of 13 songs, last summer.

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top 10

Hungarians in the global forefront In order to preserve and to convey national values, the Central Bank of Hungary and Pallas Athéné Geopolitical Foundation intend to draw global attention to young Hungarian talents and creative communities. “TOP 10 - Hungarians in the global forefront” is a joint publication introducing Hungarian talents we can be proud of, who, as role models, encourage and inspire today’s youngsters. Because “we, Hungarians can make it into the top league in Europe and globally”. Our selection is an overview of success stories from the past three years, encompassing the fields of gastronomy, sport, culture, tourism, technology and science, highlighting such segments which usually remain hidden from the general public. Let’s take a look at those sensational Hungarians who recently added colours to the world-wide web and the map of understanding the 21 st century.

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HUNGARIAN PIANIST MADE IT TO THE SECOND PLACE OF THE US BILLBOARD LIST

MASTERFUL HUNGARIAN HONEY PRODUCTION

Balázs Havasi is considered an exotic artist all over the world, since at his concerts the audience can meet an immersed composer, a virtuoso pianist and a fascinating showman – in one person. Once he gave concerts in front of 46,000 people at one single weekend, filling the Budapest Sport Arena at four occasions. He made it to the second place of the Billboard magazine’s weekly Boxscore list, which rates the largest events – it was an international sensation in the modern classical genre.

Hungary is considered to be one of the best producers of honey in Europe, since within the European Union specific bee colony density is the highest here. The bee population density in Hungary exceeds eleven colonies per square kilometre.

TOKAJ IS ONE OF THE BEST WINE REGIONS IN THE WORLD Tokaj is included in the list of ten best wine travel destinations published in the renowned American magazine, Wine Enthusiast, in 2012.

WE ARE ONE OF THE MOST SPORTY NATIONS OF EUROPE According to a survey conducted by the Public Opinion Analysis sector of the European Commission, Eurobarometer, 15% of Hungarians do sport regularly. Although this figure does not sound very glorious, even in the gold medallist country, Ireland only 16% of the population do sport daily. According to the survey, 42% of the Europeans do not do any sport at all; we can find Austria, the Czech Republic and Malta (5 per cent), Italy (3 per cent) and Bulgaria (2 percent) at the bottom of the list.

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GRAND BUDAPEST HOTEL Premiering in 2014, a comedy by Wes Anderson made Budapest the centre of the world for a while – even though the film had not been not shot here. The film featured such superstars as Ralph Fiennes, Bill Murray, Tilda Swinton, Edward Norton, and Harvey Keitel, and managed to turn a complicated story set in a fictitious wold into an opus entertaining audiences and fascinating critics.

HEREND PORCELAIN MANUFACTORY IS THE LARGEST IN THE WORLD Since its foundation in 1826, Herend Porcelain Manufactory has grown into the wold’s largest porcelain manufacture, where high-quality Herend porcelain is still hand-made, in the spirit of tradition and innovation. The products of the Manufactory are sought after in almost sixty countries, from the United States to Japan.

ONE OF THE WORLD’S LOWEST-CONSUMPTION VEHICLES WAS DESIGNED BY HUNGARIANS The students of the Faculty of Mechanical Engineering and Automation (GAMF) of Kecskemét College entered the worldwide competition of fuel-efficient vehicles in 2010. The racing car they developed, Megaméter represented Hungary in several competitions. They achieved their best result in Finland in 2013: the vehicle could run 3,082 km with one litre of fuel.

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ROBOTICS WORLD CUP2013–2014 Nóra Papcsák, Ágnes Jakab and Fanni Poór – with the help of their teacher, Csaba Abán – achieved the fourth place in the category of RoboCupJunior Rescue in the international robotics competition, RoboCup2014. The team of Kazinczy Ferenc Baptist Elementary School in Nyírbogdány achieved the fourth place in the junior world cup in 2013 as well.

HUNGARIAN BOY IN THE WINNING PROJECT OF NASA Gergely Pais, a sophomore of computer science at the Faculty of Informatics of Eötvös Loránd University was also a member of an international team of seven students, which was found to be the best in its category among 25 teams at NASA's Space Apps Challenge in 2014. The members of the winning team convinced the jury of NASA experts with their concept of E.C.A.S.A. Interactive Astronaut Helmet.

WORLD OF POTENTIALS: HUNGARY’S IMAGE FILM IS THE BEST The promotional video entitled Hungary: World of Potentials written and directed by Isti Madarász won the Grand Prix of the International Committee of Tourism Film Festivals in 2011.

HUNGARIAN INVENTIONS ARE THE BEST The inventions of a team of the teachers and students of Kálmán Kandó Faculty of Electrical Engineering of Óbuda University, led by József Papp achieved both the first and the second place in the wold competition presenting the state-of-the-art technological creations and computer inventions. In the competition organized at Azad University in Shiraz, the team’s intelligent railway management system proved to be the best, and their biosphere protection system was awarded with the silver medal.

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WANG, Yamei: China Focus: Xinjiang's first high-speed rail starts operation. In: Xinhuanet, 16.11.2014, http://news.xinhuanet.com/ english/china/2014-11/16/c_133793219.htm Xinhua/1: China, Central Asia seek cooperation on Silk Road Economic Belt. 16.06.2015, http://news.xinhuanet.com/english/201506/16/c_134331124.htm Xinhua/2: Interview: China-Pakistan Economic Corridor on track: ambassador. 24.06.2016, http://news.xinhuanet.com/english/201606/24/c_135463588.htm Xinhua/3: Spotlight: China, Central and Eastern Europe eye infrastructure-led all-round cooperation, Xinhua, 25.11.2015, http:// news.xinhuanet.com/english/2015-11/25/c_134851088.htm Xinhua/4: Thailand-China railway cooperation a boon for both. 04.12.2015, http://news.xinhuanet.com/english/201512/04/c_134885659.htm ZHENG, Yanpeng: New rail route proposed from Urumqi to Iran. In: Chinadaily, 21.11.2015, http://www.chinadaily.com.cn/china/2015-11/21/content_22506412.htm ZHOU, Fangye: China should avoid high-speed rail predicament. In: Global Times, 15.08.2016, http://www.globaltimes.cn/content/1000668.shtml New Explorers of the Oceans: China and the 21st Century New Maritime Silk Road BARNARD, Bruce: Greece, China Cosco finally seal Piraeus port sale. IN: JOC.com, 05.07.2016, https://www.joc.com/port-news/european-ports/port-piraeus/greece-cosco-china-finally-sealpiraeusport-sale_20160705.html BO, Zhou: The String of Pearls and the Maritime Silk Road. In: China & US Focus, 11.02.2014, http://www.chinausfocus.com/foreignpolicy/ the-string-of-pearls-and-the-maritime-silk-road/ CHANG, Lyu: Chinese firm to develop SEZ in Gwadar. In: ChinaDaily USA, 12.11.2015, http://usa.chinadaily.com.cn/epaper/2015-11/12/ content_22441296.htm ChinaDaily: Chinese firm wins $600m port construction contract in Ghana. 09.04.2015, http://www.chinadaily.com.cn/ world/2015-04/09/content_20037004.htm DUQUENNOY, Antoine – ZIELONKA, Robert: Bridging Asia and Europe Through Maritime Connectivity. European Institute for Asian Studies, Brussels, March 2015, http://www.eias.org/wp-content/ uploads/2016/02/Bridging_Asia_Europe_2015.pdf FOO, Sheryl: China-ASEAN Maritime Silk Road: A Path Towards Mutual Benefits or China’s Free Ride into ASEAN? Asia-Latam Connection, 27.12.2015, http://www.asia-latam.org/in-thenews/2015/12/27/ china-asean-maritime-silk-road-a-path-towards-mutual-benefitsor-chinas-free-ride-into-asean IFTIKHAR, Mohid – ABBASI, Faizullah: A Comparative View of the Ancient and the 21st Century Maritime Silk Road. Center for International Maritime Security (CIMSEC), 03.03.2016, http://cimsec.org/ ancient-land-and-the-maritime-silk-road/22660 JIAO, Wu – YUNBI, Zhang: Xi in call for building of new 'maritime silk road. In: ChinaDaily USA, 04.10.2013, http://usa.chinadaily.com.cn/ china/2013-10/04/content_17008940.htm KLEVEN, Anthony: Is China's Maritime Silk Road A Military Strategy? In: The Diplomat, 08.12.2015, http://thediplomat.com/2015/12/ is-chinas-maritime-silk-road-a-military-strategy/ LÉAUTIER, Frannie A. – SCHAEFER, Michael – SHEN, Wei: The Port of Bagamoyo: A Test for China’s New Maritime Silk Road in Africa. In: The Diplomat, 01.12.2015, http://thediplomat.com/2015/12/the-portof-bagamoyo-a-test-for-chinas-new-maritime-silkroad-in-africa/

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习近平: 把权力关进制度的笼子里, 在第十八届中央纪律检查委员会第二次全体会议上的讲话要点, 人民网, 2013年1月22日. http://cpc.people.com.cn/ xuexi/n/2015/0721/c397563-27338646.html 习近平:在第十二届全国人民代表大会第一次会议上的讲话, 新华网, 2013 年3月17 日. http://news.xinhuanet.com/politics/2013-03/17/c_115055434. htm

Ministry of Commerce, The People’s Republic of China: The Ministry of Commerce Holds the 2nd Press Conference on China-CEEC Ministerial Meeting on Promoting Economy and Trade Cooperation and ChinaCEEC Investment and Trade Expo, 03.06.2016, http://english.mofcom.gov.cn/article/newsrelease/press/201606/20160601334397. shtml

习近平: 主席在博鳌亚洲论坛2013年年会上的主旨演讲, 新华网, 2013年 04月07 日. http://news.xinhuanet.com/politics/2013-04/07/c_115296408. htm

PAVLIĆEVIĆ, Dragan: China in Central and Eastern Europe: 4 Myths. In: The Diplomat, 16.06.2016, http://thediplomat.com/2016/06/chinain-central-and-eastern-europe-4-myths/

习近平: 弘扬人民友谊共创美好未来, 在纳扎尔巴耶夫大学的演讲, 人民网, 2013 年09月08日. http://politics.people.com.cn/n/2013/0908/c100122842914.html

SESZTÁK, Miklós: T/9787. számú törvényjavaslat a Magyarország Kormánya és a Kínai Népköztársaság Kormánya között a Budapest-Belgrád vasútvonal újjáépítési beruházás magyarországi szakaszának fejlesztése, kivitelezése és finanszírozása kapcsán született Egyezmény kihirdetéséről, Magyarország Kormánya, Budapest, March 2016. http://www.parlament.hu/irom40/09787/09787.pdf

习近平:关于《中共中央关于全面深化改革若干重大问题的决定》的说明, 新华网2013年11月15日. http://news.xinhuanet.com/politics/201311/15/c_118164294.htm

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Figure 1 The word cloud of the speech on the “Chinese dream” made by Xi Jinping on 17th March, 2013 (adapted from Chinese into English) (author’s own edition) Figure 2 The word cloud of the speech on the “comprehensive and indepth reforms” made by Xi Jinping on 15th November, 2013 (adapted from Chinese into English) (author’s own edition) Figure 3 The word cloud of the speech delivered by Xi Jinping at the event held on the 2,565th anniversary of Confucius’s birth on 24th September, 2014 (adapted from Chinese into English) (author’s own edition) Figure 4 The word cloud of Xi Jinping’ speech delivered at the BOAO Forum in 2013 (adapted from Chinese into English) (author’s own edition)

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Xinhua: Animated image of Xi Jinping again a hit online. In: China Daily, 20.02.2015, http://www.chinadaily.com.cn/china/2015-02/20/ content_ 19626923.htm

Kilgour, David: The Challenge of Interdependence. In: david-kilgour. com, 25.01.2001, http://www.david-kilgour.com/secstate/interdepend.htm

The Structural Transformation of the Chinese Economy

KLEVEN, Anthony: Is China's Maritime Silk Road A Military Strategy? In: The Diplomat, 08.12.2015, http://thediplomat.com/2015/12/ is-chinas-maritime-silk-road-a-military-strategy/

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Security Challenges of One Belt, One Road

Zimmermann, Thomas: The New Silk Roads: China, the U.S., and the Future of Central Asia., Center on International Cooperation, New York University, October 2015 http://cic.nyu.edu/sites/default/files/ zimmerman_new_silk_road_final_2.pdf

Cover: Shutterstock bbs1.people.com.cn 专访国防大学教授朱成虎：美俄眼中的一带一路 (Interview with Zhu Cheng, Professor of the National Defense University: One Belt, One Road as seen by the USA and Russia), 24.05.2015, http://bbs1.people.com.cn/post/7/1/2/148524266.html Bo, Zhou: The String of Pearls and the Maritime Silk Road. In: chinausfocus. com, 11.02.2014, http://www.chinausfocus.com/foreignpolicy/the-string-of-pearls-and-the-maritime-silk-road/

The Asia Infrastructure Investment Bank AIIB gathers for inaugural annual meeting. In: Financial Times. 2016.06.24., http://www.ft.com/cms/s/0/828ff06c-39e7-11e6a780-b48ed7b6126f.html#axzz4GBGzwswK

Clemens, Morgan: The Maritime Silk Road and the PLA. China as a „Sea power”, conference lecture. In: cna.org, 28-29.07.2015, , https:// www.cna.org/cna_files/pdf/maritime-silk-road.pdf

AIIB's Board of Directors Approves $509 M Financing for its First 4 Projects: Power, Transport and Urban Investments span South, Southeast and Central Asia. Asian Infrastructure Investment Bank. http:// euweb.aiib.org/html/2016/NEWS_0624/120.html (3 August 2016)

Duchatel, Mathieu – Sheldon-Duplaix, Alexandre: China’s “imminent issue”: Djibouti and overseas military interests. In: ecfr. eu, 25.13.2016, http: //w w w.ecfr.eu/ar ticle/commentar y_chinas_imminent_issue_djibouti_and_overseas_interests4069

China-Backed AIIB Seeks Cooperation and New Members. In: Fortune. 26.06.2016, http://fortune.com/2016/06/25/aiib-china-newmembers/

Ghiselli, Andrea: The Belt, the Road and the PLA. In: China Brief 2015, Vol. 15, No 20. 14-17. 19.10.2015, http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews%5Btt_news%5D=44498&cHa sh=6e55200c2fa85acde07b4719c9091b0b#.V8A2f_mLS01 Kaczmarski, Marcin – Rodkiewicz, Witold: Russia’s GreaterEurasia and China’s New Silk Road: adaptation instead of competition. In: OSW commentary, No 219, 21.07.2016, http://www.osw.waw.pl/en/ publikacje/osw-commentary/2016-07-21/russias-greatereurasiaand-chinas-new-silk-road-adaptation

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China’s Start-Up Incubators CAO, Cong – SUTTMEIER, Richard P. - SIMON, Denis Fred: China’s 15year science and technology plan. In: Physics Today, December 2006, 38-43. http://china-us.uoregon.edu/pdf/final%20print%20version. pdf Chaoyang Overseas Talent Center, tocbd.gov.cn, http://www.tocbd. gov.cn/

China’s Cutting Edge: Research

DAHL, Jordyn: Chinese Government Luring ’Sea Turtles’ Home To Launch Startups. In: Forbes, 03.05.2016, http://www.forbes.com/ sites/jordyndahl/2016/05/03/chinese-governmentluring-seaturtles-home-to-launch-startups/3/#56892c4d76b5

财政部科技部总装备部关于印发《国家高技术研究发展计划（863计划）专项经费管理办法》的通知, 2006年. http://www.most.gov.cn/ztzl/gjzctx/ ptzckjtr/200802/t20080222_59206.htm

DAHL, Jordyn: The State of Play. Startups continue to crop up but the market may be overrun with funding. In: Beijing Review, 21.04.2016, http://www.bjreview.com/Business/201604/ t20160415_800054670.html

China Statistical Yearbook 2015, 2016. http://www.stats.gov.cn/tjsj/ ndsj/2015/indexeh.htm Highlights of proposals for China's 13th Five-Year Plan. In: Xinhuanet, 04.11.2015, http://news.xinhuanet.com/english/photo/201511/04/c_134783513.htm High-Technology Manufacturing Industries, Science and Engineering Indicators 2016, National Science Board, 29.04.2016, http://www. nsf.gov/statistics/2016/nsb20161/#/report/chapter-6/worldwidedistribution-of-knowledge--and-technologyintensive-industries National Bureau of Statistics of China: Statistical Communiqué of the People's Republic of China on the 2015 National Economic and Social Development, 29.02.2016, http://www.stats.gov.cn/english/ PressRelease/201602/t20160229_1324019.html OECD Science, Technology and Industry Outlook 2014, 12.11.2014, http: //w w w.oecd.org/science/oecd-science-technology- andindustry-outlook-19991428.htm Patent applications, nonresidents, World Bank, 2016. http://data. worldbank.org/indicator/IP.PAT.NRES/countries Patent applications, residents, World Bank, 2016., http://data.worldbank.org/indicator/IP.PAT.RESD/countries Research and development (R&D). In: OECD, 2016., https://data.oecd. org/rd/gross-domestic-spending-on-r-d.htm SPRINGUT, Micah – SCHLAIKJER, Stephen – CHEN, David: China’s Program for Science and Technology Modernization: Implications for American Competitiveness, Prepared for the US-China Economic and Security Review Commission. In: Arlington, CENTRA Technology, Inc., 2011., http://origin.www.uscc.gov/sites/default/files/Research/ USCC _ R EPOR T_China's _ Program _for Science_and_Technology_Modernization.pdf

GEIGER, Mihály: A Kínai Népköztársaság Kutatási és Fejlesztési Tevékenysége. Tudományos és Technológiai Attaséi Hálózat, éves beszámoló jelentés, 2008. http://nkfih.gov.hu/download. php?docID=7306 HOROWITZ, Josh: Inside Innoway, China’s $36 million government-backed startup village. In: Quartz, 28.10.2015, http:// qz.com/534956/inside-innoway-chinas-36-million-governmentbackedstartup-village/ iiMedia Research Group: 2016年中国孵化器发展现状专题研究报告, 2016 the development status of Chinese incubator Research Report, http://www.iimedia.cn/1459930903380n2906.pdf (in Chinese) LEE, Emma: Is China’s Startup Incubator Bubble Set to Blow? In:technode, 12.04.2016, http://technode.com/2016/04/12/chinasstartup-incubator-bubble/ LI, Danielle - YU, Stella: Top 5 incubators in China. In: allchinatech. com, 14.12.2015., http://www.allchinatech.com/top-5-incubatorsin-beijing/ MCCUAIG-JOHNSTON, Margaret – ZHANG, Moxi: China’s innovation incubators: platforms for partnerships. In: Canadian Views on Asia, 2015, https://www.asiapacific.ca/sites/default/files/filefield/ apfc_report_incubatorspd05.pdf Nemzeti Kutatási, Fejlesztési és Innovációs Hivatal: Ösztönzik a hasznosítható kutatói programokat. Sajtóközlemény, MTI, 2013. http://nkfih.gov.hu/hivatal/sajtoszoba/sajtokozlemenyek/2013/ osztonzik-hasznosithato Science Parks and Cities. Tusholdings, http://en.tusholdings.com/ index.php/52298b0c0a

The State Council of the People's Republic of China: Made in China 2025, http://english.gov.cn/2016special/madeinchina2025/

steveblank: China’s Torch Program – the glow that can light the world (Part 2 of 5). In: steveblank.com, 11.04.2013, https://steveblank. com/2013/04/11/chinas-torch-program-the-glowthat-canlightthe-world-part-2-of-5/

VAN DER STEEN, Anouk: China’s 13th Five-Year Plan: focus on innovation. In: Innovatie Attaché China, Rijksdienstvoor Ondernemend Nederland, 14.03.2016, https://www.rvo.nl/sites/default/ files/2016/03/13FYP%20innovation_march2016.pdf

Torch High Technology Industry Development Center: National HighTech Industrial Zones in China. Beijing: Ministry of Science and Technology, 2013, http://www.ctp.gov.cn/english/xhtml/images/ National%20Hightech%20Industrial%20Zones.pdf

Ware, Mark - Mabe, Michael: The STM Report. An overview of scientific and scholarly journal publishing, March, 2015., http://www.stmassoc.org/2015_02_20_STM_Report_2015.pdf

全国空间地点, region=1

Xi expounds on guideline for 13th Five-year Plan, In: CCTV. com, 03.11.2015, http://english.cntv.cn/2015/11/03/ARTI 1446559744633822.shtml

Tsinghua University - China’s MIT

zc.open.qq.com,

http://zc.open.qq.com/base/index?

Xi sets targets for China's science, technology progress. In: Xinhua, 30.05.2016, http://news.xinhuanet.com/english/201605/30/c_135399655.htm

Academic Ranking of World Universities 2016, shanghairanking. com, http://www.shanghairanking.com/ARWU2016.html

国家中长期科学和技术发展规划纲要, (2006━2020年) 中华人民共和国国务院, 新华社北京２月９日电., http://www.gov.cn/jrzg/2006-02/09/content_183787.htm

Hayashi, Yukihide: Four Major Chinese Universities. Advancing the World’s Top Level with Overwhelming Power of Human Resources. April 2014, https://www.jst.go.jp/crds/pdf/en/r_201309_01_EN.pdf History of Tsinghua. Tsinghua University, tsingua.edu.cn, http:// www.tsinghua.edu.cn/publish/newthuen/newthuen_cnt/aboutth/ about-3.html QS World University Rankings 2015/16. In: topuniversities.com, http:// www.topuniversities.com/university-rankings/world-university-ran kings/2015#sorting=rank+region=+country=+faculty=+stars=false +search= Tsinghua University, timeshighereducation.com, https:// w w w.timeshighereducation .com /world - univer sit y- rankings / tsinghuauniversity?ranking-dataset=133819

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LIST OF PICTURES AND FIGURES The main transport routes of the ancient Silk Road: Wikipedia, https://hu.wikipedia.org/wiki/Selyem%C3%BAt#/media/ File:Transasia_trade_routes_1stC_CE_gr2.png

Gross expenditures for R&D and expenditures for R&D as share of gross domestic product: (Source: OECD, 2015): China’s Program for Science and Technology Modernization: Implications for

Annual GDP output of the USA and China (nominal and purchasing power parity value): World Development Indicators, World DataBank, 2016. http://databank.worldbank.org/data/reports. aspx?source=world-development-indicators

American Competitiveness, Prepared for the US-China Economic and Security Review Commission, CENTRA Technology, Inc., 2011. 22-24.

Economic corridors of One Belt, One Road: The Belt and Road Initiative, Hong Kong Trade Development Council, 21.01.2016., http://china-trade-research.hktdc.com/business-news/article/ One-Belt-One-Road/The-Belt-and-Road-Initiative/obor/ en/1/1X000000/1X0A36B7.htm The route of Friar Julian’s travels: történelmiportré.hu: http:// tortenelmiportre.blog.hu/2016/03/25/a_tatarjaras_i_resz_az_ elozmenyek_julianus_barat_utazasai_a_kunok_elso_betelepiteseig_788 (2016.07.28.) From Nagyenyed to the foot of the Himalayas: Csoma de Kőrös’s journey tudásbázis.sulinet.hu: tudásbázis.sulinet.hu: http:// tudasbazis.sulinet.hu/hu/termeszettudomanyok/termeszetismeret/ember-a-termeszetben-4-osztaly/iranyelvek-utazashoz/ korosi-csoma-sandor-utazasai Ármin Vámbéry, in dervish dress: wikimédia: https://upload. wikimedia.org/wikipedia/commons/1/10/Armin-vambery-indervish-dress.jpg The routes of Béla Széchenyi’s expedition: Sources: blogspot. com/1: http://4.bp.blogspot.com/-uWj9ZUIAOH8/UfEc88tPDFI/ AAAAAAAAAek/ME2C426xzGw/s1600/utvonal.jpg Cholnoky, the landscape painter: Source: blogspot.com/2: blogspot.com/2: http://2.bp.blogspot.com/-kTaQ3uuhBus/ VeP2QtZ5KeI/AAAAAAAAVhM/AqkWX7unfXg/s640/29787.jpg States of the "16+1 cooperation" and the economic KPIs of the relations: AN, Baijie – LI, Xiaokun: PremierLi outlines $1 trillion goal, The State Council, The People’s Republic of China, 2015.11.25., http://english.gov.cn/premier/news/2015/11/25/ content_281475241795773.htm Economic Corridors of One Belt, One Road passing through Eastern Europe: LIU, Zuokui: The Role of Central and Eastern Europe in the Building of Silk Road Economic Belt, China-CEEC Think Tanks Network, 2016.01.11., http://16plus1-thinktank. com/1/20160111/1096.html AIIB members: http://en.wikipedia.org/wiki/Asian_Infrastructure_Investment_Bank#/media/File:AIIBMap.svg (11.05.2015) Top nine R&D-performing nations and the EU: Source: OECD, 2016: OECD, 2014 Gross domestic expenditures on R&D by the world’s four leading economic powers: 2000-2014 (US$billion) Source: OECD, 2014.

Increase of expenditures spent on research types (RMB100 million): Source: China Statistical Yearbook 2015): China Statistical Yearbook-2015, 2016. Increase of state and corporate R&D expenditures (RMB100 million): Source: China Statistical Yearbook 2015, 2016. Number and quality of publications in the world’s top five countries , 2014 Source: SCImago, 2016. Journal & Country Rank, SCImago,2016. Increase of the number of domestic and foreign patents in an international context Source: World Bank, Scientific and technical journal articles, World Bank, 2016. Shares of countries in global high-tech manufacturing Source: High-Technology Manufacturing Industries, Science and Engineering Indicators 2016 (Indicators), National Science Board, 2016. Value of high-technology exports (US$billion) Source: Word Bank, 2016: High-technology exports (current US$), World Bank, 2016. Sources of support for start-ups in China in 2015 Source: iiMedia: http://www.iimedia.cn/1459930903380n2906. pdf (in Chinese) amazon.com, http://ecx.images-amazon.com/images/ I/51hVWB8AUQL._SX382_BO1,204,203,200_.jpg amazon.com, http://ecx.images-amazon.com/images/ I/51SPcKWB-bL._SX309_BO1,204,203,200_.jpg bloomsbury.com, http://media.bloomsbury.com/rep/ bj/9781408839973.jpg amazon.com, http://ecx.images-amazon.com/images/ I/519TH27RBHL._SX296_BO1,204,203,200_.jpg amazon.com, http://ecx.images-amazon.com/images/ I/51Zgd5gaZ3L._SX331_BO1,204,203,200_.jpg libri.hu, http://s03.static.libri.hu/cover/cf/e/836174_5.jpg amazon.com, http://ecx.images-amazon.com/images/ I/41XnfbNM1zL._SX331_BO1,204,203,200_.jpg amazon.com, http://ecx.images-amazon.com/images/ I/41xUgWAt9uL._SX367_BO1,204,203,200_.jpg amazon.com, http://ecx.images-amazon.com/images/ I/51YuI5ihx2L._SX331_BO1,204,203,200_.jpg

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CREDITS EDITOR-IN-CHIEF Norbert Csizmadia MANAGING EDITOR Anton Bendarzsevszkij EDITORIAL BOARD Ágnes Bernek Anton Bendarzsevszkij László Körtvélyesi Géza Salamin Péter Szatmári György Szapáry István Szilágyi Ákos Vajas COPY EDITOR István Czene ART EDITORS Gyula Nagy Zsófia Szabó

AUTHORS Zoltán Baracskai Anton Bendarzsevszkij Norbert Csizmadia Ráhel Czirják Viktor Eszterhai Ádám Gbúr László Gere Péter K. Gergely Atilla Grandpierre Zoltán Horváth Attila Kiss Péter Klemensits Fanni Maráczi György Matolcsy Eszter Polyák Fruzsina Simigh Kati Zoób DATE OF PUBLICATION September 2016

PUBLISHED BY: Pallas Athéné Geopolitical Foundation H-1013 Budapest, Döbrentei utca 2., Hungary

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An essential selection of

book workshops consisting of 4 titles

(SCENARIOS OF THE FUTURE) George Friedman and György Matolcsy

“expect the unexpected” “see the events of the world through the eyes of decision-makers”

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What is exactly the New Silk Road? It is a project which aims at shifting the axis of the world economy from the oceans back to the mainland. The promise lying at the heart of One Belt, One Road is to restore the former economic, political, cultural, historical role of Eurasia... 193