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Home»Finance»The ‘Corridorizing’ of Asia: Cooperation, Competition, and Consequences
Finance

The ‘Corridorizing’ of Asia: Cooperation, Competition, and Consequences

July 25, 2024No Comments8 Mins Read
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The ‘Corridorizing’ of Asia: Cooperation, Competition, and Consequences
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“Corridor” has become a ubiquitous buzzword in governance and analyst circles. To fully assess the meaning of “corridors” it is appropriate to fashion an outline of a definition. While the corridor approaches deployed by China, the United States, and Russia are each very different, there are three interconnected components that form the base of this strategy.

Using Simon Curtis and Ian Klaus’ definition of transnational corridors and the transcontinental theories of John Agnew and Alison Williams, I define the corridor approach as follows: First is the territorialization and projection of state power across time and space; second is the spread of civilization across time and space; and the third is the extension, reproduction, and transformation of the state and its circulatory system across space through the construction of transnational railways, roads, bridges, ports, pipelines, and maritime routes. 

At the heart of this corridor approach is the shared belief and realization that an explicit link exists between transnational corridor building and the re-shaping of the international order. The first modern example of this concept is the China-led Belt and Road Initiative (BRI). 

China’s Roads

Since its announcement in 2013 by Chinese President Xi Jinping in Kazakhstan, the BRI’s key venue has been Asia. Made up of six corridors, the largest and most developed corridor is the China-Pakistan Economic Corridor (CPEC).

A key objective of the BRI is for China to move away from being the “traditional workshop of the world” to becoming a high-tech and high-value economy, leading the way in a lot of different industry sectors such as biotech, pharmaceuticals, artificial intelligence (AI), robotics, automated vehicles, and aerospace. As such, Pakistan, Uzbekistan (via the China-Kyrgyzstan-Uzbekistan railway and China-Central Asia-West Asia BRI Corridor), Kazakhstan (The New Eurasian Land-bridge BRI Corridor and the China-Central Asia-West Asia BRI Corridor), and other countries across Asia will operate as manufacturing hubs and serve as transit destinations.

The BRI puts this corridor scheme in motion. What Beijing is trying to achieve with the BRI is to shift global trade in the direction of China. If successful this would increase China’s international weight and its leadership credentials. It will also shift the center of economic gravity further eastward and drag Asia as well as Africa and Europe along with it. 

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The consequences for the U.S. and its partners would be quite profound. This is what Xi has called the “Chinese Dream” – the dream of a new leading role for China in international society. One that has soft power, as well as hard power and material durability. As in the definition of corridors that I use above, the BRI is also a means to advance Chinese civilization across the developing world and connect these countries with Chinese technology, via “digital corridors.” 

But not all dreams become reality. While it has been going on for the past decade and the six corridors that make up the BRI have been making headway, it is by no means certain that China’s dream will come to pass. Resistance to certain BRI projects has cropped up in Asia and in other countries involved in the BRI, particularly from a host country’s local politics, local laborers, and the commercial interests of local businesses.

China and Russia also seem to have interest in establishing corridors in the same geographical area. As CPEC enters its second phase, on July 8, Faisal Karim Kundi, the provincial governor of Pakistan’s Khyber Pakhtunkhwa said that the government has plans to extend the CPEC corridor to Uzbekistan. “The proposed expansion aims to lay tracks from Rawalpindi to Kohat [Pakistan] and from Kohat to Parachinar [Pakistan], ultimately connecting to Uzbekistan,” Kundi said.

Russia’s Plans

For Russia, transnational corridors in Asia have become a key priority in its foreign policy goals. Since the full-scale invasion of Ukraine in February 2022 and the international sanctions that followed, Russia has been developing and supporting transport projects in Asia that bypass Europe and find new markets.

Russia’s transnational corridors in Asia include the International North-South Transport Corridor (INSTC), a 7,200 km intergovernmental transport project first established in 2000 by Iran, Russia, and India. The list of participants in INSTC currently include Oman, Turkey, Azerbaijan, Turkmenistan, Kazakhstan, Afghanistan, and Pakistan. A second example is the Northern Sea Route, a set of sea routes along Russia’s northern coastline that connects it to the Pacific Ocean and is defined in Russian law as “the set of Arctic marine routes between Kara Gate in the west and the Bering Strait.” And a third route is the Northern Corridor, which connects Europe with China via Russia and Kazakhstan or Mongolia on a train route of approximately 5,400 km.

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The corridor approach for Russia is understood by political elites as a tool to build a “Greater Eurasian Partnership.” The goal of this partnership is two-fold: to cooperate and connect the BRI with the Eurasian Economic Union (EAEU), a Russia-led economic customs union including as members Russia, Kazakhstan, Armenia, Kyrgyzstan, and Belarus; and also to compete with and move away from China and connect the observers and members of the EAEU with Iran, India, and the countries of Southeast Asia. 

The recent Russia-India bilateral summit in July resulted in agreements between Indian Prime Minister Narendra Modi and Russian President Vladimir Putin that include the creation of new transport routes for the INSTC, developing the Chennai-Vladivostok sea line, and creating a unified customs procedure with the application of intelligent digital systems for barrier-free movement of goods. A month prior to this, Putin invited Pakistan to join the INSTC. Russia has also been making inroads in Afghanistan’s transport projects. According to Russian media outlets Russia has expressed its readiness to finance the Trans-Afghan Railway Project and conduct feasibility studies.

Western Efforts

The United States and its partners have adjusted their foreign policy direction, too, putting more emphasis on connectivity projects. The major corridors announced by this group include the India-Middle East-Europe economic corridor with the U.S., EU, and India, as well as U.S. President Joe Biden’s “Partnership for Global Infrastructure and Investment (PGII)” that was first launched in 2021 and is seen as an answer to China’s BRI. The acceleration and the injection of additional funding for these projects illustrate a recognition that transnational corridors now play a big role in great power geopolitical strategy. The U.S. has also endorsed other transnational corridors that bypass Russia such as the Middle Corridor project, a multimodal land and sea transport route stretching from China through Central Asia and across the Caspian Sea through Azerbaijan and Georgia to the Black Sea.

There are two key differences between the United States’ corridor approach and China’s. The U.S. flagship PGII, while widely recognized as a rival to the BRI, is a privately-led initiative with the “aim to bring together democratic nations to help developing nations upgrade their infrastructure, whereas the BRI is a state-driven initiative.” Therefore funding for the PGII is much lower compared to the BRI. 

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Another major project by the West that is also considered a rival to the BRI is the EU Global Gateway Initiative. This initiative is an investment program launched in 2023 by the EU and European development finance institutions with the aim to to mobilize up to 300 billion euro in public and private investments from 2021 to 2027 in key sectors including transport. The Middle Corridor project is one of the key projects targeted by this fund as well as the EU-funded Regional Transport Program, to be adopted in 2025, where the EU will “offer technical assistance to advance existing and future transport related projects” in Central Asia. 

For the U.S. and its partners, the key aim of their corridor approach is to ensure that Western interests and influence are not compromised overseas. This means managing and keeping a check on the growing Chinese influence in the world economy. 

Conclusion

New geopolitical and geoeconomic realities in Asia are unfolding. The infrastructure investment push by all sides for the “corridorizing” of Asia is changing the international order as we know it. While China’s BRI has been going on for the past decade, there is still hope for the U.S. and the West to catch up. 

The first step in addressing these dynamics is to recognize how the West can use its model to extend and project its economic influence over Asia in a way that is authentic to them. Second, policymakers should explore where the West can structure new supply chains that enable companies in the Global South to access Western markets. The third and final step is to increase investment in infrastructure projects in Asia so the costs and benefits of transport can be maximized.

These competing transnational corridors are forming a new way of thinking about strategy and geopolitical competition that will shape the next decade to come.

Asia Competition Consequences Cooperation Corridorizing
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