Building the Modern Silk Road

  • 2006-09-27
  • By Julia Balandina

BALTIC BOUND: Although trade between China and Latvia has grown, the countries are still far from creating a Modern Silk Road.

RIGA - Prior to joining the European Union, Latvian officials worked toward selling the nation as a transit hub for Asian countries. In April, 2004, President Vaira Vike-Freiberga toured China, and that same month Uzbekistan President Islam Karimov visited Riga. The campaign continued after accession, most notably in Kazakhstan, where Vike-Freiberga traveled with a Latvian delegation in October, 2004.

The task was to create a new "Silk Road" that would give Asian exporters the chance to send their goods 's both raw materials and finished products 's into the global market, and allow Latvia to gain the most from EU membership.

This year, Latvia and China celebrate 15 years of diplomatic relations, and look forward to a burgeoning Modern Silk Road.
"It has been 15 years since China and Latvia established their diplomatic relations," says Ambassador of the People's Republic of China in Latvia Zhang Limin. "Economic and trade relations between the two countries, in the last five or six years especially, have witnessed extremely rapid development, with an average two-digit annual increase of their trade volume in terms of percentage."

According to 2005 statistics, compiled by the Chinese Ministry of Commerce, the main goods Latvia exports to China include metal and metal products, textiles, machinery, and timber. On the flip side, Latvia mainly imports textiles, shoes, headgear, and machinery from their Asian partner. Yet, this is just the beginning.

During a recent meeting with representatives of the China Council for Promotion of International Trade, Latvian Prime Minister Aigars Kalvitis noted that close cooperation had taken place between both countries' government representatives and business circles. The result was an increase in investment, active contacts and extensive opportunities for cooperation.
Yet, it will take more than steady trade for Latvia to become a transit hub for Asian countries.

"The greatest shortcoming in our bilateral trade and cooperation is the lack of major and pillar projects to prop it up," the Chinese ambassador says, adding that the Modern Silk Road, which is still under discussion, could very well fill in this gap.
"My country's position toward this project has always been positive," he adds. "In the last couple of years, China's Ministry of Transportation has twice sent a delegation to visit Latvia, which included entrepreneurs from the largest and most prestigious ocean shipping groups."

After surveying the Baltic's investment environment and harbor infrastructure, China is eager to begin development plans, according to the ambassador. These topics will be discussed, alongside ambitious plans for the Modern Silk Road, at each session of the China-Latvia economic and trade committee.

"As the Chinese saying goes, 'a thousand-mile journey is always started by taking the first step,'" Ambassador Limin says. "There is also a similar saying in the West, namely, 'Rome was not built overnight."'
Having already glimpsed a bright future for the Modern Silk Road, China and Latvia must now concentrate on studying and solving the project's practicalities, potential obstacles and issues of cooperation.

"In the future, both sides should encourage businessmen to play a more active and important role in the building of the Modern Silk Road project," the ambassador says.