The New Silk Road is an insightful, concise (173 pages of text), and thoroughly readable book. The focus is not on energy investments and flows or on government policy, but on business and cultural strands of the Sino-Arab relationship. As a China economist for both JP Morgan and RBS in Hong Kong, and with years of residence in the Arab world, Simpfendorfer has written a book which is rich in detail and cogent in diverse interesting arguments. It is a pleasure to read.
The thesis is that we are witnessing the re-emergence of an old but long-lapsed economic and cultural relationship between China and the Arab world. Prior to about 1600 the “silk road” was a major axis of the global economy. Now it is reviving and that revival is an important part of the “global re-balancing” that is underway. Global re-balancing is defined to mean a diminution of the relative economic and cultural role of the West (Europe and the US) and growth of non-Western areas, like China and the Arab lands. The major manifestation of Arab rise, according to Simpfendorfer, has been the massive transfer of wealth to Arab oil producers in the 2000s as oil prices rose due, in large part, to increased demand by China and India. Simpfendorfer believes those price increases will remain relatively constant (with slumps reflecting business cycles) for coming decades as developing countries (again, China and India) industrialize.
The “silk road” is an emotive symbol for both Arabs and Chinese, evoking memories of times before their respective humiliation by the West and when both were centres of world power and wealth. But it is more than a symbol. The massive increase in wealth to some Persian Gulf Arab capitals due to the rise in oil prices in the 2000s, has meant increased investment by those countries in the lands to the east of the Gulf, through South and Southeast Asia, and even to China. The significant Muslim presence in those countries – including China – is one factor attracting Arab investment to this “Islamic corridor.” China too seeks a portion of this new Arab wealth. Simpfendorfer offers fascinating accounts of how several local governments in China have systematically catered to growing Arab wealth and commercial activity by building mosques and halal Moslem schools to attract Arab businessmen. The sprawling market associated at one such enterprising city overflows with cheap consumer goods favoured by small and medium Arab traders. An interesting sub-theme developed by Simpfendorfer contrasts the relatively relaxed Chinese attitude toward Arab investment and businessmen with the sometimes intolerance of post-9-11 United States in this regard. He recounts how Arab businessmen often feel uncomfortable and unwelcome in the United States in contrast to the “old friend” welcome they receive in China.
Simpfendorfer documents how China has adroitly used its diplomatic service and its media – both state-controlled and less-controlled web sites – to foster Sino-Arab business. Chinese consulates in Arab lands have many Arabic-fluent people to assist enterprising Chinese seeking business. Many ordinary Chinese and Arabs have responded. A century ago, Simpfendorfer writes, Scottish, Irish and English men were willing to live years, even their whole lives, in alien environments for the sake of economic gain and social advance. Today few Westerners are willing to accept such hardships; other professional opportunities are far more attractive. Many Chinese and Arabs are still hungry and willing to endure these hardships. China's extremely competitive markets and low profit margins lead young Chinese men and women to try their luck in Arab lands where profit margins involved in trade are still relatively high. Young Arab men (but very few women), facing high unemployment and limited opportunities at home, set out for China where they find a generally welcoming environment. Description of these grassroots-level interactions is at the core of Simpfendorfer's book.
Simpfendorfer offers a fascinating discussion of the role of China's Hui in the re-emergence of the “silk road.” Education in classic Arabic has given many Hui the ability to serve as translators and middle-men in Sino-Arab business. Hui have seized on this to forge for themselves a significant niche in the emerging Sino-Arab business relation. This substantial cohort of fluent Arabic speakers gives China a major advantage in courting the wealth of emerging Arabia, Simpfendorfer argues. Beijing recognizes this and has substantially increased the number of institutes licensed to teach Arabic and Islam.
The Chinese model of high growth via globalization combined with emphasis on social stability has considerable attractiveness in Arab countries like Syria and Egypt. The leaders of those countries travel frequently to China to study and learn about its model of development. Syria has begun to cautiously follow China's path, according to Simpfendorfer. The eruption of prolonged sectarian violence in Iraq after America-imposed democratization, has warned many Arabs against embrace of the Western model. Yet Simpfendorfer warns against seeing this as a challenge to the West. China's model is, after all, secular and market based, internally and externally. If adoption of that model generates higher growth and thus lower unemployment of young males in Arab lands, that will benefit Western countries plagued by terrorism. Simpfendorfer also notes that the “China model” is predicated on the migration of large numbers of young women considerable distances from their homes to work in factories, something that is not likely to be attractive to Moslem countries.
