“One Belt – One Road”: New opportunities for the Baltic Sea Region?

Alexander G. Druzhinin,
I. Kant Baltic Federal University,
Kaliningrad, Russia

On the scale of the modern globalizing economy, the Baltic region is one of the most developed and stable of its macro-regional components. It is actively forming both by the processes of European integration and by the multifaceted, complex, full of contradictions dialogue in the ‘Russia-West’ system. The nine Baltic sea States (including Russia) account for 3.9% of the world’s population and 8.3% of GDP (PPP) of the planet. In the four of them (Germany, Sweden, Denmark and Finland) GDP per capita  exceeds the world average from 2.5 to 3 times; in the rest (Lithuania, Estonia, Poland, Russia and Latvia) the level of economic development is also higher than the world average (from 1.6 to 1.9 times). Demonstrating the pronounced differences in the socio-economic and residential dynamics of its regional and country segments, the Baltic region as a whole is a powerful ‘clot’ of states, corporations and solvent demand of the population (16 million people are concentrated just directly in the coastal metopolitan areas of the Baltic Sea). Also this region is a significant transport ‘corridor’. It is here that place, where powerful logistics nodes are localized (some of them are included in the Top 100 largest ports in the world), the trunk sea pipelines operate and build. Also the Baltic region is geoeconomically interesting and attractive for China, which in the last two decades has become a ‘locomotive’ of global economic growth (China’s share in world GDP at the official exchange rate for 2000-2015 increased from 3.6 to 15%) and increasingly demonstrating, in this regard, leadership potential and ambitions (including reformatting and integration of the Eurasian space in the framework of the mega-project “One Belt – One Road”, proclaimed in 2013).

China, of course, needs (and will continue to feel the need) to ensure a stable transport and logistics ‘link’ with Europe as a still economically strong region. At the same time, marine freight, including the Baltic sea, will continue to be fundamental (due to the incommensurability of marine and rail tariffs). It is characteristic that at the end of 2017, the countries of the Baltic region (minus Russia, where the other, the Far Eastern-Siberian logistics prevails in cooperation with China) accounted for 7.2% of the total volume of Chinese exports. At the same time, against the background of the general reduction of imports by the Baltic countries observed in the last five years — the sale of Chinese goods is growing not only in Germany (its share in Chinese exports reaches 5.1%), but also in Poland, Latvia, Lithuania. This fact itself creates motivation for investments in transport, infrastructure and logistics projects within the “One Belt – One Road” project. The strategy of geographic diversification of activities is basic for China (taking into account geopolitical risks). At the same time, it will be combined with the priority attention to the segments of the Baltic coast, which are geo-economically most important for China, they are: German, Polish and Russian ones (the latter is already well ‘mastered’ by Chinese business, as it possesses  a powerful St. Petersburg agglomeration and the presence of the largest Baltic sea ports: Ust-Luga, Primorsk and St. Petersburg). Chinese investments in transport, production and other assets will be ‘supported’ by the growing tourist flow from China to all the main historical and cultural centers of the Baltic region. All this will preserve the transport and transit potential of the Baltic region, support (and restructure) the basic economic segments of its coastal cities (including those experiencing intense depopulation: Riga, Daugavpils, Liepaja, etc.).

The likely positive impact of the “One Belt – One Road” project on the economy of the Baltic States (and their coastal cities, regions), however, should not be overrated. The Baltic region (despite its attractiveness and significance) is only one of the many areas of Chinese economic interests (including European ones, implemented within the framework of the EU — China transport initiatives, the “China + 16” Alliance, etc.). In addition, despite the presence of such a powerful and dynamic leader as Germany, the Baltic states steadily ‘surrender’ their former positions in the world economy. While in 2000 the total share of the Baltic sea countries (without Russia) in world GDP reached 8.1 %, in 2015 it reached only 6.7 % (at the official exchange rate). In the situation of the inevitable further ‘shift’ of economic activity in the countries of South and South-East Asia — the Baltic region is able to maintain its geo-economic importance (including one for China, its transport and logistics and other strategic initiatives). But it is possible only by integrating into transcontinental, cross-Eurasian integration projects and logistics schemes, prolonging its integrity, stopping various (geopolitically and geocultural motivated) disintegration processes and risks (primarily in the ‘Russia – West’ system). Even in the significantly increased (since 2014) geopolitical turbulence, the Baltic region is able (and should be able!) remain a space for constructive cooperation between EU countries and the Russian Federation. The implementation of the project “One Belt – One Road” will create additional motives and opportunities for this.

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