Al-Hareer Road … An economic belt linking Iraq with China

Al-Hareer Road … An economic belt linking Iraq with China

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Al-Hareer Road is a 12,000 km long land and sea road linking Asia, the Middle East and Europe hundreds of years ago with commercial, cultural, religious and philosophical links. Through which ,the exchange of goods and products were made such as silk, perfumes, incense, spices as well as the cultural and scientific exchanges.
The name al-Hareer Road is relatively new , noting that in the mid-19th century, the German geologist, Ferdinand von Richthofen, named the name “de sidenstrasse” (al-Hareer Road in German) on the trade and transportation network.
The New York Times Journal mentioned that the China’s surplus industrial production is one of the most important motives behind the initiative. For example, China produces about 1.1 billion tons of steel a year (equivalent to that of all other countries), but it does not consume internally only 800 million tons. The European Federation Chambers of Commerce estimates that the initiative will absorb only 30 million ton of this surplus.
China enjoys friendly, good and influential relations with most countries in the region as it is expected to have a more effective security and political role in the Middle East.
Sino –Iraqi relations
Iraqi –Chinese diplomatic relations have witnessed a smooth development in most areas and enhanced by 2003 as the China provided $25 million in an aid to Iraq’s reconstruction noting that in June 2007, Iraq’s President Jalal Talabani visited China, the first visit by an Iraqi president, during which four agreements were signed by the two countries including an agreement on the cancellation of 80% of Iraq’s debt owed to China, amounting to eight and a half billion dollars, and the other three agreements include the cooperation between the foreign ministries of two countries and the economic and technical cooperation and a program for the training of human resources and signed a memorandum of understanding between the ministries of science and technology in both countries to train dozens of Iraqis in the field of energy and how to make use of solar energy to produce electricity.
Iraqi Prime Minister Haidar al-Abadi seeks to find an outlet for the suffocating crises in Iraq in security, political and economic areas through the signing of quick and long-range agreements to avoid the fall in oil prices, which is the main source of Iraqi income, calling for making use of Iraq’s joining the Hareer Road in developing areas of cooperation in many sectors, Especially coordination and cooperation on energy with China.
Abadi called for “activating the Iraqi-Chinese relations committee, resuming its meetings and increasing trade exchange with China.” He welcomed the expansion of investment by Chinese enterprises in the country, where Chinese President Xi Jinping supported the invitation.
According to a statement by the office of Iraqi Prime Minister Haider al-Abadi, the Iraqi government signed five agreements and memorandums for economic, technological, military, diplomatic, oil and energy cooperation with the Chinese counterpart at the end of 2015.
The memorandums are:
The first “understanding on participation in building the economic belt of the Hareer Road and the Maritime Hareer Road of 21st century”.
The second “economic and technological cooperation between the two countries”.
The third included the signing of a framework agreement on energy cooperation.
The fourth memorandum focused on “military cooperation between the two countries”
The fifth memorandum signed an agreement on the mutual exemption of visa for the entry of diplomatic passports.

Al-Hareer Road…
The importance of the new Hareer Road comes from the Chinese initiative and the areas on which it is linking to each other to form an economic belt that will expand economic and cultural exchanges and connect groups of small emerging nations to the traditional G20 emerging nations .
The economic belt of the Hareer Road is centered on three main lines of the so-called document “aspirations and actions on pushing forward the joint construction of the Hareer Belt and Road”, ” A line connecting China-Europe through Central Asia and Russia,” and a line extending from China to the Gulf and Mediterranean passing Central Asia and Western Asia “,” a third line from China to South-East Asia, South Asia and the Indian Ocean “.
The maritime Hareer route of the 21st century focuses on two main lines: “A line that starts from China’s coastal ports and reaches the Indian Ocean through the South China Sea and ends at the coasts of Europe”; and “a line linking China’s coastal ports to the South Pacific.”
China attaches great importance to Iraq for several reasons:
First, Iraq is a rich country with large oil resources, water, minerals, agriculture and various resources. This has led the Chinese to think about working and investing in Iraq and have a foothold because China needs great energy. because they expect to face problems in this regard. According to experts china will be the first consuming country for energy in 2020. And by 2025, it is expected their oil consumption to be around 15 million barrels a day, while today they consume 6.5 million barrels a day, of which 4 million barrels of their extraction, so that the amount they import from the oil abroad 2.5 million barrels per day, then if China goes in this way of development that it has witnessed in the past 20 years , it will require large amounts of energy consumption, although 65 percent of the energy is coal, 30 percent is oil and gas, and 5 percent is for nuclear power.
There is an old agreement between China and Iraq to extract oil in the field of “Ahdab” in the province of Wasit at a time when Iraq is suffering from the siege and now the Chinese demand the renewal of the contract and work, as well as geographically and civilizational and cultural heritage ,they consider Iraq one of the four civilized countries in the world: China , Egypt, India, and Iraq, and therefore they want to participate actively in rebuilding Iraq and the use of capital in it, they have a lot of money and China is the first country in terms of financial reserves.
Iraqi Ambassador to China Ahmed Berwari said Sino-Iraqi relations enjoyed an important economic strategy against the backdrop of the belt and road initiative.
He stressed that the “Belt and Road” initiative is important for Iraq because it is historically located on the Hareer Road. Therefore, we have considered ourselves as part of the initiative since it was put forward by Chinese President Xi Jinping.
The importance of this initiative is to support Iraq so that it can rebuild the infrastructure and help it economically and developmentally to be active in the region. The initiative is important for Iraq and the Middle East because it provides them with significant economic and developmental support.
Berwari said that China enjoys superiority in many fields, and since Iraq, an oil-exporting country, then the benefit is mutual between the two countries, which enjoy strategic relations.
Chinese state-owned enterprises are the biggest oil investors in Iraq, especially the modernization and development of Iraq’s oil infrastructure.
Berwari said that 90% of Iraq’s imports came from the sale of oil. Therefore, investment is important in development, which is a great support for Iraq.
Berwari said that the volume of trade exchange between the two countries in 2016 amounted to 18 billion US dollars, but this year, according to statistics of the Chinese official body, in the first half of 2017, reached 11 billion US dollars.
Despite the decline in the price of oil, the amount of Iraqi oil exported to China has not decreased, but increased. But because of the low price, we notice that the amount compared to 2013 and 2014 decreased slightly, but the price is down and not the amount of export. What attracts attention in trade relations between the two countries relatively according to the volume of exports and imports is relatively balanced, a sign of healthy economic and trade relations between the two countries.
And Berwari pointed out to the decline in trade in Iraq; because of wars and siege and problems in Iraq, and did not have the opportunity to develop and modernize infrastructure in various areas, after being destroyed in those wars, and the occupation of a terrorist organization ISIS of cities in Iraq that it need rehabilitation and reconstruction in full.
Berwari added “Chinese companies are very effective in Iraq, in fields such as trade, oil,, energy field , energy mean to produce electricity . We have a huge shortage in this field, and Chinese companies are very active and effective in this field.
Berwari said that about 60% of the electricity of the city of Baghdad is produced by Chinese companies in Iraq, and that China is a pioneer in the field of transportation and communication.
Berwari describes Iraqi-Chinese relations as historic and strategic, meaning they have reached a very advanced stage.
This type of relationship between the two countries includes areas of development, economy, oil, electric power, transportation, infrastructure, residential construction, and others.
We look forward to entering into new areas, including agriculture, security and defense, and to develop our relations more, because we want China to have a more active role in our region.

Motives and fears
Despite the development of cooperation between Iraq and China, there are fears that the surplus of Chinese industrial production is one of the most important motives behind the initiative of the belt and road; China produces about 1.1 billion tons of steel annually, a quantity equivalent to that produced by all other countries of the world, but it does not Internally consume only 800 million tons. The Federation of European Chambers of Commerce estimates that the initiative will absorb only 30 million tones of this surplus.
China’s Development Bank said it was already tracking more than 900 projects in 60 countries at a cost of about $ 850 billion and by late 2014 it had allocated $ 40 billion to the Hareer Road Fund to start funding the projects of initiative that its total cost exceeds the $ 1 trillion.
Chinese officials said that the China’s investment in the Hareer Road initiative has reached 60 billion US dollars since 2013, and China’s total overseas investments will amount US $ 120 billion to US $ 130 billion annually over the coming years, mainly to the countries involved in the Hareer Road project, that will be a major motive for a steady recovery in the global economy, free trade and investment, according to the Chinese view.

Economic advantages for the countries of the region from al-Hareer  Road:
The Arab Republic of Egypt believes that “the belt and the international road” and joining the Chinese initiative 2014, to revive the road will achieve cooperation and the interests of the people.
And a good opportunity for Egypt to present its investment incentives and the application of the new investment law, and in light of the great interest of Chinese companies to invest in the area of the axis of development of the Suez Canal, which Egypt aspires to turn into a global industrial and logistics area that is attractive and not just a navigational corridor.
Turkey has received the project of the belt and the road with great pleasure, Turkish President Recep Tayyip Erdogan said : The project «belt and road» known as the «new Hareer Road», an initiative that it «will eliminate the escalating terrorism in the world,” stressing that the project has an influential role in the future, Linking Asia, Europe, Africa and even South America to each other. ”
The project covers more than 60 countries on an area of 40 million km, and 4.5 billion people live in the world, Erdogan said.

Erdogan noted that Turkey enjoys with important geographical location and it is the intersection point of Asia and Europe so “Turkey is one of the most important countries in the Hareer Road, and it wishes to cooperate with all countries in this regard,” .

“China is a global power in the fields of trade, economy and defense industries that can fill the vacuum of the West and Turkey’s stay away from this power is a loss for it ,” said Turkish economists.

Shatha Khalil
Researcher in Economic Unit
Rawabet Center for Research and Strategic Studies