The new silk route

Security in the Persian Gulf is now as important to Beijing and New Delhi as it is to Washington

When Chinese President Hu Jintao visited the oil giant Saudi Aramco last year, he didn8217;t need a translator. Plenty of Chinese-speaking Saudis were on hand. A few years earlier, Saudi Aramco had sent dozens of employees to study in Beijing. After all, China, not the United States, represents the future growth for Saudi oil exports.

Meanwhile, the Saudis are sponsoring students to study in India, China, Malaysia, Singapore and South Korea. Three of those countries 8212; India, China and Malaysia 8212; were among King Abdullah8217;s first four foreign visits after he ascended the throne in 2005.

The Saudi students represent a small part of the growing trade and business corridor between the Middle East and Asia. Dubbed the 8220;new silk road8221;, trade and investment between the regions have quadrupled in the past decade and will continue to rise dramatically through 2020, according to the management consultant McKinsey 038; Co.

In Dubai, newspaper headlines last month spoke not of Iraq or of Arab-Israeli peace diplomacy but of the historic visit to India by Sheik Mohammed bin Rashid Maktum, Dubai8217;s CEO-like ruler. Among the dozens of agreements signed on the trip: a nearly 20 billion real estate project to create three townships on 40,000 acres in India8217;s Maharashtra state.

This new silk road is not only boosting economies the India deal is expected to create 100,000 jobs but is changing the geoeconomic and geopolitical landscape of the East, with serious ramifications for US policy. The new silk road is largely the result of the confluence of China8217;s and India8217;s economic growth and high oil prices. China and the six oil-rich members of the Gulf Cooperation Council GCC 8212; Saudi Arabia, Bahrain, Oman, Kuwait, Qatar and the United Arab Emirates 8212; are flush with cash. Chinese and Indian energy needs will ensure that the GCC region 8212; the equivalent of the world8217;s 16th-largest economy 8212; continues to grow. By 2025, forecasts show, China will import three times as much oil from the Persian Gulf as the US.

Key 8220;caravan posts8221; on the new silk road are regional economic 8220;winners8221; or rising stars: Dubai, Beijing, Mumbai, Chennai, Tokyo, Doha, Kuala Lumpur, Singapore, Hong Kong, Riyadh, Shanghai, Abu Dhabi. The old silk road civilisation centres such as Persia Iran, the Levant Lebanon, Syria, Jordan and Mesopotamia Iraq lag behind. Dubai is the unofficial Middle East capital of the new silk road, and Iran, once a central force, is the sick man.

Investors from the GCC have been pouring money into real estate, banking and infrastructure across Asia. A Dubai official said last month that some GCC states are contemplating buying the yuan to diversify their reserves. Meanwhile, Chinese, Korean, Indian and Japanese companies are active in Middle East real estate, consumer products and industrial investments.

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Security in the Persian Gulf is now as important to Beijing and New Delhi as it is to Washington. China will no longer be content to perch under America8217;s security umbrella, and the Indian navy now patrols the Arabian Sea more assertively . China and India have far more influence with Iran than the US 8212; and less tolerance for a disruptive war. Many of the Islamic republic8217;s political elites are also business elites, eager to find a way out of conflict.

Charting a path toward greater integration on the new silk road will probably be a more moderating force on the Iranian leadership than isolation. Iran8217;s president, Mahmoud Ahmadinejad, may not be too concerned, but more powerful conservative establishment players are more interested in stability and making money than war.

8211;Afshin Molavi