Economy of the Silk Road Trade and Duty-free towns on China’s new Silk Road
China is developing a unique blend of socialism and capitalism. The state-owned sector dominates but there has been a sudden surge in privately owned businesses operating in a new market economy. The two systems coexist in apparent harmony despite the seemingly contradictory ideologies of capitalism and communism. Private businesses began to appear after the country’s economic reforms of the late 1970s, ushered in by then premier, Deng Xiaoping. The emergence of private entrepreneurship led to rapid economic development for China. The country is still among the world’s fastest growing economies and is often the first to tap into new markets.
To further expand its regional economic influence, China has launched a programme to revive the famous old Silk Road. They are confident that the route will develop new international markets and forge new business alliances. The multifaceted programme involves improving road infrastructure and modernising key cities along the ancient Silk trading route. They are also creating more favourable conditions for business with incentives like company tax breaks and duty-free towns near the borders with neighbouring countries.
The project has been dubbed the ‘One Belt, One Road initiative’, and involves cooperation with more than 60, mostly neighbouring countries, with Russia among the major partners. RTD examines examples of Sino-Russian cooperation carried out under the ‘One Belt, One Road’ umbrella, including large-scale government projects and private trade deals with Russian customers.
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