The Financial Silk Road

Silk Road is a widely used term to describe both historical and contemporary events related to the encounter between China and the West, particularly between China and Europe. However, it remains a vague term, especially because it refers to a phenomenon that is vast in both spatial and temporal dimensions. Furthermore, it has been used in very different ways by various observers. For example, in Italian cultural discourse, it is closely associated with the commercial ventures of medieval Venetian merchants, notably Marco Polo and his travel journal “Milione”. But that is only a snapshot of a specific historical moment on the Silk Road. One could go further back in time and discover how the Latins—the ancient Romans—were aware of Chinese culture but were unable to maintain stable, direct contact due to travel difficulties and the presence of intermediary powers, especially the Parthians, who wanted to preserve their key role in trade between the great empires of the era.

The term Silk Road was coined by the German geologist and geographer Ferdinand von Richthofen in 1877. With “Silk Road” he intended to describe a branching system of both land and sea routes that connected East Asia, particularly China, with Europe, passing through Central Asia and the Middle East. Moving along this commercial network were merchants carrying precious goods, and at the centre was silk, as the Chinese population had been known for this product since antiquity. Being a careful geographer, von Richthofen extended the concept of the Silk Road to include cultural and diplomatic dimensions, pushing his idea of connectivity well beyond purely commercial mechanisms.

In this sense, the idea of the Silk Road naturally aligns with finance. In fact, international finance is impossible without diplomatic effort, and cultural mediation is always necessary to bridge differing approaches to economics and to reality itself. Financial networks have always accompanied trade networks, since the dawn of time. Thanks to 20th-century archaeological discoveries, we now know the financial centres of antiquity: where money changers worked, where merchants met, and where they were assisted by experts in currency, value, and risk. Among these places, we find the ancient ports of the Horn of Africa and Middle Eastern cities like Pergamon, where ancient Chinese coins have been found. In our time, the centres where financial networks converge, enabling investments, acquisitions, international payments, trade, insurance, and the registration of bonds and shares, are the international financial centres, such as Hong Kong, London, Luxembourg, and many others.

A mistake would be to exclude finance as an essential part of the Silk Road and remain tied only to its commercial and infrastructural dimensions. This mistake is often made by those who equate today’s Silk Road solely with China’s Belt and Road Initiative. While that project certainly has a broad financial dimension, it is still only a portion of the broader phenomenon that we refer to here as the Financial Silk Road. The latter represents a wider experience, as it includes flows of financial capital and strategic economic expansion operations that go far beyond the Belt and Road Initiative. In its broadest sense, the concept of the Silk Road also helps us approach financial mechanisms in a more relational way, which is far more suited to our times, where socioeconomic relations develop through complex global economic networks.

Finally, the idea of the Silk Road is particularly fitting for the financial dimension of China’s international economic expansion because, in this context, the link between China and Europe is fundamental. One of China’s major goals is to create new forms of connectivity across the Eurasian landmass. It is therefore no surprise that Chinese financial institutions have primarily focused on strengthening their ties with European economies through European financial centres, especially London and Luxembourg. We consider these two locations, along with Chinese financial centres, the very essence of China’s financial expansion into the world, and we will explore this through the mechanisms, instruments, symbolic power, and investment channels that have been consolidated in these places over recent decades.