FacebookTwitterGoogle+RedditEmail

China Widens its Silk Road to the World

Let’s cut to the chase. China’s new ‘Silk Road’ initiative is the only large-scale, multilateral development project that the 21st century has seen so far.

There is no counter-offer from the West.

Which is why the two-day Belt and Road Forum for International Cooperation, starting this Sunday in Beijing, is being set up as a game-changer for the global economy. Here the initiative looks likely to switch to Mark II mode, accelerating into what President Xi Jinping dubbed, at Davos in January, “inclusive globalization.”

The big ideas behind this grand Chinese plan, however, are still getting lost in translation. At first this trans-Asian trade expressway was billed as One Belt, One Road (OBOR), a literal translation from the Chinese yi dai yi lu. Now it’s the Belt and Road Initiative (BRI), but that still does not really fly in the West, even when China has tried adding a piece of soft power spin, as in its attempts to sell the Belt and Road to English-speaking children:

I have been covering the New Silk Roads since they were first announced in 2013. The idea started at the Commerce Ministry and then developed as a natural extension of the Go West campaign – focused on developing western Xinjiang Province – launched in 1999. The Commerce Ministry now insists OBOR/BRI is a global plan and not just tied to the Xi Jinping presidency.

The summit will attempt to portray how its ambitious trade concept has become a multilateral “win-win” shared vision that connects all of Eurasia. Or, to put it more simply, Globalization Mark II.

It’s enlightening to examine the pronouncements made by some of China’s top analysts. Wang Huiyao, president of the independent Center for China and Globalization, says this is the “the new engine of globalization.”

Shen Digli, from the Institute of International Studies at Shanghai’s
Fudan University, stresses an “an inter-connectivity initiative on a global scale.”

Wang Yiwei, from the Center of European Studies at Renmin University, is convinced this could be as important as the creation of the European Union.

And Shin Yinhong, from the Center of American Studies at Renmin University, points out, crucially, that OBOR/BRI would not work if it were merely a geopolitical gamble.

Geopolitics as geo-economics

As much as this will act as a boost to economies from Bangladesh to Egypt and Myanmar to Tajikistan, it is also a far-reaching economic/free trade/investment plan that will open up markets for Chinese technology and merchandise. And with this comes priceless geopolitical reach for China.

In parallel to this connectivity extravaganza, arguably spanning 65 nations, 60% of the world’s population and a third of global economic output, China will accumulate extra capital from Central Asia to the Middle East. It will also polish its status as leader of the developing world, allowing it to once again try and reignite the 120-nation Non-Aligned Movement (NAM).

Representatives from more than a hundred nations will converge in Beijing and most of them are from NAM. Of course we will have Vladimir Putin, representing the Russia-China strategic partnership (BRICS, SCO) that spans everything from energy to infrastructure projects (including the future Trans-Siberian high-speed rail). But, crucially, we will also have Pakistani Prime Minister Nawaz Sharif and Turkish president Recep Tayyip Erdoğan, leaders of two key hubs of OBOR/BRI.

Most of the West still needs a weatherman to see which way the wind is blowing. And a lot of Western media revel in dismissing OBOR/BRI as a conspiracy, a “scheme”, or a Chinese attempt to “encircle” Eurasia. Only one G7 leader will be in Beijing; Italian Prime Minister Paolo Gentiloni, who is very keen to investigate symbiotic links between Italy’s Industry 4.0 program and China’s Made in China 2025 manufacturing initiative.

Angela Merkel might have turned down her invitation but it doesn’t really matter as German industrialists are all for OBOR/BRI.

And the Trump administration is starting to wake up to the action following Trump-Xi at Mar-A-Lago. The US delegation will be led by Matt Pottinger, Special Assistant to the President and senior director for East Asia at the National Security Council.

And India? The US$62 billion China-Pakistan Economic Corridor (CPEC), one of the highlights of OBOR/BRI, and enthusiastically lauded by Pakistani officials, runs partly through Kashmir. Diplomacy, not trade, would better advance Indian interests. But the reality is the Narendra Modi administration – which has accused China of trying to “undermine the sovereignty of other nations” – is obsessed that the real Chinese agenda is to strategically control the Indian Ocean. So no India in Beijing.

Have yuan, will travel

The New Silk Road comes with a crossfire of numbers. No one knows for sure the true value of projects already signed along the overland belt and across the Maritime Silk Road, but numbers are said to already be as high as US$300 billion. Most of these projects will be developed well into the next decade.

Ratings agency Fitch quotes US$900 billion in projects planned or already happening. Speculation is rife that OBOR/BRI may need as much as US$5 trillion up to 2022. According to the Asian Development Bank (ADB), Asia will need a mind-boggling US$26 trillion for infrastructure projects up to 2030.

The Silk Road Fund, set up at the end of 2014, for the moment relies on just US$40 billion – a mix of foreign exchange reserves and input from the China Development Bank and Export-Import Bank of China. It has invested US$6 billion in 15 projects so far, plus US$2 billion to fund projects in Kazakhstan.

The Asian Infrastructure Investment Bank (AIIB), with 70 member-nations, went online in January 2016 with capital of US$100 billion, but disbursed less than US$2 billion last year.

The New Development Bank (NDB), the BRICS bank, is bound to step up soon, after it got a AAA rating from Chinese credit agencies.

China has belonged to the European Bank for Reconstruction and Development (EBRD) since 2015; that’s the European financing leg for OBOR/BRI. It’s also linked to a fund in Luxembourg and another one in Riga, Latvia.

So the key issue for OBOR/BRI remains how to come up with low-cost funding in global capital markets. That will be a top discussion topic at the summit. Zhou Xiaochun, governor of the People’s Bank of China, has already laid down the law; “governments” – including the Chinese government – simply cannot pay for all that’s needed for OBOR/BRI.

So everyone will have to rush to capital markets; set up their own OBOR/BRI-related financial mechanisms; and, crucially, do business in local currencies. That is shorthand for using, most of all, China’s currency. So if you are hitting the New Silk Roads, don’t forget your yuan.

This piece first appeared at Asia Times.

More articles by:

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge and Obama does Globalistan (Nimble Books, 2009).  His latest book is Empire of ChaosHe may be reached at pepeasia@yahoo.com.

December 17, 2018
Susan Abulhawa
Marc Lamont Hill’s Detractors are the True Anti-Semites
Jake Palmer
Viktor Orban, Trump and the Populist Battle Over Public Space
Martha Rosenberg
Big Pharma Fights Proposal to Keep It From Looting Medicare
David Rosen
December 17th: International Day to End Violence against Sex Workers
Binoy Kampmark
The Case that Dare Not Speak Its Name: the Conviction of Cardinal Pell
Dave Lindorff
Making Trump and Other Climate Criminals Pay
Bill Martin
Seeing Yellow
Julian Vigo
The World Google Controls and Surveillance Capitalism
ANIS SHIVANI
What is Neoliberalism?
James Haught
Evangelicals Vote, “Nones” Falter
Vacy Vlanza
The Australian Prime Minister’s Rapture for Jerusalem
Martin Billheimer
Late Year’s Hits for the Hanging Sock
Weekend Edition
December 14, 2018
Friday - Sunday
Andrew Levine
A Tale of Two Cities
Peter Linebaugh
The Significance of The Common Wind
Bruce E. Levine
The Ketamine Chorus: NYT Trumpets New Anti-Suicide Drug
Jeffrey St. Clair
Roaming Charges: Fathers and Sons, Bushes and Bin Ladens
Kathy Deacon
Coffee, Social Stratification and the Retail Sector in a Small Maritime Village
Nick Pemberton
Praise For America’s Second Leading Intellectual
Robert Hunziker
The Yellow Vest Insurgency – What’s Next?
Patrick Cockburn
The Yemeni Dead: Six Times Higher Than Previously Reported
Nick Alexandrov
George H. W. Bush: Another Eulogy
Brian Cloughley
Principles and Morality Versus Cash and Profit? No Contest
Michael F. Duggan
Climate Change and the Limits of Reason
Victor Grossman
Sighs of Relief in Germany
Ron Jacobs
A Propagandist of Privatization
Robert Fantina
What Does Beto Have Against the Palestinians?
Richard Falk – Daniel Falcone
Sartre, Said, Chomsky and the Meaning of the Public Intellectual
Andrew Glikson
Crimes Against the Earth
Robert Fisk
The Parasitic Relationship Between Power and the American Media
Stephen Cooper
When Will Journalism Grapple With the Ethics of Interviewing Mentally Ill Arrestees?
Jill Richardson
A War on Science, Morals and Law
Ron Jacobs
A Propagandist of Privatization
Evaggelos Vallianatos
It’s Not Easy Being Greek
Nomi Prins 
The Inequality Gap on a Planet Growing More Extreme
John W. Whitehead
Know Your Rights or You Will Lose Them
David Swanson
The Abolition of War Requires New Thoughts, Words, and Actions
J.P. Linstroth
Primates Are Us
Bill Willers
The War Against Cash
Jonah Raskin
Doris Lessing: What’s There to Celebrate?
Ralph Nader
Are the New Congressional Progressives Real? Use These Yardsticks to Find Out
Binoy Kampmark
William Blum: Anti-Imperial Advocate
Medea Benjamin – Alice Slater
Green New Deal Advocates Should Address Militarism
John Feffer
Review: Season 2 of Trump Presidency
Rich Whitney
General Motors’ Factories Should Not Be Closed. They Should Be Turned Over to the Workers
Christopher Brauchli
Deported for Christmas
FacebookTwitterGoogle+RedditEmail