The Return Of The Silk Road – 21st Century Style
The original silk road, spanning back to the the Han Dynasty, oversaw immense change to the way the world traded. The expansion occurred through China, Japan, Persia, Europe, and Africa. These nations hold 2/3rd’s of the world’s population currently. Now, in the 21st Century, we are once again seeing the power of globalisation and the start of a new economic landscape.
$1 trillion. That is a figure that I cannot even fathom, let alone ever get my hands on. That amount is what China are spending on the initiative called the ‘21st Century Maritime Silk Road’, or the ‘Belt and Road’ initiative. There are many names that you can call it but the proposal is still the same. Lead by China’s Xi Jinping, the manifestation before us will transform the world. It will enable trading and co-operation between Eurasian countries and the People’s Republic of China, along with railways, ports and road being made as well as other infrastructures. Of course, it will boost tourism immensely in all countries involved, something that has been affected due to global threats, such as terrorism. 6 corridors will exist, some for example, mentioned below:
The project has already started in areas. DIFC – Dubai International Financial Centre, has already spoken of the support towards OBOR. Eisa Kazim, governor of DIFC, “China is a strategic partner of the UAE and, today, its most important source of imports.” The bilateral trade between the UAE and China would have a great effect, and with the upcoming World Expo 2020 occurring in Dubai, we can expect big things from all involved! In Abu Dhabi, during the end of July, China’s Jiangsu province signed a $300 million deal with Abu Dhabi’s Ports to develop operations in Khalifa Port. The Chinese companies involved handle sectors of metals, banking to nature. It truly is a diverse project, and many areas are being involved. On the other side of the globe, the initiative is brewing in Haiti, with China planning to invest $30 billion in Haiti’s infrastructure according to Haitian Press Agency.
As you can tell, this project is going to take a lot of money and time to complete, but will the end result make everyone happy?
Benefits are pouring out of this global project for many countries involved. Pakistan has an ongoing electricity problem, with power cuts occurring daily for many, leaving much of the nation in sweltering heat, without lights, and other vital necessities. China has stepped in to aid Pakistan and the electricity deficit, with help from previously arising from the China-Pakistan economic corridor (CPEC). China is spending around $46 billion in Pakistan to build power plants around the nation to combat these shortages. With this, more employment opportunities will arise, better living standards for the people of Pakistan and will strengthen ties between the two nations.
The European parliament published a 12-page document from 2016 regarding the project, which launched in 2013. It includes the positives and negatives, with the first pages mentioning how when the plan was launched, China was in a political mess, and to this date, are still in political war. Japan, Vietnam, and the Philippines were at loggerheads with China, and not much has improved since then. Some outcomes that can arise from the global project is the promotion of Chinese currency – with 65 countries involved and over 4.4 billion people, of course the Renminbi, meaning the “people’s currency”, will see a major boost in the economy.
Clingendael, a think tank by the Netherlands Institute of International relations, published a document of their own, in 2015. This document highlights the significant consequences of China becoming increasingly important economically, politically and geographically. It mentions how China is very involved in the shipping trade, with the highest numbers of vessels at sea. Also, China is moving their focus onto the African Regio – a place where the US is not so focused in. This is a smart move from China, as they are aware how to work the economic landscape in their favor.
However, there are concerns regarding the project. Do all the nations involved have common aims? Are China simply pushing the ‘China Dream’? OBOR is said to have 5 priorities: Infrastructure, trade and investment, global use of the Chinese currency, cultural exchange and lastly, policy co-operation. It will be interesting to see how this project will pan out over the next few years and to see if these 5 priorities will remain of utmost importance.
If we look at who China has a positive relationship with, it is the Sino- Russian ties, which are very pleasant right now, and look to stay that way. There was interest to include North and South Korea, however this will be highly unlikely due to the latest August 2017 sanctions by the United Nations Security Council on North Korea.
As with anything China do, there is criticism surround the project. Some say there is a political agenda for China to ‘trump’ USA (excuse the pun), in terms of global power. It would be quite dangerous to underestimate the power of China in the world. America has always viewed itself as the best, with Pax Americana being the be all and end all. Yet, China’s influence is creating debate between nations and rightly so! China is very diplomatic in matters, picking their friends and foes in a smart way. Their military is 2nd after the USA, but in terms of economy, technology, and innovation, (not to mention population!) they are paving the way. Their influence in the Asia region as well as the MENA (middle east and north Africa) region is rising rapidly. I say, watch this space carefully and see how this unfolds for the global economy.