China Great Gambit: Spending $1Trillion to Build Hugh- New Silk Road: Bold Strategy or Grand Ruse…

China’s plan for a New ‘Silk Road’, also known as ‘One Belt, One Road’ (OBOR), consists of a network of trade initiatives that extend over land and sea through Asia, Europe, Africa… it’s the most significant global economic initiative in the world today, and it’s not getting the attention it deserves from Western media.

The initiative is gigantic and its hope to lift the value of cross-border trade to $2.5 trillion within a decade… President Xi Jinping has channeled nearly $1 trillion of government money into the project. He’s also encouraging state-owned enterprises and financial institutions to invest in infrastructure, construction abroad…

China’s web of trade would span over 60 countries that are home to 4.4 billion people, which is more than half of the world’s population… Further, the initiative would interact with economies representing more than 40% of the world’s GDP. The initiative is broken into a land component, known as ‘Silk Road Economic Belt’, and a sea component, called ‘Maritime Silk Road’. The ‘Belt’ will consist of a number of corridors connecting China to far reach of Eurasia by road, rail… The ‘Road’ will involve development of ports and shipping routes connecting Chinese harbors to Europe and South Pacific…

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According to Vikram Mansharamani; funding this massive program is not trivial… There are number of institutions on hand to support the funding of China’s grand vision… First, Beijing started a $40 billion ‘Silk Road Fund’ that has already helped fund a hydroelectric power project in Pakistan and invested in a liquefied natural gas project in Russia… Second, there’s the newly created, $100 billion Asian Infrastructure Investment Bank in which China controls 26% of the votes. Lastly, China Development Bank announced that it would invest a stunning $890 billion dollars in over 900 ‘One Belt, One Road’ projects across 60 countries…

The Silk Road is far more than just trade; it offers a widespread exchange of knowledge, learning, discovery, culture… For the world at large, the ‘Road’ is monumental; the massive project holds the potential for a new renaissance in commerce, industry, discovery, thought, invention, culture… which could very well rival the original Silk Road… However, its outcome is far from certain…

In the article New ‘Silk Road’ Could Alter Global Economics by Robert Berke writes: China is building the world’s greatest economic development and construction project ever undertaken: It’s a New Silk Road… The project aim is to revolutionize a change of the economic map of the world. It’s also seen by many as the first shot in a battle between east and west for dominance in Eurasia… The ambitious vision is to resurrect the ancient Silk Road as a modern transit, trade, and economic corridor that runs from Shanghai to Berlin. The ‘Road’ will extend more than 8,000 miles, creating an economic zone that extends over one-third the circumference of the earth…

The plan envisions building– high-speed railroads, highways, energy transmission and distributions networks, fiber optic networks… Cities and ports along the route will be targeted for economic development… An equally essential part of the plan is a sea-based ‘Maritime Silk Road’ (MSR) component, as ambitious as its land-based project, linking China with the Persian Gulf and the Mediterranean Sea through Central Asia and the Indian Ocean… When completed it will connect three continents: Asia, Europe, and Africa… The chain of infrastructure projects will create the world’s largest economic corridor, covering a population of 4.4 billion and an economic output of $21 trillion…

As part of the financing of the plan, China announced the launch of an Asian International Infrastructure Bank (AIIB), providing seed funding for the project with an initial Chinese contribution of $47 billion… China has invited the international community of nations to take a major role as bank charter members and partners in the project… Members are expected to contribute, and additional funding from international funds, including; World Bank and investments from private and public companies, local governments… Some 60 nations have signed on to become charter members including; 12 NATO countries that are among AIIB´s founding member states, including; UK, France, Germany, Italy, Netherlands, Luxembourg, Denmark, Iceland, Spain, Portugal, Poland and Norway… along with Australia, S. Korea and New Zealand… and many Silk Road and Asian countries…

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In the article Mapping China’s New Silk Road Initiative by hoexer writes: When China’s President Xi Jinping laid out his plans to establish a new ‘Silk Road’ across Central Asia in 2013, he was doing more than invoking China’s distant past… Instead he was sketching out new direction for Chinese trade and investment, one that aims not only to improve China’s links with Europe but also to facilitate China’s macroeconomic priorities and integration in the global economy.

However this is a very bold plan and it face many serious challenges, e.g.; even though the proposed expanded trade route into Europe might seem like a ‘win-win’, from business perspective, the benefits are not clear-cut… According to Jonathan Silver; the ‘New Silk Road’ is the sort of strategic policy initiative that generates little in the way of obvious and direct tangible benefits… So while business would generally welcome the potential benefits, most would only take a direct interest in the concrete results, as they arise…

In the article China’s Bold Gambit for Trade with Europe by Julie Makinen and Violet Law write: For two years, President Xi has been talking up the sweeping strategy– known as ‘One Belt, One Road’ or OBOR– on his frequent trips abroad, while lining up financing plans at home and enlisting participation of state-run and private companies… With its  grand ambition some observers compare this new endeavor to U.S.‘s Marshall Plan to rebuild Europe after World War II, a game-changing effort that revolutionized trade and recast many long-standing relationships… It’s expected to cost 10 times more than the Marshall Plan, for which the U. S. spent the equivalent of slightly more than $100 billion in today’s money…

According to Christopher K. Johnson; with these initiatives China seeks to reinforce the emerging global narrative that it’s moving to the center of– global economic activity, strength, influence… According to Markus Taube; the initiatives will strengthen China‘s economic, diplomatic leverage in Europe and provide a political and diplomatic counter-weight against U.S... The more you might think about (the strategy), the more it makes sense… But others are more skeptical, saying China’s lofty language around ‘One Belt, One Road’ masks myriad questions about how much money will be spent on the projects and where, and who will benefit… According to Ian Storey; it’s generated a lot of buzz but no one is quite sure what it actually means…

In the article China’s Great Game: Road to New Empire by Charles Clover, Lucy Hornby write: After two decades of rapid growth, China is again looking beyond its borders for investment opportunities and trade, and to do that it’s reaching back to its former imperial greatness of the familiar ‘Silk Road’ metaphor. Creating a modern version of the ancient trade route has emerged as China’s signature foreign policy initiative…

According to Valerie Hansen; it’s one of the few terms that people remember from history that does not involve hard power… and it’s precisely those positive associations that the Chinese want to emphasize. If the sum total of China’s commitments are taken at face value, the New Silk Road is set to become the largest program of economic diplomacy since postwar reconstruction in Europe covering dozens of countries with total population over 3-billion people…

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The scale demonstrates a grand ambition and significance as a way of defining China’s place in the world and its relationships… According to Anna Bruce-Lockhart; there are strong commercial and geopolitical forces at play here; first among them is China’s vast industrial overcapacity– mainly in steel manufacturing, heavy equipment– for which the new trade route would serve as an outlet…

As China’s domestic market slows down, opening new trade markets could go a long way towards keeping the national economy buoyant… According to Nadège Rolland; this is not an economic project it’s a geopolitical project– it’s very strategic… Moreover, by striking up economic and cultural partnerships with other countries, China is hoping to cement its status as the dominant player in world affairs…

According to Jin Liquin; many countries will verbally support the ‘One Belt, One Road‘ projects, but before they invest any resources they must be convinced that these initiatives will– promote growth and provide tangible returns for their investments…