China's Tentacles - The Belt and Road Initiative

[Randy W]

Ongoing topic - click for Most Recent Post

 

 

 

In the SCMP - I'm not sure this is of much interest, but in case you hear the term "One belt, one road", this is what it's referring to

 

INFOGRAPHIC: How One Belt, One Road will give China's developing neighbours easier access to Chinese-made products

China has experienced unprecedented growth, going from an inward-looking agricultural country to a global manufacturing powerhouse. ‘One Belt, One Road’ creates a land and maritime link to China’s developing neighbours and beyond and their demand for Chinese-made products and materials.

 

http://www.scmp.com/sites/default/files/2015/11/02/backpage-infographic-1102.png

 

 

. . . and from Chatham House

What exactly is 'one belt, one road'?

 

The phrase ‘one belt, one road’ has become a staple of discussions about China’s foreign policy and approach to the global economy. This is not least because the concept looks something like a signature foreign policy initiative of Chinese president Xi Jinping.

 

But the challenge has been unpicking exactly what the ‘one belt, one road’ slogan means. In English the name is clunky and somewhat misleading, a literal translation from a typically concise Chinese phrase yi dai yi lu, which in turn condenses two related ideas.

 

The first is the construction of a Silk Road economic belt spreading from western and inland China through Central Asia towards Europe, resonant of historical Eurasian ‘silk roads’ which reached their height during China’s Tang dynasty (618-906). Likewise, the second idea – a 21st century maritime Silk Road – is inspired by historical maritime trading routes from coastal China through the South China Sea and beyond. It will extend these routes to continents and countries where trade volumes are currently small, but growing, such as East Africa.

 

However, looking in more depth at these Chinese ideas shows that neither concept is about singular routes – in spite of the ‘one belt, one road’ moniker. On the contrary, they are about building networks of connectivity. The geographical linkages envisaged by the ‘belt’ and the maritime ‘road’ are to multiple locations. And the sectoral nature of these links is not limited to physical infrastructure – Xi has talked about connectivity in terms of trade, investment, finance, and flows of tourists and students.

 

. . .

 

The ‘belt’ and ‘road’ ideas came to prominence in 2013 when raised during visits to Central Asia and Southeast Asia by Xi and Premier Li Keqiang respectively. Although this high-level political messaging has created the impression that ‘one belt, one road’ is a new initiative, digging beneath the surface of Chinese policymaking reveals more continuity in their promotion than might first meet the eye.

 

As Section VI of the Chinese government’s official document released in March 2015 to spell out the ‘belt and road’ vision makes clear, the implementation of the concept is based on building on the existing and planned global linkages from various regions of China.

 

 

 

Chatham House carries out independent and rigorous analysis of critical global, regional and country-specific challenges and opportunities. It consistently ranks highly in the University of Pennsylvania’s annual Global Go To Think Tank Index, where it has been assessed by its peers as the No. 1 think tank outside the US for seven consecutive years and No. 2 worldwide for the past four years.

 

[RobertH]

I have at least 4 belts..... Dose that make me more of a super power then China?

[tsap seui]

I have at least 4 belts..... Dose that make me more of a super power then China?

Er...ah...Robear-toe....they are tawkin' about a different type of belt than a belt of whiskey.

[Randy W]

An update in the SCMP

 

Roadblocks and detours aplenty on China’s New Silk Road

Robert Bianchi says reality is setting in three years after the launch of China’s grandiose plans to unite continents and oceans, as it struggles to cope with the complex diplomacy that comes with it

 

 

China’s dream of building a New Silk Road is in trouble. Each day, it looks less like a strategy than a gamble, with risks that party leaders try to minimise or ignore. Grandiose plans to unite continents and oceans aim to project China’s status as a global power, but they betray an impulse towards overreach that threatens to check Chinese influence abroad and to aggravate vulnerabilities at home. It’s doubtful that any country could aspire to transform the world so thoroughly without turning itself upside down in the process. For China, the dangers are particularly acute because of the deepening contradictions in its politics and economy, as well as the myriad cracks dividing its society and culture.

 

[Greg.D.]

 

An update in the SCMP

 

Roadblocks and detours aplenty on China’s New Silk Road

Robert Bianchi says reality is setting in three years after the launch of China’s grandiose plans to unite continents and oceans, as it struggles to cope with the complex diplomacy that comes with it

It is certainly a coherent essay but really short on evidence to support his claims (not that I disagree with them).

 

More details here, if interested:

China’s Domestic Distractions How Economic Turbulence Undermines Beijing’s Global Agenda

 

The initiative is China’s first serious foray into exporting its authoritarian capitalist model of development, and although much of the investment thus far has been state led, in the future, China’s private sector will need to finance a significant portion of its projects. Even if China were to exempt such investments from increased capital controls, the country’s private investors have bristled since the beginning at China’s lack of an overall business plan for One Belt, One Road and relatively poor understanding of the specific risks of each project. Slow economic growth will only add to their hesitation. More broadly, Chinese officials’ focus on guiding the yuan through the ongoing economic turbulence will preclude the liberalizing reforms needed to increase that currency’s liquidity and, in turn, allow for greater funding for the projects.

There is a free registration if you want to read the whole thing. This is a respected journal (Foreign Affairs). Essentially it says there are competing policies for the yuan; on the one hand, trying to maintain its relative value, then, trying to float it as an international reserve currency, trying to stem outflows while also trying to maintain foreign investments - including by private parties.

 

Hope they can find the right balance without too much social disruption and pain.

[Randy W]

The view from Hong Kong and the SCMP

 

Why people in Hong Kong scoff at China’s grandiose Belt and Road plans

 

 

Today’s harsh banking regulations make the Belt and Road countries virtually unbankable due to the Know Your Customer (KYC) and anti-money laundering (AML) standards. Sanctions that even the Hong Kong Monetary Authority (HKMA) are trying to enforce over countries like Iran, Syria make it impossible for Hong Kong companies to do business. Money transfers are difficult to make from most of the Belt and Road-based banks. Loans will require multilateral guarantees by the likes of the World Bank or the Asian Infrastructure Investment Bank.

How ironic is it that the Belt and Road Summit occurred at the same time as the 50th anniversary of the Cultural Revolution. It is unlikely that the Chinese government can ever rally China’s population to a national collectivist cause.

. . .

But Hong Kong can contribute one key ingredient: money. Belt and Road will become a money pit. Journalists observed that the tycoons and bureaucrats who attended the dinner and state leader Zhang Dejiang’s keynote speech were looking awfully grim and sombre for such a joyous state visit.

Maybe Hong Kong’s best and brightest knew that a multibillion-dollar collection plate would soon be passed around. That’s the easiest way to placate Beijing.

Because it’s all about the money. Hong Kong ‘s paramount value to Beijing is to act as a world-class financier to fund China’s ambitions. Anything else that citizens consider essential for social stability – democracy, self-determination, independence, a high degree of autonomy, property prices – are trivial banquet conversation. Hong Kong, this is your life. Welcome to it.

 

Edited May 23, 2016 by Randy W (see edit history)

[Mick]

Down here we got plenty of roads and belts, but most of us hillbillies prefer suspenders or a nice pair of overalls.

[Greg.D.]

The author of the article both understand "how things work" wrt international projects but also knows a lot about how the Belt/Road is playing out. So much so that he merely hints at the dynamics of deals that are supposed to occur under its guise.

The comments actually reveal more of the finer nuances of how business is going to go down in the belt/road future. For the author to insinuate that mainland is pressuring HK to cough up money and services probably has some factual basis.

 

I am not so cynical. In my limited experience abroad, I see "foreign aid" projects as most directly benefiting the "donor" country - as so much of the outlay goes to inside contractors and some exclusivity is enforced on future deals, so I don't think China should be found guiltier than anyone else for exploiting such sponsoring activities. Probably they have spread themselves to thin in South America and wish they could direct those investments and loans closer to home.

 

Personally, I wish I knew a way to do business in the western China border region as a way to take part in the One Belt One Road party.

[Randy W]

This guy had a different outlook, more in line with yours

 

Huge potential gains of China’s ‘One Belt, One Road’ are worth the risks

 

 

The rationale is global connectivity, which defines the 21st century. It is part and parcel of what the World Economic Forum calls the Fourth Industrial Revolution. China is a central hub for the world’s production, supply, logistics and value chain. “One Belt, One Road” will deepen China’s infrastructural, economic, institutional and cultural connectivity with key parts of the globe. Not only will this enhance China’s global rapport and influence, it will also help counter exposure to geopolitical risks inherent in America’s “Asia rebalancing”, and China’s own energy security challenge and other imponderables in the South China Sea.

 

. . .

 

“One Belt, One Road” is supported by China’s Silk Road infrastructure fund of US$40 billion, the Asian Infrastructure Investment Bank (AIIB), with its registered capital of US$100 billion, and the New Development Bank of the BRICS countries, with an initial capital of US$50 billion, which is set to increase to US$100 billion.

 

[Randy W]

An article about the cost of shipping, but this mainly has to do with the conditions experienced during transit

 

It costs twice as much to export olive oil from Spain using China’s “One Belt, One Road” railway

[Greg.D.]

That's a great link, Randy. A quick and easy read with a good map. Relying in your cargo's safe passage through Afghanistan, Syria, Turk and Iran (and Ukraine) looks pretty dicey. I mean, if nothing else, each border crossing is another hand outstretched for a protection bribe.

[Randy W]

in the People's Daily

 

China, Russia, Mongolia endorse development plan on economic corridor

 

 

http://en.people.cn/NMediaFile/2016/0625/FOREIGN201606250021000218282519731.jpg

 

 

The plan was signed in Tashkent, the capital of Uzbekistan, after a meeting of Chinese President Xi Jinping, Russian president Vladimir Putin andMongolian President Tsakhiagiin Elbegdorj.

. . .

Xi also urged intensified trilateral collaboration by aligning of China-proposed Silk Road Economic Belt initiative, Russia's development strategies, especially its transcontinental rail plan, and Mongolia's Steppe Road program.

The signing of the development plan, as the official launch of the first corridor of multilateral economic cooperation under the framework of the China-proposed “Belt and Road” initiative, also marks a new chapter for China-Russia-Mongolia cooperation.

Based on the development demands of the three countries, the economic corridor aims to expand their cooperation space, tap their potential, pursue common prosperity and improve their competence.

 

[Allon]

Amazing. At a time when shipping container volume is way low (and thus very cheap) and shipper's are going under, China wants to build a road that still uses shipping across the India/Africa corridor.

[Randy W]

in the Guardian U.K.

 

Silk Road route back in business as China train rolls into London

After 16 days and 7,456 miles, the locomotive’s arrival heralds the dawn of a new commercial era

 

 

 

When the East Wind locomotive rumbles into east London this week, it will be at the head of 34 carriages full of socks, bags and wallets for London’s tourist souvenir shops, as well as the dust and grime accumulated through eight countries and 7,456 miles.

The train will be the first to make the 16-day journey from Yiwu in west China to Britain, reviving the ancient trading Silk Road route and shunting in a new era of UK-China relations.

Due to arrive on Wednesday, the train will have passed through China, Kazakhstan, Russia, Belarus, Poland, Germany, Belgium and France before crossing under the Channel and arriving in the east end of London at Barking rail freight terminal.

Faster than a ship, cheaper than a plane, the East Wind won’t be quite the same train that left Yiwu on 2 January. Differing rail gauges in countries along the route mean a single locomotive cannot travel the whole route. But the journey still marks a new departure in the 21st-century global economy. The new train, which will start to run weekly while demand is tested, is part of China’s One Belt, One Road policy – designed to open up the old Silk Road routes and bring new trade opportunities

 

. . .

 

Today Yiwu’s streets are among the most cosmopolitan in the world, full of traders from Colombia, Afghanistan, Kurdistan, Pakistan, India, Syria, Angola and Ukraine, and could now be attracting a few from the UK as well.

In Barking there is great excitement over the arrival of the East Wind, the name of which references the Chinese communist leader Mao Zedong, who famously said: “The east wind will prevail over the west wind.”

“The new service has a very quick transit time,” operations director, Mike White, told the Railway Gazette. “We believe this is going to change the way a lot of forwarders and shippers view their imports and exports for China.”

 

 

[Randy W]

on Facebook - https://www.facebook.com/ChinaPic/photos/a.558235270968533.1073741830.553929144732479/1176821102443277/?type=3&theater

China Pictorial

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The BeltAnd​Road: Three years of progress (1)

An excerpt from Adhering to the plan: Orderly and Pragmatic Construction of the “Belt and Road”-The Belt and Road Progress Report, released by Chongyang Institute for Financial Studies, Renmin University of China (RDCY)

 

 

Edited April 24, 2018 by Randy W (see edit history)