Saturday, February 25, 2017

One belt, one road

This initiative could be the most important one for China and its neighbors. It excludes our participation in some extent; GE and some other companies still make great profits. It is a long blog. There are 5 hours of YouTube videos on this project and several links.


Chinese is building two modern silk roads, one by land and one by sea. It has been participated by more than 60 countries. It is a $3 trillion infrastructure campaign funded mostly by China. The idea is from President Xi. There are multiple purposes:

·         Improve transportation of products and mineral resources between China and Europe.
·         Enrich the wealth and living standards of the countries between the routes especially the developing countries. Hence it provides better market for Chinese products.
·         China’s Yuan would be used as the reserve currency instead of USD.
·         Improve China’s political influences in these countries.
·         China needs their energy supply, trade and road to Europe.
·         Most infrastructure products are financed by China and built with Chinese management and technologies.
·         It could reduce some conflicts. Philippines received billions on the loan and has downplayed the islet conflict with China. The chance of Chinese military interference is reduced to me.

Many developing countries will be benefited by financing their projects via Asian Infrastructure Investment Bank (AIIB), which is mainly funded by China. China may supply most of their services such as building factories or improving ports. However, China will not see their profits from the investments in the short term. Some loans will be partly donated to friendly allies.

US is not participating in this campaign. We will not benefit from these agreements and we will lose our influences to the developing countries. However, some big projects require advanced technologies and they will be supplied by US corporations.

As in most projects, China will face problems and challenges. Thailand and Indonesia are modifying their original railroad projects. The project is easily accepted in developing countries but not in developed countries such as EU. China is having its own economic problems. Some projects may not pay back and China would end up losing money. China has to settle the islet disputes in South and SE China Sea. The natural resource prices are lower than 3 years ago.

It is better to invest in profitable infrastructure projects than selling destructive weapons. Many finished projects such as the major railway in Africa do not benefit China so far.

Trade: China’s export,   
Youtube: One Belt, One Road: Episode 2, 3, 4, 5, 6, 1 (poor screen quality)

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