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 and was initiated in 2013. There are multiple purposes:
·
Improve transportation of products and mineral
resources between China and Europe.
·
It provides better market for Chinese products.
·
Enrich the wealth and living standards of the
countries between the routes especially the developing countries, which should
benefit when US and the West reduce their foreign aids.
·
Eventually China’s higher-value products will
catch up with the West and the US. When the developing countries are richer,
they are the target markets.
·
It could reduce some conflicts. Philippines
received billions on the loan and has downplayed the islet conflict with China.
Hence the chance of Chinese military interference would be reduced.
·
China’s Yuan could be used as the reserve
currency instead of USD.
·
Improve China’s political and cultural influences
in these countries.
·
China needs their energy supply, natural
resources, trade and road to Europe.
·
Most infrastructure products are financed by
China and built with Chinese management and technologies, hence using China’s
excess capacity such as building roads and bridges.
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 such as turbines from GE. Honeywell and
Caterpillar will likely benefit. India may not participate due to the road thru
a territory claimed by Pakistan.
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 needs to
analyze the projects carefully. 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 and even the host so far. They
need to select those projects that are beneficial otherwise it would be a waste
of resources. A train started from a Chinese city to arrive in London and
another one to Madrid. In general, it is faster than sea route and less
expensive than air fright. Or, it is more expensive than sea route and more
time consuming than air fright. Many products such as red wine are suitable to
ship by train. It also depends how far the products are from the closest
seaport or railway station.
Links
Trade:
China’s
export,
There are many articles on this One Belt, One Road
Initiative (OBOR). Google it for recent articles. Here are some: Wikipedia, US & Heritage.
#Filler: Victim?
We’re a victim of our own
success: A higher living standard means higher wages, more protections to our
workers, more regulations for our environment…
# While dancing forward,
President Xi said, “I’m a lover, not a fighter”.
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