Why China believes the World needs the new Silk Road: Beijing’s ambitious mega-project explained

Published time: 13 Sep, 2019 07:04

Edited time: 13 Sep, 2019 11:41

China’s trillion-dollar “One Belt, One Road” initiative (BRI) is an attempt to revive the Silk Road, an ancient trade route that for hundreds of years connected the East and West during the days of the Roman Empire.

The initiative, which was unveiled by Chinese President Xi Jinping in 2013, envisages linking China with Africa, Asia, Europe and the Americas through a network of seaports, railways, roads and industrial parks. The major goal of the 21st century Silk Road project is to create greater connectivity across the world to promote peace through trade and development.

Why Beijing believes the world needs the BRI

Victor Gao, director of the China National Association of International Studies, said that the BRI initially started as a connectivity project, including financial and power connectivity.

© Data from LOWY Institute © RT

There are many projects within the BRI, with more than 100 countries already having signed up for it. Each country has different goods to export. Some export manufactured industrial goods, like the Czech Republic and Slovakia in eastern Europe. Other countries export more materials, commodities, energy products, and agricultural products, Gao explained.

According to the expert, better connectivity is created by building new roads, railways and ports. This boosts trade by allowing goods to move faster.

“Among the projects completed is the railway in Kenya between Nairobi and Mombasa. It is already operational and has improved the efficiency and productivity in Kenya a lot, not only in terms of moving people around but also moving goods and services around,” said Gao.

The Addis Ababa–Djibouti Railway, Holhol bridge © Wikipedia / Skilla1st

He also named a high-quality highway in Ethiopia, spanning from Addis Ababa all the way to Djibouti, crossing a vast expanse of Ethiopian territory.

A platform of Addis Ababa–Djibouti Railway © AFP / Houssein Hers

Gao said that there are many potential projects on the Eurasian continent itself. Countries like Myanmar, Laos, Vietnam, Cambodia, Thailand, Singapore, and Malaysia will benefit in terms of promoting the BRI, he said. “They will get much better connectivity, including the financial [kind].”

China’s trade volume with the Association of South East Asian Nations (ASEAN) is already surpassing its trade volume with the United States and is picking up speed, according to Gao.

Hong Kong-based political scientist Joseph Cheng has pointed to the development of cooperation projects with China’s traditional ally Pakistan. He said that African countries are also interested in participating in the BRI “because they certainly fit in the category of countries needing infrastructural development and investment funds.”

Some European countries which have been in financial difficulties may be interested in “attracting investment from China, mainly Greece a few years ago and Italy in recent years.”

Why China needs the BRI

The project is aimed at satisfying China’s domestic needs in terms of using its excess capacity in certain industries more effectively. It provides China with new markets and sources of raw materials and an opportunity to invest Beijing’s vast foreign exchange reserves, Joseph Cheng explains.

“In response to the economic crisis in 2008-2009, China launched many investment programs resulting in excess capacity in industries like steel, cement and so on.”

Cheng added that “now China would like to use its excess capacity in certain industries, its substantial foreign exchange reserves as well as its technology and experiences in infrastructural projects development.”

As a growing industrial country, China needs markets and sources of raw materials, the expert pointed out. “China has substantial foreign exchange reserves, up to $3.1 trillion. Part of that was invested in financial papers, treasury bonds in the United States, which are not seen as very productive from China’s point of view.”

According to Gao, China is mobilizing all its resources, all of its 31 provinces, autonomous regions and municipalities to contribute to the BRI. “Eventually, for many other big projects involved in the initiative, capital is a very important thing. And when you talk about capital, China is one of the biggest providers of foreign direct investments,” he said, noting that it also receives huge flows of foreign direct investment.

Source: rt.com “Why China believes the World needs the new Silk Road: Beijing’s ambitious mega-project explained”

Note: This is rt.com’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.


China’s BRI vital for Cambodia, Malaysia

KT Staff / Khmer Times Share:

September 10, 2019

Malaysian Prime Minister Mahathir Mohamad says the BRI benefits those who embrace it. KT/Chor Sokunthea

China’s Belt and Road Initiative projects are important because it opens land and sea routes to Europe.

Malaysian Prime Minister Mahathir Mohamad told Khmer Times that: “In so far as the BRI projects are concerned, we are fully supportive because Malaysia also wants to use this passage for trade with the East and the West.”

In addition, it is important, of course, that these trading passages are kept open so that more trade would be possible. After that, we’ll have to engage all the countries along the routes. Central Asia is cut off from the sea, but if they have good communications systems, then they will also prosper.”

He said that while the BRI has much support from countries, such as Malaysia and Cambodia, it is important that investors adjust to local conditions, practices, and prepare themselves for what may come.

Looking at the trade war between China and the US, this is very bad. It doesn’t benefit anybody. Everybody will suffer. But Asean countries, if we work together, we can build a good market for ourselves. This will mitigate the cost of the results of the trade war,” Mr Mahathir said.

There are no winners – only losers and those get ruined, especially those countries who depend on export-related manufacturing. This is because if countries of origin certification are strictly applied, almost every producer and exporter will be affected. One way or another, as it is, all inter-related,” he added.

Mr Mahathir pointed out that Malaysia and Cambodia have enjoyed a long and historic relationship, which stretches over 62 years – same as Malaysia’s independence. Given this long relationship, Malaysia could sympathise with some of the problems facing Cambodia, such as potential sanctions and revocation of the Everything-but-arms trade status, and pressure on its form of democracy.

He noted that there is no denying of Cambodia’s reliance on China on many fronts, primarily infrastructure development and official development assistance.

Cambodia may not have much of a choice because of external pressure on it, but Prime Minister Hun Sen is doing well in establishing bilateral trading pacts with as many countries as possible, particularly European nations,” he said.

Hedging, in terms of politics, trade and economics, is critical for a nation’s survival and as such, it could be wise for Cambodia to also stay engaged with its detractors and maintain its policy of friends with everyone and enemy of none,” Mr Mahathir added.

During his visit to Cambodia, Mr Mahathir stressed that he was visiting an old and trusted friend and that he was pleasantly surprised by the number of questions posed by students at the Royal University of Phnom Penh.

He stressed that Cambodia is on Malaysia’s radar and that Malaysia is concerned about what is happening in the Kingdom.

We think that to the extent that we can, we should help – and certainly, our business people will be encouraged to come here to do business here, but not just think of profits, although that is the main objective, but also think about their responsibility towards the Cambodian people,” Mr Mahathir said.

He noted that the visit was also to renew relations between the two countries, strengthen relations, identify and resolve problems. Mr Mahathir said that in general, both sides need actions so Cambodia and Malaysia can prosper.

Source: Khmer Times “China’s BRI vital for Cambodia, Malaysia”

Note: This is Khmer Times’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

Belt and Road Initiative: A big opportunity to reap benefit for S Asia

12:00 AM, September 09, 2019 / LAST MODIFIED: 03:11 AM, September 09, 2019

Experts say India’s indifference to join BRI poses a challenge; Bangladesh has to objectively measure both benefits, concerns

Diplomatic Correspondent

The China-led Belt and Road Initiative (BRI) comes as an opportunity for the South Asian nations, but cooperation of all the countries in the region is needed to reap benefits from it, observe international relations analysts.

Speaking at an international conference in the capital, they, however, said India’s reluctance to join the BRI poses a challenge to promoting connectivity and trade in the region.

The conference titled “BRI: Positioning Bangladesh within Comparative Perspectives” was organised by the Centre for Policy Dialogue at a city hotel yesterday.

In South Asia, all the countries, except for India, are enthusiastic about the Belt and Road Initiative… There will be certain challenges to implementing the initiative unless India joins it,” said Maj Gen (retd) ANM Muniruzzaman, president of Bangladesh Institute of Peace and Security Studies.

He also mentioned that Bangladesh was excluded from a proposed corridor connecting four countries — China, India, Myanmar and Bangladesh — through maritime routes.

We should try to talk to China so that the corridor is extended up to Chattogram via Rakhine,” Muniruzzaman told this correspondent on the sidelines of the conference.

Chinese President Xi Jinping introduced the concept of the BRI in 2013 in the light of the ancient Silk Route to connect Asia with Africa and Europe through land and maritime networks.

Bangladesh is one of the 129 countries that have already joined the initiative. Some of the big powers, including the US and India, are yet to become part of it. India, however, is involved in some other initiatives that partly overlap the BRI.

Muniruzzaman said that though the BRI has been termed a trade project, it has significant political and strategic ramifications.

We must carefully analyse these aspects as we move towards implementing the projects under the initiative,” he said.

According to the CPD, Bangladesh, located in a sub-region that includes economic powerhouses India and China, is a gateway to the Maritime Silk Route that passes through the Bay of Bengal. Bangladesh has a unique opportunity to emerge in the region as an important economic hub of the century.

While engaging itself with the BRI, Bangladesh will have to take into consideration its relationship with its big neighbour India, said the thinktank.

Thus, an effective balance of relationship with two big regional neighbours will also be a major task to be taken into consideration by the policymakers of Bangladesh,” said the CPD in a paper presented at the conference.

The BRI is likely to have implications for the interests and engagement of extra-regional powers, such as the USA and the EU, in Asia. It is of interest to observe the role of the proposed Maritime Silk Route in ensuring security in the Indian Ocean, it pointed out.

In this respect, there is possibly a need to have an effective multi-stakeholder platform to discuss the interests and concerns regarding the BRI in South Asia, particularly in Bangladesh.

It is important to have an objective analysis focusing on both economic and political aspects of this ambitious initiative. This will help the government adopt informed policies to reap the fullest benefits of the BRI and mitigate the risks associated with it,” the CPD said.

CPD Distinguished Fellow Debapriya Bhattacharya said the BRI should have clear norms such as openness, transparency, no corruption and no conflict of interest in commercial deals.

The BRI also should have multilateral framework for all stakeholders that will have equal footing in the decision-making process, he said.

We need to understand what keeps India away, and how Indo-Pacific strategy affects the BRI.

Rohingya experience taught us geo-political realities… We need to see how we can really exploit our advantages, how we can prepare better, and how we can manage our relationship in certain ways that we can optimise not only in the long run but also in the short run,” Debapriya added.

Dr Kalyan Raj Sharma, president of Nepal-China Friendship Forum, said a lack of trust among countries in South Asia is a major problem that’s hindering regional growth. And India’s role is crucial in implementing the BRI.

For example, if there is a rail link from China to Nepal, it won’t be of much benefit unless it links India or Bangladesh, he said.

Division creates poverty, unity creates wealth,” he said, stressing the need for unity among the South Asian nations.

Former ambassador Munshi Faiz Ahmad, chairman of Bangladesh Institute of International and Strategic Studies, said the BRI is flexible because each country can have its own projects, maintaining the common principles of the initiative.

If India has any objection to any component of the BRI, it can raise that and eventually join the initiative. “If not, it will create a lot of hindrances,” he said.

Another former ambassador M Humayun Kabir, acting president of Bangladesh Enterprise Institute, said India and several other countries have security concerns that may discourage them from joining the initiative.

But if there is an open environment for trade governance, things could move forward, he added.

Economic relations between China and India are transforming. “I hope India would find some form of modus operandi. On the other hand, the BRI may also have to change, and those opposing it may find space to join it,” he said.

Abul Hasan Chowdhury, former state minister for foreign affairs, said China and India are large trading partners in the region, and they should work together for regional development.

The conference was also addressed by Prof Rehman Sobhan, chairman of the CPD; Mahfuz Anam, editor and publisher of The Daily Star; Lailafur Yasmin, professor of international relations at Dhaka University; and Guo Suiyan and Dr Lin Yanming, both associate professors at Yunnan Academy of Social Sciences in Kunming of China.

Source: The Daily Star “Belt and Road Initiative: A big opportunity to reap benefit for S Asia”

Note: This is The Daily Star’s report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

Bypass Malacca Strait–China’s BRI Strategic Connections to the West

Stratfor’s article “Casting an Eye on the Belt and Road Initiative” on August 28 describes China’s BRI as China’s worldwide ambitious initiative. If China were able to satisfy the needs for construction of infrastructures all over the world, it would certainly be an ambitious initiative to make China world leader. However, China is not rich enough to do so; therefore, it invites other countries to join it in the construction.

As the infrastructures may facilitate other countries’ investment and expansion of market in receiving countries, Japan and EU are interested but still have doubt whether joining China will help China become a world hegemon. Therefore, most of them would rather join the US to demonize China by description of China’s efforts as setting up “debt traps” to hurt receiving countries.

Stratfor’s article however, points out China’s efforts to avoid its BRI projects from becoming debt traps through renegotiation to reduce the debt burdens on receiving countries. However, it fails to see the strategic importance of BRI for China.

First, bypass the Malacca Strait. BRI first of all is aimed at China’s connections to its markets and sources of resources to its West. The old Silk Road is not so important as it’s on land while most trade now is carried out by shipping, which is much less expansive and has much greater volume.

Through development of infrastructures of roads, railways and pipelines, the freight costs have reduced but are still much higher than marine shipping. The freight volume is limited. China has developed rail links with Europe through Central Asia and Russia and would keep such links even if the rail freight is not cost effective enough as they may provide alternatives if marine shipping is cut off by powerful US navy.

Even if China has a relatively strong navy to protect its shipping through the Indian Ocean, the Malacca Strait will be a bottleneck difficult to pass if it is blocked by US military stationed in Singapore.

That is why Hambantota Port is so important. If China can bypass the strait, the port will become the major transport hub as important as Singapore for China’s shipping to its west now.

That is why China is building a railway through Laos to Thailand while Thailand is building a railway linking the railway in Laos to Malaysia. Malaysia has to build its East Coast Rail Link to its port on its western coast. Such a pan-Asia railway will enable not only China but also quite a few Indochinese countries to bypass the Malacca Strait.

The article mentioned the reduction of cost by China for the construction of the East Coast Rail Link though I have mentioned that as China is building a port at Kyaukpyu, Myanmar and the establishment of China-Myanmar Economic Corridor will make the construction of a railway linking Kyaukpyu and China possible. That will give China a much better shortcut to the Indian Ocean without going through the Malacca.

A pipeline from Pyaukpyu to China has already been built and in operation for more than 3 years as a shortcut for shipping of oil to China.

Comment by Chan Kai Yee on Stratfor’s article, full text of which can be viewed at https://worldview.stratfor.com/article/casting-eye-belt-and-road-initiative-china-infrastructure.

BRI Spells the End of US World Hegemony, US Dollar Dominance

Popularresistance.org’s article “U.S. imperialism views the One Belt One Road as an existential threat to the domination and monopoly of the dollar” points out the reason of US attacks at China’s BRI initiatives though I do not agree with its orthodox socialist views.

The article says,“U.S. imperialism views the One Belt One Road as an existential threat to the domination and monopoly of the dollar. China is becoming deeply connected to Asia, Europe, and Africa and this spells doom for U.S. imperial hegemony.”

The article has the vision to point out the threat of BRI to the dominance of US dollars.

According to the article BRI has promoted economic growth of participating countries so that trade between China and BRI countries has grown fast to a quarther of China’s entire trade. It says, “The more that China dominates trade and investment worldwide, the less likely that these nations will continue to use the U.S. dollar to conduct its economic affairs.” No wonder the US has been attacking BRI so fiercely.

The article’s orthodox socialist view regards EU as US ally in attacking BRI. No, EU has been fighting against dominance of US dollar for a long time as proved by its development of a unified European currency the Euro.

Moreover, EU has becoming interest in BRI since Chinese President Xi Jinping’s visit to Italy and France. It is certainly interested in the expansion of the market in developing countries cause by BRI.

So is Japan and South Korea as proved by their desire for the establishment of Regional Comprehensive Economic Partnership (RCEP).

I have to point out that China pursues harmony and cooperation instead of conflicts as advocated by the article. It is the US that is used to create conflicts and resort to force when it is able to. US trade war with China is a typical example. China is forced to fight back, but it is still sincere in seeking win-win cooperation with the US. However, the US is fond of conflicts. It always refuses win-win cooperation in the world.

Comment by Chan Kai Yee on popularresistance.org’s article, full text of which can be viewed at https://popularresistance.org/u-s-imperial-decline-and-the-belt-and-road-initiative-the-most-important-global-struggle-of-the-century/

China’s Rise and Its BRI Will Put an End to US Hegemony

Popularresistance.org says in its article “U.S. Imperial Decline And The Belt And Road Initiative: The Most Important Global Struggle Of The Century”, “U.S. imperialism views the One Belt One Road as an existential threat to the domination and monopoly of the dollar. ‘China is becoming deeply connected to Asia, Europe, and Africa and this spells doom for U.S. imperial hegemony.’”

It describes US messy politics characterized by fierce fight for power between vested interests mainly divided into two parties and China’s plan of development that may surpass the US and success in its Belt and Road initiative (BRI). It believed that China’s rise and especially its BRI “threatens to undo U.S. hegemony for good”.

True, China’s market in BRI countries has been expanding and now risen to a quarter of all China’s foreign trade, but BRI has only begun for a few years. BRI has great potential in promoting BRI countries’ economic and trade development that will in turn greatly boost China’s economic development in the future.

The article has the vision to predict US decline and China’s rise but it obvious holds orthodox socialist views that are obsolete now.

Comment by Chan Kai Yee on popularresistance.org’s article, full text of which can be views at https://popularresistance.org/u-s-imperial-decline-and-the-belt-and-road-

Belt & Road cushions impact of trade war

By Li Qiaoyi and Chu Daye Source:Global Times Published: 2019/8/4 21:23:40

Initiative embodies win-win approach, creates joint prosperity

China Communications Constructions Ltd (CCCC) workers stand in front of the tunnel of the East Coast Rail Link (ECRL) project in the Dungun, Terengganu on July 25, 2019. – Malaysia on July 25 restarted a $10-billion, China-backed rail project that is part of Beijing’s global infrastructure drive following its suspension last year when a corruption-plagued government was ejected from power. (Photo by Rushdi SAMSUDIN / AFP)

The China-proposed Belt and Road Initiative (BRI) has greatly boosted China’s foreign trade, achieving major progress in Europe and Asia and also cushioned the negative impact brought on by the US-initiated trade war, Chinese analysts said over the weekend.

Beyond foreign trade, the BRI, as a way of how China interacts with the world, offers a stark contrast to the America First approach heralded by the current US administration, the experts said.

The BRI, now 6 years old, is a massive development plan aimed at promoting interconnection of infrastructure and economic and cultural exchanges between China and neighboring countries.

Boosted by the initiative, China’s western provinces have recorded fast growth in their foreign trade, with a total 12 provinces and municipalities posting a foreign trade annual growth rate of 14 percent in the first half of the year, according to a report by Chinese news site jiemian.com on July 29.

The growth rate was 10.1 percentage points higher than the national average.

Published foreign trade data by 26 province-level regions shows robust trade growth with the EU and the member countries of Association of Southeast Asian Nations (ASEAN), the report said.

With foreign trade between China and ASEAN growing 4.2 percent year-on-year in the first half of 2019 to $291.85 billion, the two sides have conducted a series of key projects from connectivity arteries to industrial parks, the spokesperson for the Ministry of Commerce (MOFCOM) said on Wednesday.

As of 2018, bilateral investment volumes grew 22 times in 15 years and ASEAN has been a major destination for Chinese overseas direct investment.

Progress in ASEAN

ASEAN nations striving to spur growth against the backdrop of simmering anti-globalization have been riding the wave of BRI, as landmark BRI projects are giving local economies a much-needed boost, the experts said.

They said a high-speed rail project linking Jakarta-Bandung is on track to catapult Indonesia to be the first ASEAN nation to join “the bullet train club.”

The Indonesia Java No.7 coal-fired power generation project, comprising two 1,050 megawatts units, is poised to be a great shot in the arm for the southeastern Asia economy which still has a low electrification rate, they noted.

Two China-aided bridges, when complete, will help with traffic congestion in metropolitan Manila and the East Coast Rail Link is expected to connect Malaysia’s east and west coasts, the experts noted.

Without the initiative, these projects being built and pushed forward by Chinese firms would be much more difficult to accomplish, they said.

Besides concrete projects, the BRI also brought career opportunities to local people and a ladder to improve their lives, the experts said.

Expressing gratitude for creating job opportunities for locals, Mark Kim Budianto, an on-site interpreter for the No.5 mixing plant of China Railway Group Limited’s Jakarta-Bandung high-speed railway project, said he also learned management skills from his Chinese employer, an invaluable asset to career development.

Tulus Martini from Cilacap in Central Java, working as a human resources specialist for Energy China’s Java No.7 coal-fired power generation project in Serang, recalled her career from “a nurserymaid to a well-paid white-collar worker.”

The makeover, enabled by learning Chinese and working with Chinese companies, she said, has changed her life for the better.

Chinese experts said Tulus Martini’s case was symbolic of how BRI has aided ASEAN economies and hundreds of millions of people in the region aspiring to turn their lives around.

Chen Fengying, a research fellow at the China Institutes of Contemporary International Relations, told the Global Times that the expansion of the BRI could actually help boost Chinese exports to partner countries and regions.

“As many companies have built up industrial parks overseas, they need to import parts or materials needed for production from China,” Chen said.

“This has helped beef up China’s exports, now facing protectionist headwinds.”

The promulgation of the initiative also become a bandwagon onto which central and western Chinese regions could jump, to develop trade with a new destination or produce exports unwanted by China’s original trading partners, bringing them to the forefront of opening-up, experts said.

Beijing has achieved significant progress in pushing negotiations for the Regional Comprehensive Economic Partnership negotiations over Friday and Saturday, a MOFCOM spokesperson said on Saturday.

RCEP is a proposed free trade deal between ASEAN and its six trading partners including China.

Foreign trade

As the trade war between China and the US wages on, the progress of BRI has provided some cushions to companies caught up in the tariff battle.

“So far China has been able to effectively diversify its sources of supply for many agricultural and mineral commodities for which tariffs were imposed on US imports as these are relatively easily obtained from other nations worldwide,” Rajiv Biswas, Asia-Pacific chief economist with IHS Markit.

As BRI is based on win-win, so it has immense potential for future growth, said Dong Dengxin, director of the Financial Securities Institute at the Wuhan University of Science and Technology.

“Because of the trade war, China will develop a closer and deeper economic relationship with more countries,” Dong said.

“The Chinese approach of win-win, and its contribution to multilateralism will help the country win the respect of world countries and attain global leadership.”

To pursue connectivity between Europe and Asia, the EU and ASEAN agreed to upgrade their relations to a strategic partnership on Friday.

Huang Ge also contributed to this story

Source: Global Times “Belt & Road cushions impact of trade war”

Note: This is National Interest’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.