It is the story of a colossal project carried out by a country and by one man. The Chinese President Xi Jinping’s new expansionist vision has engaged his country in a pharaonic trade road project that he wants to open across the globe. This road could change the relationship between Europe and China, on economic, but also political scale. China would like to profit from this opportunity so that they could have access to most of the world’s resources in a short lapse of time.

China’s growing influence

China’s weight on the international economic scene has been noticeably growing. Its part of the overall world GDP has reflected this growth, increasing from 4% in 2001 to 15.26% in 2012 and 18.69% in 2018, sharing the lead with other world powers such as the US and the EU. This growth is the result of a well-established strategy to “conquer” the world.
This growth has been also shown concretely in the Chinese landscape, with the country being in possession of, and by far, the largest high-speed rail network in the world, with no less than 20.000 km, and many train stations that have dazzled the world with their modern architecture and easiness of access. This example shows that China has definitely become a model and an inspiration to countries around the world, with their successful economic strategy. However, this had also raised the worries of the Western World, more particularly the US.

China has slowly opened its economy to the world, and showed irresistible opportunities to investors, in strategic regions, with a cheap and very large labor force. The “Made In China” invaded world markets, so much that China has become a very essential part of the global industrial economy.

The Second World economy has shown to be a very fragile one that could fall at any moment, due mainly to social difficulties. An economy built on secure foundations is the key to the country’s redemption. In order to achieve this, China wants to extend its economy to its internal regions, and not only depend on its coastal regions (Shanghai, Nanjing, Guangzhou,…). These internal regions are showing a lot of promises, since the State has built all necessary infrastructures to guarantee its economic growth, with more than 80.000km of the 130.000 km of Chinese motorways located in the internal part of China.

The main project that would lead to a drastic change in China’s growth is one that would heavily increase the Chinese access to new markets and new resources to exploit : the “Belt and Road Initiative” project. It’s a difficult, but ambitious project, whose conception was made according to the Chinese Government’s futuristic view, that includes internal China in the country’s growth, that develops a totally different landscape of the world we know as of right now.

 

The project of the century

Described as the project of the century, “the New Silk Road” also called “One Belt, One Road” or “Belt and Road Initiative” (BRI), was mentioned for the first time by the chinese president Xi Jinping during a conference in Kazakhstan, in 2013.

The slogan “All united along the new Silk Road with our friends from all over the world”, reflects China’s desire to “boost mutual understanding, mutual respect and mutual trust” and promote “peace and development”. So far, 65 out of 80 countries have reportedly signed agreements for these projects, enrolling in total 60% of the population and 36% of the world’s GDP. A list of countries constantly growing because China promotes a win-win initiative.

Included in the Chinese Communist Party in 2017, the project’s biggest objective is to open up the regions of Western China, forgotten by the economic reforms of the last 20 years. This internal development will help reduce imbalances between rich coastal regions such as Shanghai, and poor central and desertical ones.

Given that China is now in overcapacity of production for steel and aluminium, it is crucial for them to export over the world their reserves. Therefore, the BRI also has for mission to secure the roads by which the goods will be transported. By making it easier to trade with the countries of the road, world trade could increase by 117 billion dollars, in 2019. Finally, this project also reveals China’s affinity with raw materials, such as petroleum, where they plan to secure the supply.

Similar to the ancient silk road, this new project will consist of a terrestrial and a maritime road. China has chosen Chongqing as the starting point of the terrestrial road. Very attractive for its cheap labor force and lands, Chongqing is less known than Shanghai or Beijing, but is already seen as the future chinese motor with a growth of 14-15% each year. This terrestrial road is expected to pass through Northern Asia (Kyrgyzstan, Uzbekistan, Tajikistan), Kazakhstan, Russia, and all over Europe, ending according to most analysts in London. Whereas the maritime road will constitute a chain of seaports stretching from South China to Africa. The BRI also includes oil refineries, industrial parks, power plants, mines and fiber-optic networks, all designed to make it easier for the world to trade with China.

Between 2014 and 2018, China already invested over 410 billions of dollars in the project, to demonstrate its expertise in the construction of economic infrastructures, such as highways, railway lines, metro and sea ports, and in the energy, real estate and transportation sectors. China’s investments will exceed 20 trillion dollars through 2030.

Gaining time is the biggest advantage to emerge from this project. Nowadays, to export electronic devices from Chongqing to Germany the transportation by boat is 12 weeks. While transportation will only take 12 days with the new silk road. However, transportation by train has two disadvantages: it costs the double to transport less volume. In fact, China would need 250 trains to transport the same volume as one container ship. That is why for the moment, all trains going to Germany are seen as a symbol of China’s superpower but are not really efficient. 

All countries on the new silk road will be affected by worldwide trades but also another advantage is that the BRI will bring new tourists. Moreover, this new silk road will also foster international trade outside Europe. China is thinking about extending its project in Africa, South America and the Arctic pole.

 

Strategic plans 

Some countries like Pakistan saw its economy boosted by chinese investments in 2001, when China offered to build a new sea port in Gwadar. After the construction of the port, Pakistan experienced its highest GDP growth in 8 years. This winwin investment secured a new alternative road to transport goods that China will benefit and enabled a corrupted country to build a close relationship with a major power. Italy was also attracted by China’s project and became the first G7 country to sign the BRI, after Luigi Di Maio the Italian vice-president of the Ministerial Council, saw in this project a great opportunity to increase trades with Asia and export to China some products “made in Italy”.On the other hand, countries such as Russia, France and Kazakhstan remain wary. Aware of China’s growing influence, they prefer to stay cautious before accepting to join the BRI, scared that China could take possession and control over their lands.

China is selling a better world wherever the new silk road is going to pass; friendship between people and shared profits. However, many experts see the BRI as a risky plan. By lending money to volatile, corrupted and conflicted countries (Afghanistan, Yemen, Iraq), China is risking billions to never receive any paybacks. But why does China continue to lend money to these countries?

For example, China lended 1.5 billion dollars to build a brand new water port in Sri Lanka. However, after Sri Lanka declared to be unable to pay back its loan, China offered a 99 year lease in exchange for the port’s control. This exact same situation happened in Pakistan and in Myanmar and China opened his own naval base in DjiboutiIn response to these events, experts created “the string of pearls” theory, predicting that China is establishing a string of naval bases in the Indian Ocean, to promote and facilitate trading but also benefit from strategic points in case of conflict. In consequence, China will have the entire control. In his remarks, Xi Jinping reassured that ‘China doesn’t do geopolitical maneuvers, it doesn’t seek to exclude and doesn’t impose any commercial transactions on other countries.’

Moreover, a question arises: could the new silk road divide the EU? This project is very ambitious, and potentially very profitable. The opportunities and threats that come with this project could lead to a division of the European Union. Many Eastern European countries feel betrayed by the EU since they were not (or were barely) included in the European projects aiming for “Global Development”. These countries could see the Silk Road as a way to fasten their progress and find their way out of the EU since a Chinese collaboration could reveal itself to be more successful. This also applies for Western Europe. Germany, for example, could find more success in a Chinese partnership, rather than being “Europe’s savior”, by bringing fresh blood to an economy that needs a global restructuration.

 

China’s ambitions are constantly growing. After setting up the “Belt and Road Initiatives”, China sees much further into the Arctic with the ‘Polar silk road’, if nothing is done to halt the melting of the ice in this part of the globe. China is actually turning its interest to Northern Countries, particularly Iceland and Norway, who have direct access to the Arctic’s gas, oil and resources. They also are planning to open maritime roads through Northeast China that will allow them to directly take advantage of the Arctic’s various natural resources.

Will Europe agree to take part in this colossal project ? Would that put the EU’s future in shambles to the profit of a Europe-China collaboration?

 

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