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More on China’s New Silk Road

By Shlomo Maital

My friend Einar Tangen is an American citizen who has been living and working in China for many years, and is a commentator for Chinese English-language TV.   Here is his ‘take’ on the BRI Belt Road Initiative:

   By putting $124 billion on the table, towards his ambitious $5 trillion 60 country grand plan, Chinese President Xi Jinping made it to the front page of world news, politics and economics.   At the Belt and Road Forum for International Cooperation (BRF), Xi made it clear that the Belt and Road Initiative (BRI) is at the center of a new Chinese soft power and trade approach, not just regionally, but globally. In all, over 100 nations sent representatives, of which over 60 have, or are in the process of signing up to the BRI. Some have nicknamed it “WTO 2.0.”

     Notable was Xi’s “rising tide” exposition of inclusive predictability, contrasted sharply with Trump’s “America First” situational impulsiveness. But, as China moves into the Trump vacuum – while money talks, it also divides – so as countries are looking at the opportunities, China will need to continue shouldering the challenges and possibilities. 

     BRI is aimed at physically, economically and socially linking both countries and their citizens. For example: Farmers in remote parts of Thailand, Kazakhstan or Sri Lanka, might have heard of WTO, but without physical access to roads, rail or ports, it meant nothing. Under BRI, for those nations that participate, farmers will get the physical access and internet tools they need, to reach markets around the world.

   But, while China is leading this bold new effort, it cannot do it alone and will need partners. Dealing with such partners will require an understanding of their political, economic, linguistic, social and cultural realities. This will require a learning curve, part of which Beijing is attempting to solve with person to person cultural and educational exchanges and scholarships.

  China’s BRI is a new kind of trade initiative, one that dispenses with the post WWII ideological trade doctrines championed by the World Bank, IMF, ADB, large corporate interest and many developed nations, in favor of a non-interventionist inclusive pragmatism focused on sustainable trade and market development. The idea seems to be to figure out ways to stabilize the world by creating moderate prosperity regionally and now globally.

   BRI’s ability to gather under one roof Iran and Saudi Arabia, Palestine and Israel, rivalling only the UN in this area, is a testament to the possibilities of this approach. But, the world does not change in a day, and the certitude of American exceptionalists and those who champion an inflexible version of Liberal, Democratic Capitalism, remain unconvinced.

   For the developing and emerging nations it is a vital lifeline to the infrastructure they need to develop their economies and stabilize their countries. Concerns about basic human rights are essential, but there has been little progress trying to solve them using the barrel of a gun. 

   My own conclusion: Yesterday Donald Trump spoke in Saudi Arabia, basking in the glow of many many billions of dollars of arms sales, as the Saudis use their petrodollars to buy American support against their fanatical foes Iran. As Trump tries to organize a Sunni coalition against ISIS, and fanatical Islamic terrorism,     China works to reinvent global trade.  

      Which do you think will benefit humanity more? Which leader has the most powerful vision?

 

 


 

 

Regional to global, “WTO 2.0”

 

The WTO ushered in a tide of prosperity that linked nations, but not always people; BRI takes the WTO idea one level deeper, but without the ideological baggage.

 

 

As Xi’s frequent references to the time and distance made clear, this is not a short term political feel good project to appease a restive electorate, but a carefully staged multi-level far reaching initiative. So, what was initially a response to the U.S. maritime encirclement effort, has become the focal point of China’s efforts to: change global governance and finance models away from ideological absolutes towards pragmatic consensus; modernize its economy; create new sustainable markets; and escape a looming middle income trap.

 

Trade and soft power

 

 

Under the BRI, if a country does not like the actions of another country, it can simply not trade with them, or put the matter before the UN, but no mandate of righteous will exist to force a solution by arms.

 

As such, China’s BRI is not only a trade vehicle, but a soft power initiative, one that will emphasize consensus over corporate models of interaction between countries.

 

100, 54 and 29

 

Over 100 hundred nations and international organizations attended the BRF, of which 54 have signed on in some capacity. 29 country heads attended, but, the BRI has a way to go, as not all countries, identified in the BRI, sent heads of states or senior representatives.

 

At the next forum, scheduled for 2019, given the amount of attention and, dependent on China’s progress, it is probable that the number will go up dramatically. For example: the presence of the ABC’s, Argentina, Brazil and Chile, all represented by their presidents, except for Brazil, makes it clear that the allure of Xi’s grand plan is now global.

 

In Chile’s case they cemented an agreement to join the AIIB, which now has 77 members and will be at 85 by year end. The membership of Chile, Bolivia and Brazil and possibly Argentina, in the future, is an important milestone which shows both the global attraction of Xi’s plan and the drift away from Trump’s notions.

 

China and the U.S.

 

Ironically, given the history of why the BRI was created, the U.S. sent a delegation headed by a senior member of the Trump team, which acknowledged the importance of the BRI and then lobbied for American firms to be included in future projects. Interestingly, they were welcomed, just as was the DPRK, as Beijing went to great lengths to demonstrate, that politics was not part of the BRI.

 

But, to the majority of the world, the take-a-way will continue to be the contrast between Trump’s Me first vs. Xi’s rising tide; a contrast which is reshaping trade and soft power, as countries like Mexico, shift their wheat and corn imports from the U.S. to Argentina and Brazil.

 

Money talks, money divides

 

The numbers immediately drew the eyes of the world, the flip side was a spirited jockeying, by those attending, for inclusion as benefactors and participants. The question is; will countries see the value in Xi’s grand plan or just fight over who gets what.

 

Challenges, opportunities and solutions

 

Xi’s BRI has a long road ahead of it, and it seems China is willing to be patient.

 

The main challenges will be: understanding their partners, convincing a critical mass of them to see the value of the system, a sometimes hostile or indifferent international press and ideological, spheres of influence and territorial conflicts.

 

On the opportunities side, it could change global governance towards a more consensus rather than corporate driven model, help China through its middle income trap period, soak up excess industrial capacity, create new markets for goods and services and politically and economically stabilize countries, by offering better economic alternative and opportunities.

 

On the solutions side, for Xi’s part his willingness to step forward and attach resources to his grand plan indicates a willingness to take a leader’s role; his attention to political, economic, linguistic, social and cultural understanding is a measured path to avoiding misunderstandings.

 

But in the end it will be the smaller, but vital pieces of roads, rails, sea ports, airports, agreements, financing and the things which make them work; like the TIR Convention China joined last summer, which allows sealed containers to pass from source to destination, without the need to have inspections or pay tariffs along the way.

 

It is a grand plan and one which envisions a different future, the only question is will the world react positively or be content to struggle under the system we have now.

 

Einar Tangen is a political and economic affairs commentator, author and columnist

 

Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.

 

 

 

 

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Blog entries written by Prof. Shlomo Maital

Shlomo Maital
September 2017
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