Question

write a 5-6 paragraph report on China's new Silk Road plan. What is it? Its performance so far.

Answer 1

Announced in 2013 by President Xi Jinping, a brand new double trade corridor is set to reopen channels between China and its neighbours in the west: most notably Central Asia, the Middle East and Europe.

According to the Belt and Road Action Plan released in 2015, the initiative will encompass land routes (the “Belt”) and maritime routes (the “Road”) with the goal of improving trade relationships in the region primarily through infrastructure investments.

The aim of the $900 billion scheme, as China explained recently, is to kindle a “new era of globalization”, a golden age of commerce that will benefit all. Beijing says it will ultimately lend as much as $8 trillion for infrastructure in 68 countries. That adds up to as much as 65% of the global population and a third of global GDP, according to the global consultancy McKinsey.

But reviews from the rest of the world have been mixed, with several countries expressing suspicion about China’s true geopolitical intentions, even while others attended a summit in Beijing earlier this month to praise the scale and scope of the project.

One strong incentive is that Trans-Eurasian trade infrastructure could bolster poorer countries to the south of China, as well as boost global trade. Domestic regions are also expected to benefit – especially the less-developed border regions in the west of the country, such as Xinjiang.

The economic benefits, both domestically and abroad, are many, but perhaps the most obvious is that trading with new markets could go a long way towards keeping China’s national economy buoyant.

Among domestic markets set to gain from future trade are Chinese companies – such as those in transport and telecoms – which now look poised to grow into global brands.

Chinese manufacturing also stands to gain. The country’s vast industrial overcapacity – mainly in the creation of steel and heavy equipment – could find lucrative outlets along the New Silk Road, and this could allow Chinese manufacturing to swing towards higher-end industrial goods.

Sixty-two countries could see investments of up to US$500 billion over the next five years, according to Credit Suisse, with most of that channelled to India, Russia, Indonesia, Iran, Egypt, the Philippines and Pakistan.

Chinese companies are already behind several energy projects, including oil and gas pipelines between China and Russia, Kazakhstan and Myanmar. Roads and infrastructure projects are also underway in Ethiopia, Kenya, Laos and Thailand.

Pakistan is one of the New Silk Road’s foremost supporters. Prime Minister Nawaz Sharif said the trade route marked the “dawn of a truly new era of synergetic intercontinental cooperation”. Unsurprising praise perhaps from a country that stands at one end of the China-Pakistan Economic Corridor, where it is poised to benefit from $46 billion in new roads, bridges, wind farms and other China-backed infrastructure projects.

Support has come from further afield as well, with Chile’s president, Michelle Bachelet, predicting the route would “pave the way for a more inclusive, equal, just, prosperous and peaceful society with development for all”

China says it has no intention of deploying the Belt and Road to exert undue political or military influence and that the initiative is designed only to enhance economic and cultural understanding between nations. Xi calls his project “a road for peace,” yet other world powers such as Japan and the U.S. remain skeptical about its stated aims and even more worried about unspoken ones, especially those hinting at military expansion. Some point to China’s increasingly assertive military and speculate whether the development of dozens of ports might presage the establishment of naval bases, the so-called “string of pearls” theory that sees China trying to encircle India. Xi says the project won’t involve “outdated geopolitical maneuvering.” The World Bank says the revived Silk Road has the potential to stimulate economic growth, while also bringing challenges. Risks include corruption (the Kyrgyz prime minister is facing trial) and the creation of white elephants (like an airport in Sri Lanka that hosts only a couple of flights a day). Certain projects — especially costly overland routes — may simply not be viable or properly planned, deterring private investment. Xi, who is dealing with China’s own debt problems and slowing economic growth, has promised debt relief to some African nations, and a top Chinese regulator called for greater “social responsibility” in overseas investments. China is also drafting rules to determine which projects can be labeled Belt and Road, in part to avoid damage to the initiative’s reputation abroad.