China's overland Silk Road and Maritime Silk Road Thread


SampanViking

The Capitalist
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Have now finished reading the document.

Very clearly this is rather more than a business plan for building a few roads and railways. It is nothing less than a full blue print for a Chinese led process of Pan Continental Integration and also a blue print for the form and nature of that Chinese leadership. This is of course an Integration not only of infrastructure, facilities and resources, but also of standards, protocols and institutions.

In essence, this is the building of a new Sinocentric world, a building of China outside of China and this is of course the nub of the matter from a security perspective.
Pretty obviously, this has major implications for the status of Taiwan. If the last twenty years have portrayed the Cross Straits relationship as a stand-off along the Strait with Taiwan at the front-line of the Western World, this is all about to change. China has indeed unleashed its full might at the problem; but not in a head on assault, but in a wide flanking movement that will envelope the entire Asia Pacific region and one which will make the entire "Independence" argument pointless, because an independent Taiwan will have nowhere to go.

The AIIB is the seed fund of the project and it will help co-ordinate and set up new financial institutions and facilities in the project areas. In short it is creating an entirely new and independent Financial Architecture for the Continent that can operate and develop separately from existing global structures.
The rush to join AIIB is done in the knowledge of this and the understanding of the project AIIB is going to finance. I think we have the clearest indication of where the International community truly stands on this in relation to any choice it may have to make between the Chinese Silk and Maritime Roads and the US TPP.

No surprise either as to how China presents its leadership role. The document reads like the vision document of a new CEO and so the style of Chairman of the Board is the message being put out (very much in the style of Chinese Governance itself) and very much in contrast with Hegemonic nature of US Presidential power.

There is a huge amount of "Face" tied up in a document as ambitious as this and so we can only assume that nearly all the ground work with all the key players has already been concluded and that the publication of the document is the starting gun to start work in earnest.
 
Have now finished reading the document.

Very clearly this is rather more than a business plan for building a few roads and railways. It is nothing less than a full blue print for a Chinese led process of Pan Continental Integration and also a blue print for the form and nature of that Chinese leadership. This is of course an Integration not only of infrastructure, facilities and resources, but also of standards, protocols and institutions.

In essence, this is the building of a new Sinocentric world, a building of China outside of China and this is of course the nub of the matter from a security perspective.
Pretty obviously, this has major implications for the status of Taiwan. If the last twenty years have portrayed the Cross Straits relationship as a stand-off along the Strait with Taiwan at the front-line of the Western World, this is all about to change. China has indeed unleashed its full might at the problem; but not in a head on assault, but in a wide flanking movement that will envelope the entire Asia Pacific region and one which will make the entire "Independence" argument pointless, because an independent Taiwan will have nowhere to go.

The AIIB is the seed fund of the project and it will help co-ordinate and set up new financial institutions and facilities in the project areas. In short it is creating an entirely new and independent Financial Architecture for the Continent that can operate and develop separately from existing global structures.
The rush to join AIIB is done in the knowledge of this and the understanding of the project AIIB is going to finance. I think we have the clearest indication of where the International community truly stands on this in relation to any choice it may have to make between the Chinese Silk and Maritime Roads and the US TPP.

No surprise either as to how China presents its leadership role. The document reads like the vision document of a new CEO and so the style of Chairman of the Board is the message being put out (very much in the style of Chinese Governance itself) and very much in contrast with Hegemonic nature of US Presidential power.

There is a huge amount of "Face" tied up in a document as ambitious as this and so we can only assume that nearly all the ground work with all the key players has already been concluded and that the publication of the document is the starting gun to start work in earnest.
I wouldn't underestimate the destructive power of spite in the case of Taiwan, as a significant segment of the population there is tunnel visioned with an extreme anti-China bias similar to the most radical Hong Kong protesters who have been assaulting people they presume to be mainland tourists recently.

There are also other potential sources of spite that can easily ruin the Silk Road party, India and Pakistan, Russia and several other former Soviet states, and conflicts in the Middle East and Africa come readily to mind.

As long as Japan and the US maintain a separate economic circle then Taiwan does have alternatives to a potentially China-led one in Asia. Also Africa, Europe, and the Americas are still out there, Taiwan would be missing out but would also be far from isolated.

I am not buying either the AIIB or the Silk Road initiative being a China dominated scheme as there are too many big players for that to happen, at a minimum Russia and India will certainly have a lot of influence and can easily make things very difficult for China. Though as you mentioned, China must have discussed and received some form of consent from these powers before making the public announcement.

Despite the obvious overlap between the AIIB and the Silk Road initiative I would also be careful to not presume they are always linked as the Silk Road initiative mentions many other avenues of funding including its very own Silk Road Fund. My expectation is that the AIIB will focus on projects related to the maritime route while other funding sources cover the overland one.

Finally, while the US may have been unnecessarily antagonistic and dictatorial towards China and others, it is never too late to change course to be more collaborative which I think will benefit the US overall. It can of course also continue to make things as difficult as possible for China and others, but that is probably going to backfire if it is purely self-serving.

The US course is not about any "hegemonic nature of US presidential powers" (the Obama administration failed to convince Congress to agree to IMF voting reforms giving developing countries more say) but rather if all the powers that be within the US are willing to adapt to all the consequences of a changing world of their own making. It is a question of attitude, my-way-or-the-highway or rising-tide-lifts-all-boats?
 

solarz

Brigadier
What we are seeing now is, to put it simply, Vision. The HSR was only the first step. Its success allowed the Silk Road initiative to be realizeable. The AIIB and the New Development Bank are both well suited to realizing this initiative, as the primary obstacle to the Silk Road is the lack of infrastructure in the countries along the way.
 

Equation

Lieutenant General
I wouldn't underestimate the destructive power of spite in the case of Taiwan, as a significant segment of the population there is tunnel visioned with an extreme anti-China bias similar to the most radical Hong Kong protesters who have been assaulting people they presume to be mainland tourists recently.

There are also other potential sources of spite that can easily ruin the Silk Road party, India and Pakistan, Russia and several other former Soviet states, and conflicts in the Middle East and Africa come readily to mind.

As long as Japan and the US maintain a separate economic circle then Taiwan does have alternatives to a potentially China-led one in Asia. Also Africa, Europe, and the Americas are still out there, Taiwan would be missing out but would also be far from isolated.

I am not buying either the AIIB or the Silk Road initiative being a China dominated scheme as there are too many big players for that to happen, at a minimum Russia and India will certainly have a lot of influence and can easily make things very difficult for China. Though as you mentioned, China must have discussed and received some form of consent from these powers before making the public announcement.

Despite the obvious overlap between the AIIB and the Silk Road initiative I would also be careful to not presume they are always linked as the Silk Road initiative mentions many other avenues of funding including its very own Silk Road Fund. My expectation is that the AIIB will focus on projects related to the maritime route while other funding sources cover the overland one.

Finally, while the US may have been unnecessarily antagonistic and dictatorial towards China and others, it is never too late to change course to be more collaborative which I think will benefit the US overall. It can of course also continue to make things as difficult as possible for China and others, but that is probably going to backfire if it is purely self-serving.

The US course is not about any "hegemonic nature of US presidential powers" (the Obama administration failed to convince Congress to agree to IMF voting reforms giving developing countries more say) but rather if all the powers that be within the US are willing to adapt to all the consequences of a changing world of their own making. It is a question of attitude, my-way-or-the-highway or rising-tide-lifts-all-boats?
Outside of China can anyone else offer low interests loans to it's neighbors? That's why the AIIB is too important to ignore even to those who disagrees with China's in any way.
 

no_name

Major
Where there are economic activities it is natural that overtime wider cooperative security framework will be worked on because now there are things to protect and in the interest of more and more parties that stability is kept.

Maybe this is a first step towards making Asia a more stable place.

So you set up a situation that creates a flow trend and then ride along it.
 

no_name

Major
China has rejected NK interest citing unfavorable security and economic situation of that country.

Taiwan has applied under Chinese Taipei

Out of the BRICS South africa has not applied.
Iran has not applied.

Ironically Syria is probably one of the countries that could very much benefit from infrastructure investment.
 

plawolf

Brigadier
I see this as a very pragmatic and long term plan based on building relationships as much as roads and railways.

At its heart, is the economic blueprint for sustained Chinese prosperity for the next century, which will help ensure Chinese interests for the next millennium.

China's greatest economics strengths of the last few decades have been the twin engines of infrastructure building and manufacturing.

At present, after all those years of sustain investment and development, both those areas are reaching the point of saturation within China. Simply put, China has been doing too good of a job, on both fronts.

On the infrastructure side, there are now too many roads and railways and bridges and damns etc in China for China's economy to easy digest and utilise.

As a consequence, China is suffering diminishing returns on its domestic investments, and also building more white elephant projects that are not necessary. Much western media ink has already been shed highlighting every instance of this, so I do not think I need to expand on this too much.

So, rather than restructure (ie kill off) the infrastructure development part of its economy and automatically copy and paste the western orthodox of economic development and rush to become a services economy to fight for a piece of the existing pie against more experience and established western firms and economies (where the west would obviously hold the advantage, hence the keenness for China to adandon its strengths and instead play to the west's) China is making a much bigger pie.

The new Silk Road is a colossal project by design, as it is suspose to sustain and nurture the infrastructure building part of the Chinese economy for the next 50-100 years.

Once the actual contracts are signed and work begins, China's economy would be firing on all cylinders again, and should allow China to return to the 8-10+% annualised growth rates it has become accustomed to.

That is another reason why China is willing to be generous when it comes to finance and loans. It sees those loans and financing agreements as subsidising a vast part of the Chinese economy, and would probably yield better returns than all the domestic subsidies, grants and cheap loans it has to make to help sustain that industry domestically.

It is a beautiful example of out-of-the-box thinking that turns a potential weakness and liability into an asset and source of strength.

On the manufacturing (of consumer goods) side of things, it has long been known that both the European and American markets are saturated.

Again, China's strategy to counter declining demand from the west has been to create new demand elsewhere. Up to now, because of the low income of much of the third world and its own domestic population, much of that extra demand has only been for low value (and low value added) basic goods.

As China has successfully demonstrated domestically, investment brings with it economic development and rising incomes, which in turn leads to increased demand for more sophisticated (profitable) goods.

A lesson that I think and hope Chinese planners have learnt from its domestic development history is that too much sophistication and disposable income too quickly may not necessarily benefit China.

An annoying phenomena of China's development has been that as its population prospered and where uplifted, they soon outgrew the product range sweet spot of China's firms, and instead looked to more established and higher value goods from Euorpe, America and South Korea/Japan.

That is another reason China wants to diverse some of its investments abroad, as the more you invest in one area, the quicker that local economy and tastes moves up the value chain.

So I would expect China's Eastern Seaboard to see less investment and development going forwards, with much of the resources redirected to China's western hinterland (China's developing West strategy is another major reason for the New Silk Road) and to the areas covered by the new roads and railways and other infrastructure that will be built along the New Silk Road.

Asside from internal geographical rebalancing to close the wealth gap, within China, it should also create a whole new generation of conusmers who's needs and tastes falls smack in the middle of China's product range sweet spot.

I would expect this economic uplifting to be broad rather than deep at first, so rather than continuing to develop an area to the point where it reaches Chinese East Coast standards (and face the same problems of consumer needs and tastes outpacing China's product offerings), the lion share of the money and investment would instead move on to create more new consumers.

The already covered areas will of course contine to develop and grow richer and more sophisticated. But that will be a far more natural and slow process than the supercharged pace achieved in China's East Coast.

That should give China's companies and economies more time to move up the value chain, as they are already rapidly doing, to keep pace with developing tastes and needs.

If done right, China could almost fine tune the pace of development along the New Silk Road to keep pace with its firms' move up the value chain, so that the goods and services Chinese firms are best placed to offer are exactly the kind of things people and economies along the New Silk Road want and need at that stage in their development. (The Chinese government could also use that investment to prod Chinese companies to continue to move up the value chain as well to prevent complacency and stagnation).

With this tool, China will be able to not only create hundreds of millions of new consumers across Asia, and eventually the Middle East and Africa, but it will also be able to make sure the vast majority of those new consumers spend their new found wealth on Chinese goods and services by making sure Chinese goods and services gives them the best value and are tailor made for their needs and local development stage.

Simply put, the New Silk Road's economic strategy is to create new markets, tailor them to best suit Chinese strengths (as well as tailoring Chinese firms and offerings to best meet the needs and wants of these new consumers) and then corner them.

This 'double tailoring' of adjusting local demand as well as Chinese offerings should be a far far more powerful means of seizing the market than traditional methods like barriers to entry for other players because you will be making your produces the obvious and logical choice, so people are choosing you out of their best interest rather than through a lack of choice or coercion, which tend to drive people to bypass your barriers and leave a distinct bad taste in the mouths of those you prevent from perusing their best interest.

I think that will neatly reflect China's diplomatic approach as well.

Rather than seeking and employing(absuing?) Western style, 'you will bend to my will to suit my needs', power and approaches to international 'co-operation', China will instead be asking, 'what can we do and how can we change the way we do things to best suit the both of us?'

As such, I do not see a massive military security element to this strategy. China will seek to bind countries to this New Silk Road using their own self-interest rather than coercion or force of arms.

China's non-interference policy should also allow it to easily deal with natural changes of governments, as it is already successful doing in much of the world, because China sees itself as dealing with the country and the people of places rather than specific political movements.

That is born out of pragmatism more than philosophic concerns. Parties and governments come and go, it would be as unwise as it is unfeasible to impose an unpopular government and leader on a people who oppose and despise them.

And before anyone starts, I do not see any contradition between China's internal leadership model to this philosophy. In fact, it would have been the Chinese domestic experience that helped form and shape this world view within the CCP.

Contrary to western propaganda, the CCP has stayed in power not through blind and brutal oppression, but rather through radical and often painful internal change.

Deng's economic reforms and opening up of China to the world is perhaps the most obvious and famous example of this pragmatism at work, but President Xi's anti-corruption drive is also a very good current example to show that that process is still very much alive today.

I think the only instance will China would strongly object to the point of being willing to use arms is if foreign hostile governments engineered regime changes and coups in countries along the New Silk Road with a view of sabotaging it.

But, even in that eventuality, China will still retain the overwhelming advantage.

The Sea is the source of power for America and its European allies. By being an overland project, the New Silk Road moves the area of interest far from anywhere the West could effectively employ its military might and puts it in an arena where China holds the overwhelming advantage.

It would be a grave and obvious mistake for the West to start a fight with China pretty much anywhere along the route of the New Silk Road (the route itself was of course not chosen without great and careful consideration).

If the west is arrogant and/or stupid enough to try, it will only hasten its own decline.

As such, I expect China to take a more hardline approach to any moves by the west along the New Silk Road than currently, so that will be a potential source for conflict if the west is hell bent on trying to sabotage the plan.
 

plawolf

Brigadier
The Sea based element of this plan won't be anything too radical to start with, and would be more a backup and stablising element designed to keep China in the game in terms of diplomacy and commerce with established coastal powers, and to assuage any fears and concerns they may have about the New Silk Road threatening their sea trade depent economic prospects.

For some countries, the Sea based part of the strategy could be used as a demo, whereby China would develop ports and other coastal infrastructure and used that to pitch the land based deal. But we are talking decades down the line here, where they are building branching networks to further integrate the region with China.

Ultimately, once the land part of the Silk Roads has been well established, China will shift its focus to gaining supremacy on the seas and Oceon as well.

By that time, China's economy should be several times that of America or the EU's, and so China would be able to afford the kind of navy that can beat any America or European fleet, all without having to break the bank on military spending. But that's unlikely to be something we will see within our lifetimes, as that may be a hundred years away, and a lot can happen in that time.

But that is the kind of timescale Chinese leaders operate in, and what this plan is designed to take to bare full fruit.

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BTW, I hate this 10k character limit cap. :p
 

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