China’s Belt and Road Will Change the World

While the United States blunders

China’s Belt and Road Will Change the World

As Australian prime minister Malcolm Turnbull prepares to visit the United States in mid-February 2018, media down under report that near the top of his agenda with U.S. president Donald Trump are plans for the two countries to counter a project most Americans have heard very little about. China’s Belt and Road Initiative.

The two hope that they can likewise convince their right wing nationalist comrades in Japanese prime minister Shinzo Abe and Indian P.M. Narendra Modi to join in the project, a process reportedly begun during the 2017 ASEAN summit.

For at least 60 other countries spanning across most of the world, however, the initiative is a tremendous opportunity to grow and develop their economies under a new global order — one that may not have the same strings attached to it as the U.S.-led system in power today.

If the initiative goes according to plan — and if there’s one thing the People’s Republic of China has shown a capacity for, it’s executing well-developed plans — it will have world historic consequences for U.S. power.

For all the bombs and boots on the ground we’ve launched in the last century, China is close to conquering the world without firing a shot, and you would never know from following the U.S. press.

In Chinese media, on the other hand, the Belt and Road Initiative was the most-mentioned topic in the news last year. This reflects the historic significance of the plan. If completed would likely represent the largest peacetime project ever, estimated to cost between $4 trillion and $8 trillion.

The project would revive the Silk Road of ancient times, connecting China, Central Asia, the Middle East, Africa and Europe with roads, railways, pipelines, communications networks, electrical grids and other infrastructure over land, and a maritime road that would connect ports from the South China Sea, Indian Ocean, Arabian Sea, Persian Gulf and Mediterranean.

All told it would connect most of the world’s population in a single economic network, and it would integrate just under half the world’s GDP. By the time it is finished the very process of building it might very well mean that it would bring together most of the world’s economic output.

More important than mere physical connections would be the legal and financial integration of the countries along its path. “Countries along the Belt and Road may fully coordinate their economic development strategies and policies, work out plans and measures for regional cooperation, negotiate to solve cooperation-related issues and jointly provide policy support for the implementation of practical cooperation and large-scale projects,” China’s National Development and Reform Commission stated in its 2015 “Vision and Actions” document on the Initiative.

Among the primary mechanisms for this international process is the Silk Road Fund, an investment fund financed by the People’s Bank of China and other state agencies. The Fund helps pay for key infrastructure projects in the countries along the Road, facilitating integration of the host countries into the Belt and Road system.

Its $40-billion initial capitalization is very modest in the context of the trillions the project will ultimately cost, but it has already begun to shift geopolitical realities on the ground in ways favorable to the Initiative.

The Fund’s first project is the Karot Hydropower Station in Pakistan, a $2-billion dam and power plant on the Jhelum River that was first proposed in 1994 but went unbuilt until the Silk Road Fund concluded a “build-operate-transfer” agreement in 2015. The station is now slated for completion in 2020, and will be operated by a Chinese company for 30 years after which ownership will be transferred to Pakistan.

Such capacity to turn decades-long dreams out of the reach of poor countries into realities in a matter of months is sure to attract global attention, especially in light of recent U.S. withdrawal from diplomacy.

A Chinese train station. David Axe

Chinese path to the Arabian Sea

The Kaot Station project is part of the China-Pakistan Economic Corridor, perhaps the most strategically significant piece of the entire Initiative. The $60-billion effort will create a network of highways, railways and fiberoptics stretching across Pakistan, connecting Western China with Karachi.

This would alleviate China’s dependence upon the Straits of Malacca to import energy into the country, a major vulnerability the United States has sought to exploit by developing close political and military relationships with nations along the Straits. In return, China is investing billions into energy projects like the Karot Station to help relieve Pakistan’s chronic power shortages.

“China’s basic policy of diplomacy with neighboring countries is to treat them as friends and partners, to make them feel secure and to support their development,” Chinese leader Xi Jinping said in a 2013 speech included in his 2014 theoretical tome The Governance of China. “This policy is characterized by friendship, sincerity, reciprocity and inclusiveness.”

Central Asian republics have already seen the huge possible benefits of the plan, with both Kazakh and Tajik heads of state formally asking to connect their highway networks to the Corridor. With Russia’s engagement already assured — the Silk Road Fund has purchased nearly 10 percent of Russian petrochemical giant SIBUR — these connections would mean that most of Asia would already be connected and interdependent in new ways.

This is the Belt and Road vision, and despite substantial obstacles it seems more likely to come to fruition than not.

A Chinese factory making tunnel-boring machines. David Axe photo

Building a beautiful belt and road

One of the more recent nudges in the direction of success has come from none other than Donald Trump. Trump used his favorite tool of self-sabotage for the blunder, Twitter, launching a tweet on New Years Day that decried Pakistan for giving the United States “nothing but lies & ­deceit, thinking of our leaders as fools.”

China immediately repudiated Trump’s statements, insisting that Pakistan had “made great efforts and sacrifices for combating terrorism,” repeating a pattern that had played out in August 2017 when Trump previously attacked Pakistan as a terrorist haven. At that time China had called themselves Pakistan’s “all-weather” friend, not-so-subtly calling out America’s fair-weather policies towards the South Asian republic.

The U.S. media seem to have missed the story more or less entirely, with a greater focus instead on kvetching about staff politics in the West Wing and a series of fiscally deranged budget deals out of Congress. A bipartisan array of pundits expressed at least some approval for Trump’s line on Pakistan, never connecting the dots on Belt and Road which few seem to consider very important.

Even more dramatic and irresponsibly underreported was Pakistan’s move on Jan. 2, 2018 to announce that it would begin using the Chinese yuan in bilateral transactions, giving up the practice of mediating the exchanges with the dollar. The State Bank of Pakistan even authorized the use of yuan in private and other governmental transactions, a step in the direction of the currency stability system called for in the Belt and Road vision.

While the trade between the two countries is modest even with the billions of Belt and Road investments taken into account, the shift should be seen as a canary in the global coal mine for U.S. power. The energy China will be moving across Pakistan from the Arabian Sea will almost certainly include oil and gas from Iran, creating a huge new market for the under-capitalized energy industry in the Islamic Republic and undermining the dollar’s monopoly in the global hydrocarbon trade.

Even more important may be the huge amounts of wind, solar, geothermal and hydroelectric power envisioned by the plan. By perfecting these technologies and investing in the scale necessary to make them work they begin to transition away from an unsustainable and risky energy economy responsible for so much conflict to date towards one that makes present U.S. attempts to control fossil fuel production a total waste.

America’s hesitancy to plan for a world after carbon-based energy and after the dollar will be seen as one of history’s most notorious blunders.

A mural in central China. David Axe photo

Socialism with global characteristics

This highlights the key underlying power of the Initiative — an economic vision not in thrall to capitalism as it has been understood to date.

The true nature of China’s system — whether it is actually socialist or building socialism or a capitalist betrayal of the communist dream — has been a topic of debate since in the 1970s. The Belt and Road Initiative is the culmination of the system adopted then — ”socialism with Chinese characteristics” — and crystallizes what is now called “Xi Jinping Thought,” the political philosophy of China’s present leader.

This Thought is now enshrined in the Chinese Constitution alongside Mao Zedong Thought and Deng Xiaoping Theory, the three pillars of what China characterizes as their style of socialism. The Belt and Road Initiative is shaping up to be the ultimate test for the concept.

From Mao the Initiative focuses on the latent power of the Third World — former colonies and subalterns to the “First World” powers of the West — to unite and contest the imperialist powers. Deng’s vision of a market economy controlled “at the commanding heights” by socialist state institutions such as the People’s Bank is being extended on an international basis in the Initiative. And Deng and Xi’s principle of collaborative, non-interfering investment stands in stark, attractive contrast to the United States’ proviso-filled alternative.

Indeed, when America engages with other countries for the sake of trade or investment the needs and interests of its ruling monopoly finance class come first. It takes a hard look at the country for profit-taking opportunities. If it finds that the country has put up some sort of obstacles to exploitation in its own national interest, the United States will use all its imperial powers to cajole or coerce the country into removing them.

It’ll withhold needed resources, drag them before international bodies built by and for U.S. financial power — e.g., the World Bank, the IMF — downgrade their credit or label them “human rights violators” or “sponsors of terrorism.” It’ll meddle in elections or foment unrest or back coups. It’ll impose sanctions, lob missiles, seize international assets, sabotage infrastructure, threaten with nuclear annihilation or even invade and occupy.

For almost every country in the world it works very well, but it creates a great deal of resentment in its wake. China’s Belt and Road Initiative promises “mutual non-interference in each other’s affairs” for each of the countries that joins, a practice China has kept to for years now in Asia, Africa and Latin America.

“We should each respect the other’s right to independently choose social system and development path as well as the right to explore and pursue new ways of economic and social development, and improve its people’s lives,” Xi said in a speech 2013 address to the Indonesian Parliament also included in The Governance of China.

Just as this option is opening up the “paper tiger” of U.S. power — as Mao first called it — is suddenly looking especially flat and flimsy. An inability to complete its military tasks and the political collapse signified by Trump’s rise makes jumping ship for a new project especially attractive. The Belt and Road Initiative is China’s strategy for consolidating this long anticipated advantage and changing the world entirely.

This is probably the reason we have heard so little about this plan in Western media. For nearly three years our press has been obsessed with the daily tabloid carnival that is Trump and his orbit of degenerates. Space that should have been devoted to serious developments has been taken up by talk of porn stars and whether or not Nazis are all bad guys. That these developments all demonstrate the inflexibility and creeping obsolescence of American power is all the more reason to focus on something else.

But make no mistake — there is probably nothing happening in the world today more important than the Belt and Road Initiative. In its very name and basic vision it demonstrates China’s deep sense of history. In our pervasive ignorance of it we demonstrate the United States’ arrival at a condition history has seen the powerful fall into over and over again. Decadence.

The people of Asia, Africa and Europe see an opening for something different, and if they’re lucky they’ll get it without Americans wrecking it out of spite on our way out. The good news — as Mao could tell us — is that the people are the ones that make history, and in this case their path seems to lie along this Belt and Road.

23 Feb 2018  -  War Is Boring (