 |
Mises Institute, Mises Wire, April, 20, 2018,
4 pgs.
|
|
| |
Reviewer Comment:
The two questions that the Chinese massive building project described here
should be answered are: for what geopolitical purpose are the Chinese
endeavoring so much effort and resources, especially since it is outside China;
and how are they financing it? Another issue is what will be the impact of the
result on the individual countries in which it is built and on the world-wide
geopolitical scene.
The author is a professional writer on many subjects especially fine art, but
also banking and current economic issues.
|
|
| |
In this short essay the author calls
attention to what she considers insufficient discussion in U.S. media of the
$900 billion Chinese "New Silk Road' and "Belt Road Initiative"
begun in 2013. This huge geopolitical program does merit much more and
continuing attention that it receives in the major media. The project comprises
many and various separate construction developments, but taken together, which
they should be, it is, as she writes, "one of the largest infrastructure
and investment maga-projects in history, covering more than 68 countries,
equivalent to 65% of the World's population and 40% of the global GDP as of
2017"
|
|
|
The author draws attention to the
Sino-Russian aspect of this transportation project. One of the main rail
connections between China and Western Europe will pass through Central Asia and
Russia. The Russians are interested in participating in creation of a
Sino-Russian economic bloc to replace the Russian loss of Ukraine in their
economic sphere. In the modern world-wide economic environment a large scale
market is essential.
Interesting factoid is that back in 1910 Sir Aurel Stein shipped the crates of
artifacts he had collected throughout Turkistan from Kashgar to London and then
India via Russian railroads from Samarkand. This route was then months shorter
than across the Himalaya Mts to India. That route also has been improved by the
Chinese building of the Karakorum highway.
Transportation over thousands of miles or railroad seems more expensive than by
container ships. But perhaps not so much over electrified high speed railroads
that China already is building in many places. However, it is the geopolitical
protection that these routes create versus via sea routes vulnerable to
blockade.
|
|
| |
She also focuses on the important energy
aspects. The Chinese are determined to reduce their vulnerability to receipt of
vital crude oil and NG by sea from the Middle East. They are building joint
pipelines to receive oil from Russia and from Central Asia. And energy is the
most important factor for Russia as well. Russia needs to export it for foreign
exchange income as much as China needs to import it and prefers to pay for it
by exchanging gold ande yuan.
|
|
| |
There is also the monetary - financial
aspect. Both Russia and China are determined to free themselves (and the world)
from dependence of the U.S. Dollar for international currency trading,
especially in oil. China has already established a oil exchange market in
Shanghai denominated in yuan. It has been increasing its gold reserves in
preparation for making the yuan a world reserve currency and has entered into
direct exchange of the yuan with other countries.
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
