Two years ago I was in Kazakhstan visiting my brother. We were taken for a drive one day out to a national park 3 hours east of Almaty. Part of the trip was on your average Soviet era road system. However, for about 30 km we intersected a brand new concrete four lane highway. It was world class. It was part of China’s One Belt-One Road infrastructure grand plan. Its real, its being built. When we flew out a few days alter I could see this concrete snake taking shape over hundreds of kilometers.
I just read this interesting summary of the plan by John Mauldin. Enjoy.
China’s Belt & Road Initiative looks like a giant infrastructure program, and it is, but that’s not all. It is Xi’s mercantilist version of the US-led postwar Marshall Program. Where we carved out leadership via institutions and trade agreements, while at the same time supplying much-needed money, China seeks to do the same by physically connecting itself with the Eurasian continent. I have said from the beginning that this may be one of Xi’s most profoundly disruptive and transformative policies of his career. There was some skepticism when it was first announced as the scope was so massive, but I think everyone is now a true believer. China is committing to putting its hard dollars into completing this project’s multi-decade vision.
As my friend George Friedman often says, China’s main strategic challenge is that the US controls the seas. Geography means China’s imports and exports must traverse coastal bottlenecks the US could easily close if it wished. That’s intolerable if your goal is to be a superpower, and that’s definitely what Xi wants.
One Belt, One Road is the answer. It will link the Eurasian land mass into a giant trading bloc with Europe at one end and China at the other. The project will open land routes the US cannot interdict, thereby letting China take what it feels is its rightful place of leadership. The scope is breathtaking, but Beijing is determined to make it happen. Again, I would not bet against Xi on this.
Notice all the smaller Asian countries that the One Road goes through. It will give you access to not only East Asia but Europe as well. China is building a “main pipeline” not unlike Eisenhower’s interstate highway system. And that means all those little countries will access that main road. Ultimately, China wants to pay for all the products it buys in Renminbi and have those small countries make it part of their central bank holdings. That is part of the process of becoming a reserve currency, which is something China covets. The same thing is true for the project’s ocean and seaport aspects.
Whatever your feelings about Chinese leadership, you have to admire a country that can undertake such a huge project that will take decades to fulfill. While Xi and his team may be starting it, it is unlikely anyone currently on top will still be on top in 30 years. That is Vision with a capital V.