Rebuilding Europe After WWII Cost Nothing Compared to This

China's new 'Silk Road' is unprecedented in its scale
By Newser Editors and Wire Services
Posted May 15, 2017 2:27 PM CDT

(Newser) – China's president calls it the "project of the century:" a sweeping new version of the ancient Silk Road designed, according to China, to promote global development. Leaders from 30 nations issued a joint endorsement Monday as part of a 2-day meeting that counted Vladimir Putin and Recep Tayyip Erdogan among attendees but saw no major Western leaders present, the AP reports. (The US delegation was led by the National Security Council's Asia director.) Reuters reports Xi Jinping on Sunday pledged another $124 billion for the "Belt and Road" initiative, which was first announced in 2013. China's line is that it's a purely commercial effort. Some foreign diplomats and political analysts aren't so sure. What you need to know:

  • What it is: As Sky News puts it, the initiative's goal is to "recreate the trading routes of old overland and sea through central Asia, to Europe and beyond." The recreating part means investing massive sums in everything from high-speed railways and ports to airports and telecom projects in more than 60 countries, in what would be China's most ambitious foreign project ever.
  • The numbers: "The scope is always changing," reports the Washington Post, so the estimates run the gamut from $900 billion and up—way up. NBC News puts the estimated price tag at $1.4 trillion, and notes that's 11 times the cost (converted into today's dollars) spent rebuilding post-WWII under the Marshall Plan.
  • Specific plans: One vision is to lay so much high-speed rail track that you could go from Beijing to London in two days, notes NBC. It also flags a port effort in Pakistan that would facilitate new trade routes to China's western Xinjiang region, and a China-Myanmar pipeline that will give Beijing a new way to access Middle East crude.
  • From Xi's mouth: He hopes the plan "will unleash new forces for global economic growth" free of a political agenda. That claim has raised eyebrows among Western diplomats who wonder if China is making a move to boost its exports at the expense of US influence in Asia.

  • The skepticism: Al Jazeera's Adrian Brown's take: It'll cost a "phenomenal sum of money, so many people are asking where is this money going to come from and [saying] that China is acting out of self-interest [as it] needs to get its own economy moving again and helping the economy of countries that depend on China."
  • Africa-specific skepticism: A post at Quartz likens the new Silk Road to colonial Britain's trade routes, and says a major goal is to open up new markets for China. Except "African countries are already flooded with Chinese products." There's already an imbalance, with not even 20% of sub-Saharan African countries having a trade surplus with China based on 2015 data.
  • Another concern: What Reuters terms the "lending program of unprecedented breadth" that's facilitating all this construction. It reports that two Chinese policy banks have already doled out hundreds of billions in loans to, in some cases, "heavily indebted, poor countries" at generous terms. The banks say they've made moves to limit risk, but Reuters warns of the potential for a "hangover."
  • The foils: As far as the world stage goes, there's a bit of a clash between President Trump's "America First" stance and China's desire to come off as a global player. The Post observes that "at the World Economic Forum in Davos, Switzerland, this year, Xi, the authoritarian leader of a one-party state, positioned himself as a champion of free trade."
  • Semantics: Sky notes the initiative is "slightly awkwardly titled," and the Post notes that, rather inscrutably, "road" refers to a sea route and "belt" references land.
(Read more trade stories.)

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