BRI Forum – Time for Icebreaking

So two years on and BRI has not only expanded enormously, turning expressions of intent, into real projects underway, but the world has turned up its interest. This forum shows the world’s appetite for China’s ideas, knowing that they are based upon the “scientific method”, and likely to happen. The attendees have seen China put up billions of its own money into BRI projects, and focus key construction companies into BRI. It has spread from 100 miles from China across to the Baltic and the Atlantic and across to Central America and the West Indies, to Africa and the Middle East and back to Eastern Europe and Russia and Asia.

 

The plans for BRI go out many years to a form that would surprise many. I have heard some wise men say there is no long term BRI plan.  If this were true it would be the only project of this scale with a beginning and no middle and end in the last 70 years. China has a long term plan that is for sure.

 

It is typical to look at China today. That is what its critics do and what the Western media usually does. So they say that bad debts are a policy designed to gain ownership of projects , or even nations. I think that is nonsense. Why? Because China has openly studied the history of empires – and it is they who use debts – and it is clear it is a direction that ends in decline. Community of Shared Future is the core sharing philosophy of President Xi. CSF – is about sharing, and how cooperating to alleviate poverty, ensure sustainable economic development, face regional and global challenges, is the way forward for the world. As a concept it faces the vague concept of Liberal Democracy  or Enlightenment.

 

BRI is to help under-developed areas of the world to gain economic development. It’s primary way is to build the infrastructure to enable the nations to access resources, develop them, and export and use them. Without major rail and road arteries, water channels in rivers, canals and sea, major energy availability, and power and telecommunications, these nations will be resigned to poverty and aggression. China is helping them facilitate the infrastructure to exit poverty. But the infrastructure is low return and China is taking that hit. It may sell some of the projects through bonds.

 

BRI main focus is helping the developing world develop. It is to open a world the West long left behind.

 

The primary benefit of the infrastructure is the downstream developments, particularly urbanisation, especially in areas of the world that are low in population density and economic activity – i.e. the forgotten areas of the globe. Opening up these areas to economic activity will lessen the likelihood of hiding places for terrorism, and gain the buy in of peoples for peace and stability, and economic growth. See the Chinese plan for 2100 and see a world where the population is spread much more evenly. Where the resources are more accessible and shared. So this means vast new urbanisations and connectivities.

 

Yes there will be failures – how can you build a new land without mistakes. But the people leading the new path are experienced. The China miracle of the last 40 years is informing the plan. And the people who can build the infrastructure and the downstream agriculture and urbanisation – the fields and the factories and services – are the Chinese. And who has the funding to invest in the infrastructure? The Chinese. But China has a target of 10-12 pc of the funds to come from China. so that means they will compromise for more funding support. But that does not mean they will accept the wrist turning of the West. They will compromise but only to a point. They would rather go slower, or more selectively, than compromise on principles to help the poorer nations.

 

Yes there is a self-interest in avoiding hostile borders by building prosperity, but that is better than putting armies and missiles in place. China knows that this world needs a complete overhaul of connectivity and thinking between the major nations of the world. The Marshall plan helped Europe rebuild after the second world war. Even if the UK were repaying debt through to 10 years ago, we never complained about the cost of the help. That much smaller plan, in every way, rebuilt Europe and provided two decades of economic development, until we fatally let the finance sector go crazy. A new approach requires a new relationship between China and the West, and especially between the USA and China.

 

The West is being short-sighted in its approach to BRI. The best pieces will be gone within a short number of years. There will be vast new highways with new gas stations, and electricity charging in the roads and by the roads. The vehicles for sale for use along these highways will be linked to the characteristics of the highways. The same for the trains and the ships . If Western companies stand on the side they will get run down, and then be sold to Eastern buyers at knock down prices.  In the early 90’s the West held back whilst Taiwan, South Korea, Hong Kong and Japan and South Korea moved manufacturing into China. That holding back , encouraged by the USA, hurt the first move advantages that Western companies missed. The West needs to move now. Icebreak now!

 

The reality is that once the offerings look right the USA will engage. It is too smart to be doing more than leveraging for advantage.

 

Don’t wait for the USA and be second or worse. Move now is the advice to the Western nations before the best pieces go.

 

And are we going to fight to keep the Western rules in charge? We have to recognise that new rules are emerging throughout SCO and we will have to compromise, or accept two systems in one world.

 

Who benefits most from commercial development in Pakistan? Why has the Crown Prince of Saudi Arabia been there to invest, and in China and in India. Why might Modi and Abe find all this very interesting?

 

Be careful London. You are losing with Brexit, and will lose to new financial centres around the world that are already being developed. The West cannot wait and let an opportunity for growth be grabbed firmly. Globalisation is a two way street.

 

A new world is coming and its conceptual source has a name on it – Xi Jingping. We would be smart to recognise a partner and not turn our backs.

 

Time for Icebreaking

 

Stephen

 

 

 



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