China and “One Belt, One Road”

This past Sunday, Chinese President Xi Jingping termed the “One Belt, One Road” project “[the] project of the century.”

As the United States becomes a more isolated country under current president Donald Trump, China is hoping to create a new economic order. To start this change, they have pledged $100 billion for development banks in China. These banks will be providing loans to create bridges, rails, ports, and energy starting in China, that will eventually spread to over 60 countries. The ultimate goal of this project is to address poverty, which has become a widespread issue throughout Asia.

The goals of this project are very similar to those of the World Bank, which is very interesting since China has, historically, not trusted or worked with the World Bank.  China seems to be turning over a new leaf though, claiming that all organizations such as the World Bank and other similar groups, and all nations, are welcome to partake in the meetings, and all involved will benefit. Another benefit that this poses for the Chinese is spreading their model of state-led expansion.

Since the project was introduced four years ago, the Chinese government has only invested a mere $50 billion dollars in comparison to the amount that was spent on their domestic investment program.

Xi has stated, “[that] we have no intention to form a small group that would dismantle stability but we hope to create a big family of harmonious coexistence.” When saying this, Putin was sitting in the front row, but noticeably absent were many leaders of Western nations who were invited. Many Western firms have shown that they would be interested in participating in this initiative, doubts cast on it by the United States have prevented them from investing. The Chinese government has not been transparent in their project plans, which has left many western investors uneasy because they fear an uneven bidding process.

However, unfair bidding may not be the only factor keeping out certain nations. A prime example of this is India who refused to attend the conference due to China’s links with Pakistan, a neighboring country that has posed an imminent threat for much of the recent past. Prime Minister Narenda Modi did not attend because he believes that this program would make more money available to Pakistan due to how intertwined their economy is with that of China, which will cause many issues for India.

Even with these many oppositions to this program, China is still pushing the United States and their allies to back the program in hopes of achieving legitimacy. The Chinese say that they are not giving aid, but are instead hoping to build infrastructures by having countries assume debt from their banks. Even with the interconnectedness, the US is treading carefully because it seems as if China is only opening up certain sections of their market, while many of the more important sectors are only open to domestic investors.

Featured Image via AP