The largest economic development project in history could have dramatic ripple effects throughout the world economy. China is building the world`s greatest economic development and construction project ever undertaken:
The New Silk Road.
(Picture: Extend of Silk Road. Red is land route and blue is sea route)
The Silk Road is a network of trade and cultural transmission routes that were central to cultural interaction through regions of the Asian continent connecting the West and East by merchants, pilgrims, monks, soldiers, nomads, and urban dwellers from China and India to the Mediterranean Sea during various periods of time.
Extending 4,000 miles (6437 kilometers), the Silk Road derives its name from the lucrative trade in Chinese silk carried out along its length, beginning during the Han dynasty (206 BC – 220 AD). The Central Asian sections of the trade routes were expanded around 114 BC by the Han dynasty, largely through the missions and explorations of Chinese imperial envoy, Zhang Qian.
The Chinese took great interest in the safety of their trade products and extended the Great Wall of China to ensure the protection of the trade route.
Trade on the Silk Road was a significant factor in the development of the civilizations of China, the indian subcontinent, Persia, Europe, the Horn of Africa and Arabia, opening long-distance, political and economic relations between the civilizations.
The main traders during antiquity were the Chinese, Persians, Somalis, Greeks, Syrians, Romans, Armenians, Indians, and Bactrians, and from the 5th to the 8th century the Sogdians. Following the emergence of Islam, Arab traders became prominent.
The Silk Road derives its name from the lucrative Chinese silk trade. The German terms Seidenstraße were coined by Ferdinand von Richthofen, who made seven expeditions to China from 1868 to 1872.
The new Silk Road will be massive, and the ambitious vision is to resurrect the ancient Silk Road as a modern transit, trade, and economic corridor that runs from Shanghai to Berlin. The «Road» will traverse China, Mongolia, Russia, Belarus, Poland, and Germany, extending more than 8,000 miles, creating an economic zone that extends over one-third the circumference of the earth.
The plan envisions building high-speed railroads, roads and highways, energy transmission and distributions networks, and fiber optic networks. Many cities and ports along the route will be targeted for economic development.
An equally essential part of the plan is a sea-based «Maritime Silk Road» (MSR) component, as ambitious as its land-based project, linking China with the Persian Gulf and the Mediterranean Sea through Central Asia and the Indian Ocean.
Three continents will be connected when the ancient Silk Road is completed; Asia, Europe and Africa. The Chain of infrastructure projects will create the world`s largest economic corridor, covering a population of 4,4 billion and an economic output of $21 trillion.
The idea for reviving the New Silk Road was first announced in 2013 by the Chinese President, Xi Jinping. As part of the plan, in 2014, the Chinese leader also announced the launch of an Asian International Bank (AIIB), providing seed funding for the project, with an initial Chinese contribution of $47 billion.
China has invited the international community of nations to take a major role as bank charter members and partners in the project. Members will be expected to contribute, with additional funding by international funds, including the World bank, investments from private and public companies, and local governments.
58 nations have signed on to become charter bank members, including most of Western Europe, along with many Silk Road and Asian countries. After failed attempts by the U.S to persuade allies against joining the bank, the U.S reversed course, and now says that it has always supported the project, a disingenuous position considering the fact that U.S opposition was hardly a secret.
The Wall Street Journal reported in November 2014 that the U.S has also lobbied hard against Chinese plans for a new infrastructure development bank.
Russia is fully integrated into the project.
The Huffington Post`s Alastair Crooke has this to say on the matter: «For very different motives, the key pillars of the region (Iran, Turkey, Egypt and Pakistan) are re-orienting eastwards. It is not fully appreciated in the West how important China`s «Belt and Road» initiaive is to this move (and Russia, of course is fully integrated into the project).
Regional states can see that China is very serious indeed about creating huge infrastructure projects from Asia to Europe. They can also see what occurred with the Asia Infrastructure Investment Bank (AIIB), as the world piled in (to America`s very evident dismay). These states intend to be a part of it.»
Buttressing this effort, China plans to injecting at least $62 billion into banks to support the New Silk Road. The China Development Bank (CDB) will receive $32 billion, the Export Import Bank of China (EXIM) will take on $30 billion, and the Chinese government will also pump additional capital into the Agricultural Development Bank of China (ADBC).
Will the U.S join the effort? If the new Trans-Pacific Partnership (without Russia and China, two Pacific powers) is any indication, U.S participation seems unlikely and opposition all but certain.
The project is expected to take decades, with costs running into the hundreds of billions of dollars, if not trillions. What that will mean for the world economy and trade is almost inconceivable. This project will face many geopolitical abstractions. It has already started.
The U.S President Barack Obama said; «If we don`t write the rules, China will write the rules out in that region,» he said in defence of the Trans-Pacific Partnership (TPP).
Beyond the riches of silks, spices, and jewellery, it could be argued that the most important thing that Marco Polo brought back from China was a famous nautical and world map that was the basis for one of the most famous maps published in Europe, one that helped spark the Age of Discovery.
Christopher Columbus was guided by that map and was known to have a well-annotated copy of Marco Polo`s travel tales with him on his voyage of discovery of a new route to India. The decisions about the new Silk Road are massive.
The geopolitical conflicts over the project could lead to a new cold war.
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