Tag Archives: Silk Road

Economic globalization is the trend of the times. Though countercurrents are sure to exist in a river, none could stop it from flowing to the sea

World Economic Forum (WEF) started its annual meeting yesterday, and it will continue till Thursday this week. This is the first global in-person leadership event since the start of the Covid-19 pandemic, and this time their theme is; «Working Together, and restoring Trust.»

But the annual meeting has never been confronted with so many unprecedented global issues as it is now in 2022. The WEF`s annual meeting is coming at a crucial time. The most crucial in its 50-year history.

The world is recovering from a global pandemic, struggling with a war in Ukraine, and facing huge challenges from climate change. On top of that, monkeypox is coming, and so are inflation and famine.

One of the topics is globalization, and as we all know, globalization is dead right now. But, I think it`s only set on «pause.»

Chinese President Xi Jinping visited WEF in 2017, and on his first trip he said; «Whether you like it or not, the global economy is a big ocean that you cannot escape from.»

This time, in 2022, Xi said; «Economic globalization is the trend of the times. Though countercurrents are sure to exist in a river, none could stop it from flowing to the sea.»

Xi is also the founder of the Belt and Road Initiative (BRI), which is the 21st Century Maritime Silk Road. The Silk Road has always been important to the trade in the world. It was an ancient trade route that linked the Western world with the Middle East and Asia.

It was a major conduit for trade between the Roman Empire and China and later between medieval European kingdoms and China.

Established when the Han Dynasty in China officially opened trade with the West in 130 B.C., the Sild Road routes remained in use until 1453 A.D., when the Ottoman Empire boycotted trade with China and closed them.

Although it`s been nearly 600 years since the Silk Road has been used for international trade, the routes had a lasting impact on commerce, culture, and history that resonates even today.

I find it very interesting to see that Venetian explorer Marco Polo famously used the Silk Road to travel from Italy to China, which was then under the control of the Mongolian Empire, where they arrived in 1275.

Notably, they did not travel by boat, but rather by camel following overland routes. They arrived at Xanadu, the lavish summer palace of the Mongolian emperor Kublai Khan. (You can see the film about that relationship on Netflix. I think you will like it a lot).

In all, the explorer spent 24 years in Asia, working in Kublai Khan`s court, perhaps as a tax collector.

Marco Polo returned to Venice, again via the Silk Road routes, in 1295, just as the Mongolian Empire was in decline. His journeys across the Silk Road became the basis for his book, «The Travels of Marco Polo,” which gave Europeans a better understanding of Asian commerce and culture.

Khan`s Empire is gone. So are the Roman and the Ottoman Empire. Some historians say the start of the British Empire started around the 1490s, while others say the early 1600`s, but it all ended in the years after World War 2, with most of Britain`s colonies ruling themselves independently by the late 1960s. But what about the American Empire?

A New World Order started after World War 2, and the U.S became the leading Empire in the World. Now, we are all facing a revolution. A New World Order. Again. Globalization is dead, but it will come back, because as Xi said: «Economic globalization is the trend of the times. Though countercurrents are sure to exist in a river, none could stop it from flowing to the sea.»

On Friday, the S&P 500 briefly fell into a bear market, and the inflation in the UK hit a 40-year high in April. We are into a vicious cycle, and the WEF`s Chief Economists Outlook has warned of lower economic activity, higher inflation, lower real wages, and greater food insecurity globally in 2022.

They warn that this could have devastating human consequences as the global economy fragments.

As Saadia Zahidi, Head of the Centre for New Economy and Society and a Managing Director at the World Economic Forum explained:

«We are at the cusp of a vicious cycle that could impact societies for years. The pandemic and war have fragmented the global economy and created far-reaching consequences that risk wiping out the gains of the last thirty years.

Leaders face difficult choices and trade-offs domestically when it comes to debt, inflation, and investment. Yet business and government leaders must also recognize the absolute necessity of global cooperation to prevent economic misery for millions around the world.

The WEF`s Annual Meeting this week will provide a starting point for such collaboration.»

Four Futures for economic Globalization: Scenarios and their implications:

Globalization has created significant opportunities and lifted millions out of poverty, while also driving inequality and economic disruption. With many countries turning inward in search of new strategies to increase security and resilience, the convergence of physical and virtual forms of economic globalization is no longer a given.

As the traditional drivers of globalization have reached a critical juncture, we are entering a new phase of increased economic volatility, polarization, and structural reset of the global system. Ever-accelerating digitalization, however, means that the rivalry between global centers is rapidly expanding from the physical to virtual space, where competition over the control of technology and information networks is growing. How different economic centers of gravity will choose between physical and virtual integration, fragmentation or isolation will shape the fate of economic globalization in the years to come.

This White Paper outlines how the nature of globalization may shift as economic powers choose between fragmentation or isolation in both physical and virtual integration. The report calls for “no-regret actions” by policymakers: global cooperation on the climate crisis; investment in human capital to prepare populations for a range of economic futures, and returning to developing resilience through greater economic integration, knowledge-sharing, and diversification.

Globalization is at crossroads. It`s changing, but it isn`t ending.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shinybull.com. The author has made every effort to ensure the accuracy of the information provided; however, neither Shinybull.com nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities, or other financial instruments. Shinybull.com and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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The New Silk Road is the largest economic development project in history

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.

 

Silk route

(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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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. UA-63539824-1.

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