BUILD

The belt and road initiative

We should build the Belt and Road into a road of opening up.

In Summary

• We should build the Belt and Road into a road of opening up. 

• For a country, opening up is like the struggle of a chrysalis breaking free from its cacoon. 

Financial analyst Aly-Khan Satchu.
Financial analyst Aly-Khan Satchu.

Finance is the lifeblood of modern economy. Only when the blood circulates smoothly can one grow. We should establish a stable and sustainable financial safeguard system that keeps risks under control, create new models of investment and financing, encourage greater cooperation between government and private capital and build a diversified financing system and a multi-tiered capital market.

We should build the Belt and Road into a road of opening up. Opening up brings progress while isolation results in backwardness. For a country, opening up is like the struggle of a chrysalis breaking free from its cacoon. There will be short-term pains, but such pains will create a new life. The Belt and Road Initiative should be an open one that will achieve both economic growth and balanced development.

As the second Belt and Road Forum drew to a close, the leaders of 37 countries joined Chinese President Xi Jinping in signing a joint communique promising to work together as the global project enters its next phase. At the inaugural forum in 2017, just 29 nations made such a pledge, with Portugal, Austria, the United Arab Emirates, Singapore and Thailand among the new signatories this time around.

Now of course, China has had to fine-tune, resize and even the tighten the belt and disavow some folks of the notion that Xi was Santa Claus.

The sheer volume of the supposedly multi-trillion-dollar initiative looked impossible to match. Meanwhile, a corrosive combination of debt, corruption and privileged access for Chinese companies threatened to lure or coerce countries away from the US orbit into China’s.

In many ways, though, this model always contained the seeds of its own failure. The emphasis on speed and scale came at the expense of sustainability, both economically and politically. In most countries, China failed to build a broader consensus for its investments beyond whatever government happened to be in office. In a series of elections from Malaysia to the Maldives, opposition parties have sailed into power by railing against Chinese megaprojects that looked to be lining the pockets of politicians more than boosting the economy. Investments in countries such as Pakistan had already been pared back as rising debt levels limited their ability to take on new projects. But leaders in Beijing can and will adjust. They’ve already shown striking willingness to renegotiate contracts, with Malaysia’s $16 billion East Coast Rail Link — now around 30 per cent cheaper — being only the largest example. 

 

China is on the hook for billions in Venezuela for billions of Dollars if Maduro is regime-changed. China has always affirmed its Policy of non-interference but in many parts of the World we are watching a lot of long standing Regimes spasm and a betting Man would bet on many of them dying. This is clearly particularly the case in many parts of Africa as we watch events unfold in real time in places like Khartoum and Algiers. Clearly the old Chinese bet of buttressing the incumbent via building roads to his home village and Football stadia is no longer de rigeur. A lot of Leaders have yet to make the adjustment. Those who straddle the Belt and Road Platform ''geo-economically'' and ''geo-strategically'' will evidently get a Free Pass and these countries are easily identified and include the Near Abroad [Asean], Pakistan [key to triangulating India and the Gwadar Port is an escape hatch], Greece and Italy [a beachhead into Europe and where your best Mate Vlad is also snapping at European Heels] and then Africa of course where You will note Prime Minister Abiy is getting the kid-glove treatment, the Indian Ocean Islands [because of Economic Exclusion Zones, for example]. 

Xi Jinping has been pivoting his Belt and Road. He has his hand on the Spigot a lot more firmly. Time to pay attention.