Conference Presentation, Panel
Belt and Road Initiative: China's 21st Century Plan for Eurasia
Milken InstituteCurtis S. Chin, Mishaal Al Gergawi, Karim Al-Wadi, James McCormack, V. Shankar, Tariq Shaikh, JC Bork
- The One Belt, One Road initiative is expected to reinvent historical land and maritime pathways, reshaping geopolitics from Pakistan through Iran, Turkey, and the Gulf, involving nearly 70 nations, 4.4 billion people, and up to 40% of global GDP.
- China predicts doubling the minimum income since 2010 by 2021, eliminating poverty for 40 million people within three years, and achieving a modern, European-standard lifestyle by 2035, ahead of the original 2050 target.
- Economic projections indicate China will become the world's largest economy within 10 years, adding an economic equivalent to one UK every three years, while possessing $4 trillion in bank accounts and seeing 140 million tourists annually.
- By 2050, China anticipates attaining superpower status across all aspects, a milestone originally forecast for the end of the century, supported by advanced infrastructure and high optimism rates of 87%.
- Financial backing involves $100 billion from the Asian Infrastructure Investment Bank (AIIB), $40 billion from the Silk Road Fund, and $10 billion from the Bricks Bank, totaling $240 billion in combined capital to address $95 billion annual infrastructure needs in Africa, of which $43 billion is currently spent.
- The initiative operates as a connectivity strategy with 89% of Eurasian projects contracting Chinese firms, though 50 state-owned enterprises have invested in nearly 1,700 projects and foreign companies are welcomed into an open architecture to avoid "white elephant" financings.
- Geopolitical and security strategies include incubating the Belt and Road with Euro-Asia corridors (including Kazakhstan, Mongolia, and Saudi Arabia), expanding military presence with Djibouti as a starting point, and utilizing foreign military protection for workers, such as the 12,000 Pakistani troops promised.
- Trade and energy logistics focus on securing oil and gas imports, with 80% of oil and 30% of gas needs transiting the Malacca Strait, while China-Africa trade expanded from $8 billion in 2000 to $200 billion in 2012.
- Strategic comparisons suggest the initiative is a "multiple Marshall Plan," a monumental effort contrasting with Western anti-globalization trends, with no political requirements or dogmatism attached to Chinese investment.
- Potential risks include $20 trillion in corporate debt exceeding combined U.S. and Japanese levels, growing indebtedness of recipient nations, and a potential trade deficit in 30 to 40 years if luxury consumption mirrors Western levels.
- Future development faces external threats where exogenous events could slow progress, alongside competition from other initiatives like the $200 billion India-Japan "Africa-Asia Growth Corridor."
- Project success assessment depends on the quality of recipient institutions and the management of crony capitalism, with local labor increasingly utilized over expensive Chinese labor in regions like Africa.
- The initiative reflects a 50-year vision with detailed AI sector plans, enabled by centralized state decision-making power that can commit trillion-dollar investments impossible for a U.S. President to authorize.