China's Belt Ad Road Initiative: A Tectonic Shift In Geopolitical Balance Of Power

China and Russia: Whoopin' Uncle Sam at his own game, by Mike Whitney

China’s Belt and Road Initiative: A Tectonic Shift in the Geopolitical Balance of Power

Over the weekend, more than 5,000 delegates from across the world met in Beijing for The Second Belt and Road Forum For International Cooperation. The conference provided an opportunity for public and private investors to learn more about Xi Jinping’s “signature infrastructure project” that is reshaping trade relations across Europe, Asia, Latin America and Africa. According to journalist Pepe Escobar, “The BRI is now supported by no less than 126 states and territories, plus a host of international organizations” and will involve “six major connectivity corridors spanning Eurasia.” 

The massive development project is “one of the largest infrastructure and investment projects in history, ….including 65% of the world’s population and 40% of the global gross domestic product as of 2017.” (Wikipedia) The improvements to road, rail and sea routes will vastly increase connectivity, lower shipping costs, boost productivity, and enhance widespread prosperity. The BRI is China’s attempt to replace the crumbling post-WW2 “liberal” order with a system that respects the rights of sovereign nations, rejects unilateralism, and relies on market-based principles to effect a more equitable distribution of wealth. The Belt and Road Initiative is China’s blueprint for a New World Order. It is the face of 21st century capitalism.

The prestigious event in Beijing was barely covered by the western media which sees the project as a looming threat to US plans to pivot to Asia and become the dominant player in the most prosperous and populous region in the world. Growing international support for the Chinese roadmap suggests that Washington’s hegemonic ambitions are likely to be short-circuited by an aggressive development agenda that eclipses anything the US is currently doing or plans to do in the foreseeable future.

The Chinese plan will funnel trillions of dollars into state of the art transportation projects that draw the continents closer together in a webbing of high-speed rail and energy pipelines (Russia). Far-flung locations in Central Asia will be modernized while standards of living will steadily rise. By creating an integrated economic space, in which low tariffs and the free flow of capital help to promote investment, the BRI initiative will produce the world’s biggest free trade zone, a common market in which business is transacted in Chinese or EU currency. 

There will be no need to trade in USD’s despite the dollar’s historic role as the world’s reserve currency. The shift in currencies will inevitably increase the flow of dollars back to the United States increasing the already-ginormous $22 trillion dollar National Debt while precipitating an excruciating period of adjustment.