If President Donald Trump is opening a void by withdrawing American leadership on global trade, President Xi Jinping is determined to fill it — and the world is taking notice of the shift. Nearly 30 heads of state, the chiefs of the International Monetary Fund, World Bank, the UN, and delegates from around the world converged on Beijing yesterday for a conference promoting China’s Belt and Road initiative, its new Silk Road.
The plan is a hugely ambitious one, to build roads, rails, ports, pipelines and other infrastructure joining China to Central Asia, Europe and Africa by land and sea. Spurs from the overland “belt” and the maritime “road” reach into Southeast Asia and towards the Indian Ocean. Some $900bn of investments, financed by a variety of Chinese or China-backed banks and credit funds, are projected.
Visitors to the conference will have both hopes and fears. Rising western powers also deployed finance to develop markets for their products and expand political spheres of influence. Poorer countries were happy to take the money — with mixed results for both sides. There is more going on here, however, than the repetition of a colonial pattern in the 21st century. China presents the Silk Road not primarily as a development project, but as a stimulus for trade in a world struggling with middling economic growth and stalling trade volumes. Lower trade barriers and regulatory harmonisation are, quite rightly, on the agenda alongside infrastructure. Many of the countries the initiative would affect need better infrastructure and deeper international trade relationships. There is the potential for it to do real good.