The Belt and Road Initiative: Charting a New Trajectory for Mankind

William Jones

The Belt and Road Initiative: Charting a New Trajectory for Mankind

William Jones

When President Xi Jinping announced the Silk Road Economic Belt project in September 2013, it took the world by surprise. But it didn’t come totally out of the blue. Anyone closely following events in the region would have known that there were a number of strands that had been coming together since the collapse of the Soviet Union which converged on the notion so eloquently enunciated by President Xi in his speech at Nazarbayev University in September 2013 in which he presented his idea of the Silk Road Economic Belt, and then one month later, the 21st Century Maritime Silk Road.

After the breakup of the Soviet Union there was a great deal of discussion - and urgency - about the need to develop independent transportation grids going from these newly independent, but landlocked, Central Asian countries to Asia and to Europe. Chinese scholars, who were tasked with the issues of economic and social development in China, were already considering the possibility of extending transportation infrastructure to the central and western regions of China, which had been left out of the rapid development occurring in the coastal regions. This grid could then branch out into Central and South Asia. Among the ideas raised was the proposal for a Euro-Asian Continental Bridge. And in Europe at the beginning of the 1990s, the Schiller Institute was already publishing material on the possibility of a “New SilkRoad” traversing Russia and Central Asia, to China and the Pacific Ocean and providing a corridor of trade and development for the newly independent states and the basis for greater economic growth for the world. On September 12, 1990, the Northern Xinjiang Railway connected with the Tuxi Railway of the former USSR, marking the completion of the 11,000 kilometer-long New Euro-Asian Continental Bridge. Later, on September 8, 1995, railway experts from the seven countries concerned signed an agreement on opening the Alataw Pass-Druzhba international bridge.

All of these various strands came together in May 1996 in a major symposium held in Beijing under the auspices of the Chinese Ministry of Science and Technology, entitled “International Symposium on Economic Development of the Regions along the Euro-Asia Continental Bridge.”Speaking at the conference were leading Chinese scholars like Professor Ma Hong, who had written a major book on the subject of Eurasian transportation, Academician Mikhail Titarenko from the Russian Academy of Sciences, Russia’s now-deceased premier expert on Chinese affairs and culture, and Helga Zepp-LaRouche, President of the Schiller Institute. A major address was given by Song Jian, Chinese Minister of Science and Technology.1Jonathan Tennenbaum, et al., The Eurasian Land-bridge. The “New Silk Road” – locomotive or worldwide economic development, EIR Special Report, January 1997.

It was clear even at this early stage that the idea was already gestating in Chinese scientific and political layers. But it was no doubt the unique circumstances of China’s internal and external developments during the first decade of this century that convinced President Xi to place this project at the top of China’s foreign policy agenda.

More importantly, China has reinvigorated with the Belt and Road the Silk Road spirit, the spirit which imbued the ancient Silk Road with its profound exchange of both goods and ideas. This was a period of time in which there was a tremendous exchange of goods - silk, spices, jade and gold. But there was also an important transmission of ideas and cultures, of styles, fashion and music, indeed one of the first attempts to create an international dialogue of cultures, a transmission of different philosophies and outlooks, each enriching the others in a glorious intellectual interplay. Along the Silk Road appeared important centers of intellectual activity in places like Samarkand, Bukhara and Alexandria. The transmission of culture along the Silk Road provided the basis for the advancement of culture in Egypt and Greece, leading to the development of European culture itself, coming out of Greece and Sicily (Magna Graecia).

Another aspect of the Belt and Road agenda has to do with China’s growing role on the global stage. Given the tremendous turbulence characterizing the world situation in the last decade - the economic crisis in Europe and in the United States, the continual deterioration of the conditions in the developing countries, and the spread of international terrorism, enflamed by the numerous military interventions by the US andNATO into various Middle Eastern and North African countries - the Belt and Road represented a bright light in an otherwise uncertain world. Already it has created a sense of optimism, not only in Asia but in Africa and Latin America. The unprecedented success of the AIIB which has mobilized the majority of the world’s population behind it has engendered a feeling that the world can now go forward, after many years of economic stagnation. The adherence of the BRICS group to the Belt and Road perspective has largely brought the great majority of the world’s population behind the initiative.

A Dirigiste Model

The enthusiasm for the Belt and Road has been enhanced by the fact that it was China which put forward the proposal. China remains the only developing country which has succeeded, in the post-Cold War period, to move in the direction of becoming a moderately prosperous nation. And such a development by the largest country in the world, population-wise, demonstrated to other developing nations that they too could move from poverty to prosperity. While countries like Japan and South Korea had become “Asian tigers” in the period of the Cold War, they did so with the assistance of the United States and in a climate in which they were seen as bulwarks against communism. Ironically, they also, like China, used a dirigiste model for their development. Similar to the United States after the American Revolution, under the economic direction of Treasury Secretary Alexander Hamilton, they understood that only with the government providing overall directionality for the economy could their industries develop.2Chang Ha-Joon, Kicking Away the Ladder, London: Anthem Press, 2003.Through a wise tax and credit policy, the government could assure that the countries’ immersion in the “world market” did not lead to the country being reduced for all eternity to the level of a low-wage producer of goods for the more prosperous nations.

In China’s case, this involved a conscious attempt to “leap-frog” fromthe low-wage production that characterized Chinese production in the early days of reform and opening up to higher-value production. The conscientious striving for the “cutting-edge” technologies, including the ambitious Chinese space program, became a “science driver” for the Chinese economy.

Countries in Africa and Latin America gained valuable lessons from the Chinese experience and were therefore very open to working with China in advancing their own prospects. Infrastructure investment plus an emphasis on developing science and technology was proving to be the road to success. China has made it a priority for utilizing that model in order to help benefit its neighbors - both near and far. Investment in infrastructure, in particular transportation infrastructure, creates the network for a functioning industrial structure and a flourishing trading pattern, increasing overall productivity by providing access to wider markets for both agriculture and industry, and quicker turnover and less travel time for people and goods in the urban centers.

China is keen on promoting science and technology in the Belt and Road countries. By June 2016, China had signed memoranda of understanding for scientific and technological cooperation in the areas of space, energy and ecology with 56 countries along the Belt and Road. In addition China has also established 38 science and technology centers in the form of industrial parks, joint laboratories, international technology transfer centers, and industrial cooperation and incubation centers. China also intends within the next three to five years to bring 150,000 science and technology personnel from Belt and Road countries to China for exchanges or training and expects to receive more than 5,000 young scientists during that same period.

This is also the case with the Chinese manned space program. China has opened up the program to cooperation with all countries. Similar to what the US had done during the latter days of the Cold War, China is prepared to help other countries advance in the development of space technology. USSoviet cooperation in space during the Cold War helped to reduce tensionsand the lack of trust that existed between the two nations. Today, however, the US Congress has placed restrictions on cooperation between NASA and CNSA in the vital area of manned space exploration.3“NASA’s International Partnerships: Capabilities, Benefits and Challenges,” May 5, 2016, https://oig. nasa.gov/audits/reports/FY16/IG-16-020.pdf.Therefore, the Chinese program is the only space program which has a welcoming mat for ALL nations, including the United States.

关于50 G PON调制方案，目前业界仍在研究中，具体包括不归零码（NRZ）、NRZ+均衡和四级电平脉冲幅度调制（PAM4）等。为了更好实现50 Gbit/s速率，NRZ需要50 Gbit/s的速率器件，当前产业链不够成熟。NRZ+均衡和PAM4基于25 Gbit/s速率器件，器件相对成熟，是50 G PON调制技术的研究热点。

Overcoming a Cold War Mindset

The Belt and Road Initiative represents much more than simply a needed development program. It is a key element in a new model of governance in the world. The era in which politics was determined by a single power is really at an end. While the United States remains militarily the most powerful country in the world, new nations have come forward and taken their place in the world arena, China being the most striking example. But Russia has also fought its way up from the destruction incurred by the post-Soviet malaise and dismantlement of key scientific and industrial structures. And in spite of its continued difficulties, India has become a key player in world politics.

Since the Cold War is over (except in the minds of some policythinkers in Washington who still view the world through the Cold War prism), there is no need for a leader of the “free world.” Creating a “straw man” in the form of a “resurgent Russia” or a “rising China” will ultimately not succeed in mobilizing people to what is a non-existent threat. The actual threat that does exist in the form of terrorism is too close to home to people in Europe and elsewhere for them to worry about a fictitious bogeyman Russia that has proven, in its recent intervention in Syria, to be one of the most effective defenses against terrorism as witnessed by the thousands of refugees who have been freed from the iron grip of ISIS in Aleppo, and China that has now become a leading proponent of global economic development and poverty elimination.

After World War II, Franklin Roosevelt was determined that the world would no longer be ruled by conflict among nations. The creation of the United Nations was his attempt to bring ALL nations together in one body to work out their differences and try to find common ground in order to prevent disputes from leading to war. The UN remains to this day a key tool for maintaining world peace and preventing the outbreak of another war between major powers. It has also been responsible for putting a damper on lesser conflicts through its extensive peacekeeping operations, to which China has become the greatest contributor.

Institutions that have been in operation a long time often have difficulty in changing the way they work and their mode of thinking. In that sense, China had to exert great efforts in gaining recognition for the new status which it had attained in the global arena through its economic development. While it joined the WTO in 2001, it did so only after lengthy negotiations and had to make major changes in its economic policy because of pressure from the US and Japan in particular. It also achieved Permanent Normal Trade Relations status with the United States at about the same time, but then again after an uphill battle to overcome the resistance by many Republicans in the US Congress to award China that status. And even then, Congress created the US-China Congressional-Executive Commission on China (CECC) as a “watchdog”to monitor Chinese adherence to trade agreements as well as sundry other issues, like human rights, religious freedom, etc., as if China were some recalcitrant child that needed watching. To this day, the CECC remains an element of anti-China agitation within the US Congress. And achieving its legitimate voting rights in the IMF which corresponded with its growing role in the world economy has also been a fight, with foot-dragging by the US Senate which was unwilling to let China begin to assume its legitimate role.

Because of this innate bureaucratic conservatism in the international institutions and the fact that all too many people in the Western political establishments, particularly in the US, were still stuck in the Cold War paradigm, China’s initiation of the Belt and Road struck at the roots of the problem by charting an independent course for world development and creating the institutions to implement that course.

Toward a New, Just World Economic Order

While China had the financial capability of initiating the Belt and Road with its own financial institutions, the China Development Bank, the Export-Import Bank, etc., China’s initiative in establishing the Asian Infrastructure Investment Bank (AIIB) in October 2014 represented a new directionality for the world economy as well as a major boost to developing sector countries’ role in the world economy.

By the beginning of this century, it was clear that the world financial structure and the international financial institutions (IFIs) at its center were in a state of total breakdown. Global debt had soared, taking it far beyond any possibility for the world economy to pay it off. The iron-clad commitment of the IFIs to hold all debt as sacred has led to the imposition of massive austerity in the debtor countries, including the United States, where most of the 50 states are in a state of bankruptcy. While institutions like the World Bank and the Asian Development Bank were originally tasked with investing in infrastructure, particularly in the developing sector, much of their funding has been side-tracked to other concerns, sometimes euphemistically called “poverty alleviation,” leaving a several trillion-dollar infrastructure deficit in Asia alone. But the creation of the AIIB was more than “complementary” to the lending of the other institutions. Its laser-like focus on infrastructure investment once again underlined the crucial role of infrastructure investment in alleviating poverty. While the $100 billion of the AIIB (originally it began with a commitment of $50 billion) was not a great amount compared to the need, the example that it set put the worldon a different trajectory. Consequently, we soon saw a renewed interest in infrastructure investment by the World Bank and the ADB.

But here again there were major attempts to prevent countries from joining the AIIB. The Obama administration pressured countries, and individual firms, not to support the new Chinese-initiated bank, stating that it was “worried about a trend of constant accommodation” of China. But this pressure had little effect. When Great Britain, with whom the United States is mooted to have a “special relationship,” decided to join the AIIB in 2015, it was clear that this pressure was totally ineffective. It was a clear signal that there was a keen awareness of the growing need for such an institution and a clear support for the policy that China was pursuing in that respect. It was also a recognition that “business as usual,” within the confines of the traditional New York-London financial structures, was no longer an option.

In fact, there is a growing recognition throughout the world that this post-Bretton Woods structure is effectively at an end. The tremendous expansion of world debt, both corporate and private, including the debt incurred in the rarefied world of derivatives and over-the-counter trading, is calculated to be around two quadrillion dollars, that is, $2,000 trillion. World GDP, on the other hand, is valued at around $70 trillion. Obviously, world production can never eradicate such a tremendous amount of debt. Only a thorough revamping of the international financial system, including massive write-offs of much of the mainly fictitious debt, would take us to a point at which the world economy could begin to generate the credit needed for rebuilding world infrastructure.

In addition, the needs of the developing sector have been totally disregarded in this post-Bretton Woods era. Without the recent intervention by China, countries in Africa would have plunged into chaos. A similar situation exists in Latin America, where, in the 1960s and 1970s, countries like Argentina and Brazil looked as if they were preparing to take off on the road to development. When Nixon took the dollar off the gold standard, effectively ending the Bretton Woods arrangement, creating major inflation and disrupting the “terms of trade” with these countries, many of themwent from a condition of relative affluence into a condition of absolute penury. The call for a New World Economic Order had been raised by the developing countries at the United Nations already in 1976,4The Time Has Come For a Debt Moratorium,” Executive Intelligence Review, Vol.3. No.40, October 4, 1976.but the United States and Britain, in particular, were not prepared to listen.

Attempts were made in the 1970s to create among Third World countries a “debtors’ cartel”5“Larouche Debtor’s Cartel at Center of Third World Agenda,” Executive Intelligence Review, Vol.10, No.3. January 25, 1983.which would be capable of negotiating with the major banks and the creditor nations from a position of relative strength, but the lack of solidarity by some key developing nations prevented this from becoming a viable option. In Europe in the late 1970s, there were also efforts by German Chancellor Helmut Schmidt and French President Giscard d’Estaing to bring together an East-West, North-South arrangement which could create the basis for a development policy in Africa and Asia. The combination of the free traders in the Reagan administration and Great Britain’s Margaret Thatcher prevented that from happening. Then a series of terrorist attacks and assassinations targeted the key players in this policy, like Dresdner Bank’s Chief Jurgen Ponto and German industrialist Hans-Martin Schleyer.

With the Asia financial crisis in 1997, the idea of creating an Asian Monetary Fund, independent from the IMF and its notorious“conditionalities,” was proposed by Japan’s Eisuke Sakakibara.6Shintaro Hamanaka, “Reconsidering Asian Financial Regionalism in the 1990s,” ADB Working Paper Series on Regional Economic Integration, March 2009.Such a fund would be constituted as a $100 billion fund simply to support Asian currencies which had been under massive attack by foreign speculators like George Soros’ Quantum Fund. Japan, as the major creditor to Thailand andto the other Southeast Asian countries hit by the speculation, had a clear interest in the matter. Opposition to this proposal by the IMF prevented it from ever getting off the ground, although the Chiang Mai Initiative, a network of bilateral swap arrangements set up by the ASEAN+3, which resulted from that discussion, remains intact to this day.

But the crisis made it clear to everyone that another major financial blowout was highly probable and that the Group of Seven (G7), which had previously served as the political “steering committee” of the world economy, was no longer sufficient to accomplish that task. Developing sector countries, and particularly China, had to be brought into the mix if any solutions were to be forthcoming. This led to the convocation of a broader group, the G22 (later the G20), in order to deal with the ongoing crisis.7William Jones, “Group of 22 Debates ‘New Financial Architecture’,” Executive Intelligence Review, Vol.25. No.17, April 24, 1998.The G20 would effectively take over the role played earlier by the G7 as the main body responsible for oversight of the world economy. The G20 has also begun to play a major role in coordinating the response of nations to major crises, and, as we have seen in the recent G20 Hangzhou Summit, has begun, under Chinese encouragement, to formulate a policy of world development, with poverty elimination at its core.

Righteousness over Advantage

Many in the West portray the rise of China on the world stage as an attempt to “usurp” the role of the United States. Such comments ignore the reality. Firstly, the role of the United States as the “world leader,” while always overexaggerated, has lost much of its relevance. Beginning with the first Iraq War which plunged the Middle East into turmoil and chaos, the United States began to lose its credibility as an effective leader, with many countries feeling that US actions since then have caused more harm than good.

But the world itself has changed in the last two decades. The rise of China and the increasing demands from the developing sector to be allowedto fully develop their economies and to have a say in world politics can no longer be suppressed. And China’s response to its own role has been far from that of a regional “bully” throwing its weight around as some in the West try to portray it. Working closely through regional and international institutions, China has offered its assistance to provide the means for its neighbors to partake in its development drive. The Belt and Road Initiative provides the overall conceptual framework for bringing together the development programs of all the countries in the region.

But the Belt and Road is much more than a framework of economic cooperation. It is an alternative philosophy for the interaction of nations, indeed, a dialogue of cultures. And while the Silk Road spirit imbues the spirit of the Belt and Road, it also contains an element that is characteristically Chinese and stems from Confucius, particularly Confucius’ saying, “The superior man is aware of righteousness, the inferior man is aware of advantage.” The Belt and Road Initiative at the deepest level is concerned with the question of “righteousness” in economic affairs, characterized by President Xi’s continual emphasis on the feature of its“win-win” cooperation.

In this respect, the Belt and Road represents the kernel of a “new paradigm” of international relations. The benefit accrues to all who partake– and all are invited. While there has been a regional concentration in the formulation of the actual projects, the reverberations are universal. The railroad projects in Kenya and Djibouti and the envisioned inter-continental railroad in Latin America have long broken regional strictures of the original vision, expanding to a world land-bridge. The enthusiastic reception of the Belt and Road by many of the European nations as well as the recent consolidation of the Belt and Road in the perspective of the United Nations has established it as the vision of what the world has to achieve.

The Addis Ababa - Djibouti Railway, a new 752km track constructed by Chinese enterprises and linking Ethiopia’s capital with the Port of Djibouti, was inaugurated on October 5, 2016, a milestone for the Belt and Road Initiative on the promising African continent.

While the “old paradigm” lingers on as an element of practical policy, particularly but not only in the United States, we have also seen a keen desire expressed by the US population for a change of paradigm, and people will begin to realize how the model of the Belt and Road infrastructure development can also bring back the prosperity that the country once enjoyed under wiser political leadership. If President Trump is really interested in reviving the US economy, he should take the lessons of China to heart, and accept the hand of cooperation and friendship that is offered by China and extend the Belt and Road to the North American continent, launching cooperation between nations on infrastructure projects of mutual benefit, fostering science and technology in order to develop those new energy resources like fusion energy to propel tomorrow’s growth, and adopting a mutually beneficial dialogue of cultures in which the greatest achievements of one culture can be exhibited and learned from by the other, enriching each with a new sense of beauty and respect. In this way, while wewill no doubt encounter more turbulence and setbacks as the Belt and Road moves forward, we can still cherish the hope that the alleged “advantages”of the zero-sum game will pale in the face of the tremendous prosperity engendered by the more “righteous” spirit of the Belt and Road Initiative.

While the strategy is clear, the road ahead will no doubt be a rocky one and with possible pit-falls. In addition to the old mind-set, there is also the lack of trust among many of the Belt and Road nations that has yet to be overcome. The countries of Central Asia have had significant disputes with each other regarding the water, resources and other matters. Relations between India and Pakistan have often been on edge ever since partition. Iran is still treated by the United States and by other Western nations as a“rogue” nation. The conflicts in the Middle East, a region that was central to the ancient Silk Road, have been so inflamed during the last century, that overcoming the religious, ethnic and political divisions that have arisen since the Western nations divided the region up in the aftermath of World War I, will not be an easy task. Then there is the endemic threat of terrorism, which has become seriously aggravated by the continual military incursions by the US and NATO in the region. And the attitude of the new Trump administration has also created a good deal of uncertainty for the Belt and Road, although, if President Trump held true to his commitment to revitalize US infrastructure, he might well be interested in expanding the Belt and Road to the United States and working with China to bring development to the Middle East as well. If there were unity in the overarching goal on the part of the outside powers, particularly among the US, China and Russia, this could provide a solid basis for achieving a lasting peace in the region. It is only with a program of comprehensive economic development that any of these conflicts can ultimately be resolved, and the Belt and Road represents that solution. Steering this boat through the sometimes choppy waters will require skill, diplomacy and nearly infinite patience on the part of China. But the progress already achieved by the Belt and Road Initiative gives great hope that this endeavor will ultimately be a resounding success.

William Jones is the Washington Bureau Chief of Executive Intelligence Review. He worked as an EIR correspondent in Sweden, Norway and Germany before becoming EIR’s White House correspondent and Washington Bureau Chief. He is a co-author of the 2014 EIR report, “The New Silk Road Becomes a World Land-Bridge.”