Chinese President’s new Silk Road plan will fail unless ideas are free to travel – by Carl Mortished (Globe and Mail – May 29, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

“One Belt, One Road” is China’s slogan for a 21st-century revival of the ancient trading routes that linked Han Dynasty silk merchants with Central Asia and the Mediterranean. President Xi Jinping’s big idea is investment in roads, railways, ports and pipelines that will link China to the world.

However, the ancient Silk Road was more than a caravan of camels loaded with stuff. It was also a convoy of ideas, and this may be where the Chinese Communist Party’s great ambition comes a cropper.

The first question you have to ask is why China needs such a vision of a new Silk Road.

The Chinese President sought to give a romantic gloss to his plan when he first mentioned it in 2013 on a visit to Kazakhstan, noting the thousands of years of trade between the two nations on the Silk Road. Last year, he announced a $40-billion (U.S.) infrastructure fund to build roads, railways, ports and airports across central and south Asia, and this year China reaffirmed its political ties to Pakistan with a promise of $45-billion of infrastructure investment.

The grand strategy is to build a land bridge westward from Xinjiang province and a maritime link from the South China Sea to the Indian Ocean and to the Mediterranean via the Red Sea. Pakistan would be a key piece in the infrastructure puzzle, offering western China access to sea ports in the Indian Ocean.

After decades of industrial expansion and a domestic building boom, China’s economy is operating at only half-throttle and it needs to recycle its surpluses into something more worthwhile than low-yielding U.S. T-bills.

Efforts to purchase access to valuable resources in Australia, the United States and Canada have largely failed, often in an embarrassing way. Meanwhile, the neighbours in Central Asia have valuable resources (oil, gas, minerals and food), but lack the means to fully exploit their advantage.

For the rest of this article, click here: http://www.theglobeandmail.com/report-on-business/economy/economic-insight/chinese-presidents-new-silk-road-plan-will-fail-unless-ideas-are-free-to-travel/article24671883/

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