China Belt and Road Initiative
Most Americans don’t have a clue as to the massive
investments that China is undertaking in much of the Eastern Hemisphere. They look at Russia, who do have nuclear
weapons, a large land mass and the thug Putin as a leader, but who have a GDP
the size of Mexico, as a big threat.
Russia is a “little threat” if we continue to allow Putin
& co. to wield power that is out of proportion, as in Crimea. The real long-term threat to U.S. hegemony,
and to the rest of the world, is China, who is still a communist country, but
who is led not by Mao-style revolutionaries, but by well-educated, pragmatic
business managers and engineers. Xi
Jinping is an old style communist who has a degree in Chemical Engineering.
I first learned of the extent of China’s BRI during a
trip to China in 2015. I also was
impressed by a Chinese “bullet train” that I took from Shanghai to Suzhou at
200 km/hr.
This is from a Forbes article dated Sept 4, 2018.
The Belt and Road Initiative Will Affect 60 Percent of
the World’s Population
“The most
well-known among China’s projects is the Belt and Road Initiative (BRI), one of
the most ambitious undertakings in human history. The biblical-size trade and
infrastructure endeavor—a sort of 21st century Silk Road—could cost 12 times as
much as what the U.S. spent on the Marshall Plan to
rebuild Europe following World War II. The BRI has the participation of 76
countries from Asia, Africa and Europe, and is poised not only to reshape globe
trade but also raise the living standards for more than half of the world’s
population.
According to
the International Monetary Fund (IMF), the
“BRI has great potential for China and participating countries. It could fill
large and long-standing infrastructure gaps in partner countries, boosting
their growth prospects, strengthening supply chains and trade and increasing
employment.”
The BRI,
which turns five years old this fall, announced in 2013, will have a strong
presence in Eastern Europe, also a prime destination for China FDI, as the
countries there offer a wealth of metals, minerals and agricultural products.
According to
Stratfor, Chinese companies have invested as much as $300 billion in
Eastern Europe over the past decade. Last May, China and Ukraine agreed to
cooperate on joint projects valued at nearly $7 billion, and in November, it
was announced that China Railway International and China Pacific Construction
would build a $2 billion subway line in the Ukrainian capital, Kiev. More
recently, Chinese engineers with China Harbor Engineering completed a $40 million dredging operation in
Ukraine’s Yuzhny Sea Port, allowing it to receive larger ships.
Like the
Marshall Plan before it, the BRI will require tremendous amounts of commodities, metals and fuel.
In 2011,
members of our investment team and I had the opportunity to see one of China’s
high speed trains firsthand. The train averaged 185 miles per hour during our
923-mile trip from Shanghai to Beijing. As I wrote then, “I’ve traveled to
all corners of the world and have seen many things during my travels, but
viewing China’s explosive growth as it flies by you is something I will never
forget.”
Ray Gruszecki
December 24, 2019
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