This article will discuss China’s Belt and Road Initiative, alternatively known as the new silk Road, and what this means in practical terms is that China is building trade links with the rest of the world and new institutions. China is doing what the United States did after World War II and making a new international order or at the very least replacing the old order with chaos. The scope of this article will be discussing the new silk Road and what this could mean.
With the fall of the Soviet Union, the economic landscape of central Eurasia fell into disconnected shards. However, as soon as the Soviet Union disintegrated, the countries of Central Asia, especially the Caucasus, started considering new strategies to reconnect. An inspiration was quickly taken from history – from the “Silk Road.” During the days of the “Silk Road,” countries of Central Asia acted as land bridges connecting China with those in Europe to strengthen trade. Ancient cities like Aleppo, Baghdad, and Xi’an became major transhipments and manufacturing hubs. Now, Eurasia stretches from the west of Europe to the east coast of China, making it a huge market with 60 countries covering 60% of the world’s population, 30% of GDP, and 75% of the world’s energy sources. (Gebauer, S. 2017).
History of Global Trade and Great Powers
By reading this article, the reader should understand the Belt and Road Initiative (BRI) and why it is significant for the global economic, political, and world order to understand the overarching impact of the Belton Road initiative. The Belt & Road Initiative will have political repercussions that will affect humanity in the 21st century and may reshape global power politics. Understanding that China has historically not been the only global network is essential, and it can even be debated what the oldest trade networks are and who created them. However, this can be debated due because the Habsburg dynasty ruled the Spanish Empire with Charles V of the Holy Rome Empire or; alternative he was also known as Charles I of Spain and his son Philip II of Spain with the Spanish empire was called the empire where the sun would never set this is due to the Spanish Empires trade links. The trade links were to the new world, the Mediterranean Sea and Africa (Osorio, 2021).
The Sike Road network connected the Arab caravans with the Roman Empire and Chinese markets (The Silk Road and Arab Sea Routes (11th and 12th Centuries) | The Geography of Transport Systems, 2021). Alternatively, the Chinese Silk Road connected the original Arabs trading caravans, joining Western Europe and Mediterranean Europeans to the original global trade network. For example, when it comes to understanding the word markets, this is not a market as in a market stall. Still, in the sense that each nation has its own markets where people can go and buy and sell at a marketplace when it comes to talking about International trade, this is called Globalisation.
A global marketplace allows financial institutions, companies, and individuals to buy, sell and procure services globally. The belt and road initiative is significant because China’s ability to influence international trade, international markets, and finance could potentially translate into hard and soft powers, which can mean military power and cultural power like the American move industry. According to Glenn Arnold, a PhD holder, ex-professor in Finance, and now full-time financial investor stated that, even without its empire, the United Kingdom is still one of the globe’s top five canters for financial services (Arnold, G. 2011). This goes to show the importance of international trade and the global marketplace. With China investing in a new trade network connecting global finance to the Chinese economy, China is becoming the 21st century’s new hegemony. The impact of the Belt Road initiative and a comprehensive understanding will be the goal of this article. It will be linked to economic development, politics, and China’s place in the world.
China’s Belt and Road initiative is not just building on new or previously existing economic links between China and Western Europe but a connection to Africa, the networks connecting the globe to China’s expanding markets. Historically China has held over 25% of the global GDP (The Rise, Fall, and Comeback of the Chinese Economy over the Past 800 Years, 2017b), signifying the power and prestige that China has had historically and is now reclaiming. China historically, from the time of the Han Emperor Wu (Psarras, 2004) and his expansion north and east of China helped to connect China with the old Roman Empire after the Han and Xiongnu wars from 133 BC to 89 AD helped to contact and build the original silk road connecting China with the European.
Another historical precedent for the Belt Road initiative is the British Empire’s trade network connecting global markets. China is not just building a trade network but also creating connections like those which the British Empire had created and similar to what successive powers have done successfully, like the United States after World War II or failed to capitalise on like the Soviet Union (Romero, 2011). What China is doing is not unique. However, it is still historically significant to all rising powers, particularly the British Empire, after Napoleon Bonaparte’s defeat at the Battle of Waterloo in 1815 left England victorious in the Second hundred years war from 1689 to 1815 (Scott, 1992) and the American hegemony after World War II after great conflict hegemonies build new institutions to secure their economic and political power. What the belt and road initiative signifies is not a unique outcome in the history of humanity; what it shows is not uncommon in the sense that it could potentially change the global balance of power away from the Bretton Woods system, which is the current world order after the second world war (Fukumoto, Y. 2011 852–864). Economic institutions which were created after World War II laid the foundation of peace in Europe for over 70 years. Also, there were and are a set of unified rules and policies that provided the framework necessary to create fixed international currency exchange rates. Essentially, the Bretton Woods agreement called for the newly created International Monetary Fund (IMF) to determine the fixed exchange rate for currencies worldwide. But these institutions were also created because one of the reasons for world war II was the economic problems in the global economy in the 1930s, which led to a second world war.
The Belt And Road Initiative
The belt and road initiative, in its current inception, was created by President Xi Jinping first with the initiative during state visits to Kazakhstan and Indonesia in late 2013. Still, the Initiative gradually took shape over the following years. According to the official action plan released in March 2015, the Belt and Road Initiative (BRI) rests on five pillars: policy coordination, facilities connectivity, unimpeded trade, financial integration, and people-to-people contacts. There are estimates that the BRI investment would add over one trillion USD of external funding for foreign infrastructure starting from 2017 (OECD 2018: 3). The Belton Road initiative is attractive to African nations due to trade with China does not come with negative implementations of Africa’s colonial past having been ruled by the old colonial powers such as the German Empire, French Empire, British Empire and other Western colonial influences in Africa. China’s non-interference in domestic foreign policy influences the growth of Chinese and African connections (Kaczmarek, F. 2019). What African leaders find attractive about China is its mass success since 1989 and the fact that China does not come with Western economic demands, green policies, and human rights.
In recent years, China’s “One Belt, One Road” Initiative has become one of the most significant frameworks for foreign capital investment worldwide, with around 70 countries hosting BRI projects (Gebauer, 2017). There is a regulatory interaction between China and host countries arising from this process. There are two strands. The first focuses on the interaction between Chinese-sponsored BRI projects and the regulatory systems of host countries linked to foreign investment, encompassing greenfield investment and mergers & acquisitions. The second focuses on how China has adapted its domestic regulatory framework to facilitate outward foreign investment. (Pakistani Print Media’s 2021)
The new silk Road is a mechanism for connecting international trade to China. It remains to be seen what this will mean for China as a potential hegemony. Ultimately, until further evidence can be accumulated through time, the information will not be available to understand the long-term impacts of the Belt & Road Initiative. Looking at past historical precedents may offer potential solutions; however, at this stage, the belt and road initiatives’ goal is to create a new global order, like what was created at the end of the Second World War with the Bretton Woods system. What the world may be seeing in the next 20 years is a new world order which could be seeing china taking over America in terms of global politics and economic influence with the new silk road as a way for China to flex its new and growing world power. What this could mean, according to John Mierchinor, is that we could be seen the collapse of the unipolar or bipolar world order which has existed since the second world war. with the decline of America, we could be seeing a return of a multipolar world order which existed before the second world was and baked Europe with constant wars (Mearsheimer, 2014). It does not appear that China will be the world policeman like the United States, which may be returning to its historical norman of self-isolation; what this means for humanity is that great power will be carving out their own regional empires until a new hegemony emerges from the international rivalry.
A Link to my Blog on the Japanese Aging Population Problem
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