luzribeiro (luzribeiro) wrote in talk_politics,
luzribeiro
luzribeiro
talk_politics

Unleashing the dragon

It's nice when you're swimming amidst tons of cash, right?

Belt and Road Initiative: China Plans $1 Trillion New ‘Silk Road’

It's got all in this plan: ports, power plants, power grids, telecommunications networks, roads, railways, bridges, transport hubs, transport manufacturing (train/ship builders) etc.

Here's a nice colorful map of it all:



Well, all I see is a colourful streak on a map running through many Muslim countries pretending to be functional nation states. This must end well.

Would love to see how China would be taking its turn in dealing with the (in)famous Middle East quagmire. It should help accelerate global distrust of China.

Anyway...

If any country could do something like this, it's certainly going to be China. They have two things that help them move swiftly on big projects like these:

1) Like I said, lots of fucking money to throw around. And few actual places to police around the world, and waste money into (although that's bound to change, what with China's ever expanding commercial empire: Asia/Pacific, Africa, the Americas, etc).
2) A strong, heavy-boot top-down government. The party says "get it done" and it's done, no matter the cost and the consequences (think the one-child policy, the huge ghost towns in the middle of nowhere, etc). In the long term, this could be a weakness, while in the long term a plus for their government. Especially once their economic advantages inevitably diminish in the long term (you're never on top forever, as history has shown over and over).

All that said, technology could disrupt the importance of something like this. Although the mainstream media noise of 3D printing has subsided (recent posts on this forum notwithstanding). It is still going through major innovation. 3D printing will clearly decentralizes manufacturing. Also, with Chinese wages on the rise, it's becoming more viable for other industrialized nations to manufacture goods domestically. The discount you get for manufacturing in China is decreasing every year (in some industries, it's only 6% cheaper to manufacture in China).

This sort of project sounds like it would require high volume of goods to keep it sustainable, but volume will decrease dramatically eventually. The number of goods that need to be shipped around the globe (especially from China) will take a nose dive. Also, from an environmental and supply chain standpoint, it too is better to have decentralized manufacturing.

I'm not saying this plan will not work, but I'm saying it's not such a sure thing that it would be a success, and thus a benefit to China and the world. I guess China's plan is more about geopolitical influence here, rather than purely economic.
Tags: china, economy, trade
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