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Chinas New Silk Road: Implications For The US

Chinas responds to US pivot to Asia with One Belt, One Road that could offer opportunity for the US

Chinese road: Chinese President Xi Jinping outlines his "One Belt, One Road" Initiative at a conference in Boao, China (top); the Chinese built a deep-sea port at Gwadar in Pakistan, part of the proposed New Silk Road

GENEVA: Successful launch of the Asian Infrastructure Investment Bank and confrontations in the South China Sea have reignited debate over how the United States should deal with a rising China. The US has not yet offered an official response to China’s “One Belt, One Road” that marks an unprecedented shift of China’s economic diplomacy from a low-key approach to an ambitious China Circle. A considered response is warranted – and the new Silk Road network could offer an opportunity for the US to engage with China in a constructive manner.

The initiative has two parts, namely, the Silk Road Economic Belt and the 21st Century Maritime Silk Road. The concept was introduced by Chinese President Xi Jinping in late 2013. In less than 18 months, China has produced a comprehensive action plan with committed support from near 60 countries in Eurasia and beyond.

The proposed network has enormous geographic scale. The belt on land runs through the continents of Asia, Europe and Africa, connecting China, Central Asia, Russia and Europe in the north, and linking China with the Persian Gulf and the Mediterranean Sea through Central Asia and the Indian Ocean in the south. The maritime route starts from China's coast to Europe through the South China Sea and the Indian Ocean in one route and to the South Pacific in the other – estimated to cover 4.4 billion people and US$2.1 trillion gross production, respectively 63 percent of world population and 29 percent of world GDP.

China’s vision is no less impressive than the geographic scope. The belt and road will not only enhance “five connections” – trade, infrastructure, investment, capital and people – it will create a community with “shared interests, destiny and responsibilities.” China hopes the network will become two wings of Asia, with China at the head of this flying eagle.

The belt and road form a massive China Circle that does not overlap with US territory. China does not want a confrontation. With this emerging circle, China will have more equal footing vis-à-vis US in the international economy:

US politicians should not bury their heads in the sand. The rise of emerging countries is inevitable.

The emerging China Circle poses three questions for US politicians:

Does containing China work? Probably not. China’s manufacturing capacity, domestic market and foreign reserves are big enough to create its own circle. Many countries will decline to support containment measures, as shown when many nations ignored US advice to avoid AIIB membership. Despite US admonitions against joining AIB, most major economies, 57 in all, applied as founding members.

Shall the US welcome China’s rise and the emerging China Circle? It’s not wise for US politicians to bury their heads in the sand. The rise of emerging countries is inevitable. The rise of China Circle, along with an Indian Circle and Brazil Circle, is unstoppable. Obama’s State of the Union address in 2015 and recent congressional trade debates fail to offer a global vision, by arguing that US policymakers should ensure the US, not China, to write rules of the global economy. Sadly, their worries center solely on putting US workers and business at a disadvantage. In assuming global leadership, the United States should welcome China’s more equal-footing participation in updating rules and recognize that its growing influence may be a force for good. China’s belt and road, if successful, may be such an example, helping fill capital gaps in badly needed infrastructure, economic development and political institutions throughout Eurasia. A more developed region could create a bigger economic pie for everyone, including US business and workers. Success could also undermine terrorism and radical movements.

Will supporting China's One Belt, One Road, compromise core universal values and high environmental and labor standards? These are key areas where the US can show leadership and remain a keystone of the 21st century global economic architecture. But a keystone must work with other stones rather than stand alone.  

 

Shuaihua Wallace Cheng

, PhD, is managing director, ICTSD China, the International Centre for Trade and Sustainable Development, and a Yale World Fellow in 2015.

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