China Wins Trade War With the U.S.

Their new infrastructure is a power play.

by StockSnap from Pixabay

China is building huge projects to access markets in the East.

Even Russia and Africa are involved.

It's called the One Belt, One Road project.

• Years ago, America pushed to develop the west.
• They had a slogan to encourage development.
• “Go West Young Man, Go West”.

Now China’s going West. They’re also going North, and South.

• There used to be a Silk Road trading route to Europe.
• There were Maritime trading routes too.

China is reviving these routes and adding several more.

They are investing in many mega projects that will give them access to markets all over Asia, Europe, Africa, and the Middle East.

These projects link two major trade corridors.

They connect China with Central Asia, the Middle East, and Europe.

One corridor is by land and one by sea.

They are calling it the One Belt, One Road project.

BELT includes three rail and road projects.

• The North belt goes through Central Asia and Russia to Europe.
• The Central belt route connects them to the Mediterranean via Asia and the Persian Gulf.
• The South belt connects China to the Indian Ocean through Pakistan.

ROAD is the maritime Silk Road route.

• These maritime routes are considered the most lucrative roads to develop.
• They go through Asia, the Middle East, and Africa.
• China is focusing most of its resources on developing ports and inland routes along these corridors.
• Russia and China are partners in the construction of an 'Ice Silk Road' along the Northern Sea in the Arctic,

It’s a massive undertaking.

I‘ve seen part of the construction.

• A few years ago, we were traveling in a small boat on the Mekong River in the northern part of Laos when we discovered the construction of a massive bridge.
• When we asked our guide, he told us it was being built by China.
• Later we found out it’s a high-speed train being constructed by the China/Laos Railway company.
• The route goes from China, through Laos and Thailand to Singapore.

Why build trade routes to Africa?

China needs access to two things: markets and resources.

• They can build a market in Africa if they can help the country develop.
• Then they can sell products to them.

It’s a long term view.

by S. Hermann & F. Richter from Pixabay

Africa has a wealth of resources and low-cost labor.

China has many advantages over the West.

In the past, other countries couldn’t exploit these resources because they were too remote.

• There were no transportation or support systems in place.
• A country would have to invest a ton of money to develop the infrastructure needed.
• It was too risky to build it in parts.
• The return on investment was too far in the future for most banks to finance.
• It was too much for countries with a short term view.

The Chinese have a long term vision.

They also have the resources to finance huge development projects.

They will work with countries with poor human rights track records.

• Western countries might shy away because of backlash.

They have fewer constraints.

• The government can make unilateral decisions. They can ignore local restrictions or environmental impacts.
• Western countries are held more accountable by their constituents.

China is planning to build the whole thing.

• Which means they will have full control.

It’s strategic.

This infrastructure gets them political support from the countries they invest in.

They also gain a huge market.

• Some see it as a play to reposition China in the global economy.
• Others see it as a way to provide support to people in underdeveloped countries.

Either way, it’s a major power play.

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