China’s $900bn plan to rebuild the Silk Road
President Xi Jinping has unveiled plans for the “project of the century” — building a modern-day Silk Road that will create trade routes through Europe, Asia and Africa. What will this mean?
Power plants and ports in Pakistan. Railways in Laos and Thailand. Roads, tunnels, and pipelines stretching right across Europe and Asia. A shipping route which passes through Indonesia, India and Africa.
This is China’s “One Belt, One Road” project, an ambitious plan to rebuild an ancient trade route known as the Silk Road. It has already attracted $900 billion of investment. It will involve around 60 countries, affecting 65% of the world’s population and transporting one quarter of the world’s goods and services.
On Sunday, China’s President Xi Jinping promised that the project would usher in a new “golden age” of globalisation during a speech to world leaders.
The ancient Silk Road was established more than 2,000 years ago. It was a vast network of routes between China, Europe and Central Asia which allowed countries to trade luxury goods like spices, pottery, and — of course — silk. But it was not just about money; the Silk Road also allowed the exchange of ideas, religions, and languages.
President Xi described these ancient merchants as “pioneers” who did not shape history “with warships, guns or swords” but by “leading caravans of camels and sailing treasure-loaded ships.” It was an era that proves “that civilisation thrives with openness and that nations prosper from exchange.”
Now Xi plans to revive that era, with China at its centre. Although the plan was first announced in 2013, it has become even more significant after Donald Trump’s election in the USA. Trump has already pulled out of a potential free trade agreement with other countries in Asia; many believe that America’s role as a “champion of globalisation” is ending.
Of course, the One Belt, One Road plan also has its critics. India has accused China of trying to “undermine the sovereignty” of other nations, essentially buying their loyalty through infrastructure. But Xi insisted that it would be “open, inclusive, balanced and beneficial to all.”
This is no surprise, say historians. It may seem odd to think of a Communist country as leading globalisation. But history shows that this was China’s role for thousands of years. After all, this is the country which brought the world paper, gunpowder and the compass. Clearly, the last 200 years of British and American influence have been a blip.
Slow down, say others. The idea of rebuilding the Silk Road may capture imaginations, but so far it has seen very little progress. China has only spent $50 billion on the project so far (an extremely small amount, according to one expert). Meanwhile, details are thin on the ground and there are countless practical hurdles. If Xi wants to “Make China Great Again”, he has a long way to go.
- Is the One Belt, One Road project a good idea?
- Who will be seen as the leader of globalisation in the 21st century: America or China?
- Write down three potential obstacles to building a new Silk Road.
- Create a timeline of Chinese history, including key events from ancient times through to the 21st century.
Some People Say...
“Throughout history, trade between nations has been far more significant than war.”
What do you think?
Q & A
- What do we know?
- President Xi Jinping introduced the plan to several world leaders (including Russia’s Vladimir Putin and Turkey’s Recep Tayyip Erdogan) at a two-day summit in China which ended yesterday. He pledged more than $100 billion for various strands of the plan on Sunday — including emergency food aid to poorer countries.
- What do we not know?
- Whether President Xi will follow through on this plan; the impact that it will have on the countries involved; or what China’s true intentions are. Xi is making every effort to paint the project as a benevolent plan to enrich poorer countries and stimulate growth. However, sceptics say it is merely a “smokescreen”, and that China will put its own financial interests first while trying to extend its political influence.
- $900 billion
- According to ratings agency Fitch, this is the cost of One Belt, One Road projects which are currently planned or ongoing.
- According to the consultancy firm McKinsey & Company. They also said the project would cover about one-third of the world’s GDP.
- 2,000 years ago
- The road was used regularly from around 130BC — when China’s Han dynasty opened up trade with the West — until 1453AD, when the Ottoman Empire closed the routes.
- China has been a Communist country since 1949, when Mao Zedong won the Chinese civil war and established himself as leader. After his death in 1976, the country began to embrace capitalism through economic reforms.
- Invented in around 105AD. Paper soon spread to Asia and the Middle East via the Silk Road.
- Invented — by accident — by alchemists searching for an elixer of life, around 850AD.
- Historians are unsure when the compass was invented, but it could date back as far as 400BC.
- According to Nicholas R. Lardy, a China specialist at the Peterson Institute for International Economics in Washington.