global systems and global governence Flashcards
china's belt and road initiative (21 cards)
how many countries are linked to china’s belt (road) initiative
9 = germany, turkey, iran, russia, kazakstan, pakistan, uzbekistan, russia, mongolia
how many countries are linked to china’s road (sea) initiative
9 = italy, greece, egypt, pakistan, kenya, india, sri lanka, malaysia, singapore
‘belt’ and ‘road’
belt is the overland connection
road is the shipping route
when was it announced and when is it due to be complete
announced = 2013
completed = 2049
what is the plan
link 139 countries, that, combined, account for half the world’s population and a quarter of global GDP (gross domestic product)
links to past history
aims to revive old silk roads by encouraging new trade and improving connectivity
belt
connects china and europe through central asia and the russian federation
road
ongoing maritime silk road that connects china with south-east asia, east africa, the middle east and ultimately the heart of the mediterranean
economic prospects
forecast to generate $7.1 trillion per annum with approx. 70% of the worlds population
additional aims
to export and import goods more easily and create jobs for chinese workers
china’s biggest exports
USA = $481 billion
Hong Kong = $304 billion
Japan = $148 billion
South Korea = $110 billion
other countries perceptions on the BRI
Japan and the EU are working on on their own connections between Europe and Asia
The US are wary as they think China aims to increase its power and influence around the world
Pakistan BRI
How does China benefit:
- suppose China wants to import food and other things from Africa: it can ship them to Gwadar, then by land to Kashgar. Much shorter than a sea journey between Africa and China’s east coast
Pakistan BRI
How does Pakistan benefit:
- by much more than ports and airports
- electricity generation boosted, therefore reduced powercuts massively
- port perfectly located for trade with Africa, Middle East and Europe : this opens up lots of opportunities for Pakistan to trade further afield
How does the BRI work
- China talks to countries about potential BRI projects. (usually big costly infrastructure projects to build ports, railways and roads, pipelines for oil and gas and power stations that burn fossil fuels)
- China offers to lend money for the projects, at low interest rates if they need it. Countries and especially lower income countries may be very happy to agree.
- Chinese companies arrive to carry out these projects where needed.
- Everyone looks forward to the benefits, including China
BRI and Sri Lanka
Sri Lanka is at risk of being caught in a debt trap.
Sri Lanka owes China a lot of money (around 6% of their total GDP, and interest will have to be paid on any borrowed money)
How has the BRI helped Sri Lanka
Project includes the construction of power stations which burn fossil fuels which is not environmentally friendly.
Imports from China have increased, however exports from Sri Lanka to China have not.
Management of the port was eventually sold off to a Chinese firm (min. 99 year lease)
Workers are sometimes Chinese migrants rather than Sri Lankan local workers
Sri Lanka borrowing money - right decision or not
2010, Sri Lanka got a $1.5 billion loan from China to build the port in the town of Hambantota
Sounds like decent business deal (multi-national), however the port sees very little activity
Lack of shipping and trade made the Sri Lankan government realise they would not be able to pay the money back to the Chinese, as no revenue generated
In order to resolve this, Sri Lanka signed a bilateral deal with China which straight away handed the port over on a 99 year lease
World Bank perspective on it
FDI in BRI predicted to increase by 5%., with regions such as Sub-Saharan Africa and East Asia and Pacific seeing greatest potential gains.
Increase in FDI can exert postivie impact on GDP, trade, and employment growth, especially for lower-income countries.
BRI may not just be about boosting trade…
Djibouti recently borrowed money from China in order to build a port. Not only link agreement reached between the two countries. 2017: China opened a naval base with an agreement to station 10,000 troops there.
VERY IMPORTANT trade route , described as the throat of the sea. Provides a lifeline for international oil shipping.
China says military base will help to protect shipping routes from piracy - a major issue in the region.
USA is unhappy with this - could be seen to be used to be developing and growing their power and authority
OVERALL CONCLUSION
there is probably more cons than pros to this inititative.
PROS:
- economic growth
- infrastructure development
- increased trade
CONS:
- debt sustainability (some countries have gained a lot of debt from this and so the sustainability of these projects is questioned)
- environmental impact
- corruption
- chinese influence
- soft export of authoritarianism
- lack of transparency
