Tuesday, May 23, 2017

Xi Jinping's 21st Century Silk Economic Belt and Road
  About California's future if China becomes
  the world's 21st Century economic center


At the beginning of this month, for two weeks an event took place for which I can find no news coverage in the United States - not even California news sources. Here is how the China Daily described it:
    An annual event dedicated to promoting business and cultural exchanges between China and California, ChinaWeek draws industry and government representatives from Guangdong, Hebei, Inner Mongolia, Jiangsu, Shandong, Shanghai and Chongqing to expand and deepen bilateral trade and investment, said Peter Shiao, chairman of ChinaWeek and its organizer.
    California Governor Jerry Brown, as usual, was upbeat on the state's relationship with China during his keynote speech at Tuesday's California-China Business Summit, an important component of ChinaWeek.
    Brown anticipates closer and deeper collaborations within a wide spectrum of industries and fields between China and California, especially high tech, clean tech, real estate, agriculture, infrastructure and education. "Let's roll up our sleeves to have the work done," said the governor.
    China in the past 16 years has invested $16 billion in more than 370 businesses in California and accounted for 60 percent of international trade activities in the "gateway state", said Shiao, adding that China remains Los Angeles County's biggest trader partner.
Not one American news website story on this gathering can be found if you do a Google news search.

On the other hand, this past week's Belt and Road Forum for International Cooperation was given some, albeit mostly dismissive, coverage by the American press, from both mainstream and alt right.

Click on images to see larger versions!

What may have been the most significant political speech of 2017 was a toast at a banquet at the Great Hall of the People in Beijing. China's President Xi Jinping in calling for renewing the Silk Road spirit said:
    More than 2,000 years ago, our ancestors, driven by a desire for friendship, opened the overland and maritime Silk Roads and thus started a great era of exchanges among civilizations. Today, we gather here to renew the Silk Road spirit and discuss the Belt and Road development for international cooperation. This is both a continuation of our shared legacy and a right choice for the future.
He also noted that the Belt and Road Initiative embodies the aspiration for inter-civilization exchanges, the yearning for peace and stability, the pursuit of common development and the shared dream for a better life.

Silk Road? Belt and Road Initiative?? 2000 years??? Where is the all important "me" in that????

In considering such a span of human history, it is wise to keep in mind these words from the Polish poet Czeslaw Milosz:

Love means to learn to look at yourself
The way one looks at distant things
For you are only one thing among many.
And whoever sees that way heals his heart,
Without knowing it, from various ills—
A bird and a tree say to him: Friend.

Despite the fact that "selfies" and self-important tweets are all the rage among the consumers of the world, there is no "me" in considering 2000 years, even in or particularly in the World Wide Web. Individual fruit flies and individual humans are equally unimportant over time periods measured in centuries.

Yes there have been individual humans who made a significant continuing impact on humans in time spans measured in thousands of years. It would be fair to say that of the 100,000,000,000± billion folks who have ever lived and are not alive today, 100± individuals made a significant impact that reverberates through history to today. That's 1 out of every 1 billion.

So it's likely that, out of the 7 billion now alive, there are seven individuals out there who will be recognized as someone who still impacts significantly on human life 2,000 years from now.

And not that most of us don't contribute to the cumulative gross mess that is human history. But it is likely that when it comes to altering the course of that history in a meaningful way, this guy is probably one of the seven....


You probably recognize he is not Donald Trump nor any other American. Nor for that matter is he from any European culture. If you are among 95%+ of Americans, just from the picture below you will not be able to place a name...


...with the face of the man in the middle with is wife, China's President Xi Jinping.

On February 11, 2009, while visiting Mexico, then Vice-President Xi spoke in front of a group of overseas Chinese noting that China's task was to keep "its 1.3 billion people from hunger" and regarding the financial crisis affecting the Atlantic oriented world: "There are some bored foreigners, with full stomachs, who have nothing better to do than point fingers at us. First, China doesn't export revolution; second, China doesn't export hunger and poverty; third, China doesn't come and cause you headaches. What more is there to be said?"

That helps put a bit of perspective on his visit to Central Asia and Southeast Asia in September and October 2013, when as China's President he raised the initiative of jointly building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road.

Additional perspective (for those who live in a country that is less than 400 years old) comes from China's history where writing began around 7000 BCE,  the first empire dynasty emerged around 2100 BCE, and the Shang Dynasty from the 17th to the 11th century BCE created oracle bone script which is a direct ancestor of modern Chinese characters. To make a long story short, around 220 BCE the state of Qin established the first unified Chinese state. Its King Zheng enacted legalist reforms throughout China, notably the forced standardization of Chinese characters, measurements, road widths (i.e., cart axles' length), and currency. His dynasty also conquered the Yue tribes in Guangxi, Guangdong, and Vietnam. The Han dynasty emerged to rule China between 206 BCE and CE 220, creating a cultural identity among its populace still remembered in the ethnonym of the Han Chinese. The Han expanded the empire's territory considerably, with military campaigns reaching Central Asia, Mongolia, South Korea, and Yunnan, and the recovery of Guangdong and northern Vietnam from Nanyue. Han involvement in Central Asia and Sogdia helped establish the land route of the Silk Road, replacing the earlier path over the Himalayas to India. Han China gradually became the largest economy of the ancient world. For more historical detail on the Silk Road click on this image:

Historical extent of Silk Route/Silk Road. Red is land route and the blue is the sea/water route.

Xi's Silk Road Economic Belt and the 21st-century Maritime Silk Road - also known as the Belt and Road Initiative, the Belt and Road (abbreviated B&R), or One Belt, One Road (abbreviated OBOR) - is a broad international economic development strategy that focuses on connectivity and cooperation among countries.

The plan covers 65 nations, about 60 per cent of the world’s population and a third of global GDP. China has budgeted $40 billion for the project. The Asian Infrastructure Investment Bank, which began operations last year with $100 billion in capital, is also expected to fund Belt and Road projects.

The Belt and Road initiative is geographically structured along six corridors, and the maritime silk road:
  • New Eurasian Land Bridge, running from Western China to Western Russia
  • China–Mongolia–Russia Corridor, running from Northern China to Eastern Russia
  • China–Central Asia–West Asia Corridor, running from Western China to Turkey
  • China–Indochina Peninsula Corridor, running from Southern China to Singapore
  • China–Pakistan Corridor, running from South-Western China to Pakistan
  • Bangladesh–China–India–Myanmar Corridor, running from Southern China to India
  • Maritime Silk Road, running from the Chinese Coast over Singapore and India to the Mediterranean.
The initiative calls for the integration of the region into a cohesive economic area through building infrastructure, increasing cultural exchanges, and broadening trade. Apart from this zone, which is largely analogous to the historical Silk Road, another area that is said to be included in the extension of this 'belt' is South Asia and Southeast Asia.

Many of the countries that are part of this belt are also members of the China-led Asian Infrastructure Investment Bank (AIIB). North, central and south belts are proposed. goes through Central Asia, Russia to Europe. The Central belt goes through Central Asia, West Asia to the Persian Gulf and the Mediterranean. The South belt starts from China to Southeast Asia, South Asia, to the Indian Ocean through Pakistan. The Chinese One Belt strategy will integrate with Central Asia through Kazakhstan's Nurly Zhol infrastructure program. (Much of this information is from the Wikipedia entry which offers more.)

From a movement point of view the B&R historical ties looks something like this:




But in terms of world impact it could also be viewed this way...



...or this way:

Click on image to access links to each country.
Attending the Belt and Road Forum for International Cooperation this past week were the following representatives of non-member nations:
Heads of State:
  • Argentina: President Mauricio Macri Chile: President Michelle Bachelet
  • Fiji: Prime Minister Josaia Voreqe Bainimarama
  • Greece: Prime Minister Alexis Tsipras
  • Italy: Prime Minister Paolo Gentiloni
  • Kenya: President Uhuru Kenyatta
  • Philippines: President Rodrigo Duterte
  • Poland: Prime Minister Beata Szydło
  • Spain: Prime Minister Mariano Rajoy
  • Switzerland: President Doris Leuthard
Minister Level:
  • Australia: Trade Minister Steve Ciobo
  • Brazil: Secretary for Strategic Affairs Hussein Ali Kalout
  • Finland:  Minister of Transport and Communications of Finland Anne Berner
  • Germany: Minister of Economic Affairs Brigitte Zypries
  • North Korea: Kim Yong-jae, Minister of External Economic Relations
Other:
  • France: Jean-Pierre Raffarin, chairman of the Committee on Foreign Relations, Defense and Armed Forces in the French Senate
  • Japan: LDP Secretary General Toshihiro Nikai
  • South Korea: Ambassador to China Kim Jang-soo; Park Byeong-seug, National Assembly member for the Democratic Party
  • United States: Matt Pottinger, National Security Council senior director for Asia (Who???)
There is a lot of recent history and current activity involved, not all of which has been successful as explained in Wade Shepard's I Spent Two Years On China's Belt And Road, And This Is What I Found. Shepard also provides a proper perspective:
    China takes a long-term view of these investments, and have show that they are willing to exercise the requisite patience. By long-term view, I mean 30, 40, 50 years down the line, not the 5 to 10 years that is roughly where the west’s nearsightedness kicks in.
    China has shown that it is both willing and able to weather the storms of domestic and international politics in order to get what they want in the end.
Shepard is one of those rare American's who, in addition to being able to read and write well above a 6th grade level, is a China expert based upon his travels and study in China. He is currently traveling the New Silk Road doing research for a new book. You can follow his writings through this feed.

Which brings us back to that 2000 year window. As Shepard commented about Americans, we are limited by "the 5 to 10 years that is roughly where the west’s nearsightedness kicks in." That is really generous as much of our business activity is controlled by a 5 to 10 week time frame and generally Americans struggle with a planning attention span of 5 to 10 days.

So it's probably ok that those selfies and tweets are on some electronic device and/or cloud that will certainly and inevitably disappear over the next hundred years. They don't matter, not even Donald Trumps tweets, nor all the self-important news reporters following them.

As explained in an Atlantic article while most post-election analysis cited economic anxiety as the main concern when people chose to vote for Donald Trump, a newer survey paints a different picture - it was cultural anxiety that drove white, working-class voters to Trump.  Sixty-eight percent of white working-class voters said the American way of life needs to be protected from foreign influence and nearly half agreed with the statement, “things have changed so much that I often feel like a stranger in my own country.”

So, the American way of life needs to be protected from foreign influence. Members of the alt-right and Trump tweet about it on their smart phones manufactured in Asia by Asians. But then again so do the members of what is now being called "the Alt-Left" led by Bernie Sanders which is working to take over the Democratic Party.

Meanwhile, The Sydney Morning Herald reported Sunday that Eleven Asia-Pacific nations agree to salvage Trans-Pacific Partnership:
    Eleven Asia-Pacific nations, including Australia, agreed on Sunday to salvage a massive free trade deal that US President Donald Trump pulled out of days after taking office in January.
    Australia's Trade Minister Steve Ciobo pushed for the agreement at a meeting in Vietnam to "launch a process to assess options" to bring the Trans-Pacific Partnership into force.
    New Zealand Trade Minister Todd McClay, who chaired the meeting, left open the possibility of the US rejoining the TPP despite Mr Trump saying he prefers bilateral free trade deals.
    Mr McClay said each country had to consider both economic values and the strategic importance of the agreement "but in the end there is a lot of unity among all of the countries and a great desire to work together to come up with an agreement."
As I explained almost one year ago Sanders and Trump to destroy Pacific Rim states of California, Oregon, and Washington by forcing the United States out of the Trans-Pacific Partnership.

Because the Alt-Left and -Right led American voters (I consider them both among "The Deplorables") wanted their grandchildren to have income and eat, before voting they examined major economic shifts, studying them as much as they possibly could, ignoring their own self-indulgent feelings of stress. So they knew the TPP was a plan to reduce the impact of China on the economies of the Pacific Rim nations and the World over the next 50-100 years - the lifespans of their children and grandchildren.

Except, of course, that isn't what they did because the ignoramuses leading them, Trump and Sanders, still don't know what's happening. As Bill Maher regularly notes, the American voters mostly are stupid, failing to vote their own self-interest mostly because they don't know what that is.

At this point we are facing what I call The Deplorables Map of the Future of World Economics because they at election time assured it (click on it for a larger version):


This economic China-centric world is the future. As the intent of the B&R is explained by The New York Times:
    [China's President] Xi is aiming to use China’s wealth and industrial know-how to create a new kind of globalization that will dispense with the rules of the aging Western dominated institutions. The goal is to refashion the global economic order, drawing countries and companies more tightly into China’s orbit.
    “President Xi believes this is a long-term plan that will involve the current and future generations to propel Chinese and global economic growth,” said Cao Wenlian, director general of the International Cooperation Center of the National Development and Reform Commission, a group dedicated to the initiative. “The plan is to lead the new globalization 2.0.”
    Mr. Xi is rolling out a more audacious version of the Marshall Plan, America’s postwar reconstruction effort. Back then, the United States extended vast amounts of aid to secure alliances in Europe. China is deploying hundreds of billions of dollars of state-backed loans in the hope of winning new friends around the world, this time without requiring military obligations.
    Mr. Xi’s plan stands in stark contrast to President Trump and his “America First” mantra. The Trump administration walked away from the Trans-Pacific Partnership, the American-led trade pact that was envisioned as a buttress against China’s growing influence.
    “Pursuing protectionism is just like locking oneself in a dark room,” Mr. Xi told business leaders at the World Economic Forum in January.
As of 2017, China (including Hong Kong) holds $1.324 trillion in U.S. debt derived from our deficit balance of trade. The average American can pretty much figure out where that came from by looking at the stuff around his or her house, cupboards, and closests (as well as staring at that phone in his or her hand). Much of it contains components, or is entirely, made in China. After all it is where the Trump family has their clothing lines made. So President Xi is pretty comfortable loaning a few billion here and there around the world.

But wait. Didn't I say that while the B&R includes about 60 per cent of the world’s population, it only includes a third of global GDP?  And my "Deplorables Map" above doesn't correctly reflect the World as it does not include Europe, particularly the European Union members. After all, the EU is the second largest economy in the world and the world's largest trading block. Of course, Brexit likely will change all that. However, what were talking about here is the area in the square...


...which geographically isn't perhaps the largest block. But nonetheless, it the following map initially would seem to indicate a meaningful portion of the World's economy...


...except... notice the round purple dots on all the countries that are members of China's Belt and Road Initiative and remember as mentioned above that the heads of state of Greece, Italy, Poland, and Spain, plus cabinet ministers from Finland and the United Kingdom attended the Belt and Road Forum for International Cooperation.

It might not be unreasonable to assume that China's economic policy influence in Europe would increase substantially in the next 50-100 years as the United States abandons its allies like it did in the Pacific Rim.

When contemplating Europe, we have to remember that it is the same distance between Berlin and Beijing as it is between Berlin and the State Capitol of Illinois, Springfield. Far more Chinese citizens live closer to Berlin than Americans. Denver is closer to Beijing than Berlin.

The problem is, our history is Atlantic-centered (except for California, Oregon, Washington, and Alaska). That made sense when the sailing ship was the primary source of transportation between continents. But since the mid-20th Century aircraft altered the reality for everyone except Americans East of the Mississippi and Europeans who still live in the 18th Century.

I get it. Sure the Deplorables of the left and right and the Brexiters feel things have changed so much that they often feel like a stranger in their own countries. But it's long past the time that sailing ships were lobbing cannon balls while Francis Scott Key wrote those sterling versus in the defense of owning slaves. Get over it. There are new problems now. Americans are going to have to adjust or lose out completely by the beginning of the 22nd Century.

Back in January, California Governor Jerry Brown went to the Chinese consulate in San Francisco to speak at a Lunar New Year celebration to reaffirm what he called the state's "great interest" in working with China. As explained in the LA Times:
    "There will be a few side arguments in Washington," Brown said. "Don't worry. When it comes to California and China, we're on the right track, and we're going to stay there."
    California has collaborated closely on climate change with Chinese officials, who have studied the state's programs as they formulate their own. Brown said the state also has benefited from China's production of solar panels, helping to drive down the cost of renewable energy.
    "We are working together with China," he said. "Whatever little differences we have, or whatever big differences, the fact is, we have one world. We have one space we're all connected by."
    Brown's brief comments at the consulate weren't all rosy. Often preoccupied with existential threats , he told the audience that he wanted to make sure they "walk out of here with at least three things to worry about."
    First, he said, "you will suffer" if climate change isn't addressed. Second, nuclear bombs could "get used by somebody," which would be "very bad." Third, the global financial system "might collapse again."
    "That's a lot to worry about," Brown said.
Next month Brown will be in China to attend a climate change conference. Brown previously visited China in 2013 on a trade policy trip. He makes these trips because he knows that China and the U.S. have to take the lead on climate change. He also knows the most serious threat of nuclear war comes from North Korea. He understands that as was true in 2008 the potential collapse of the global financial system will result from U.S. economic policy, the impact of which China is trying to avert.

Finally, he understands that while California's economy ranks, depending on year, between #5-#8 in the world, it couldn't without strong foreign trade as represented by this data:

At the end of the 19th Century, bilateral trade relationships between countries dominated which led to the most murderous century in history. At the end of the 20th Century during which 100+ million people died in wars, multilateral trade relationships between countries became the norm to avoid conflict.

China's leadership understands this world reality and intends to take the leadership role which will be facilitated by the absence of U.S. influence. California's leadership understands this world reality and intends to continue its active role in order to protect the interests of its people, particularly necessary in the vacuum left by the U.S. government.

And if you don't think there is a potential threat, consider this article that appeared in Asian news sources but not American news sources in March 2017 Moscow and Beijing join forces to bypass US dollar in world money market and perhaps you'll begin to understand that isolating the U.S. as Trump touts bilateral trade negotiations could become a disaster for the grandchildren of The Deplorables.