Posted on November 18th, 2016


(REVISED 21.4.2017)

The ‘international community’ now accepts that China is going to be the next world power. ‘We are now well into the China decade’, said TIME IN 2015. China will soon have the world largest economy. China is expected to overtake America between 2030 and 2040 as the world’s leading economic power. In 2015 China had around 4 trillion US Dollars in foreign currency reserve. Western countries   are already turning to China for help with their economy.   China has signed 40 billion Pounds worth of deals with UK. Britain is deeply resentful over the deal. China is complacent.

China has bought real estate in USA, and real estate, health care, mining and renewable energy assets in Australia.  In Indonesia Chinese investment is set to nearly triple, year on year and in the Philippines, China is likely to surpass US as Philippine’s biggest investor in 2017. Mandarin is taught as a second language in Australia, Indonesia and several European countries. The Chinese car market is now the largest in the world, said China News. It has the most brands and models, the most expensive cars and also the cheapest.

China itself is no longer ‘backward’. ‘China has 167 Super computers and USA has 165 ‘said TIME in July   2016. China   won the fastest supercomputer crown for the eighth time in 2016. China has more than 12,000 miles of rail track and more high speed rail than the rest of the world combined.  The world’s longest, highest glass bridge has been built in Hunan province, setting 10 world records for design and construction.

It is very creditable for China with its huge population of very poor, just three decades ago, to have turned into one of the great modern economic powers. It has achieved 10% GDP growth for two decades. This remarkable economic transformation was carried out by the Communist Party of China. China has a one party system. In such a system the government is free to concentrate on economic development. There is a  smooth transition of power from one leader to another. TIME says China may be able to supply a new economic and political doctrine to the world, that of stable authoritarianism married to personal enterprise. This could supplant the American ideal of democracy and international law.

China is the world’s leading trading nation today.  120 countries trade with China more than with USA. The yuan is swiftly overtaking the euro to become the world’s second most widely used currency in global trade finance. Chinese firms have gone global. Alibaba has acquired over USD 170 billion worth of acquisitions in 2016. Most of Asia now counts China as its largest trading partner, said TIME in December 2016. Most of the region has been pulled into China’s economic orbit.  ‘Very soon,’ said TIME, ‘Chinese led multinationals will lend money to foreign governments   for infrastructure development, enabling them to bypass traditional western lenders like the IMF, World Bank.’

China initiated the    Asian Infrastructure investment Bank (AIIB), established in 2015, with headquarters in Beijing.  China provided the major share of 30 billion USD as capital  and has around 30% of the votes. USA was dead against this Bank but 57 countries from European Union, Middle East and Asia ran to join. The Bank will provide infrastructure development funds for Asia, reducing the domination of the western controlled Asian Development Bank (ADB).

China’s political ambitions include the whole of Eurasia as well as Africa. China’s president, Xi Jingpin selected Russia, not USA, for his first overseas visit after assuming office. China sees USA as a spent force.   Unlike the USA, China refuses to be drawn into military conflicts. China prefers soft power diplomacy. China is helping improve the transport  infrastructure of many nations in Africa, Asia and Latin America. China plans to upgrade the Greek port of Piraeus    fund the    Belgrade to Budapest bullet train  and construct a high speed rail system through Brazil’s rain forest and the Andean mountains. A cargo rail line between Yiwu in China and Madrid in Spain   and between Beijing and Germany’s Duisburgare also in progress. Observers note that China offers complete packages on concessional terms and is quick to implement and disburse big sums of money.

For Africa, China created, in 2000, the Forum on China Africa cooperation (FOCAC). The fifth summit in 2015 was attended by      50 African countries. At each summit meeting China usually doubles the money it had offered earlier. In 2015, China trebled its earlier contribution and offered USD 60 billion. China has already completed over 1000 infrastructure projects in Africa including rail and highway construction, with future plans for roads and bridges linking the African countries.

For Euro-Asia  there is the  Shanghai Cooperation Organization (SCO)   founded in 2001 in Shanghai by China, Russia, Kazakhstan, Kyrgyz Republic, Tajikistan, and Uzbekistan. It was set up to dealt with threats of terrorism, separatism and extremism but now also looks at economic development. The working languages are Chinese and Russian.

China is   also reviving the overland   Silk Road, which, this time, will go across central Asia, Russia and Europe to the Baltic Sea taking in all the countries in between. The first cargo train from China to Iran arrived in Teheran in 2016, after a 14 day journey through Kazakhstan and Turkmenistan from China’s eastern Zhejiang province.

China also sent a freight train to Britain filled with clothes and other retail goods. This was followed by the first-ever freight train from Britain to China, laden with whisky, soft drinks and baby products, in April 2017. The 32-container train started its mammoth journey from London Gateway container port on the River Thames bound for Yiwu on the Chinese east coast. It was seen off on its 18-day, 12,000-kilometre (7,500-mile) journey with a string quartet, British and Chinese flags, and speeches voicing hope that it will cement a new golden age of trade between the two countries as the UK leaves the European Union.

The journey will take three weeks. The train will travel across France, Belgium, Germany, Poland, Belarus, Russia and Kazakhstan.”We are proud to be able to offer the first ever UK to China export train,” said Xubin Feng, the chairman of Yiwu Timex Industrial Investment. “This is the first export train and just the start of a regular direct service between the UK and China. We have great faith in the UK as an export nation and rail provides an excellent alternative for moving large volumes of goods over long distances faster.” The rail route is cheaper than air freight and faster than sea freight, offering logistics companies a new middle option.

China is  creating a  new ‘ maritime  silk route’  starting from South China Sea and taking in the new ports China is helping to build  at Sitwe (Myanmar), Chittagong (Bangladesh), Hambantota (Sri Lanka) and Gwadar (Pakistan). This ‘string of pearls’ will secure for China, a trade route which will control the Indian Ocean from the Persian Gulf to the Malacca straits. These are commercial ports, not naval bases  and    China will have rights over the ports. There are plans for a gas pipeline from Bay of Bengal through Myanmar to southwest China as well.

There is special focus on Pakistan. There is    the China Pakistan economic corridor” (CPEC) funded by China on subsidized loans. This corridor will go across Pakistan and link Gwadar in southwestern Pakistan to China’s northwestern autonomous region of Xinjiang via a vast 1800 mile highway and high speed railway over the Himalayas to Xinjiang province.  This port and land route will help to get oil across to China bypassing the sea route.

Pakistan’s Gwadar port, located near a 2,282 acre free trade area in Gwadar, is modeled on the Special Economic Zones of China. The site will include manufacturing zones, logistics hubs, warehouses, and display centers. Businesses located in the zone would be tax exempt.  The port started operating in November 2016. China   will also fund a new international airport in Gwadar.  China has    built six nuclear reactors in Pakistan over the last two decades,

Heads of state from more than two dozen countries will attend a major summit in Beijing in May 2017, to discuss China’s Belt and Road Initiative” and its series of infrastructure projects across Asia, Europe and Africa. They include the heads of state of Czech Republic, Ethiopia, Hungary, Indonesia, Italy, Kenya, Malaysia, Myanmar, Philippines, Russia, Spain. Switzerland Turkey  and Vietnam. The leaders of France and Germany had indicated their willingness to attend the summit, but were unable to  do so  due to the impending electiosn. United States, the United Kingdom, Australia, Germany and Canada will not attend.

Military wise, China is building its first overseas military base at Djibouti about 8 miles from the largest US military base in Africa.   USA’s Pentagon predicts that China will also start a base in Oman’s port of Salah. China   has become a weapons producer, observed India’s Colonel Hariharan.   It can deliver  missiles and nuclear weapons from air craft, surface ships  and  submarines. China has also has developed a  powerful drone bomber with a range of 15,000 miles , which can fly for two days without refueling. It is capable of carrying smart bombs, missiles and high tech radar jammers. It is considered one of the most powerful unmanned combat aircraft in the world.  China is also building  a huge navy to protect its shipping.

China is now recognized as ‘the new player in the super power game.’ China is already flexing its military muscle in its immediate neighborhood, especially in the sea lanes of the South China Sea with a long-term view to extending its influence to the Indian Ocean and beyond to the African seas.  China and Nepal began their first-ever joint military exercises in April 2017.  (To be continued)

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