China is building a new empire that, if President Xi Jinping’s ambitions are realized, will stretch across ‘half the world’ and cement Beijing’s position as the new economic epicenter. The most obvious proof, writes Bloomberg, is undoubtedly the New Silk Road or the ‘Belt and Road’ initiative, an economic development project that has already surpassed the famous Marshall Plan for Europe after World War II.
Xi proposed it back in 2013, describing it as a ‘road for peace’, but his words have failed to dispel the doubts of other world powers, from Japan and the USA to the European Union. Bloomberg journalists therefore visited five cities on three continents that represent important stops on the new Silk Road and checked how beneficial their entry into the whole story has been.
Most of these are poor cities that eagerly accepted the offer from the Chinese, hoping that the projects financed by their money would finally allow them to catch up with the world. Recently, however, it seems that the Belt and Road has also brought with it plenty of reasons for dissatisfaction.
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In Malaysia, one of the countries with the most Chinese investments, new Prime Minister Mahathir Mohamad expressed his concern about the lending conditions and the influx of Chinese labor, which he believes restricts the development of the Malaysian economy. His engagement has put on hold billion-dollar projects such as the construction of a new railway network in the area.
According to estimates by experts from investment bank Morgan Stanley, the Chinese will spend $1.3 trillion over a decade on the renovation and construction of railways, ports, and electrical networks. The growing network of trade routes, as a direct consequence of this initiative, has so far affected 76 countries, mostly in Asia, Africa, and Latin America, as well as several countries on the eastern edges of Europe.
The main goal of the initiative is to strengthen existing and establish new trade and transport links between Asia and Europe through two key components – the land route they have called the ‘Economic Belt of the Silk Road’ and the maritime route, or the ‘Maritime Silk Road for the 21st Century’.
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The first of the cities visited by Bloomberg reporters is the Chinese Yiwu, which they compare to a huge market, flooded with stalls and street vendors. Compared to their first visit to Yiwu in 2014, journalists Kevin Hamlin and Miao Han found an incomparably livelier and more prosperous city that has since attracted more than 10,000 traders from the area ‘from Beirut to Seoul’.
The renaissance of Yiwu is primarily due to the establishment of a direct railway connection with Europe, not only with Kazakhstan and Russia but also with cities such as Amsterdam and London. A large portion of goods until recently was transported to and from Yiwu by ships, while the new train lines have accelerated the entire process by a third and increased the value of exported goods by as much as 79 percent in just the first four months of this year.
A significantly different situation was found by Bloomberg in Hambantota, a city in the jungle in the south of Sri Lanka. Thanks to the influx of money from China, this city has renovated its port and acquired an airport, an international conference center, and a cricket stadium. Despite the investments, things have remained more or less the same, as often not a single airplane takes off from their airport throughout the day, while the average for the new port is less than one ship per day.
Pressed by previous debts and an economy devastated by a thirty-year civil war, the Sri Lankan government literally handed over the new port to the Chinese, making the China Merchants Group its seventy percent owner. They announced that they would bring life back to the port and bring ships from all over the world, but the local population does not really believe those promises.
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Similar announcements have so far proven unfounded in the Pakistani port of Gwadar. Partially surrounded by desert and so remote that it obtains electricity from Iran, this city was supposed to be revived according to Chinese plans through the construction of large residential complexes, which is also ‘on hold’. On the other hand, investments from Beijing have brought them new roads, a hospital, and an airport, significantly increasing the population. The works on the port and shipyard will cost about a billion dollars, but experts estimate that even the new port will not significantly change Gwadar’s position on the economic map of the world.
Despite accusations from local media that the Chinese behave ‘neocolonially, racially, and discriminatively towards local workers’, Kenyan Mombasa is among the cities that have greatly profited from this initiative. During the construction of a nearly four billion dollar railway network, more than 30,000 Kenyans were employed, including many former truck drivers whose livelihoods have been seriously threatened by the new Silk Road, accelerating and modernizing the railway route.
The last city they visited is the Greek Piraeus, where control of the port was handed over to the Chinese state company Cosco a few years ago, leading to protests from workers. The first results showed that there was no need for protests: since coming under the management of the mentioned company, Piraeus has become the seventh busiest container port (it was not even in the top fifteen before), with its earnings jumping by 69 percent in just the first year, or by $429.5 million. The next step is the construction of new port terminals and a nearby shopping center.
