Macroscope | Rethinking ‘one belt, one road’, though doubts linger

Am I too sceptical  about the “one belt, one road” vision? So many are so very excited, I have been forced to pause, and to wonder whether I am wrong.

You may recall I wrote two weeks ago that the  one belt, one road  concept is “likely to be empty of short-term significance from a strict trade and investment point of view”, and that it is instead much more “a new prism with which to view the world economy, and the global balance of power – not a prism hovering over the Atlantic, with the US on one side and Europe on the other, but one firmly over China”.

But as I learned this week of a major three-day “East Russia Economic Forum” being hosted in Vladivostok early in September by President Vladimir Putin, I have been forced to pause. Perhaps there are aspects of the  one belt, one road vision that may have very immediate significance from both a trade and investment point of view. So too with the  focused Hong Kong government commitment to develop the concept around its long-neglected trade and investment relationship with the Asean economies.

Let me re-emphasise my original reasons for scepticism: first, many of the elements of the  concept are old wine in a newly marketed bottle. China’s economic relationship with Southeast Asia is set to grow apace anyway, with or without one belt, one road.  So too its relationship with the EU economies at the far western end of this new silk road.

The idea of building stronger economic links west into the long-neglected “stans” – Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and so on – may be exciting and new, but these economies are so small and unpopulated that trade and investment will take many years to warm up.

Trade links with Iran, Iraq and other Islamic states of the Middle East and north Africa may offer great potential, but I am very confident that these are going to remain deeply troubled economies for at least my lifetime – hardly a region around which to build a radical new economic policy.

Links with Africa’s economies will be increasingly important, but do not sit in any natural way on any silk road or maritime belt. Since the early 1980s when I read daily reports of high-level exchanges, and trade and investment commitments between China and African states large and small, it has been clear that Beijing has a keener and more focused interest in Africa than most Western economies. The one belt, one road  vision in no way alters that.