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One Belt, One Road

China’s belt and road can take its cues from the world’s first model of globalisation

Juan José Morales and Peter Gordon go back in history to find thriving trade of global scope that is radically different from today’s, apart from the fabled Silk Road

PUBLISHED : Friday, 02 December, 2016, 11:05am
UPDATED : Friday, 02 December, 2016, 6:41pm

International politics, even more than nature, abhors a vacuum. And with America’s apparently headlong withdrawal from the Trans-Pacific Partnership (TPP) and metaphorically – if not yet physically – walling itself from Latin America, it is hardly surprising that Chinese-led alternatives were broached at the recent Asia-Pacific Economic Cooperation summit in Lima. “As Trump talks wall, China builds bridges to Latin America,” went the Associated Press headline.

Right on the heels of President Xi Jinping’s ( 習近平 ) sojourn in Peru, he met Spain’s deputy prime minister, Soraya Sáenz de Santamaría, on a stopover in the Canary Islands. They discussed the possibility of joint projects in Latin America: the two countries are very much “in tune” on this subject, she said.

What Hong Kong has to learn from the rise and fall of Manila

One would need a long memory for this rapport between China and the Spanish-speaking world to sound familiar, but the world has in fact seen this before. If the American-led globalisation is indeed on the wane, then what replaces it may well be something akin to the world of the 16th-18th centuries, during which international trade was very much configured on precisely this China-Spain-America triangle.

Hong Kong is situated perfectly to take a key and – should it make an effort – primary role in the re-emergence of the ‘Silver Way’

The advent of globalisation can be precisely dated to 1565: in that year, Spanish navigator Andrés de Urdaneta discovered how to sail east, i.e. back, from Asia to Mexico. Within a decade, this route developed into the “Manila Galleon” trade with regular sailings between Acapulco and Manila. American silver was exchanged for Chinese silks and ultimately products from throughout Asia.

This “Silver Way”, as we have called it, provided the key elements of what we now call globalisation: bi-directional trade routes of global scope and integration of world financial markets through the medium of silver. There were corresponding human and cultural exchanges, with tens of thousands of Asians emigrating to the Americas; Mexico, arguably history’s first “world city”, had a Chinatown in the early 1600s. The Spanish milled dollar, dating from the 1730s, was the first global currency.

Since globalisation predates the key elements of the traditional (Anglo-American) narrative – which says that globalisation is tied to liberal economics and politics, and post-war international institutions – it can neither derive from nor be concomitant with these. And globalisation need not necessarily retreat with Brexit or withdrawal from the TPP.

How to save globalisation from its demise

Belt and road points the way to a 21st-century Renaissance, if China stays true to its vision

Indeed, a rising but not liberalising China never fit well into the traditional narrative; it is better accommodated by moving the globalisation story back two centuries, to a period before New York and London were financial capitals. Several key characteristics of China were evident even then: manufacturing prowess and a reticence to engage with the world except on its own terms.

Perhaps most importantly, this early period was characterised by both the lack of an institutional framework for globalisation and the absence of a leading national player, resulting in an instability that resembles the one we may be entering. Trade, and globalisation, nevertheless proceeded.

It is easy to see the Silver Way as a parallel to and in some ways a successor to the Silk Road. One went east overland, the other east over the Pacific, but both were similar. And both offer modern China paradigms for organising its relations without reference to the institutions and procedures of the post-war order. China has formalised this with “One Belt, One Road” and one can see the glimmerings of a modern reincarnation of the Silver Way.

Hong Kong must seek sister cities to truly benefit from ‘One Belt, One Road’

Hong Kong is not ideally situated for key involvement in “One Belt, One Road” – it is in the wrong place. But it is situated perfectly to take a key and – should it make an effort – primary role in the re-emergence of the “Silver Way”. Start learning Spanish.

Juan José Morales and Peter Gordon are co-authors of the forthcoming The Silver Way: China, Spanish America and the Birth of Globalisation, 1565-1815. Morales is former president of the Spanish Chamber of Commerce in Hong Kong and Gordon is editor of the Asian Review of Books