Chinese Expansion, Pre-COVID-19

Scholars have long used “Silk Roads” to refer to ancient east-west trade routes. According to historian Peter Frankopan, however, modern-day Silk Roads are more than trade networks – they’re a state of mind.

In this engaging study of global geopolitics and economics, Frankopan explains that when a Chinese billionaire buys a soccer club in England or a condo in Vancouver, he’s traveling a post-globalization version of the Silk Roads, whether in person or virtually. China, India and other emerging nations embrace this concept; the United States and Europe oppose furthering globalization.

Finding ways to work together is neither easy nor a given.Peter Frankopan

Readers should note that Frankopan’s insights appeared in 2019, prior to the COVID-19 pandemic and Russia’s more recent invasion of Ukraine and the accompanying havoc they wrought on world trade.

Globalization

Under globalization, commodities move along ancient east-west trade routes, Frankopan writes. Western real estate markets, for example, have seen a huge influx of Chinese capital. Exports of French wine to China jumped 14% in 2017, and Starbucks announced an initiative to open 2,000 locations in China by 2021. Pakistan, meanwhile, features the world’s fastest-expanding retail economy.

Chinese Tourism

A boom in air travel exemplifies changing trade patterns. Chinese citizens’ tourism expenditures jumped from $500 million in 1990 to $250 billion in 2017 as Asian travelers now make or break tourist destinations. The International Air Transport Association forecasts that passenger counts will double to 7.8 billion by 2036, thanks primarily to newly well-to-do Chinese, Indians, Turks and Thais.

“Belt and Road”

China’s ambitious “One Belt, One Road Initiative” aims to push the nation to the forefront of international trade. It embraces Asia, Africa, Europe and the Arctic and includes investment in cyberspace and outer space sectors. In 2017, Chinese President Xi Jinping predicted, “Exchange will replace estrangement.”

The changing world means changing spending patterns and living habits at home as well as abroad.Peter Frankopan

In 2015, the China Development Bank announced it would invest $890 billion in 900 projects. More than 80 countries from Central Asia, South Asia, the Middle East and Eastern Europe have agreed to form partnerships with China. According to Frankopan, China must meet its massive domestic demand for resources, as it seeks to shift from a manufacturing economy to a contemporary, services-based economy. It also craves security, as evidenced by its nation-building military bases in the South China Sea, which the Permanent Court of Arbitration ruled China has no right to possess.

Chinese Investment

China says the Belt and Road Initiative is worth $1 trillion, but some wonder whether its actual investment will approach that amount. The goals of the Belt and Road Initiative are difficult to parse, Frankopan found. It’s a strategy of investing nearly everywhere and in almost everything. Moreover, strongmen and kleptocrats, such as Zimbabwe’s Robert Mugabe, run many of China’s new partner-nations, which suggests that much of China’s investment will line their pockets.

The expansion of China’s perception of its national security interests has played an important part in the development of locations in the South China Sea and beyond.Peter Frankopan

Or, Frankopan asks, is China creating a new colonialism by seeking to exploit poor nations? For example, Kenya accepted Chinese backing of a $3.6 billion railroad project, but chafed at the lack of reciprocal opening of Chinese markets to Kenyan exporters. Beijing either controls or financed – on onerous terms – seaports in the Maldives, the Republic of Djibouti and elsewhere. 

UK and US Wariness

China curries favor wherever it can, building ties, for example, with Saudi Arabia and Iran: mortal enemies that both possess vast oil reserves. But as China and other Silk Road economies deepen their ties to the wider world, Western nations seek to untie themselves from foreign markets as they erect new barriers to free trade.

Compared with the Silk Roads and Asia, Europe is not so much moving at a different speed as in a different direction.Peter Frankopan

The presidency of Donald Trump portended wariness of the new Silk Roads, as did the Brexit victory in the United Kingdom. Italy, Germany, Poland and Hungary also initiated anti-integration measures and backed away from ties with the European Union.

Co-Dependents

The United States has decried China’s massive looting of American intellectual property, valued at hundreds of billions of dollars. Still, as Frankopan points out, the United States’ effort to resist ties with China is a futile endeavor for both countries. Fully 20% of Apple’s sales come from China, Hong Kong and Taiwan. Alcoa, the Pittsburgh-based aluminum producer, saw its shares plunge in 2018 after it informed investors that Trump administration anti-China tariffs would cost it $14 million a month. Trade continues apace. General Electric won more than $2 billion in Chinese contracts in 2016, and Chinese airlines could drop $1 trillion on planes made by Boeing.

New Alliances

While India remains circumspect about binding itself to the United States, it seeks new trading relationships through its own Silk Roads programs. Other nations offering global connections include Saudi Arabia, through its Vision 2020 plan; Russia and its neighbors in the Eurasian Economic Union; and Vietnam, Laos, Cambodia and Myanmar, all of which have their own development plans.

Seasoned watchers of the Silk Roads also know that unpredictability and eccentricity are par for the course.Peter Frankopan

Frankopan believes that, increasingly, nations are taking a pragmatic approach to the new Silk Roads. For example, Iran and Turkmenistan have proposed gas swaps, even though the two nations have been embroiled in a decade-long financial dispute. And, since Kazakhstan, Uzbekistan and Tajikistan eased checkpoints and other trade barriers, all three nations have seen double-digit growth in trade.

Insightful but Outmoded

Frankopan is an engaging writer, well-informed regarding 2019 politics and outlooks and, as his other books show, deeply vested in the historical Silk Road and its consequences. Unfortunately, however, COVID-19 and its effects, as well as subsequent events, consign many of Frankopan’s conclusions and predictions to a future that never arrived and seems unlikely to show up now. Nations have vigorously retrenched, of necessity, and as global demand cranks back up, global supply lags far behind. Consider this, then, a worthwhile, interesting, well-reported and detailed portrait of a specific era, now over.

Peter Frankopan also wrote The Silk Roads and The First Crusade. Books on China’s international initiatives include Belt and Road: A Chinese World Order by Bruno Maçães and Asian Waters: The Struggle Over the South China Sea and the Strategy of Chinese Expansion by Humphrey Hawksley.