One Belt, One Road (OBOR) to gird the world
July 7, 2017 3:52 AM   Subscribe

China’s Belt and Road Initiative (also known variously as The New Silk Road, OBOR, and One Belt, One Road) is a multi-faceted strategy aimed at boosting the flow of trade, capital and services between China and the rest of the world, involving over 65 countries which together account for 29% of global GDP and 63% of the world's population. OBOR is an ambitious plan to build and upgrade highways, railways, ports, and other infrastructure throughout Asia, Africa, and Europe designed to enrich the economies of China and its trading partners. Since 2014, the initiative has generated enthusiasm and high hopes but also skepticism and wariness.
posted by infini (22 comments total) 29 users marked this as a favorite
 
Thanks, infini - luckily it's raining today, so I'll just be sitting here with a nice cup of tea
posted by mumimor at 4:01 AM on July 7 [1 favorite]


I heard about the China - UK rail connection (that just started earlier this year!) on the radio a few weeks ago and my mind was a bit blown. That's pretty astounding.
posted by hippybear at 4:02 AM on July 7




Well, at least someone is investing in infrastructure, even if we aren't.

Photos I've seen recently from people traveling in Africa show Chinese road building crews everywhere. Whether or not the political/economic goals come to fruition, this will have left a lasting mark in many places.
posted by Dip Flash at 4:49 AM on July 7 [6 favorites]


Some Chinese memes.

- "In my neighbourhood, there are roadful of conmen."

- "Where we live, the roads are full of potholes."

- "In my neighbourhood, the sting cops are up and down the road, waiting to capture some john dudes."

Boring explanation:

一带 = literally, 一 (one) + 带 (belt, tape, fig. belt-shaped region), OR generally, an area, a neighbourhood. 我们那一带 = our neighbourhood / where we live / around our home.
一路 = literally, one road, OR with 一 as "entirety of" + noun, i.e. 一家老小 = the entire family, everyone (lit. one family old and young).

Therefore you can form endless memes by exploiting the syntactically overloaded constructions.

The sting cops are another meme, invoking the images of the police (or "para-police") abducting "undesirable" citizens without probable cause (and hold them without trial, usually with torture), and charge them with "soliciting prostitution."
posted by runcifex at 4:50 AM on July 7 [2 favorites]


Jesting aside, the Chinese are doomed to invest in foreign infrastructure, as a consequence of its massive inability to consume its domestic products (due to the household being crushed and taking an ever smaller cut in the distribution of income). This means that China must take a trade surplus, and by definition, capital outflow (that is, investing in foreign assets). Unless there is domestic rebalancing, China must export its excess capital.

Traditionally, this is done by domestic capital control (centralizing the foreign-denominated savings as government foreign reserve) and hoarding of US Treasuries paid by such reserves. However, China must prepare for the day when the US will no longer want its Treasuries be hoarded without restriction. This means there must be new kinds of foreign assets to be owned.

Also, Crony Capitalism with Chinese Characteristics (CCCC) means the heavy-capex industries, dominated by gigantic state-owned conglomerates (each with its own special interests), exert significant sway on policy. Among them, the most powerful ones are all on the supply chain of infrastructure construction. As domestic return diminishes, they (and by proxy, the state) must move the capital out to where it can be absorbed. They don't even have to turn a profit, as long as the SIGs are compensated in some way, for example politically.

This is more or less how I look at the big economic picture. There will be more. As capital is exported, along with it will be Chinese-flavoured capitalo-societal institutions. This will be Finlandization on (domestic debt-financed) steroids.
posted by runcifex at 5:18 AM on July 7 [19 favorites]


This means there must be new kinds of foreign assets to be owned.

... Or old kinds, if you want to go all longue durée.
posted by PMdixon at 6:41 AM on July 7


This post is better than the one I was planning, and it could use a soundtrack
posted by the man of twists and turns at 7:04 AM on July 7 [4 favorites]


>Well, at least someone is investing in infrastructure, even if we aren't.

I assume that means the USA, and it is funny (not ha ha funny) that the US has forgotten that the major beneficiary of investment on the fringes is the centre of the empire. I guess that the US will gain some advantages too, from China's investment, as trade increases due to easier conditions, but presumably, the gain to China will be greater.

>However, China must prepare for the day when the US will no longer want its Treasuries be hoarded without restriction.

Indeed. As much as the US debt is a problem for the USA, it is also a problem for the purchasing states. Everything needs balance and the unbalanced current situation is ripe for disruption. Not sure if I want to be a heavily armed debtor, or highly populated creditor if the wheels gum up. In many ways it is better for the USA to default early while it still has global supremacy, rather than later when there could be practical challengers.
posted by bystander at 7:31 AM on July 7 [1 favorite]


Photos I've seen recently from people traveling in Africa show Chinese road building crews everywhere. Whether or not the political/economic goals come to fruition, this will have left a lasting mark in many places.

Indeed it will.
posted by Sangermaine at 8:10 AM on July 7


Indeed. As much as the US debt is a problem for the USA, it is also a problem for the purchasing states. Everything needs balance and the unbalanced current situation is ripe for disruption. Not sure if I want to be a heavily armed debtor, or highly populated creditor if the wheels gum up. In many ways it is better for the USA to default early while it still has global supremacy, rather than later when there could be practical challengers.

China has been selling off treasuries for years. They're down to a hair above a trillion ($1.092 trillion) and Japan is above China now at $1.1 trillion holdings of US debt.

The balance here is isn't in foreign debt, the foreign debt holdings really are a pittance compared to the real sleeping dragon. The balance (who's destruction is being currently threatened) is the inflationary pressure of the intragovernmental holdings that SS and The Fed hold. This pressure is held in check by the global hegemony of the almighty US dollar. Losing that hegemony and the global demand for all the dollars we can print (and shove out into the world for real goods!) would cause catastrophic hyperinflation.

It kind of pisses me off that Trump gets on his goat about trade deficits and threatens defaulting on treasuries because, asshole, we get to print otherwise worthless pieces of paper and exchange them for real goods from every sucker that's willing to take them! When you hand away otherwise worthless paper for goods you're going to have a fucking deficit. But this magic spell only works while our worthless pieces of paper are unassailably worth their face value in goods to the rest of the world.
posted by Talez at 8:23 AM on July 7 [12 favorites]


Like I'm not sure Trump and Co understands the advantage we get when East Bumfuck Nowhere wants to buy a barrel of oil. They need to send us $45 worth of goods to get the $45 of paper that they then send to the oil guys to get a barrel of oil.

Even if they buy the $45 from someone else that someone had to send us $45 worth of goods at some point in time to get that $45. And since moderate inflation steadily erodes the purchasing power of the USD it doesn't matter how long ago that trade was made for that $45. We "won" no matter what happened.

Then! And this is the best part! Once the oil guys get their $45 they send it straight back to us for safe keeping and a nominal amount of interest that doesn't even cover the erosion of the purchasing power! The debt is completely immaterial because we're not even paying real interest. We get to invest that money into our own population who then turn it into even more money. It's a FUCKING RACKET that we get to do this.

And now we're doing our best to rock that fucking boat for some sort of white male dominance display of machismo.
posted by Talez at 8:37 AM on July 7 [11 favorites]


wait, what was a that, lightning in the distance, is that thunder roiling on the horizon?
posted by infini at 8:44 AM on July 7 [1 favorite]


Pepe Escobar has been reporting about this for several years.
Here's a link to a recent update.
posted by Mesaverdian at 12:32 PM on July 7


Like I'm not sure Trump and Co understands the advantage we get when East Bumfuck Nowhere wants to buy a barrel of oil.

You're talking about a dude who uses bankruptcy as a standard financial tool.
posted by Thorzdad at 1:01 PM on July 7 [2 favorites]


Can we not make this a Trump discussion, please?
posted by hippybear at 1:04 PM on July 7 [3 favorites]


After having read some, but not all of the linked articles (those links are veritable Chinese boxes!) I am reminded that we are all entering a whole new global order which is really hard to adapt to. It's not so much if you "like" the US, or Russia or China or Africa or the EU or whatever, it's that the balances that determined how the big wheels of power worked are now tilted and there is a new balance.
As I am confused, I realize how much of my understanding of whatever happens in global politics has been based on a set of assumptions that all point to the US being a hegemon even as I was critical of the US as a hegemon. Now that is gone, nothing I knew last summer applies, and I wonder what that means, if I should be worried, and how it may change over time.
posted by mumimor at 3:06 PM on July 7 [2 favorites]


As I am confused, I realize how much of my understanding of whatever happens in global politics has been based on a set of assumptions that all point to the US being a hegemon even as I was critical of the US as a hegemon. Now that is gone, nothing I knew last summer applies, and I wonder what that means, if I should be worried, and how it may change over time.

This is clarity. Thank you.

It's not so much if you "like" the US, or Russia or China or Africa or the EU or whatever, it's that the balances that determined how the big wheels of power worked are now tilted and there is a new balance.

Imho only, this is the issue.

and for clarity's sake I'll frame these points here as they are, and return with another cup of coffee to share my own rambling thoughts
posted by infini at 1:04 AM on July 8 [1 favorite]


Here's an example of the interpretation of events that happens when looking through a lens which, as you just framed, mumimor, doesn't really apply anymore. Essentially, what you're saying is that the underlying frameworks and foundation for analysis do not apply, thus, now what?

Given that the past, however it may have been, was still driven by a vision that was global, based on mutually accepted and held values, and provided structure and frameworks for framing a future for the planet, the biggest challenge now seems to be a lack of that driving vision.

Or, at least, a driving vision that is inclusive enough, sustainable enough, and beneficial enough to resonate with enough of the planet's population.

In this vacuum, if the events of this weekend are anything to go by, if there emerges a viable such vision, that speaks to enough of the majority, would it not then flourish simply because there was no viable, desirable, feasible alternative vision that made sense anymore?

The world has indeed changed in the 8 or so decades since the original vision was crafted. If we were to step back and look at it like a startup, everyone would be pointing out the need for a pivot. Or, if it was a company - Kodak comes to mind - b-school case studies would be filling up the publications with all the jargon of innovation and transformation and human centered strategies.

Why then does there seem to be a continued yet unspoken assumption that the global vision of humanity's peaceful future progress that seeks to preserve the planet and its life forms, its resources and its quality (air pollution in Asia for instance) should hold true even when the context and criteria for it has changed around it?
posted by infini at 2:54 AM on July 8


I´d just like to point out that Chinese involvemant in Africa is not exactly new.
In the modern era they have been active in infrastructure since Tanzania independence in 1964 when they started construction of the railway to Zambia completed in 1976.
Three years ago Tanzania signed seven agreements with six Chinese companies worth $ 1.7 billion
mostly for the Energy sector but also a new port at Bagamoyo.
There is also 1.2bn investment in a natural gas pipeline. Ports and roads mean China is ‘winning in Africa’.
posted by adamvasco at 6:45 AM on July 8


Does this need to export capital mean a further distortion of various housing markets, e.g., Sydney?
posted by jadepearl at 8:27 PM on July 9


For China’s Global Ambitions, ‘Iran Is at the Center of Everything’

Might this be a reason some American policy-makers are obsessed with war with Iran?
posted by mumimor at 4:33 AM on July 25


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