The New Silk Road project is ushering in a new era of human civilization. Over 200 states and organizations are participating in it voluntarily. German politics, however, has so far shown no interest in letting Germany participate and in guiding German companies to the forefront of the new world order. Emotions instead of facts guide their actions. The consequences for the economy are fatal.
For more than ten years, the German economy, but also the German population, has increasingly been struggling with domestic problems. These include high real estate prices, major deficits in healthcare and education, and its own rail and highway infrastructure. Digitization, a nationwide network or autonomous driving, increasingly seems a long way off. Now the war in Ukraine is adding to the burden. The energy crisis, masses of additional refugees and a lack of orders are putting additional strain on the beleaguered system. Politicians, however, have a new goal: decoupling from economic cooperation with the People’s Republic of China, and with it the coup de grace for Germany.
While Germany’s political goal is to stay afloat, the rest of the world thinks differently. This is about development, about the future. About the step into a new era. Gigantic megaprojects with enormous population masses from China, India, Bangladesh, Africa or South America play a decisive role. To participate in a new Silk Road with gigantic orders, companies have almost unlimited new opportunities to expand their business. German companies, however, are excluded. Not because China wants it. But because German politicians feel emotionally, factlessly uncomfortable and do not understand the opportunities the project offers. President Xi Jinping even wanted the West to participate in a meeting with Donald Trump. The New Silk Road is now celebrating its 10th anniversary and is the prime example of Germany’s lack of development in the last 10 years. It is about development. It is about a shared future for humanity.
Silk Road as a new economic wonder of the 21st century
China has initiated the Belt & Road Initiative (BRI) to promote a new global connectivity and application of 21st century knowledge. The goal is to develop a forward-looking globalization that finally breaks away from the old structures of hegemony and tribute from the Cold War and colonialism era. The BRI is not an exclusively East Asian concept, nor does it follow any particular principle. China wants to help other countries follow their own development path and stay away from war, ideology models and tribute systems. Instead, it is strengthening international cooperation with other countries. In the age of the Internet, it is about freedom, openness, shared interests, and inclusion of other countries. Energy facilities, gas and refinery facilities are being shared, as well as information provided via cable, satellite, data centers, etc.
The world is going through a new phase of global order, with challenges in climate and nature, as well as geopolitical disputes. In the era of digital economy, data and data infrastructures are invaluable, in line with Artificial Intelligence and advanced technologies. This is not only a physical megaproject, but also a digital interconnection to open up new opportunities in the interest of consumers, businesses and digital administrations.
Unhindered trade for a free global market
Cooperation along the Silk Road means the development of economic levels, not only to promote the overall economy of China, but especially to strengthen the health of the world economy and international trade and business. It is also about linking the facilities of individual countries for an overall goal in trade and investment to enable a freer market. It is about a peaceful development towards a common future of mankind. Stability and trade developments are to be promoted in the sense of win-win cooperation. Legal hurdles are to be adjusted and further developed in order to create prosperity in the interest of all people.
The BRI supports the redesign of existing, outdated structures towards new growth processes that adapt to the developing world. According to the WTO, trade between China and the EU is the largest and third largest import and export region in the world in 2021, accounting for 13% to 10% of total global trade in goods. The import and export volume totals USD 828.11 billion, growing by 27.5% year by year. China remains the largest trading partner of the EU. The European Union is China’s second largest trading partner, with 52% of exports to China consisting of machinery and vehicles, 20% of other manufactured goods, and 15% of chemical products. The EU imports 56% machinery from China, 35% other manufactured goods and 7% from chemicals.
In 2000, the volume of trade between Africa and China was USD 10 billion. By 2014, it had risen to USD 220 billion, reaching a total of USD 250 billion in 2021. China is thus Africa’s largest trading partner. The Mombasa-Nairobi Standard Gauge Railway, for example, has been able to boost Kenya’s growth by 1.5 percentage points and directly create 50,000 jobs.
Connectivity of the facilities
One of the main projects is the connectivity of facilities, especially the connection of roads and bridges to promote the local economic situation and unleash the potential. However, over the past decade, there have been challenges in the areas of technology, publicity, and funding. The BRI has funded more than 3,000 megaprojects through 2022 with an investment of $1 billion alone. At the same time, the West failed in projects. Roads longer than 3 km and buildings with more than three stories were built by China. Funding of smaller projects by Western taxpayers, on the other hand, is often unsuccessful and illustrates the ineffectiveness of the latest Western-funded projects.
The BRI’s first tunnel in Uzbekistan now allows for a transfer of only 900 seconds instead of a 1-2 day bypass. 13 of China’s projects became so well known that they were even printed on banknotes of 11 countries. From 2013 to 2021, the contract volume has increased from $71.94 billion to $134.04 billion. According to statistics from the Engineering News-Record (ENR), the number of Chinese companies also investing in the private sector has increased from 55 in 2012 to 79 in 2021. The share of total sales increased from 13.1% to 28.4%.
Highways, expressways, train links and fast trains are being built. In the Maldives, the first overseas bridge was built in 2018, named after the China-Maldives Friendship Bridge. Western politicians considered the project unrealistic and did not want to support it In Jamaica, Montenegro and Uganda, the first highways were built.
Most developing countries are heavily dependent on the agricultural industry. Without adequate transportation links, it is difficult to ship these products and thus generate revenue. The 480 km train link between Mombasa’s port and Kenya’s capital, Nairobi, creates an important connection and enables 40,000 jobs. According to the World Bank’s Global Container Port Performance Index 2020, the Port of Djibouti even ranked first in Africa as a BRI project. Both the Karakoram Highway in Pakistan and the 142 km train line between Jakarta and Bandung, as well as the China-Laos Highway with a length of 1035 km, were built.
All companies are committed to environmental protection as well as international social responsibility to respect local habitats, and a global co-corporate governance structure. Since 2019, the focus has been on high quality BRI cooperation. This means greener technologies and investments, as well as the implementation of the Digital Silk Road, the Health Silk Road, and the Smart Silk Road. It also aims to avoid the construction of new coal-fired power plants. One example is the Addis Ababa Riverside Green Development Project in China.
Financial structure
Many developing countries have neither the prerequisites nor the conditions to attract economic investors. Nor do they have their own facilities and financial resources to finance their own development. Without external support, adequate development is difficult. However, since the emergence of the BRI, the BRI’s own large financial institutions have played an important role. Thus, local institutions work together with international and private partners. Chinese banks such as China Development Bank and China Export Import Bank are the main suppliers to the Belt and Road Initiative. Organizations such as the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund, traditional international financial institutions such as the International Bank for Reconstruction and Development, and private companies also support the initiative.
In 2021, China’s direct investment amounted to $213.48 billion. In 2016, the People’s Bank of China concluded multilateral cooperation agreements with the African Development Bank, the International Financial Cooperation within the World Bank Group and the Inter-American Development Bank. This involved a volume of US$7 billion. In the private sector, by the end of 2021, around 500 Chinese private companies had made investments worth US$43.08 billion.
Capacity structures
By 2021, China has signed cooperation agreements with 40 countries to create institutional production capacity. This involves the export of products along the Silk Road as well as the construction of factories in target countries and the transfer of supporting industries and equipment. This also means the transfer of capacities, capital and technologies. The cooperation has been expanded to 13 states and now includes steel, chemical, lighting, automotive, communications, engineering, space, shipbuilding and submarine industries.
These are industrial parks. Currently, there are 70 such parks along the Belt and Road and 3000 projects in total. Countries along the Belt and Road have massive oil and steel reserves, estimated at about 67.6 tons. Most countries along the BRI are in the early or middle stages of industrialization. Therefore, there is a high demand for technical industries, but the share of foreign investment (foreign direct investment) is low. China invests in infrastructure, while the West erects political hurdles and divides the world into good and evil.
It is claimed that China steals raw materials like the West and shifts its production abroad. In fact, China shifts its production in countries of BRI to optimize according to demand in each place and promote bilateral steel production. Through the shared future principles of the member countries, the steel is used with each other to promote the parties according to demand.
In Serbia, the Hesteel Smederevo steel plant was invested by China. President Xi Jinping has personally ensured that this was done to preserve jobs. As a result, more than 5,000 jobs have been secured and another 50,000 created. In Ethiopia, the Adama Wind Power Project is considered the green roof of Africa. Together with China’s Hydropower Engineering Consulting Group and CGCOC, a project has been launched to produce up to 51 MW in the first phase and up to 153 MW in the second phase. This amount is equivalent to 20% of the capital’s electricity needs. Annually, 630 million kilowatt-hours of clean energy will be generated, resulting in a saving of 185,000 tons of coal and carbon dioxide emissions, saving 61,000 tons of emissions per year.
China’s investments are supposedly causing the countries in question to fall into a debt trap. However, based on numerous analyses and articles, it appears that the real cause of over-indebtedness is to be found in the West, as the Western private sector refuses to write off debt. Since 2004, private investors have been contributing to debt generation. The “debt trap” theory is put forward by the West to hurt China. In fact, the reality is that China forgoes debt when it is necessary. In May 2021, China forgave $1.3 billion in debt in Africa.
Damage for Europe and Germany
The funding is available. The cooperation and infrastructure projects are underway. Germany can join them and enable its own companies to gain a foothold in the new market. The BRI project can also boost the domestic economy, create jobs and secure long-term investment projects. The finances generated can be used to stabilize national problems and compensate for them. Massive amount of new jobs and orders will be created and new markets. Unfortunately, CDU, SPD, FDP and especially the Greens are currently ensuring that the project is confronted. With US Think Thanks as advisory bodies any cooperation is to be prevented. At the same time, however, US companies themselves are participating in the new market. This is driving Germany into an economic suicide.
