China’s Belt and Road Initiative and the Global Power Transition

Prof. Manochehr Dorraj
Language
English
Abstract

Using quantitative data, this paper focuses on the impact of China’s Belt and Road initiative (BRI) on Global power transition. BRI is an Afro-Eurasian, Pacific-Atlantic, Mediterranean-Arctic vision of a multipolar world and the place of China’s soft power in that world. It is intended to deepen relations with the regions encompassing the new economic Silk Road and the new Maritime Silk Road, including East-West and Central Asia, Iran, India, Pakistan, Turkey, Israel, the Arab World, Africa, Russia, Latin America, and Europe. This area of the world “contains 4.4 billion people (63% of the world’s population) with an aggregate GDP of $2.1 trillion (29% of the world’s aggregate wealth).” China has begun building a network of transportation, internet, broad band and ports to facilitate the expansion of trade, using regional and Chinese currencies, bypassing US dollar. So far 131 nations have signed unto BRI. In 2016, 52% of Chinese engineering projects were in Belt and Road countries. In 2017, this figure jumped to 56%. China is building a global financial apparatus as an alternative to the ascendant financial institutions dominated by US and its European allies to Finance its BRI project. So far China has invested $1 trillion to get the BRI off the ground. This amount is anticipated to expand to $5-8 trillion in future. The current US deficit of $23 trillion VS China’s surplus of $2 trillion ensures that China would have plenty of cash in its coffers to finance its ambitious BRI project. The current lose-lose tariff war between the two countries notwithstanding, projections are that by 2040, China is going to overtake the US economy in Gross Domestic Product (GDP) and Gross National Product (GNP). By 2060, US economy is projected to count for 17% of the global GDP and China’s economy would count for 28% of global GDP. These developments portend the early stages of a global realignment of power that is going to impact Russia and the European Union nations as well. We would also chronicle and analyze how Trump administration policies are accelerating this transition of power. Finally, we would speculate on the possible scenarios regarding the future direction of global power transition.