G7 Countries in Search of an Alternative to China’s One Belt, One Road Megaproject

As a result of the latest summit of the G7 countries in Hiroshima, the US, Canada, the UK and the EU adopted yet another, 11th to be precise, package of anti-Russian sanctions. The package includes more than 90 companies from all over the world, which, according to Brussels, allegedly violated the restrictive measures and continue supplying Russia with sanctioned goods (including companies in Armenia, Iran, UAE, Syria and others). At the same time, eight out of these 90 companies operate in China.

In this regard, the President of the European Commission, Ursula von der Leyen, in an interview with the German TV channel ZDF, referring to China (whose companies were sanctioned for the first time since the beginning of the Russian-Ukrainian military and political crisis), emphasized the need to find an alternative to the Chinese megaproject One Belt, One Road.

As you know, given the leap in the Chinese economy at the beginning of the 21st century, Chinese President Xi Jinping first proposed in 2013 a global international project One Belt, One Road as a kind of revival of the historical Silk Road. The essence of Beijing’s initiative is to intensify multilateral trade and investment projects with the participation of more countries and the use of Chinese and foreign capital. For the past 10 years, 152 countries and more than 30 international organizations have joined this project.

Naturally, such initiatives are not born out of nothing and pursue the far-reaching strategic interests of the initiating country. Accordingly, the dynamics of economic development (first of all, modern high-tech industrial production) and high demography of China have created objective conditions for the export of Chinese goods to world markets, GDP growth, strengthening of the national currency yuan and systematic access to new markets and regions (countries).

Taking into account geographical distances and objective need in modernization of logistics (especially land trade communications – roads and railroads), and also taking into account high financial opportunities of the European market China works on new projects on development of multilateral (first of all, trade and investment) relations with different countries to form diverse and alternative trade communications within the One Belt, One Road initiative.

Among such alternative international routes to the west, China has already developed three options:

1) the “Russian corridor,” that is, through the territory of Russia and on to Europe (but now, for obvious reasons of the West’s anti-Russian sanctions regime, this route toward the EU countries may be temporarily suspended);

2) “the middle corridor” (conditionally also called “the Turanian corridor,” because its main beneficiaries are mainly the Turkic world or the members of the Organization of Turkic States), involving a line through Pakistan, the post-Soviet Central Asian countries, the Caspian Sea, Azerbaijan, Georgia (possibly the Armenian Zangezur Corridor), Turkey and the EU;

3) “Iranian-Turkish corridor,” including post-Soviet Central Asian countries, Iran, Turkey and the EU.

There is simply no other geography of land connection from China to Europe. Beijing is trying to use its financial, economic and military-political power to absorb all of these alternative routes to enter the European market. The latter promises a new growth of trade turnover, GDP growth, its dominance in the regions intermediate on the way to Europe (in relation to the group of small and weak countries) and the strengthening of partnerships with the larger players (in particular, with Russia, Iran and Turkey).

At the end of 2022, China’s trade turnover with the US and EU countries amounted to $1.6 trillion, which was a record high. In particular, Sino-US trade grew to $760 billion, and China’s trade with the EU was $847 billion. And this despite the fact that US President Joe Biden, apparently due to the controversial issues on the fate of Taiwan, as well as due to the acute economic (especially in the field of technology) competition with the PRC, pursues a policy of pressure on Beijing. For example, in June 2021 Washington banned investment in Chinese technology companies, and in November of the same year President Biden signed a law banning the use in the United States of equipment from Chinese tech giants Huawei and ZTE.

Nevertheless, last year showed a steady growth in China’s trade with the US and the EU. At the same time, the balance of exports and imports favors China. In particular, China sells more goods to the West (the US imported $567.3 billion worth of goods and the EU imported $562 billion worth of goods) than it buys from it (the US imports $408 billion and the EU imports $285.4 billion). At the same time, the US and the EU sell more services to China than they import from China.

And despite this progressive dynamics of trade turnover, the Collective West (obviously, at the behest of Washington) in May 2023 after the G7 summit in Hiroshima is taking actual sanctions to curb China. That is why Russian Foreign Minister Sergey Lavrov at the 31st Assembly of the Council on Foreign and Defense Policy, assessing this approach of the G7 countries towards China, described it as a “policy of double containment of Russia and China.”

Thus, the leading countries of the West are not guided by objective economic interests, which in this case involves support for the Chinese megaproject One Belt, One Road, but are guided by the geopolitical trends of imaginary American hegemony and the supremacy of the West over the rest of the world.

What does the Collective West understand as an alternative to the Chinese project One Belt, One Road? Some experts tend to think that what Ursula von der Leyen sees as an obvious geographical and economic alternative to China is Africa, which used to be mostly a European colony (for example, France, Portugal, Spain, England, Italy and Germany), and now is a neocolony of the EU. Brussels believes that Africa’s time as a raw materials appendage of the outside world is coming to an end, to be replaced by a more progressive future based on the production of high-tech and competitive goods.

In other words, European investment and technology can move from distant China to Africa, which is relatively close in geography, minimizing the financial costs of logistics and new communications. At the same time, the US will obviously seek to select India, neighboring and competitive with China, as the new center of its Asian support for technology and investment exports.

“Indian alternative” to the Chinese Silk Road is determined not only by the peculiarities of geography, Indo-European civilization, the demographic balance between New Delhi and Beijing, but also by the desire to contain Chinese overland communications to the outside world (primarily Europe) by alternative routes. The dynamics of investment and technology growth of the US, Canada, the UK and the EU in the economies of India and Africa will be indicators of new transformations in regional and global politics.

The US is unlikely to give the “green light” to Chinese communications in the EU if Beijing retains its independence and does not make concessions to Washington on the issue of Taiwan and Russia. However, China is the heir to an ancient civilization, remembers the key and positive role of the Soviet Russia in its fate and cannot undermine its authority to satisfy the ambitions of American leader Joe Biden.

However, are the US and its subordinate EU countries capable of changing the natural course of history and the world economy, where China steadily ranks second? What can the Collective West oppose to the new economic and political alliance of China with Russia, Iran, Saudi Arabia, UAE, Turkey and others?

This does not mean that the US and the EU will not be able to create alternative centers in the global economy (in particular, to “grow” competitors in the face of India and African countries to challenge China). The latter fact, of course, will contribute to the regrouping of some weaker states, dependent on the new centers, communications, and, most importantly, the dictates of the US. But this will require considerable resources and time. However, these subversive plans may prove to be too much for the West. The US is frightened by the growing economy of China and its catching up with the United States.

It is useful for Washington to take into account that the military-industrial complex, where Russia’s contribution is quite significant, plays an important role in strengthening China and India. It is no secret that many modern high-tech weapons developments and the global arms market belong to the United States and Russia. Accordingly, the achievements of the national military-industrial complex of China and India are to a large extent associated with Russian (Soviet) developments and military-technical cooperation partnership with our country.

The economy should develop, first of all, on the basis of economic laws (in particular, the principle of profit), and not under the influence of political conditions. In turn, modern Russia, being one of the world military-industrial leaders, today, due to the provoked special military operation in Ukraine and the Western sanctions regime, has found itself in a situation of extreme demand for diversification and modernization of the national economy not in words, but in deeds. Indeed, this crisis may still turn out to be a true blessing in disguise. Russia will strengthen the consolidation of its national intellectual, scientific, technological and production potential for a breakthrough in development given the entire complex of world natural resources and lack thereof with its competitors.

By Aleksandr SVARANTS, PhD
Source: New Eastern Outlook

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