The Belt and Road: China's trillion dollar dream

Photo credit: Getty.

Over the next decade China may spend close to a trillion dollars in one of the most ambitious infrastructure projects in history.

Estimated to affect over 65 percent of the world's population and up to 40 percent of Global GDP, the project is known as the "Belt and Road Initiative".

In practical terms the Belt and Road will be numerous trade routes connecting China to the rest of the world, helping to flex its immense economic muscle through increased commerce.

China is planning to spend enormous sums annually, with ratings agency Fitch estimating up to a trillion dollars may be spent on infrastructure such as pipelines, roads, ports and railways.

The plan is divided into two broad areas, the 'Silk Road Economic Belt' on land, and the '21st Century Maritime Road' at sea - hence the 'Belt and Road'. The plan focuses primarily on Asia and Europe and encompasses around 60 countries.

The sprawling initiative was first announced in 2013 when Chinese President Xi Jinping  gave a speech calling for a new "Silk Road Economic Belt". The project has expanded in the years since and rebranded under its current name.

The last National government signed a memorandum of understanding with China in 2017 regarding the deal but Deputy Prime Minister Winston Peters has said they were too hasty, saying on Q&A:

"I think the speed with which they did it showed a lack of, in the case of New Zealand, preparation and thought and consideration as to what it all means."

National's memorandum didn't make many firm commitments and was broadly an affirmation of plans to work closely together in future. It did commit New Zealand to NZ$30b of two way trade with China by 2020 and promised the 2008 free trade deal would be 'modernised'.

Some world leaders have cautioned the plan is a disguise for China's geopolitical ambitions and that their true goal is increased dominance over Asia.

India’s Prime Minister, Narendra Modi, warned that China's grand plan may “undermine the sovereignty of other nations" and refused to attend a summit regarding the plan in 2017.  

Whatever the true intention of the plan, it further cements China's leadership role in an era where the United States has stepped back from its role in dominating global politics.

While US President Donald Trump continues to tout  "America First", Chinese officials herald the Belt and Road as the start of "a new era of globalisation that is open, inclusive and beneficial to all."

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