The Silk Road Economic Belt is the latest trade and economic zone initiative of the China-backed Belt and Road Initiative (BTRI). Chinese President Xi Jingping has once again publicly stated his plan to strengthen the ties between the economic powerhouse of China and the rest of the world. This time, the Silk Road is the trading zone. Indeed, the Silk Road Economic Belt is a crucial and important initiative for China India trade relations, and for India-European and US-Chinese cooperation.
The Belt and Road Initiative (BRI) was established as an alternative to the ancient Asian trade routes. This alternative was meant to serve as an alternative to the Western development model. The model included railways, roadways and shipping routes across Asia in the same direction as the Western world. At that time, the Western world was mostly involved in trade with Japan and other East Asian countries. However, by creating the Silk Road Economic Belt, China hopes to become a significant player in the international trade system.
Currently, China’s economy accounts for more than a fifth of the world’s economy. In fact, most analysts say that the country’s economy would be the largest in the world in a few years. The BRI was designed to create a huge trade route connecting China to the Middle East, Central and South America and the rest of the world. China’s vision was that by establishing this huge trade route, it can increase China’s economic independence and be able to provide products at a much lower price than the already established Western market. By having its own international market, China is able to sell its high-quality goods and services at a much cheaper price than it is currently getting them. It would also be able to protect its intellectual property from being copied by other companies Silk Road economic belt.
The Silk Road economic belt was supposed to bring economic benefits not only for China itself but also for its neighbors. By increasing trade, these nations would have the ability to modernize and even excel in their respective fields. And since China shares many trade and economic links with these neighboring nations, these nations would be able to improve their quality of life. These benefits would, in turn, allow them to improve their economic situation and will enable them to develop stronger economies.
However, these benefits were supposed to last only for a few decades. Recently, President Obama has warned that the current trend of globalization is threatening the viability of the existing global trading system. He cited a recent example in which the European Union is planning to expand its trade with South Korea and Japan. President Obama argues that such move will jeopardize the balance of trade between these two countries. If these EU countries proceed with this, they will become even weaker economically.
This kind of threat is worrying not only China. US Secretary of State Hilary Clinton also recently warned that the current trend of globalization is threatening the post-war world order. This is because many of the countries that are inside the belt are worried that their markets might be affected. They therefore look out for protection against foreign competition. In fact, many say that the Belt is already creating a protectionist sentiment.
At the same time, there is no denying that the Belt is being used as a trade tool by some countries. For instance, in Singapore, the government has launched a project to develop rail links with Indonesian companies. Some say that this is not just a government initiative. Many private companies, including those from Singapore, have also entered into the race. The logic is simple: the more countries you can get into the trading ring, the more your overall exports go up.
But some economists are worried that this will adversely affect the regional level. The argument goes something like this: if we start letting more countries into the trade ring, there will be a surge in exports worldwide. However, there is little we can do about it. We cannot simply stop countries like Singapore from getting involved in this race, and neither can we dictate other countries to join or not join.