The New Silk Road

China’s President Xi Jinping has called Beijing’s mission to build a new trade route across Asia the “project of the century”

What does this “Silk Road” entail?

It’s not so much a road as a vast range of massive infrastructure projects – roads, telecommunications networks, ports, railways, bridges – that China is building or plans to build across Asia. Beijing says it has $900bn of deals in the pipeline and will ultimately spend or lend between $4trn and $8trn on projects in 68 nations that between them account for 40% of the global economy, and 4.4 billion people. Yi Dai Yi Lu, as China calls the project (literally, One Belt, One Road) is the cornerstone of President Xi Jinping’s global strategy to link China to Europe by land and sea, and to draw countries and companies more tightly into China’s orbit. The aim is to entrench China as the dominant power in Asia and as a global superpower to rival the retreating US.

What’s the economic rationale for it?

The crucial idea is that better Trans-Eurasian infrastructure will boost global trade and help create more prosperous and stable countries (and potential markets) to the south and west of China. It should also give a development boost to China’s poor interior, in particular the restive region of Xinjiang, home to roughly half of China’s 23 million Muslims. All this has been given added impetus by the cooling of China’s investment boom, which has left it with vast overcapacity in steel, cement and machinery, and a need to develop new markets abroad. If the Belt and Road Initiative, as it’s also known, rolls out as promised, it will dwarf America’s Marshall Plan that rebuilt Western Europe after WWII, making it the largest act of economic diplomacy ever seen.

When was this grand scheme first envisaged?