by Pepe Escobar posted with permission and first posted at Asia Times
The extraordinary confluence between the signing of the Iran-China strategic partnership deal and the Ever Given saga in the Suez Canal is bound to spawn a renewed drive to the Belt and Road Initiative (BRI) and all interconnected corridors of Eurasia integration.
This is the most important geo-economic development in Southwest Asia in ages – even more crucial than the geopolitical and military support to Damascus by Russia since 2015.
Multiple overland railway corridors across Eurasia featuring cargo trains crammed with freight – the most iconic of which is arguably Chongqin-Duisburg – are a key plank of BRI. In a few years, this will all be conducted on high-speed rail.
The key overland corridor is Xinjiang-Kazakhstan – and then onwards to Russia and beyond; the other one traverses Central Asia and Iran, all the way to Turkey, the Balkans, and Eastern Europe. It may take time – in terms of volume – to compete with maritime routes, but the substantial reduction in shipping time is already propelling a massive cargo surge.
The Iran-China strategic connection is bound to accelerate all interconnected corridors leading to and crisscrossing Southwest Asia.
Crucially, multiple BRI trade connectivity corridors are directly linked to establishing alternative routes to oil and gas transit, controlled or “supervised” by the Hegemon since 1945: Suez, Malacca, Hormuz, Bab al Mandeb.
Informal conversations with Persian Gulf traders have revealed huge skepticism about the foremost reason for the Ever Given saga. Merchant marine pilots agree that winds in a desert storm were not enough to harass a state of the art mega-container ship equipped with very complex navigation systems. The pilot error scenario – induced or not – is being seriously considered.
Then there’s the predominant shoptalk: stalled Ever Given was Japanese owned, leased from Taiwan, UK-insured, with an all-Indian crew, transporting Chinese merchandise to Europe. No wonder cynics, addressing the whole episode, are asking, Cui Bono?
Persian Gulf traders, in hush hush mode, also drop hints about the project for Haifa to eventually become the main port in the region, in close cooperation with the Emirates via a railway to be built between Jabal Ali in Dubai to Haifa, bypassing Suez.
Back to facts on the ground, the most interesting short-term development is how Iran’s oil and gas may be shipped to Xinjiang via the Caspian Sea and Kazakhstan – using a to-be-built Trans-Caspian pipeline.
That falls right into classic BRI territory. Actually more than that, because Kazakhstan is a partner not only of BRI but also the Russia-led Eurasia Economic Union (EAEU).
From Beijing’s point of view, Iran is also absolutely essential for the development of a land corridor from the Persian Gulf to the Black Sea and further to Europe via the Danube.
It’s obviously no accident that the Hegemon is on high alert in all points of this trade corridor. “Maximum pressure” sanctions and hybrid war against Iran; an attempt to manipulate the Armenia-Azerbaijan war; the post-color revolution environment in both Georgia and Ukraine – which border the Black Sea; NATO’s overarching shadow over the Balkans; it’s all part of the plot.
Now get me some Lapis Lazuli
Another fascinating chapter of Iran-China concerns Afghanistan. According to Tehran sources, part of the strategic agreement deals with Iran’s area of influence in Afghanistan and the evolution of still another connectivity corridor all the way to Xinjiang.
And here we go back to the always intriguing
Lapis Lazuli corridor – which was conceptualized in 2012, initially for increased connectivity between Afghanistan, Turkmenistan, Azerbaijan, Georgia and Turkey.
Lapis Lazuli, wonderfully evocative, harks back to the export of an array of semiprecious stones via the Ancient Silk Roads to the Caucasus, Russia, the Balkans and North Africa.
Now the Afghan government sees the ambitious 21st century remix as departing from Herat (a key area of Persian influence), continuing to the Caspian Sea port of Turkmenbashi in Turkmenistan, via a Trans-Caspian pipeline to Baku, onwards to Tblisi and the Georgian ports of Poti and Batumi in the Black Sea, and finally connected to Kars and Istanbul.
This is really serious business; a drive that may potentially link the
Eastern Mediterranean to the Indian Ocean.
Since Russia, Iran, Azerbaijan, Kazakhstan and Turkmenistan signed the Convention on the Legal Status of the Caspian Sea in 2018, in the Kazakh port of Aktau, what’s interesting is that their major issues are now discussed at the Shanghai Cooperation Organization (SCO), where Russia and Kazakhstan are full members; Iran will soon be; Azerbaijan is a dialogue partner; and Turkmenistan is a permanent guest.
One of the key connectivity problems to be addressed is the viability of building a canal from the Caspian Sea to Iran’s shores in the Persian Gulf. That would cost at least US$7 billion. Another issue is the imperative transition towards container cargo transport in the Caspian. In SCO terms, that will increase Russian trade with India via Iran as well as offering an extra corridor for China trade with Europe.
With Azerbaijan prevailing over Armenia in the Nagorno-Karabakh flare up, while finally sealing a deal with Turkmenistan over their respective status in the Caspian Sea, impetus for the western part of Lapis Lazuli is now in the cards.
The eastern part is a much more complicated affair, involving an absolutely crucial issue now on the table not only for Beijing but for the SCO: the integration of Afghanistan to the China-Pakistan Economic Corridor (CPEC).
In late 2020, Afghanistan, Pakistan and Uzbekistan agreed to build what analyst Andrew Korybko delightfully described as the PAKAFUZ railway. PAKAFUZ will be a key step to expand CPEC to Central Asia, via Afghanistan. Russia is more than interested.
This can become a classic case of the evolving BRI-EAEU melting pot. Crunch time – serious decisions included – will happen this summer, when Uzbekistan plans to host a conference called “Central and South Asia: Regional Interconnectedness. Challenges and Opportunities”.
So everything will be proceeding interconnected: a Trans-Caspian link; the expansion of CPEC; Af-Pak connected to Central Asia; an extra Pakistan-Iran corridor (via Balochistan, including the finally possible conclusion of the IP gas pipeline) all the way to Azerbaijan and Turkey; China deeply involved in all these projects.
Beijing will be building roads and pipelines in Iran, including one to ship Iranian natural gas to Turkey. Iran-China, in terms of projected investment, is nearly ten times more ambitious than CPEC. Call it CIEC (China-Iran Economic Corridor).
In a nutshell: the Chinese and Persian civilization-states are on the road to emulate the very close relationship they enjoyed during the Silk Road-era Yuan dynasty in the 13th century.
INSTC or bust
An extra piece of the puzzle concerns how the International North-South Transportation Corridor (INSTC) will mix with BRI and the EAEU. Crucially, INSTC also happens to be an alternative to Suez.
Iran, Russia and India have been discussing the intricacies of this 7,200 km-long ship/rail/road trade corridor since 2002. INSTC technically starts in Mumbai and goes all the way via the Indian Ocean to Iran, the Caspian Sea, and then to Moscow. As a measure of its appeal, Azerbaijan, Armenia, Belarus, Kazakhstan, Tajikistan, Kyrgyzstan, Ukraine, Oman, and Syria are all INSTC members.
Much to the delight of Indian analysts, INSTC reduces transit time from West India to Western Russia from 40 to 20 days, while cutting costs by as much as 60%. It’s already operational – but not as a continuous, free flow sea and rail link.
New Delhi already spent $500 million on a crucial project: the expansion of Chabahar port in Iran, which was supposed to become its entry point for a made in India Silk Road to Afghanistan and onward to Central Asia. But then it all got derailed by New Delhi’s flirting with the losing Quad proposition.
India also invested $1.6 billion in a railway between Zahedan, the key city in southeast Iran, and the Hajigak iron/steel mining in central Afghanistan. This all falls into a possible Iran-India free trade agreement which is being negotiated since 2019 (for the moment, on stand-by). Iran and Russia already clinched a similar agreement. And India wants the same with the EAEU as a whole.
Following the Iran-China strategic partnership, chairman of the Iranian Parliament’s National Security and Foreign Policy Committee, Mojtaba Zonnour, has already hinted that the next step should be an
Iran-Russia strategic cooperation deal, privileging “rail services, roads, refineries, petrochemicals, automobiles, oil, gas, environment and knowledge-based companies”.
What Moscow is already seriously considering is to build a canal between the Caspian and the Sea of Azov, north of the Black Sea. Meanwhile, the already built Caspian port of Lagan is a certified game-changer.
Lagan directly connects with multiple BRI nodes. There’s rail connectivity to the Trans-Siberian all the way to China. Across the Caspian, connectivity includes Turkmenbashi in Turkmenistan and Baku in Azerbaijan, which is the starting point of the BTK railway through to the Black Sea and then all the way from Turkey to Europe.
On the Iranian stretch of the Caspian, Amirabad port links to the INSTC, Chabahar port and further on to India. It’s not an accident that several Iranian companies, as well China’s Poly Group and China Energy Engineering Group International want to invest in Lagan.
What we see in play here is Iran at the center of a maze progressively interconnected with Russia, China and Central Asia. When the Caspian Sea is finally linked to international waters, we will see a de facto alternative trade/transport corridor to Suez.
Post-Iran-China, it’s not far-fetched anymore to even consider the possible emergence in a not too distant future of a Himalaya Silk Road uniting BRICS members China and India (think, for instance, of the power of Himalayan ice converging into a shared Hydropower Tunnel).
As it stands, Russia is very much focused on limitless possibilities in Southwest Asia, as Foreign Minister Sergey Lavrov made it clear in the 10th Middle East conference at the Valdai club. The Hegemon’s treats on multiple fronts – Ukraine, Belarus, Syria, Nord Stream 2 – pale in comparison.
The new architecture of 21st century geopolitics is already taking shape, with China providing multiple trade corridors for non-stop economic development while Russia is the reliable provider of energy and security goods, as well as the conceptualizer of a Greater Eurasia home, with “strategic partnership” Sino/Russian diplomacy playing the very long game.
Southwest Asia and Greater Eurasia have already seen which way the (desert) winds are blowing. And soon will the masters of international capital. Russia, China, Iran, India, Central Asia, Vietnam, Indonesia, the Korean Peninsula, everyone will experience a capital surge – financial vultures included. Following the Greed is Good gospel, Eurasia is about to become the ultimate Greed frontier.
I really must declare how enriched I feel at the poetry in Pepe’s reportage. He paints a solid portrait, all while fleshing out a shared a vision of the Saker’s Zone B stitching the world into some as yet not clearly defined experience of unity. A mutually supportive matrix of globalized integration, all underwritten by the world’s most successful communist super – power. A global community of balanced and shared mutual interest seems to be the Chinese State’s version of the real new world order.
Yes, Pepe paints a solid portrait. My favorite sentence is this one:
” Following the Greed is Good gospel, Eurasia is about to become the ultimate Greed frontier”.
Rather unfortunate, but true, as it’s logical, historically proven. Pepe is not the only analyst who pointed this out.
Just to reiterate what other analysts have stated, namely that a rift will occur between European and American elites. It’s inevitable. Politics is politics, but business is business.
Well the “Greed is good” thingy is so obviously self defeating in the end, don’t you think?. The Western version of “greed is good” really meant it is good when the greedy control the organs of state power. Which means in practice that the greedy are free from government oversight and appropriate regulation. A bourgeois capitalist definition of liberty if ever there was one. Greed is good meant the whole civilization is ruled by people who are so lost that they can only find solace in greed. I don’t see Zone B and particularly China and Iran surrendering their spiritual culture to rule by the greedy. That is a Western ideal which depends for its dominance upon the absence of spiritual culture. I have learned that it is a staple of serious religion to never let the merchant class take control of the state and government. As these bourgeois will reduce all decision making to simple questions of material profit and loss. When that happens civilization goes out the window accordingly.
For example Jack Ma was disciplined by the Chinese government because they correctly judged that his wealth was giving him more power than should accrue to any single individual. Greed can be managed given the right political relations don’t you think?
However I do agree that Asian economic growth defeating the Anglo-European capitalist parasites at their own game carries a delicious flavor of finality.
Pepe’s Big Picture Show of Eurasian growth opportunity.
Imagine an Eurasian Stock Market with these projects as public equity and bond opportunities.
The next 20 years in Eurasia will dwarf the first 35 years of China’s boom.
The 20 years afterward will mark economic growth 3-5 times what China has achieved.
4.5 Billion people. Poverty reversed, new cities, high speed rail connectivity, airports and ports, fiber and tunnels, bridges and superhighways, natural gas pipelines and nuclear power plants, electric grids and water resources, agriculture and mining, health services, hospitals, colleges and universities, housing and recreational areas, waste management and recycling facilities.
The modernization of 60% of the planet. A huge opportunity. With very little Western involvement.
Pepe just provided an index of the first generation major projects.
The empire won’t go quietly into that good night.
Absolutely not; A wounded animal is far more dangerous than a healthy one. However, even if it causes some damage before it is put down, the solution remains the same “Lead in the Head” , it seems China and Russia are willing and able to do it. There is a Chinese Curse: “”May you live in interesting times”” thats exactly where we are at this juncture of history “Interesting times”
Eurasian Integration and development doesn’t require the Empire to go away.
Of course, the Hegemon will continue to interfere by using local wars, led by proxy groups like ISIS and AQ terrorists and separatists like ETIM/Uyghurs and other CIA-bred extremists.
But, China has the manpower and some experience in dealing with the threats. As does each of the nations along the BRI corridors.
With the Eurasian stakeholders heavily outnumbering the US proxies, and most nations desperate for development, investments and growth, the US and its proxies don’t have much of a future spreading their chaos in Eurasia.
The US has gotten little traction trying to stir up allies on the mainland of Eurasia to fight against China and Russia.
The reality the US faces is it finds itself a stranger in a strange land, unwelcome by one and all, unable to mount its military (90% of which is naval power) against China and Russia, and its wad of sanctions shot with little or no effect against its rivals.
The quiet of the night is disturbed by US crying, not anything it can do to affect a favorable outcome for its hegemonic empire.
Poor sad Zbigniew and his lost East Asian island.
Agree completely – the US in in no position to effect any of this, the jihadist proxy war on Syria & Iraq was funded primarily by Saudi Arabia & Qatar to the tune of about $400billion, & that is what is acknowledged, it doesn’t include private charity donations & wealthy Gulf contributors. That turned out to be a waste of colossal sums of money, no one is going to try that again. US military power can not do anything either, the combat readiness of the US soldiery is non existent, using bombing power is a no no because Russia can deflect it – so what can the US do to prevent Eurasian integration when both direct & indirect sabotage & aggression is off the table? Added to which, the US is descending into its own existential crisis – the only reason a civil war did not erupt following the theft of the Trump presidential election victory is Trump’s own decision to stand down & prepare for 2024. Had Trump decided to mobilize the base, the US would as of now be on fire – as many commentators expected & predicted. But with the military presence in DC being maintained clearly to prevent any return of Trump in 2024 – what are we going to see in the US? No one knowns, but nothing good. US hegemony is finished, it is over, the internal crisis has begun & it is now facing its own Soviet Union 1989 moment – ironically with a (non) military withdrawal from Afghanistan also as one of the foreign policy factors exemplifying US impotence. The rest of the world will be left to build a post West hegemonic reality, as Lavrov said.
I have read several other journalists who wrote nothing but positive, glowing commentary concerning China’s BRI project. But at what financial cost to the smaller economy countries that wish to join this enterprise?
Chinese banks are the major lender of record and a number of economically stressed nations are feeling the pinch of managing their debt to China for which forgiveness has been less than 2 percent of credit borrowed according to this article here:
see: https://green-bri.org/public-debt-in-the-belt-and-road-initiative-bri-covid-19/ .
Discussions around debt sustainability combined with internal political objections in these countries needs to be included in any of the reports about BRI. China is not disclosing loan information to financial analysts, which says we should be concerned with the thorns hiding in the perceived bed of roses.
The old China loan trap trope.
Have you read Economic Hitman by John Perkins?
If not, I’m sure a second hand copy can be acquired for pennies. Or a library loan.
The past half to full century has been predatory capital across the globe.
I know this reply is “whataboutism”. But yeah. Have a look at the predatory enslaving that bankers and industrialists have indulged in since….. hmm, 1945? 1919? 1890? ……… pick a decade, pick a century, pick a country, pick a continent.
It’s freely available online.
Perhaps you should consult your own history book and pick Iran today to find that religion prevents them from abusive predatory usury.
Perhaps this is why they are hated by the west so greatly, differing ideologies.
Read this: https://www.theatlantic.com/international/archive/2021/02/china-debt-trap-diplomacy/617953/
And this is Yanis Yaroufakis on his experience renegotiating a port in Greece with the state owned shipping outfit.
In short they agreed to renegotiate the terms and his comment was (I’m paraphrasing) “Can you imagine a German or an American company doing that?”
The Atlantic article you provided essentially states the China debt trap accusations are a myth. It then proceeded to give an account based upon its research but doesn’t prove that China doesn’t seek strategically devised contractual terms with debtor nations for which their banks, construction firms and Chinese employees benefit.
It even stated here, “There was not an open tender, and the only two bids came from China Merchants and China Harbor; Sri Lanka chose China Merchants, making it the majority shareholder with a 99-year lease, and used the $1.12 billion cash infusion to bolster its foreign reserves, not to pay off China Eximbank.”
So China restricted an open bid process to only Chinese businesses as a condition of the loan to develop the Sri Lanka Hambantota Port. The Chinese craftily negotiated for sovereign capital assets in lieu of debt repayment in arrears and now has a 99 year lease on the port to effectively control it to primarily receive the benefit of sea based transportation commerce.
The article earlier stated, “Our research shows that Chinese banks are willing to restructure the terms of existing loans and have never actually seized an asset from any country, much less the port of Hambantota.”
Now the question has to be asked, “How much difference is there between seizing a capital asset and having control of it for 99 years?” Not much in my opinion.
Here is a New York Times article that talks about the Hambantota Port deal:
See: https://www.nytimes.com/2018/06/25/world/asia/china-sri-lanka-port.html .
That is one demented interpretation of the Atlantic article by you. First of all, there’s a difference between seeking “strategically devised contractual terms with debtor nations for which their banks, construction firms and Chinese employees benefit” and engaging in a sinister ploy to entrap other countries with debt. What exactly is wrong with the former? Is China somehow expected to “strategically devise” contractual terms with debtor nations that result in losses for Chinese banks, construction firms and employees?
Secondly, you’re completely ignoring the fact that China only came into the Hambantota Port project after the US and India had rejected it. And by the Sri Lankan government’s own admission, the terms offered by the Chinese were generous:
“This was in 2007, six years before Xi Jinping introduced the Belt and Road Initiative. Sri Lanka was still in the last, and bloodiest, phase of its long civil war, and the world was on the verge of a financial crisis. The details are important: China Eximbank offered a $307 million, 15-year commercial loan with a four-year grace period, offering Sri Lanka a choice between a 6.3 percent fixed interest rate or one that would rise or fall depending on LIBOR, a floating rate. Colombo chose the former, conscious that global interest rates were trending higher during the negotiations and hoping to lock in what it thought would be favorable terms. Phase I of the port project was completed on schedule within three years.
For a conflict-torn country that struggled to generate tax revenue, the terms of the loan seemed reasonable. As Saliya Wickramasuriya, the former chairman of the SLPA, told us, “To get commercial loans as large as $300 million during the war was not easy.” That same year, Sri Lanka also issued its first international bond, with an interest rate of 8.25 percent. Both decisions would come back to haunt the government.”
The financial trouble that the port later ran into was caused not by onerous terms imposed by China but by political instability and the Sri Lankan government’s own mistakes. In any case, the article points out that “Sri Lanka owed more to Japan, the World Bank, and the Asian Development Bank than to China”. Nowhere in the article is it stated that China restricted the bidding process to Chinese companies only and “craftily negotiated for sovereign capital assets in lieu of debt repayment in arrears…” You just made that up. And yes, there is a difference between seizing an asset outright and leasing it for 99 years.
It is harsh for you to use the word “demented” when describing my opinion regarding China’s BRI project and its terms of lending offered to financially stressed countries.
I never wrote that China has a strategy to entrap countries in debt. I explained the situation where the Chinese government includes clauses in lending agreements with countries that have nothing to do with borrowing money, such as the requirement to use Chinese labor (not the countries labor), Chinese construction firms, equipment, etc.
Imagine going to a bank to obtain a construction loan to build a new house. The bank dictates to you (mortgagor), which builder you are allowed to use to build your house and that you must use union labor in order to get the loan. It’s the attachment of unrelated conditions to the loan that suggests the bank is also acting in partnership with construction related companies and labor unions for their mutual benefit. That process is illegal in American banking because it denies free market competition options to a prospective borrower.
But not for the CCP (Communist Chinese Party) because for all intent and purpose it is the Chinese government and if a country wants to join the BRI project and use Chinese banks for lending, it has to agree to all the terms demanded by China. China is making money both on the financing and the construction of the BRI infrastructure projects to keep its own businesses employed. It is clear that BRI is more China-centric than open to global participation.
As far as the Sri Lanka story, you are correct in that China was the only bidder for the Port of Colombo construction (not the Port of Hambantota) due to favorable loan terms and the first phase of the project was completed.
You then wrote that,“Nowhere in the article is it stated that China restricted the bidding process to Chinese companies only …”
Apparently you skipped over the paragraph in the Atlantic article that stated, , “There was not an open tender, …. “Not an open tender” means exactly what I wrote; the bidding was closed to all other offers except for Chinese lenders, which follows the strategy when countries seek funding from Chinese financial institutions.
The Port of Hambantota had problems as you also identified that created a Hobson’s choice for Sir Lanka since a default would ruin future lending for the country. However your last imputation stated, “You just made that up.” when I wrote that China offered the lease option as settlement for the debt allowing Sri Lanka to apply the loan money of $1.12 billion to its treasury instead of paying the creditor, China Eximbank.
So you believe that a creditor country (China) having control of an income producing capital asset (Port of Hambantota) for an exceptionally long period of time that belongs to a debtor country (Sri Lanka) is different than an outright seizure.
First of all, it is possible China could have been awarded Hambantota if it brought a civil lawsuit against Sri Lanka in the ICJ (International Court of Justice) demanding Hambantota as compensation for the unpaid debt. But the CCP decided that a long-term lease that produces income for 99 years as a sea port to distribute its goods is more profitable that owning the port and having to be responsible for upkeep, maintenance, depreciation and other fixed costs.
Let me offer an example to make my point. Let’s say you wanted to make expensive repairs to a commercial truck you own and use to haul goods for profit. I offer to loan you the money to make the repairs but attach the truck as collateral for the loan. For whatever reason, you couldn’t afford the loan payments and would have to default on the loan. Instead of me suing you for the truck and taking possession of it, I offered to settle the debt by leasing the truck from you for 10 years and make money using your truck to haul goods for profit. As part of the agreement, you accept the responsibility for the maintenance of the truck. So in affect I have taken away an income producing asset from you for 10 years while you pay the cost of maintenance.
Effectively you would be in a Hobson’s choice situation just like Sri Lanka and that is why I wrote there is not much difference between the outright seizure of the Port of Hambantota and a 99 year lease that denies Sri Lanka use of its income producing asset that it rightfully owns.
A CSIS (Center for Strategic & International Studies) article states that for Chinese funded projects, 89 percent use Chinese companies, 7.6 percent use local companies and 3.4 percent are from foreign companies. When non-Chinese funded banks are involved in the lending for BRI infrastructure, Chinese companies do not dominate simply because there is no government mandating terms like Communist China does.
When a government such as China has complete control of the production of its home country, it can uses that power to project macroeconomic leverage over other bidders for projects such as BRI to profit from lesser economic countries that could find themselves in a debt sustainability crisis.
“I never wrote that China has a strategy to entrap countries in debt. I explained the situation where the Chinese government includes clauses in lending agreements with countries that have nothing to do with borrowing money, such as the requirement to use Chinese labor (not the countries labor), Chinese construction firms, equipment, etc. “
The requirement to use Chinese labour is also a myth:
“In a small group of oil-rich countries with expensive construction sectors — including Algeria, Equatorial Guinea, and Angola — governments do allow Chinese construction firms to import their own workers from China. But elsewhere in Africa, the research is clear: The vast majority of employees at Chinese firms are local hires. Hong Kong-based academics Barry Sautman and Yan Hairong surveyed 400 Chinese companies operating in over 40 African countries. They found that while management and senior technical positions tended to remain Chinese, more than 80 percent of workers were local. Some companies had localized as much as 99 percent of their workforces.”
“As far as the Sri Lanka story, you are correct in that China was the only bidder for the Port of Colombo construction (not the Port of Hambantota) due to favorable loan terms and the first phase of the project was completed.”
I don’t know what you’re talking about.
“Apparently you skipped over the paragraph in the Atlantic article that stated, , “There was not an open tender, …. “Not an open tender” means exactly what I wrote; the bidding was closed to all other offers except for Chinese lenders, which follows the strategy when countries seek funding from Chinese financial institutions.”
No. The article states that there was not an open tender but it does not accuse China of having imposed this condition. If Sri Lanka had had other offers, it presumably could have told China to take a hike anyway. The decision to lease out Hambantota Port was made by the Sri Lankan government in the first place and it is consistent with the recommendations that had been made by the Canadian consulting firm that had done the original feasibility study. But it is interesting that you’re now actually arguing that China’s leasing of the port is in fact worse than seizing it outright… Those damn crafty Chinese!
China’s SOE (State Owned Enterprises) are the firms that work on the BRI projects when China lenders provide the funding to those countries that participate in the BRI project.
“Foreign involvement in Belt and Road projects has been limited, as much of the interest and attention has been on participating in the multi-million-dollar infrastructure builds, and these typically come with Chinese state financing, conditional that Chinese SOEs conduct the work. Chinese BRI projects favor other State-Owned partners rather than public companies, both for business cultural reasons and for keeping details out of public scrutiny …”
I didn’t mean that all the work must be performed by Chinese employees when I wrote that Chinese lending agreements requires Chinese labor. Obviously local labor fulfills all the menial jobs such as laying railway track and other low-skill work required. However SOE employs its own Chinese nationals who provide the skilled expertise depending upon the specifications of a project.
Here is a lead picture from aForbesarticle that shows a SOE Chinese engineer overseeing a task while local laborers do the unskilled work.
You wrote,” No. The article states that there was not an open tender but it does not accuse China of having imposed this condition.”
Seriously, that’s your argument? Why didn’t the author of The Atlantic article simply exclude the reference to “not an open tender” if China was not opposed to bids from non-Chinese lenders? It is evident that mentioning the fact suggests that when a country seeks funding for BRI projects from China the options are nearly always closed to non-Chinese offers (tenders) and limited to only Chinese creditors.
That is confirmed in another article when China Merchants negotiating the 1.12.billion loan with the proviso that Sri Lanka agree to the 99 year lease of the Port of Hamhantota and acquired 70 percent of the port’s operating company. That is a significant loss of a long-term income producing asset for Sri Lanka in exchange for low-interest money.
My overall opinion about China’s BRI project is that it will help to develop basic infrastructure of underdeveloped countries such as on the continent of Africa. But those governments have to be wary when their economies become stressed to the point where they face default on debt repayment. China may decide to forgive the debt or choose to renegotiate favorable terms for long-term benefit to it’s economy that may be viewed as exploitation of a countries assets (such as the Port of Hamhantota) or its natural resources, like copper and minerals needed for electronics.
Xi Jinping’s “win-win” project is not altruistic; it’s a global economic business plan on the surface that has an underlying agenda that could be a “Trojan Dragon” and government leaders must not only have a 5 year or 10 outlook but have a 100 year vision because that’s what the CCP does.
“Eurasia is about to become the ultimate Greed frontier.”
I hope not. Prosperity yes, planning yes, but greed no. We in the EU$A have experienced a decline in prosperity, power and reputation since the advent of Reagan, Thatcher and their Gospel of unfettered Greed.
I’m absolutely convinced that all these projects are going to be resoundingly thwarted by Navalny and the Ukronazis / sarc off /
The contrast between the West and Asia sharpens. In Asia, Pepe keeps us up with powerful developments that spell a revival of the old world that slipped into subjection over the last centuries. Now a rapid awakening, rebuilding. In the West the Malthusians reign supreme. A world running short of oil, fresh water, unpolluted arable land. A world increasingly at odds with itself. A world of debt and advanced forms of corruption in all spheres. Politically a condition of stasis takes hold on both sides of the Atlantic. Knustler speaks of a ‘World Made By Hand’. Most tellingly, the kids are stuck into their games which envision a new dark age bristling with warlords and leather clad mistresses wielding broadswords. Nobody within the Anglo-sphere particularly seems to believe in the future, or at least their future. Talk of the tremendous dynamism of China elicits sullen refusals to countenance totalitarian threats to their liberal identities. They sense their impending downfall but are so accustomed to identify their development with the world in general that they are driven to insist that all are going down together and necessarily must. Because of peak oil, or climate change, or overpopulation and such. I don’t doubt the seriousness of these matters but what I’ve come to believe is that the doom and gloom arises from our shared Western sense that we simply don’t have what it takes to rise to the occasion and deal with the problems we face. Oligarchies are ill suited to either addressing or resolving problems. But rather than emulate those who actually can learn on the spot and act according to their real needs, we would rather go to hell and curse the rest of humanity with our fate.
Excellent comment Kevin Frost.
What happens when all this busy-busy economic-growthforever comes up against the hard geophysical limits to growth? They haven’t gone away, nor have their trajectories deviated much if at all from the projections put out by the Meadows team in the original ‘The Limits To Growth’, and vindicated strikingly in ‘TLTG – The Thirty-Year Update’.
Just at the moment, the fashion is that few amongst the chattering classes of the world seem to want to think about these steely realities, even though they haven’t changed in the slightest.
In our – obviously-justified – delight that the dreadful, declining-and-falling Anglozionist empire is suffering its death-blows from Russia/China, everyone – including the ever-estimable Pepe – seem to have forgotten these overriding realities: The Limits.
It’s anyone’s guess what will happen in detail. But it seems to me that all this brand new development frisson across the Eurasian World Island simply guarantees the hastening of the time when industrial ‘civilisation’ across the entire planet – with *no* exceptions – comes hard up against The Limits, and bounces helplessly off them.
Despite all the elation – in Zone B – about the BRI phenomenon I surmise that the whole planet is already in the early ebb-tide time of the Long Descent (qv) away from industrial society: this weird aberration which we, humankind, have invented over the past few centuries – to our and the Earth’s considerable detriment.
This has been what Richard Duncan called “the Single Giant Pulse Event” in the Earth’s long history of life (single, because it depends crucially on a whole range of non-substitutable, absolutely-essential, limited-availability commodities, such as metal ores and cheap, abundant energy sources, which – once used up – mean that industrialism becomes physically impossible to continue, or even to maintain). And this SGP-Event is now already on the ebb. Nor are their any (actually-realistic) techie-techie miracles anywhere on the horizon which can reverse the tide. Lots of substanceless fantasies, but nothing actually doable in the real world. (Please! Don’t get me started on ‘renewable’s, with their absolute, umbilical dependency on fossil-hydrocarbon energy subsidies to get built and to be maintained thereafter; likewise nuclear-electricity. And when there’s no longer any abundant, cheap, high-EROEI SLEG available – that’s Sweet, Light, Easy-Get-crude – then what…?)
So – expect BRI to be a considerably briefer interlude in world history than the original Silk Road: One last splurge of Earth-wrecking industrialism, for the Global South, East, and North, and then – finished. Technocracy will find itself hard up against realities which it has no means at all to override.
OK, OK, I’ll now get back into my ‘hugely-unfashionable-at-the-moment ideas’ box, and leave y’all to wait and watch the actual outcome of this next, late, last indulgence in (attempted) economic growthforever – on a finite planet. I give it about a century or so, max.
PS: Expansion to the Moon and Mars, to keep the growth going? Good luck with that SchwabyGatesyMusky delusion! Off to the fantasy planet of the Vulcans with ’em! :)
Rhysiart Gwyliam: “cheap, abundant energy sources, which – once used up …Please! Don’t get me started on ‘renewables’…”
Admittedly our local Sun is not renewable, but it has been going for tens of billions of years, and looks set to last another couple of billion. I forget the exact figures, but daily solar energy received by this planet far exceeds our puny human output from combustion of hydrocarbons and carbohydrates. As for nuclear fuel, the molten core of Earth has been heated by natural radioactivity for similar billions of years, with similar reserves for the future.
The problem is not industrialization; the problem is greed, insensitivity, stupidity and hubris.
Re Malthusianism: the Earth began to be overpopulated when Cain slew his brother Abel for jumping over the wall that Cain had built around his property. Only a dozen people on Earth at that time.
And if not him, most certainly a well studied impersonation ;)
what makes the future belong to the russia/china one belt one belt is the nature of difference in how money comes about between them and the west and the ownership nature of what is commonly understood to be public infrastructure
in the west and especially the usa it is
1. private banks which has usurped the creation of money into reality NOT the central banks. in the west the treasury no longer merely prints a percent of GDP yearly it needs to operate it first must borrow it into existence from private banks…………and the private banks own the state or think they do and will go to war to keep it alive and crush anyone who operates differently
2. in the west critical public infrastructure has been increasingly privatised to extract maximal wealth from the public that uses its and needs it
3 for defense defense armorers are privately owned and squeeze the public purse dry with no real motivation to offer value for money spent
these 3 reason are small reason why emerging eurasia is utterly wiping out the west
1. defense costs a fraction there opposed to ther west because the defense companies are state owned or state controlled
2. public infrastructure is not privatised…healthcare, education, water, NOT designed to extract but to serve… many other example to public versus private infrastructure
3. private banks in the eurasian world are not in control as they are in the west so rent seeking is the modus operandi there as opposed to the west
long term planning and thinking is the order of the day where as in the west its maxmising profit and next quarters results that matter
this makes the west simply uncompetitive in every area of importance to human progress this slowing down growth, general welfare and happiness. the west under its current elite controlled raison d’etre is going extinct
because greed and short terms thinking is rendering it uncompetitive against rising eurasia
do the economic growth math and you can clearly see the west is on it final decade before irredeemably collapsing into poverty for the 99.9% with revolution to follow. this is what the great green reset is all about in the west .
an effort to to get ahead of the coming revolution while maintaining elite control under what will become hi tech feudalism pretending be environmentally friendly as its selling feature.
this is also why the western elites are so hostile to china and russia. they can see the writing on the wall and know time is about over unless they can divide and fracture the emerging eurasia.
peace means prosperity war means continued rule by the western elites.
Thankyou ‘tedrichard’. Excellently summarised and succinctly put. As you say the writing is on the wall. After reading your analysis there is little reason to doubt Pepe’s belief in the Asian future regardless of any Ukraine war.
‘Tedrichard’ you have summarized our reality and challenge very well. Thank you.
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
How will the change come about in the West? I would encourage the Saker to turn your comment into a separate post with his thoughts (or you can write an article), so people can share ideas on driving our change instead of letting rulers drive it. I look forward to more discussion on this topic.
One could call it check mate on all levels for the West and foremost the Master-Elite : Mass scheming ideology born out of bare bone stupidity.
As is expected, everything will return into god’s realm, going forward, unfolding – nothing – absolutly nothing can stop this push.
China and Russia are wise to follow this flow because it also provides them with the bonus of god’s providence – already being clearly visible, while the West is being fiercly punished by ever deeper strikes by the sword of truth.
Diverting trade routes from cargo ships to high speed train will prevent repetition of Opium Wars outcome (naval blocade).
Imagine all this getting done with the US on the sidelines still acting like the world revolves around it.
Maintaining 100s of military bases on foreign soil, fomenting wars, instigating Regime Change and instability and perpetuating occupations where the net results are negative, would understandably warp one’s sense of reality, but damn, when will they wake up and realize that the status quo is unsustainable?