Then, on 6 June, Siemens AG announced that the company had organised the Belt & Road International Summit and that over 1,000 representatives from governments, companies, financial institutions and think tanks from 30 countries had travelled to the summit.
“The Belt & Road Initiative is an invitation to the world to join in the world’s largest infrastructure project. It is a pioneering movement, representing one trillion euros of infrastructure investment in 90 countries and beyond; a project that has the potential to improve the lives of 70 percent of the world’s population. It is a project that creates opportunities in virtually every sector,” said Kaeser in his speech. Let us explain: One Belt, One Road or Belt and Road Initiative (BRI) is the internationally established name for reviving the infrastructure corridors on the silk road.
Looking back: on 7 September 2013 in Astana, Kazakhstan, China's President Xi Jinping announced the “Silk Road Economic Belt”, and in Jakarta, Indonesia, the “Maritime Silk Road of the 21st Century” as a new phase in China's economic policy. At the Boao Economic Forum in March 2015, entitled “Asia's New Future: Towards a Community of Common Destiny”, the Chinese leadership then presented a first action plan with “Visions and Actions on Jointly Building the New Silk Road”. 29 heads of state and government, as well as top representatives from 100 countries and international institutions, met in Beijing for the historic launch of the “Belt and Road Forum for International Cooperation” in 2017, which was also attended by heads of state from Italy, Spain, Switzerland and Hungary.
The integration of energy infrastructure, i.e. oil and gas pipelines, coal-fired, hydroelectric and nuclear power stations, is included in the action plan. It deals with building modern, automated industries, science and research centres, special cross-border economic zones, new cities, waterways, ports and airports - all as an increasingly integrated global development concept. The BRI memorandum has also been signed by nine African countries and talks are being held with 20 more. BRICS, the Eurasian Economic Union, the Shanghai Cooperation Organisation, UNASUR, CELAC and many other communities of states also see cooperation with China's New Silk Road as the key to developing their future potential.
German Construction Industry in a Poor Position
And what about Germany? Germany Trade and Invest, the Foreign Trade and Investment Agency of the Federal Ministry of Economics and Technology, in cooperation with several chambers of commerce, did not launch an initial, relatively modest information initiative until February 2018. It is no secret that “the German construction industry is in a rather poor position for major infrastructure projects [...]”, that “Hermes guarantees are still only available to a limited extent for financing transactions in many Silk Road countries”, and that the regular banking sector and international lenders, such as the World Bank, demand excessively high interest rates for such long-term major projects.
For existing projects and in special economic zones, German companies should only offer themselves as subcontractors and suppliers of special equipment in the sectors of railway, ship, port and aviation technology. One study commissioned by the Federal Ministry of Economics and Technology even states that Germany is in danger of missing out on the global market if it were to completely lose its ability to handle major turnkey projects. In tandem with an ideologically anti-industrial mood in Germany’s political and social institutions, we are facing some relatively large challenges concerning our participation in the “Belt & Road” programme. The energy revolution in Germany has already led to the country having the highest energy prices in Europe and to an exodus of energy-intensive companies.
The Silk Road States’ Credit System
Traditional industry and infrastructure have suffered greatly from the restructuring towards a financial and service economy. Since the systemic financial crisis in 2008, bailout packages and cheap money for banks and stock corporations have triggered a fictional boom and fuelled the culture of speculation in financial markets rather than suffocating it. The good news is that within a surprisingly short period of time, the Silk Road States have established a new, alternative credit system, including the Silk Road Fund with over USD 55 billion and the Asian Infrastructure Investment Bank (AIIB) with USD 100 billion. Under the umbrella of the “Silk Road Economic Belt” and the “21st Century Maritime Silk Road”, both explicitly support economic cooperation.
Indeed, the columnist for the Bloomberg financial news agency, Noah Smith, noted that China had not experienced any economic depression in the past 25 years. When times are critical, China's leadership instructs its state-owned banks to extend loans for the infrastructure, construction and real business sectors. With this credit policy, China has always averted the crash scenarios predicted by Western experts. Perhaps an incentive for Germany to rethink. The German government’s coalition agreement, however, contains a very general remark: “China's economic development is a great opportunity, especially for the German economy. China's Silk Road initiative is an example of opportunities and risks. We want to develop a European response to this to safeguard our interests and better equip and bundle German and European financial instruments.”
In October, the European response was presented and discussed in Brussels. There are clear signs that the EU is totally opposed to the project. Will Germany join this geopolitically motivated attitude or seek its own way, as other EU states are already doing? In Italy, a BRI China Task Force has already been set up at the Ministry of Economy and a successful conference was recently organised in Rome. In its government programme for 2017-2022, Austria states, “We would like to ensure that large supraregional and geostrategic infrastructure projects, such as the planned Silk Road Project or broad gauge do not pass Austria by, but that, as a hub, we are involved in it.”
Chinese Renaissance
The “Belt & Road” projects go far beyond the field of traditional infrastructure. Using advanced technologies in the field of nuclear energy, magnetic levitation trains and space technology, in addition to creating cutting-edge fusion power plants, China will make quantum leaps in development. But the Silk Road initiative is also creating new impulses in the sphere of culture. The Parisian founder of the China Europe International Business School, David Gosset, has been explaining the emergence of a “Chinese Renaissance” in his lectures and articles for some time already. In Xi Jinping's principle of the “community of shared future for mankind”, he sees a new interpretation of the classical concept of the so-called “great unity” or harmony for the 21st century.
In his speech at the 18th summit of the heads of state of the Shanghai Cooperation Organisation in the Chinese coastal city of Qingdao on 10th June, Xi Jinping welcomed those present with quotations from Confucius and Menzius, an extremely influential Confucian philosopher. If Germany wants to contribute to this gigantic, optimistic New Silk Road project, it should ameliorate the image of its large-scale industrial projects, abandon its geopolitical position towards China and revive the humanist values of its culture.
About the Author:
Stephan Ossenkopp, born in 1969, is an author, consultant and member of the International Schiller Institute. He lives in Berlin and conducts research on political and cultural topics. You can reach him at: ossenkopp@schillerinstitute.org