David Dollar describes the impact of China`s Belt and Road Initiative over the past seven years, and these are broader economic and geopolitical opportunities and challenges it has posed to U.S. and regional players. This piece was originally published by the Ripon Society. Victoria has been attacked by members of the federal coalition for its agreement on China`s belt and road initiative, but what does this mean for Victoria and Australia`s foreign policy towards China? More generally, Chinese leaders are determined to restructure the economy to avoid the so-called middle income trap. In this scenario, which has affected nearly 90% of middle-income countries since 1960, wages and quality of life increase as low-skilled production increases, but countries struggle to move towards the production of higher quality goods and services. The Belt and Road initiative aims to improve physical infrastructure through land corridors that roughly correspond to the ancient Silk Road. These are the belts in the name, and there is also a maritime silk road. [50] Infrastructure corridors, which cover some 60 countries, mainly in Asia and Europe, but also in Oceania and East Africa, will cost between US$4 billion and US$8 trillion. [51] [52] This initiative contrasts with the two U.S.-focused trade agreements, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership.

[52] The initiatives are supported financially by the Silk Roads Fund and the Asian Infrastructure Investment Bank, while they are technically coordinated by the B-R Summit Forum. Land corridors include:[50] While Italy and Greece have joined the Belt and Road Initiative, European leaders have expressed ambivalent views. German Chancellor Angela Merkel said the BIS should “lead to some reciprocity and we are still arguing about it.” In January 2019, French President Emmanuel Macron said: “The old Silk Roads have never been anything but Chinese… The new roads cannot go in one direction. [104] European Commission Chief Jean-Claude Juncker and Japanese Prime Minister Shinzo Abe signed an infrastructure agreement in Brussels in September 2019 to counter China`s Belt and Road initiative and link Europe and Asia to coordinate infrastructure, transport and digital development projects. [116] [117] As part of its Silk Road strategy, China is involved in the construction and operation of railways, roads, airports and industry in much of Africa. In several countries, such as Zambia, Ethiopia and Ghana, dams have been built with the help of China. In Nairobi, China is funding the construction of Africa`s tallest building, the Pinnacle Towers. China`s $60 billion investment in Africa, announced in September 2018, will create opportunities and encourage the local economy and provide African raw materials to China. [71] From China`s perspective, Africa is important as a market, supplier of raw materials and platform for the extension of the new Silk Road – African coasts should be included.

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