Write about the Marshall Plan and the Belt and Road Initiative for KSI Transactions.
Belt Road Initiative (BIR) was the Chinese Communist Party (CCP) initiative and it’s a well-known as the silk Economic road in the 21st century maritime. It’s one belt one road system which is believed to be very economical. It was Chinese Communist preference because it far from being concrete but it was very cohesive. This BIR project covers several corridors spreading through Central Asia all through to the Eurasian continent.
The Road runs through the Asia, Africa and Europe continents thereby connecting the vibrant of the main economy of East Asia with the developed Europe circle.
September 2013- The Belt Road Initiative was introduced by Xi Jinping, the Chinese president. This happens during his visit to Kazakhstan. In his speech to Nazarbayev University, the Chinese’s president suggested that Asia and China should come together and come up with something economical that will stir up strategic vision (Chen, 2014).
October 2013- The concept of Silk Road came up to promote peaceful co-existence of maritime co-ordination. This was arrived at based on Jinping proposal and the Indonesian Parliament. Together they also came up with Asian Infrastructure Investment Bank (AIIB) which provide the capital for the construction and promotion of regionalism through economic integration (Shen, 2016).
November 2013- There was 3rd session among the committee of the belonging to Communist Party. They called for an acceleration of infrastructure among their neighbours to help in the facilitation of the construction of the BIR.
December 2013- The president of China himself championed the members of strategic planning involved in this initiative to promote a conducive environment with more connections that will facilitate the completion of this project. This involves creation connection to Russian President Vladimir Putin.
February 2014- Jinping and the Russian President reached on a Memorandum of Understanding and they agreed that the belt road initiative should pass through Russia.
March 2014- A government report was established that was accelerating the construction of this Belt and Road Initiative, by Premier Li Keqiang. This report also called a developmental balance between the China and Pakistan.
May 2014- The completion of the first phase between China and Kazakhstan, and it was on operation on the east part of China called Lianyungang Port. This terminal brought a total investment of 606 million of Chinese currency which is equivalent to 98 million U.S. dollars. It provided an intermediary of goods from Asia to overseas markets (Chen, 2014).
October 2014- Many Asian countries were ready to join Asian Infrastructure Investment Bank as the first members as agreed on their MoU. Beijing was to be the Host as the city of this Bank or the HQ of the AIIB. This Bank was expected to be fully operational by the end of 2015.
November 2014- The president of China, announces their contribution of 40 billion U.S. dollars in setting up the Economic Silk Road. During the meeting at Beijing, Jinping gave directives that the money was to use in providing financial support and investments. This was to give support to countries located along this road (Yiwei, 2015).
December 2014- The priorities were stretched by the Economic work to ensure that the following year there was full implementation of the BIR. Thailand came in and approved the MoU, and joined the cooperation.
January 2015- The founding members of AIIB increased to 26 countries located along the belt. Saudi Arabia also joined officially.
February 1, 2015- The priorities of BRI was stretched the Chinese government giving transportation pillar a first consideration followed by trade and investments along the belt.
March 5, 2015- The government report by Premier Li, gained many initiatives and most parts were highlighted to quicken and strengthen the infrastructure with the neighbouring countries and the gateways.
March 8, 2015-Foreign minister of China dismissed the claims that the BRI was similar to the United States Marshall plan which was sponsored by the U.S government. He brought everybody on board by letting them know that the BRI was as a result of cooperation between many countries which contributed together which should not be viewed with a different mentality such as cold war. He said this with the aim of promoting China’s diplomacy as they make progress with the BRI.
March 28, 2015- Action plan was released by the joint ministries, foreign affairs being one of them. This action plan was based on principles, priorities on cooperation, framework and ways of realization of BRI. President Jinping also highlighted the same strategies on a ceremony of the Boao Forum.
May 2015- There was an agreement between China and Russia on economic integration for Silk Road construction. The agreement took place at Moscow. The agreement included even trade between them and also infrastructure development across Eurasia.
January 2016- countries such as Egypt Iran China and Saudi Arabia also came in in this initiative of Silk Road economic construction. During this time the AIIB came into full operation and full investment.
June 2016- China made an agreement with Serbia, Uzbekistan and Poland. The agreement was to expand the Silk Road network to these countries and to increase its coverage. The construction of Economic Silk Road has led to the creation of more than 60000 local jobs to citizens. There is also increased international participation including more than seventy counties, this is according to Xi Jinping the Chinese president.
Much focus was put on the infrastructure development, but this initiative was even good to developed countries which are already been industrialized since they too experience ageing factor which must be replaced with time. Continents such as Europe and North America needed this initiative the most. This provided a democratic view more so to the lopsided parts of the United State with are leading on globalization (Cheng, 2016). China as countries which came up with this initiative has explained to west countries the objectives and why they came up with this initiative, they have even extended a hand of invitation to many countries who are willing to join a warm hand of welcome. Most western countries though found it very lucrative to join based on what’s is reported on media with respect to the main objective which is infrastructural development, and these countries have offered strong support in regards to this.
China’s main effort is to inherit the globalization through liberal means though they have faced resistance from the western countries the US being the main one, UK, Australia Germany and many more. This has led to contradictions within the western countries and even closing of minds towards globalization of the new world (Yiwei, 2015). This initiative is also forging connectivity and cooperation among different countries by fostering what is called free world. Because the world nowadays is not about the west verse the rest of the world. This initiative taken positively will bridge the gaps between third world countries and the developed and industrialized countries.
The initiative has also promoted the localization more so indo-specific strategy which has been for a long time led by Quad, of the United State of America, Japan, India and Australia (Swaine, 2015). Though it has not been that easy on China going ahead with this initiative. This initiative also come up with so that it can create an all-inclusive platform, where no countries are viewed as more superior than others. This could create more room for collaboration with other countries and this will result in more economic growth and development.
One of the impacts BRI has is in the shipping law. Movement of goods across the sea is governed by many international laws. Most of these laws represent the international communities which strive to harmonize and modernize these rules. Most countries such as Asia have developed an attitude of wait and see. As most countries are looking forward to harmonization, China is seen to be the flag bearer of converting these laws to domestic laws with the domestic provisions.
This initiative has also brought different effects on foreign trade in Central Asia, for example. Transport infrastructure and transit. With this development, good roads will be developed and with the good transportation system, there is increased import and export trade which results in more foreign exchange (Sabine, 2017). There is the development of related Belt and Road Initiative projects. For example, the irrigation system may develop as a result of the creation of electricity to for more power generation.
There has been also the development of trade policies and trade facilitation measures. This will increase trade to neighbouring countries because they can even come up with common currency within that region leading what is called liberation. Others might include microeconomic effects which are associated with BRI. Since this initiative was aimed at connecting and cooperation of different countries that were involved, hence there will be peaceful co-existence between the countries that are taking part in such collaboration (Liu & Dunford, 2016). This BRI project covers two routes running through Asia and Europe thereby connecting close to 63% of the world. This has led to the creation of partnership of different countries located along the belt thereby increasing international collaboration and research.
Lastly, Chinas Belt and Road Initiative have a great impact on South Asia in terms of peace and stability. In this regard there has been a lot of interaction between people of different communities as they carry on their businesses; hence China is helping in promoting international peace (Shen, 2016). There was also economic growth as a result of this initiative, making it a mix at its best. Local economies have risen because of low interest a loan being given out by the Chinese government and with loans, almost 20% goes to traditional aid. Though claims that these loans have not been helpful.
The Marshall plan was considered to be more economical by most historians because it was covering almost 16 countries and the amount realized in 1951 was 130billion U.S dollars. This gave about 2.5 percent of the Gross Domestic Product. More investments played a big role in helping Europe to recover but not with much percentage. Comparing Marshall plan and the Belt and Road Initiative is a bit tricky because the size of BRI is not known yet. But going with figures, Chinas investments amounted to 56billion U.S. dollars from 2014 to 2017 (Shen, 2016). This was amount resulting from direct investments not including the loans from the banks. Going with the figures, Marshall Plan left much behind with this BRI. However, the Belt and Road Initiative having just started, it’s still developing and ongoing initiative, this means that China will invest up to 150 billion U.S. dollars in a span of five years while Marshall Plan will be having a relatively constant investment over this period.
The greatest challenge China has is to bridge the gap between the return earned and what Market would prefer. The Marshall plan, on the other hand, on the other hand, portrays American as not really relying on the cash but providing the market-friendly policies. This has proven the Americans commitments to ensure they brought back their financial stability and do away with trade barriers. These reforms brought enormous benefits in 1941 (Huang, 2016). Though BRI has a greater potential of growing far much more compared to the Marshall plan, China has to meddle down their internal affairs economically together with other countries. BRI sponsors are yet adopting this initiative back home while the Marshall plan provides more freedom to their markets by allowing them to choose the resources they want. But BRI has the potentiality to do better than Marshall Plan.
Though the U.S. Marshall plan shared some similarities with the Chinas BRI, Chinese commentators have come out to clarify why their initiative is their Marshall plan. This was further explained by their minister of Foreign Affairs Wang Yi, rejecting claims that BRI was based on geopolitics. The minister also stated that BRI is more open and non-institutionalized as opposed to the U.S Marshall plan. He described this initiative as open and harmoniously all-inclusive proving that it promotes tolerance and commitments. He provided a go-ahead for any nation willing to participate in this BRI. Marshall Plan has been viewed to be ideologically driven, making it an exclusive affair (Habova, 2015). The line of criticism is under the perception of United State foreign policy on other countries like China.
The Americans have always found their way through using both soft and hard ways just to gain influence. They believe that America must always lead, but in the statement that was given by China’s foreign affairs minister, there are no words like leadership (Shen, 2016). Americans have created the perception of continental leadership which contrast and very much different with Chinese policy on their initiative. The Chinese government have viewed this as Americans extension of cold war mentality. Though some critics are fair based on the fact that some Americans are supporting this initiative so that they can find a way of intruding so that they can cause instability to the Chinese regime. Since no foreign policy is monolithic, there is hope and a tangible evidence that China will emerge and prosper with this initiative despite the resistance they are facing from the western countries (Djankov & Miner, 2016). It’s always important to note that Americans always view their Chinese counterparts with a lot of negativity even if their plan is a goodwill.
Both the Marshall Plan and the BRI have similarities in the economic and political and economic agendas. One similarity is in countering of the rivals. The U.S. had hoped to use the Marshall Plan to bring the wars to an end to the wars in Europe in order to demonstrate capitalism rather than communism while undermining the Soviet Union (Shen, 2016). The Marshall Plan provided a way to stop the impact of the Soviet Union. Equally, the China’s Belt and Road Initiative targeted the U.S. as the major competitor. Emphasis were on the construction of the onshore harbors and the energy pipelines (Ma, 2016).
Another similarity is in siphoning away of diplomatic support. Marshall Plan had targeted the Eastern Europe countries to get support, Tito’s Yugoslavia being one of the Eastern European state which benefitted through acceptance of the Marshall Plan aid (Curran, 2016). Similarly, BRI endpoint being in Europe has demonstrated the wish to try and intensify the diplomatic support with the United States. The recent interactions between the China and Western European countries and the decisions made by the U.K., France and Germany to join AIIB have indicated the decline of United States influence.
Another similarity was in the export of currency. The Marshall Plan allowed the U.S. to export its currency, the amount of aid which was provided was thirteen U.S. billion dollars. The dollars were used for subsidies, whereas the European countries procured the United States goods with their currencies (Yiwei, 2015). This was similar to the Chinese economists. China have been looking forward in expanding the use of the international currency The recent International Monetary Fund has included renminbi (RMB) of China in the international use of currency.
References
Chen D (2014) China’s ‘Marshall Plan’ is much more. Retrieved from https://thediplomat.com/2014/11/chinas-marshall-plan-is-much-more/
Cheng, L. K. (2016). Three questions on China’s “Belt and Road Initiative”. China economic review, 40, 309-313.
Curran E (2016) China’s Marshall Plan. Retrieved from https://www.bloomberg.com/news/articles/2016-08-07/china-s-marshall-plan
Djankov, S., & Miner, S. (Eds.). (2016). China’s Belt and Road Initiative: motives, scope, and challenges. Peterson Institute for International Economics.
Habova, A. (2015). Silk Road economic belt: China’s Marshall Plan, pivot to Eurasia or China’s way of foreign policy. KSI Transactions on Knowledge Society, 8(1), 64-70.
Huang, Y. (2016). Understanding China’s Belt & Road Initiative: Motivation, framework and assessment. China Economic Review, 40, 314-321.
Liu, W., & Dunford, M. (2016). Inclusive globalization: Unpacking China’s belt and road initiative. Area Development and Policy, 1(3), 323-340.
Ma CZ (2016) China’s One Belt, One Road: Will it reshape global trade? Retrieved from https://www.mckinsey.com/global-themes/china/chinas-one-belt-one-road-will-it-reshape-global-trade
Sabine P (2017) Belt and road are ‘Marshall Plan without a war’, analysts say, as Beijing and banks woo private-sector investors. Retrieved from https://www.scmp.com/special-reports/business/topics/one-belt-one-road/article/2082733/belt-and-road-marshall-plan
Shen S (2016) How China’s ‘Belt and road’ compares to the Marshall plan. Retrieved from https://thediplomat.com/2016/02/how-chinas-belt-and-road-compares-to-the-marshall-plan/
Swaine, M. D. (2015). Chinese views and commentary on the ‘One Belt, One Road’initiative. China Leadership Monitor, 47(2), 3.
Yiwei, W. (2015). ‘China’s ‘New Silk Road’: A Case Study in EU-China Relations,’’. Xi’s Policy Gambles: The Bumpy Road Ahead, ed. A. Amighini and A. Berkofsky, 103-115.
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