Several of this week’s analyses emphasise the 13th five year plan for social and economic development of China. Two of its five focus areas are Innovation and Opening up.
'Innovation' is interpreted as follows: 'Move up in the value chain by abandoning old heavy industry and building up bases of modern information-intensive infrastructure.' This notion is crystallized in the policy `Made in China 2025´. This focus area works twofold. On one hand, the new generation of Chinese companies embraces the digital domain as none other, i.e. Alibaba.com. This e-commerce platform, well-known for its price-friendly products with varied quality-standards, is diversifying into online markets and other financial services. Alipay is its digital payments service which creates a huge amount of possibilities in tourism. On the other hand, China is profiting from EU-sanctions on Russia, which could be fuel for its engine of innovation. First, the trade relations between Russia and China have intensified since the sanctions were imposed; expected growth is 30 percent per annum with a possibility of grossing $100 billion in total in two years. Second, Russia has big ambitions to implement a digital 5-G network domestically. By 2020 Moscow, including seven other Russian cities, will have total coverage of the 5-G network, which makes it a vanguard of digital communication, thus outranking cities such as London. In this sense, the BRI might benefit from the imposed EU-sanctions on Russia [Belt & Road Initiative Ushering In New Trade & Logistics Blockchain & 5G Technologies].
'Deeper participation in supranational power structures, more international co-operation' is the detailed description of the focus area 'Opening up'. This causes disruption (or paradigm shifts) in today's economy and how we perceive the world. For example, the trans-European rail should not be regarded as a short-term profit project, but rather as a platform to provide more future possibilities. Authorities and companies in the EU, China, Kazakhstan and Russia are cooperating to realize this ambition [The Hidden Economic Rationale Of China-Europe Rail].
Another example of a paradigm shift (or as Alvin Toffler puts it, 'FutureShock') are Aerotropolises. Globalization and the internet shape today’s economy. Products need to be shipped in large quantities, and efficiently. Cities with major airports (Aerotropolis) are enjoying significant economic growth. However, an Aerotropolis is capital-intensive and coordinated political will is paramount in realizing them. China has taken an interest in building an airport in Greenland, a self-governing territory of Denmark. The United States and Denmark oppose this plan, due to strategic reasons (location and vast mineral resources including uranium and rare earths) and current vested interests (a radar station that is part of a US ballistic missile early warning system). Despite these concerns Greenland regards itself autonomous enough to enter into a partnership with China in accordance with lawful, green, cooperative and market principles. A rift between Denmark and the US may be lurking [Greenland's courting of China for airport projects worries Denmark].
Sun-Tzu once said: 'Let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt.' The BRI itself is shrouded with mystery and secrecy. However, the actions are considered bold and swift. Like the resonation of thunder, outsiders linger on the outcome of these actions in order to grasp the BRI.
A. Cikmazkara
This week's Silk Road Headlines
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