Skip to main content

Neoglobalization, China’s Silk Road and the Middle East

http://ameinfo.com/money/economy/neoglobalization-chinas-silk-road-middle-east/

October 13, 2017 1:00 pm

By: Prof. Dr. M. S. S. El-Namaki- Dean, Victoria University, School of Management, Switzerland

The concept of globalization, as known over the past few decades, is becoming opaque. Foundations established most notably during the Reagan era, including free markets, open economies, small governments, private initiative and corporate dominance, are losing coherence.

The ongoing shift in economic growth diverts away from manufacturing and services towards disruptive technologies, as much as the gradual shift in economic drive away from Western economies towards China and its environs, have hastened the blur. Politics in the United States echoed protective noises and Brexit followed.

One Belt One Road Initiative (BRI) took shape.

BRI and neoglobalization

The BRI framework was first made known by President Xi Jinping in October 2013. Fine details followed and the most authoritative statements are the statements made by the State Council, where the Council stresses the search for “[…] a multipolar world, economic globalization, cultural diversity and greater IT application”.

The State Council goes further to explain that the initiative is designed to “uphold the global free trade regime and the open world economy in the spirit of open regional cooperation”. In the process, BRI would promote connectivity of Asian, European and African continents, align development strategies, tap market potentials, promote investment, enhance consumption, stimulate demand, induce job creation and encourage cultural exchange (Inaugural Belt and Road Summit; May 18th, 2016).

Read: UAE seeking to boost trade and investment ties

To appreciate the magnitude of this initiative, one has to realize that BRI covers nearly a quarter of global trade ($7.2 trillion in 2016), that BRI member countries produce a near 55 per cent of global economic output, represent 70 per cent of the world’s population and possess an estimated 75 per cent of known energy reserves.

BRI will have far reaching implications. One of those is to make China the center of global economic gravity and create a serious potential of changing global geopolitical configuration. A more significant consequence, however, is the emergence of a new template for cross country exchange or globalization.

BRI premises are creating what we may call neoglobalization or a novel template for cross country multi-functional exchange.

This one is built on novel dimensions largely ignored in yesterday’s globalization. Prime among those is the inclusion of all factors of production, including human resources in the process, the adoption of a cross country dynamic synergy dimension, the introduction of infrastructure investment pivot, the initiation of new capital market instruments and institutions, the inclusion of an economic development component, an integration of an international organization drive and, last but not least, a strong element of political empathy.

BRI-inspired neoglobalization will mark the emergence of a new era in cross country economic, social, technological and political exchanges. Trade flows, capital market institutions and instruments, logistic infrastructures, technology hubs and telecommunication vehicles will all assume a new profile.

But where does that leave the Middle East?

Read: Dubai’s non-oil foreign trade reached AED327 billion in Q1 2017

BRI and the Middle East

BRI-inspired neoglobalization template is a central aspect of China’s strategy to expand its reach and influence throughout the structurally attractive Middle East market.

The promise of no strings attached infrastructure financing and the reciprocal flow of energy will provide the pivot of neoglobalization in the Middle East. Chinese companies feature heavily in construction work, carried out within Egypt’s new capital. The UAE, a founding member of The Asian Infrastructure Investment Bank (AIIB), is building a new Middle East logistics hub along the BRI route. As for energy, China is and will continue to be the world’s largest importer of energy, with The Gulf Cooperation Council (GCC), Iran, and Iraq providing 60 per cent of today’s imports and a lot more of future ones. (Middle East Institute, August 2017)

Future developments are likely to see this narrow framework expand to include an expanded trade. The Chinese are negotiating a free trade zone with the GCC and have already established one with Egypt.

Read: Why is Egypt’s non-oil business going from bad to worse?

Other players

BRI will have implications for several other Middle East players too. The China-Central West Asia Economic Corridor has Iran as one of its end points, connecting the two states through a multiple of infrastructure investment projects.

Turkey also features prominently in the BRI by being the endpoint in the China-Central West Asia Economic Corridor. A high-speed joint Chinese-Turkish cross Turkey railway was recently completed setting an example for things to come (Washington Post; June 21st, 2017)

Comments

Popular posts from this blog

Balochistan to establish first medical university

https://www.dawn.com/news/1366135

The Newspaper's Staff CorrespondentOctober 25, 2017QUETTA: The provincial cabinet on Tuesday approved the draft for establishing a medical university in Balochistan.Health minister Mir Rehmat Saleh Baloch made the announcement while speaking at a press conference after a cabinet meeting.“The cabinet has approved the draft of the medical university which would be presented in the current session of the Balochistan Assembly,” he said, adding with the assembly’s approval the Bolan Medical College would be converted into a medical university.Published in Dawn, October 25th, 2017

China’s 'Digital Silk Road': Pitfalls Among High Hopes

https://thediplomat.com/2017/11/chinas-digital-silk-road-pitfalls-among-high-hopes/


Will information and communication technologies help China realize its Digital Silk Road?By Wenyuan WuNovember 03, 2017In his speech at the opening ceremony of China’s 19th Party Congress, President Xi Jinping depicted China as a model of scientific and harmonious development for developing nations. Xi’s China wants to engage the world through commerce but also through environmental protection and technological advancement. This includes Beijing’s efforts to fight climate change with information and communication technologies (ICTs) that it plans to export along its “One Belt One Road” initiative (OBOR). Xi may have ambitious plans, but could China be throwing up obstacles in its own way?In his speech, the Chinese president emphasized the need to modernize the country’s environmental protections. The Chinese state is taking an “ecological civilization” approach to development and diplomacy, with a natio…

Germany’s Siemens sets up Belt and Road office in Beijing

https://gbtimes.com/germanys-siemens-sets-up-belt-and-road-office-in-beijing
Germany’s Siemens sets up Belt and Road office in Beijingby Janne Suokas Mar 23, 2018 15:20 TRADEINVESTMENTBELT AND ROAD INITIATIVEGerman industrial and engineering group Siemens will set up a Belt and Road office in Beijing. surberFlickrCC BY 2.0
German industrial and engineering group Siemens will set up an office in Beijing to boost international cooperation under China’s Belt and Road initiative, the company said on Friday.The move will help strengthen Siemens’ cooperation with Chinese and international companies and expand business opportunities brought about by the Belt and Road initiative, according to the company’s statement.The Belt and Road initiative is China’s ambitious project to boost trade and infrastructure investment in more than 65 countries along the ancient Silk Road trade routes from Asia to Europe and Africa.Siemens said it had already partnered with hundreds of Chinese companies in overse…