– by Sahil Philip
With the global economy in a constant decline coupled with the gradual decline of the United States, and China constantly vying to replace it as the global hegemon, the answer lies in China’s Belt and Road Initiative.
The Lord of the Rings author J.R.R Tolkien, when asked about how he composed the trilogy spanning more than a thousand pages, said: “I wisely started with a map and made the story fit”. For nearly 60 years, world politics and economic supremacy rested with the United States of America, thanks to the visionary trajectory set forward by the Marshall Plan. The trajectory radiated from Washington through Western Europe to parts of East Asia, integrating goals and values put forward by the US along the way. Ever since, the US has gone on to establish an empire of its own; having gone on to architect its own rules, norms and institutions since World War 2.
Since the global financial crisis of 2007 and 2008, we have witnessed a decline in the US-led world order. Many view it as the inflection point, with the world looking for a new, fresh face to lead them into the next century. Then entered China, with their Belt and Road Initiative (BRI), Chinese Premier Xi Jinping is seeking to create a new world map that plans to replace the US-led international system. What connects a highway in Pakistan to a port in Vietnam is the movement that China seeks to link Europe, Africa, and Asia too. The plan, as ambitious as it may sound, is churning into hard reality having signed 173 cooperation agreements with around 125 countries and nearly 30 international organizations. The BRI’s 6 major economic corridors – the New Eurasian Land Bridge, China-Mongolia-Russia, China- Indochina Peninsula, China-Central Asia-West Asia, and the Bangladesh-China-India-Myanmar economic corridors, all linking the Asian, European and African economic circles together.
The plan to revive an ancient trading route could leave an economic and political legacy far greater than what the Marshall Plan could achieve. Take nothing away from the Marshall Plan – having sown the foundation to the current world order; having erected United Nations (UN) and the North Atlantic Treaty Organisation (NATO) to name a few, the plan dictated terms and rules set by the West (mainly the US) for the benefit of the West. China, on the other hand, seeks to create “collaborative globalization” above the existing US-led type. Xi Jinping offered the principles of mutual consultation, joint construction and shared benefits initially as he launched the BRI into action and if the Chinese are able to keep their word, the One Belt One Road (OBOR) could be the new map which guides mankind into the next century; both economically and politically.
Economically the BRI is five times the amount of money that the US put under the Marshal Plan (adjusted for US dollars in 2018). Another important area of difference is the countries that come under its ambit. Unlike the Marshall Plan which was exclusively for the Western European countries and a few Asian nations (of which China was a recipient), the BRI has a much wider reach being open to all countries who are interested in development and growth irrespective of their political ideology and government type.
However, both the Marshall Plan and the BRI share similar characteristics in a lot of aspects. First and foremost is the idea of exporting currency. The Marshall Plan provided about $100 billion worth (in today’s estimates) of aid to countries, thus creating the USD as a currency of stability. Post World War 2, there was a vacuum for a global currency and with most of the nation’s still recovering from the ravages of war, the stage was set for the US to leapfrog into the economic forefront with its currency acting as the global currency with the dollar-pegged against the gold. China nurtures similar ambitions. The International Monetary Fund (IMF) has already added the Renminbi (RMB) in its Special Drawing Rights basket of currencies and via the BRI, China plans to use the RMB as the settlement currency of all the trade happening through the routes. This would be an arduous task to achieve with most of the countries less welcoming to the idea of adopting the RMB as the settlement currency. This remains to be seen as one of the biggest challenges and opportunities that the BRI offers.
The second major similarity would be the idea of countering a rival. The US used the Marshall Plan to revitalize the economies of the Western European countries to cement their position as the global hegemon over the Soviet Union, who were their closest rivals. Many viewed communism as the much-needed alternative following the collapse of global capitalism which failed spectacularly in the first half of the 20th century. If the European economy had stagnated, the traditional capitalist economic system pursued by the US, Europe, and Southeast Asia wouldn’t have survived. The Marshall Plan, through providing subsidies and lowering trade barriers, mapped the blueprint for the reinvigoration of modern-day capitalism and also served the purpose of undermining the global reach of the Soviets. The BRI aims to achieve a new type of great power relations in the Asia-Pacific region, which it views as large enough to accommodate the two global behemoths.
Lastly, the similarity lies in the common goal of siphoning away diplomatic support from the rival nations. The Eastern European countries may have not fallen under the ambit of the Marshall Plan but the US still was open to providing aid to countries that abandoned communism so as to undermine Soviet influence. Exempli Gratia, Tito’s Yugoslavia benefitted immensely from the Marshall plan. The BRI, on the other hand, has its endpoint rooted in Europe which the US views as its backyard. To gain traction in this region, complemented by the fact that countries such as the UK, France, and Germany joining the Asian Infrastructure Investment Bank (AIIB), one of China’s flagship institutions indicates a declining US influence.
It would be unfair to compare the contents of history with that of the present. Both came at a time of the world system in decline and both had the potential for a greater change. Whilst the US was on the cusp of creating a world order all together, China is to inherit an existing world order and revamp it with its own norms and ideas. And whilst China would be facing a well-entrenched world system albeit in an era of constant stagnation, with the US not in its usual meteoric rise, it faces the biggest challenge and opportunity of the century. China has the challenge of creating and integrating its own values into the system and has the opportunity of leading the way deep into the 21st century. Over to you, China.
Sahil Philip is a 2nd-year student pursuing a bachelors in Global Affairs at OP Jindal Global University.
- Anon,(2019). [online] Available at: https://www.nature.com/articles/s41599-018-0077-9#Sec11 [Accessed 10 Aug. 2019].
- China’s’Marshall Plan’ Is Much More https://thediplomat.com/2014/11/chinas-marshall-plan-is-much-more/
- The New Silk Road: China’s MarshallPlan? https://thediplomat.com/2014/11/the-new-silk-road-chinas-marshall-plan/
Picture Source :https://business.followcn.com/2016/12/23/china-affects-u-s-economy/
One response to “China’s One Belt One Road could be the Marshall Plan of the 21st century”
Nice and informative.
The comparison made among the BRI and Marshall Plan is quite interesting.