China’s new Silk Route initiative – Signs up with Hungary as first partner

Adam Minster of Bloomberg informs of this development:

Although Budapest and Beijing are separated by 6,000 miles, they’ve just agreed to become much closer. In a quiet ceremony held last weekend, Hungary became the first European country to sign onto China’s New Silk Road initiative, a multi-billion dollar program to build up infrastructure and trade along the land and maritime routes of the ancient Silk Road that stretched across Asia and Europe.

Right now, Hungary’s participation probably won’t have an impact beyond its own borders. But as others countries follow its lead, China’s economic and political relationship with Europe will likely undergo a dramatic shift — one that may not be to the European Union’s liking.

The Chinese government’s interest in Europe isn’t new. In recent years, it has made substantial investments in Greek port facilities, andagreed to help finance the development of high-speed rail service between Belgrade and Budapest. In both cases, China wanted to simplify the logistics of exporting to European markets. In return, it offered something to the countries in question: help building infrastructure, and easier access to Chinese markets (assuming they could figure out something to export back).

The novelty of the New Silk Road initiative is that China is now pursuing far deeper partnerships as part of a comprehensive political strategy. Previously, policy makers in Beijing tended to treat, say, an investment in Tajikistan as a discrete exchange — you get a pipeline, we get gas. Under the New Silk Road framework, it’s part of an explicit effort to expand Chinese influence across Eurasia — one step toward earning primacy for China on the global stage.

Beijing hasn’t denied having vast ambitions for a program it expects to spur $2.5 trillion in annual trade by the end of the decade. In March, Xinhua, China’s official state news wire, announced the purpose of the program is nothing less than to “change the world political and economic landscape.”

The grand plan to tilt world geo-polity towards China has started. Really fascinating to follow these developments.

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