The Chinese economy is bound to surpass the 19-nation eurozone before the end of the year. You don’t need to be an analyst in China to know that. Common knowledge from Guangdong to Gansu is that China’s economy was bigger than Europe’s up to the mid-19th century. Then came a bad spell – unleashed by Brit gunboat diplomacy – for a short 150 years.
Now things are back to a historical normal.
Europe accounts for roughly 60% of Chinese foreign investment – including mergers and acquisitions – compared to 25% in the US and 15% in Asia, Africa and Latin America. The EU as a whole is desperate for any measure of GDP increase. Almost three decades on from the Cold War, the new normal is Eurasia being configured as an increasingly integrated trade and investment space.
The past three years have seen a flurry of deals – from the $44-billion Chinese buyout of Swiss agrochemical giant Syngenta to ChemChina acquiring Pirelli for 7.1 billion euros and Chinese participation in France’s PSA. In 2015, Italy, in fact, was at the top of the Chinese drive, with $10 billion invested in over 300 companies in the five years to 2015, followed by France.
In 2016 Cosco bought 51% of the port of Piraeus – the privileged entry point of Chinese products in Europe. Chinese companies scour for made-in-Europe top-end technologies able to be transposed to an integrated China boasting the largest high-speed rail network in the world; over 20,000 km built in only a few years.
Battle of the Super-Ports
The beauty of the New Silk Roads, or the Belt and Road Initiative (BRI), is that each player is free to choose how it will position itself along and across myriad connectivity belts, roads, nodes and arcs.
Chinese and European companies interface on all these connectivity nodes. For instance, City Railway Platform and China Railway Container Transport work with Swiss Hupac on the Yiwu-Madrid link. Wuhan Asia Europe (WAE) is involved in the Wuhan-Lyon link while French Geodis is active on the Chengdu-Rotterdam link.
All these links feature on the nine-corridor Trans-European Network – Transport (Ten-T), which is due to be finished by 2030. One of Ten-T’s key corridors constitutes an absolute Chinese strategic priority; the high-speed rail line tying Budapest-Belgrade-Skopje-Piraeus, which benefited from a special $3-billion Beijing-facilitated line of credit.
Meanwhile, the Chinese-led Asian Infrastructure Investment Bank (AIIB) and the European Investment Bank are also partners funding other infrastructure. After all, BRI’s final destination is the European Union (EU).
In parallel with the crucial interface between BRI and Ten-T, the fact is 85% of trade between Europe and Asia is maritime trade. And as far as Beijing is concerned, the Maritime Silk Road, via the Suez Canal, keeps a special focus on the ports of Piraeus and Venice.
No wonder the smart money on the peninsula has already mapped how BRI offers Italy a unique position in the complex web of Chinese global supply routes.
Profiting from the largely Chinese-financed set-up of the Piraeus-Budapest Balkan corridor, the ambitious aim is to configure Italy as continental Europe’s entry door for connectivity routes from east and south while also serving, in a cost-effective manner, scores of destinations west and north. Italy ranks as the third European nation in terms of naval trade.
Thus, the importance of a revamped Venice port channeling supply lines from the Mediterranean towards Austria, Germany, Switzerland, Slovenia and Hungary. Or Venice configured as an alternative super-port to Rotterdam and Hamburg. Call it the Battle of the Super-Ports.
Chinese involvement in Italian ports is on the rise. Cosco is about to buy 40% of the Vado Ligure container terminal – amplifying the appeal of the port of Genoa in its “competitive integration” with further terminals such as Marseilles and Barcelona.
And Venice has signed a memorandum of understanding with Tianjin and Ningbo.
Still, the most ambitious plan in the Ten-T galaxy is the effort to configure Venice, integrated with Ravenna, plus Capodistria-Trieste, as the privileged link to southeastern Europe. Call it the North Adriatic BRI gambit.
The reasoning, on the Italian side, is that a mega-container arriving from Shanghai landing in Venice, Ravenna, Trieste and Capodistria will be able to deliver the goods to all sorts of markets; from northern Italy, Switzerland and southern Germany to Austria, Hungary and the Balkans.
Enter the Venice Offshore-Onshore Port System (Voops), which also happens to be a top priority for the European Commission (EC). That’s the overall framework for a modernized port of Venice – arguably accumulating extra merit by not polluting the artistic marvels of La Serenissima.
Paolo Costa, president of the Venice Port Authority, lays it all down with the requisite Marco Polo touch:
“The added value, the ‘Columbus egg’ of the Venice Offshore-Onshore Port system relies on the fact that a single offshore platform is capable of sorting mega-cargoes of mega-ships on several existing seaports (as Marghera, Chioggia, Porto Levante, but also Ravenna) and inland ports (as Mantua and Padua).” Costa sees it as the way Venice “can help ensure that Italy will not be cut off from the mega-ships’ routes (over 18,000 TEU), destined to dominate the trade relationship between Europe and Asia.”
And it does help that supplying EU markets from Venice saves up to five sailing days compared to Northern European ports.
Voops, as currently projected, is a collaborative effort involving Italian engineers and Chinese operators. When online, Voops will be configured as true Marco Polo in reverse, profiting from free-trade deals between the EU and the Balkans to allow China to reach a mega-market of 800 million people.
As much as the EU may appear extremely fragile politically, it remains a very strong single market and a fully mature economy crammed with capital and knowledge. It’s no wonder the Chinese leadership has committed itself to historically revamp the Ancient Silk Road as a formidable political-economic framework spanning the whole of Eurasia. And it’s no wonder the new Marco Polos all bet on Eurasian infrastructure integration.
So much talk for one port
The US establishment will not be pleased by the BRI — it’s a commercial and geopolitical threat to US / USD hegemony.
Yes Raja, there is a lot of history repeating "in reverse" here… Venice lost its strategic position when Columbus ( from Genoa, but working for Spain ) landed in the Caribbean, and so did Genoa. Then the world shifted to the west, and now switching back to the east… And by the way, the discovery of the Americas gave a big boost in those days to the Silk Roads bazaars, given the new purchasing power of the protestant European nuveau riches, and their appetite for exotic goods and spices – and swapping tea for opium, as more recently wars for oil -… You see, the maps of the BRI new Silk Roads are still following the ancient paths. Only difference is that now we are also looking at arctic routes, and the RMB replacing the US$.
The key information of the article is this:
"Europe accounts for roughly 60% of Chinese foreign investment – including mergers and acquisitions – compared to 25% in the US and 15% in Asia, Africa and Latin America. The EU as a whole is desperate for any measure of GDP increase.
In parallel with the crucial interface between BRI and Ten-T, the fact is 85% of trade between Europe and Asia is maritime trade."
In other words, there’s a mismatch between what the EU wants (the revival of Atlanticism) and what it needs (China).
These kind of geopolitical mismatches usually indicate, in History, a period of greater than usual instability, a period where the old dies but refuses to let the new to be born — just like the mythological Krónos.
I think it is "wrong" to speak of China without Russia, as the two are operating in tandem, particularly with respect to Eurasian economic integration. Instead of France and Germany deciding the fate of Western Europe, it is another partnership which decides the fate of Africa and Eurasia.
Many thanks to Pepe for featuring news that are not be seen on NYT, WaPo and the Guardian.
Alot of hype maybe..in the intiative to have china control port of calls throughout the Malacca straits till dijouthi they became white elephants and an albatross debt for the nations….this is is to use all the excess of Chinese companies
I love Italy and I love Venice. This is great news for a great nation like Italy. Here is a typical example where China’s silk road plan is working while "Quad" has done nothing.
Michael, I also share your love for Italy, but it is not a great nation.. Just a great number of great walled cities, like a small 2500 years ago’s China at the time of the Warring States, but today
A lot of well-described specifics here–a verbal map of some of the various parts of the BRI. More generally, the titanic shift in dominant economic loci, seen in the context of military might’s too-often symbiotic function alongside economic "success" makes one hope for a conscious recognition of the huge power dynamics and a consequent interregnum wherein might is separated from the pursuit of prosperity once and for all–otherwise all roads, including the BRI, lead to disaster.
As Escobar points out, the new routes are some of the very same older historical routes, and along the way China suffered great losses when Western imperialism forcibly intervened for more than a century. No need for that to happen again, that way or its reverse, but only if international law informs and governs the kilometers and nautical miles of these roads and protects ALL its wayfarers will its construction really have succeeded. The current Juggernaut of population punishing sanctions and profit (often looting) at the point of a nation-destroying gun puts all this into current focus. The BRI definitely IS a grand, exciting idea, but in this dangerous and often dismal world, without as large a political correction, the road to hell may be paved with insufficient and merely mercantile intentions.
Italy is great to me for the following reasons:
-Roman Empire and all that she gave including the Byzantine Empire
-Seat of the Catholic church and her world wide influence
-Birth place of the Renaissance and all that age did
-One of the central nations for the Age of Discovery
-Use of Latin
-Birth place of Opera and one of the greatest places of culinerary delights.
also birth place of Fascism and Mussolini.
Well Michael, any time you happen to be in Italy let me know, and I will be glad to offer you some culinary pleasure. For the sake of good food and wine, let’s forget about Mussolini and the Catholic church, as they are hard to digest…. And have a good time Michael
Thank you Luca. That is sweet of you. One of the first times I went to Italy two Italian families help show me around in their respective cities. In Rome it was the "Zoccolli" family. You may have heard of them. They own vast numbers of apartments in downtown Rome. The Zoccolli home is on one of the 7 hills of Rome. It is a mansion. The other family, the Caratto family owned the wholesale of flowers in San Remo. Because of them I saw Italy from an angle not open to tourists. As for Venice I fell in love with that city. Take care Luca
Nice, informative article.
Historical Normal. Well said Pepe.
For 2000 years 300 BC -1700AD, India and China EACH produced 1/3 of world wealth, the rest (Americas, Europe, ME, Africa, Australia) the remaining 1/3.
Says Corporate Capitalist West’s prophet of doom Samuel Huntington factually:
” .. The West won the world not by the superiority of its ideas or values or religion, but rather by its superiority in applying organized violence. Westerners often forget this fact, non-Westerners never do ”
—— The Clash of Civilizations and the Remaking of World Order, p. 51 ..
The English Crown pushed opium on China and de-industrialization and de-population on India through barrel of guns. Ironically, recently using American capital China has done the same, de-industrializing them, but without a gun at their head. And the Anglos love it. Dimwits, LOL.
The rise of the CCW was a fluke of history, made possible by Sunni Kaliphate and Jewish greed and stupidity who together blocked land routes to China. Only after Christians kicked out both Jews and Sunnis from Spain that Europe found new routes and lands. The rest is history.
Now that CCW has lost its colonies, and Kaliphate has been defeated, and Europe is Jew-Free, things are going back to Historical Normal as they should.
Go China Go.
the center of global development, despite its name, is biased in its assessment. the bookings institute is well respected for its objectivity and attempts at impartiality. imf, just like wb and adb, are US controlled lending institutions..they will look negatively at any project and initiatives not financed by them.
The current Hegemon can only try but PutinXi will be waiting for it to be taught a bigly lesson.
"China has done the same, de-industrializing them [the Capitalist West]"
True enough. But that’s the tail end of the story, and it’s not an East/West paradigm. After all who is "China’s" daddy? East/West obscures that they [the Capitalist West] did it to themselves, and also among themselves, before China became the preferred money-pit for new industry. The USA first gave Japan much of its industry, but as well as to close-by western countries (Canada, Mexico) and farther away within the west itself (VW, etc.) This pre-China list of western de-industrialization goes on and on–and it’s more of a cloud diagram–investments going north, south, east, west–cheap means of production is the universal driver here. China, for lots of the usual reasons, factors of labor, resources, intellectual skills, has risen as the behemoth at the end of the line. However, the trend did not include them in this process for several important post-WWII decades that also included intra-movements of capital resources within the West itself. Anything, anywhere for a dollar. In China’s case, anywhere, including back to Western Europe and to Africa, for a yuan.
I remember just a few years ago, Spengler/Goldman was capitalist ubermensch and Pepe Escobar was the raving revolutionary. Now Goldman is the once-great has-been (Trump can’t make anyone great again) and PE is champion of economic progress.
But really has anyone changed? No, it’s the world that’s changed.
raja if you read the article, you will find it is not only about one port
There are two truths——–Pepe Escobar is the "MAN" at Asian Times—————and the Middle Kingdom continues to march forward!!
They need to add cruise ship docking and ban them from Venice where they cause damage and ruin the scenic views.
Italy is a beautiful country. I was there last week for a conference in Turin. I stopped in Rome for a layover and spent two nights in Chinatown. The Chinese are in every major city in Europe and they have thriving business and culture, The hotel i stayed in was bought by a Chinese man. I saw Chinese students and tourists in Rome and Torino. I’m not suprised that they are investing in Venice.
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