China aims to pour $1 trillion into an ambitious project to remake the world. Its goal is a revolution in trade, the likes of which the world has seldom seen. It seeks ultimately to make the Chinese culture and language as dominant and widespread as the English language is today.
In a project more ambitious than even the $120 billion (in today’s money) Marshall Plan, China aims to restore trade routes between Europe and the East, collectively known as the Silk Road. This would transform not only the global economy but also global power. The decline of the Silk Road was one of the most important events in history. In rebuilding it, China aims to forge a new economic system.
China is building a “geo-economic empire.” “China’s mammoth initiative … appears as the creation of a new world order that challenges the existing status quo of the United States-dominated Western global order,” wrote Amrita Jash, editor in chief at IndraStra Global and senior research fellow at the Center for East Asian Studies at Jawaharlal Nehru University (International Affairs Forum, Winter 2016).
Once “it was possible to sail from Southampton, London or Liverpool to the other side of the world without leaving British territory,” writes Peter Frankopan, a senior fellow at Oxford University, in his book The Silk Roads: A New History of the World. “Today, it is the Chinese who can do something similar.”
This is far from a niche subject of trade policy. It is about global domination.
For thousands of years, flourishing trade routes linked Europe and the East. Over 2,600 years ago, silver from Egypt, cedar from Lebanon, ivory from India and turquoise from Khwarezm near the Aral Sea all traveled along Persian roads—roads that were the envy of surrounding nations. Hundreds of years before that, some of the oldest empires known to history—ancient Egypt, the Akkadian Empire and the Indus Valley civilization—almost certainly had some trade with each other through this region.
Roman coins have been found as far away as China and Korea. Pliny the Elder complained that Rome spent 100 million sesterces a year on goods from the East. “This astonishing sum represented nearly half the annual mint output of the empire, and more than 10 percent of its annual budget,” writes Frankopan. “But remarkably, it does not appear to have been wildly exaggerated.”
This enormous economic exchange continued for centuries. Various Persian empires, Muslim empires, the Mongols, Tamerlane and the Ottomans grew rich from this trade. So did the Vikings, and then Venice and other city-states. Control of trade routes between Europe and China meant wealth and power. Crusaders preferred to conquer cities that controlled trade with the East even more than they cared about conquering Jerusalem. The flow of money and goods—and people—was vast: Frankopan estimates that around a.d. 1000, at least half a million slaves were traded along these roads annually.
For a huge portion of history, the Middle East and Central Asia housed the world’s greatest empires.
Then came the Age of Exploration.
This age, typified by the voyages of Christopher Columbus, literally changed the world. The discovery of a continent generally unknown to Europe was revolutionary. But so was the discovery of oceanic trade routes to the East. Adam Smith wrote in The Wealth of Nations: “The discovery of America and that of a passage to the East Indies by the Cape of Good Hope are the greatest and most important events recorded in the history of mankind.”
The Portuguese, then the Dutch and the English, set sail for India. Trade with the East shifted from the Silk Road to European shipping routes. Flows of money in Central Asia dried up. Opulent cities became backwaters. Empires atrophied. Controlling the Silk Road no longer meant wealth and power. The way to world domination was through the new trade routes: the open ocean.
This shift led to two centuries of Anglo-American domination. Britain first dominated global trade and economics and became the greatest empire in history. After the Age of Empire ended in the 20th century, it was America’s turn to become the superpower.
But today China wants to return the world to the pre-Columbian days of the Silk Road. It aims to rebuild the global economy around trade between Europe and the East to bring back the Age of the East.
Roads of Iron
These ideas are not new. They formed the key theory of Sir Halford Mackinder, the founder of the subject of geopolitics. His “Heartland Theory” revolved around a technology that would, he believed, reverse Columbus’s revolution: the railway.
“Transcontinental railways are … transmuting the conditions of land powers, and nowhere can they have such effect as in the closed heartland of Euro-Asia,” he wrote. Goods and men would travel through Central Asia faster than ever. A network of iron Silk Roads would dominate trade between East and West. Controlling Central Asia would again win wealth and power. Whoever controlled this “heartland” would control the world, he believed.
Mackinder published his theory in 1904. By then it was clear that the railway was as world-changing as Columbus’s voyage.
Describing early America in his book Undaunted Courage, Stephen Ambrose wrote, “A critical fact in the world of 1801 was that nothing moved faster than the speed of a horse. … Nothing had ever moved any faster and, as far as [Thomas] Jefferson’s contemporaries were able to tell, nothing ever would.” Few men of Jefferson’s day believed the new U.S. could rule from the Atlantic to the Pacific. “The distances were just too great,” wrote Ambrose.
Jefferson was an exception. Despite never having seen a steam train, he wrote that “the introduction of so powerful an agent as steam” to a carriage “will make a great change in the situation of man.”
Sixty years later, Jefferson had been proved right. “This great leap forward in transportation—by a factor of 20 or more—in so short a space of time must be reckoned as the greatest and most unexpected revolution of all—except for another technological revolution, the transmitting of information,” wrote Ambrose.
When Mackinder surveyed the world, he saw that railways had made possible a new continent-spanning nation, a nation that was not simply a core dominating a hinterland but a nation with power matching its great size. Some of the top international controversies of the era revolved around the Cape to Cairo and Berlin-to-Baghdad railways. Why couldn’t the same technology transform Asia?
But it didn’t. During the Cold War, Russia controlled much of the old Silk Road. Mackinder had forecast that control of this region would mean control of the world. But the Soviet Union lost.
Mackinder probably underestimated the enduring importance of sea power. But most importantly, the Cold War meant that the large-scale rail links upon which his theory depended were never built.
At one end of the Silk Road, an Iron Curtain cut off trade. Meanwhile China and Russia were enemies. Rather than facilitate new trade links, Russia’s dominance of the heartlands shut down the Silk Road.
The Silk Road Is Back
The end of the Cold War allowed the Silk Road to regrow. Frankopan wrote that “today the Silk Roads are rising again—unobserved and overlooked by many.”
A “region and a series of connections” are “reemerging in front of our eyes,” he wrote. “Major new urban centers have been founded, even including a new capital city—Astana in Kazakhstan, which has risen from the dust in less than 20 years.”
“Transport links as well as pipelines have expanded dramatically in the last three decades,” he wrote. “Major investment in transcontinental railway lines has already opened up freight routes along the 7,000-mile Yuxinou International Railway that runs from China to a major distribution center near Duisburg in Germany.”
China is now dramatically expanding these routes. In 2013, President Xi Jinping announced the “One Belt, One Road Initiative”—though there were Silk Road-related initiatives before then. China is expanding rail links and ports and gaining greater control over all routes between East and West.
The Diplomat noted the similarities with Mackinder’s ideas, writing that the strategies China is “pursuing are more or less in line with the British geographer’s theories” (Feb. 7, 2015).
China is also building the infrastructure of the 21st century. Companies like zte and Huawei are bringing 3G phone reception and superfast broadband to the steppes of Central Asia.
China has committed nearly $1 trillion to rebuild the Silk Road, nearly eight times what America spent on the Marshall Plan, adjusted for inflation. “It just might shape the 21st century as much as the Marshall Plan did the 20th,” wrote Vikram Mansharamani, a lecturer at Yale University.
Funding the New Silk Road will be a major task of the Asian Infrastructure and Investment Bank (aiib). The bank was created by China last year. America opposed it, seeing it as a rival to the World Bank, but many U.S. allies, especially in Europe, signed up.
Chinese leaders are devoting a lot of time to the project. The president himself often travels around the world promoting it. “For China, it’s a top-level issue—all government departments are focused on this,” said Zhai Kun, professor of international relations at Peking University.
Currently, it takes six days to get from Moscow to Beijing by rail. China aims to cut that down to 33 hours.
These faster links open up new possibilities for trade. For many foodstuffs, for example, sea trade is too slow and air travel too expensive. The success of Amazon.com shows that if you deliver more quickly, you sell more. The rise of rail means a computer manufacturer could build a laptop to custom specifications in China and ship it to Europe in just days. Hewlett-Packard has already relocated its production from Shanghai, on China’s coast, to Chongqing, a major rail hub, and is sending its products by train. Rail has also changed where your iPhone or Android device is manufactured.
This is about more than economics. The think tank Russian Council wrote that China’s investment is motivated “not only by its future economic benefits, but also geopolitical calculations.” China “hopes to create in Eurasia a ‘growth base’ for a future great Eurasian power,” it wrote (January 22).
“It is not an economic project, it is a geopolitical project—and it is very strategic,” wrote Nadège Rolland of the National Bureau for Asian Research.
China aims to shift the world away from the dollar-denominated, U.S.-reliant trade system. The Council of Foreign Relations wrote that China’s new trade network “would also expand the international use of Chinese currency, the renminbi, in transactions throughout the region.” If Beijing gets Europe involved, it would be possible to switch a whole swath of world trade from the dollar to the renminbi and/or euro.
“China, with its ‘One Belt, One Road’ initiative, plans to negotiate free-trade agreements with 65 countries along the One Belt, One Road periphery,” wrote Amrita Jash. “In addition, [the] China-led aiib is seen as the Chinese effort to undercut the dominance of Western economic institutions like the World Bank and the International Monetary Fund, thereby defining new rules in the international system” (op cit).
The “grandiose vision” behind the Silk Road “holds a greater potential of strengthening China’s growth model and providing an alternative to the existing Western economic model,” he continued.
The Silk Road connects two thirds of the world’s population and vast amounts of raw materials, with 60 percent of the world’s proven oil reserves and 80 percent of gas within its reach. Just as importantly, this region contains 70 percent of the world’s rare-earth minerals, metals needed in almost all modern electronics. An economy that connects all of this could easily become the world’s dominant power.
China also aims to strengthen its overland trade routes. Today, if you cut off China’s access to the sea as Japan did during World War ii, the nation is crippled. By building pipelines and railways inland, China reduces this vulnerability.
China is creating a “geo-economic empire” that will “be largely impregnable to hostile U.S. interventions, should a grave crisis occur in Sino-American relations,” wrote the Diplomat (op cit).
Paul Lacourbe, a professor in Hungary, gave a TEDx Talk in 2013 as the Silk Road initiatives began. He asked why he, a Chinese, was speaking English to Hungarians. “If you look at the origin of this phenomenon, it is in fact the Battle of Trafalgar in 1805,” which “established the dominance of the Anglo-Saxon sea power,” he said. “This dominance actually has such a profound effect on the language we speak, the money we use, the films we watch, the food and drink we consume .… It is really amazing that a single naval engagement could have so much impact on people’s daily lives.”
Then he asked, “Could this all change?” He answered that China’s building of railways does just that: It “reduces the Anglo-Saxon dominance of the sea, which has such a profound impact on our daily lives.”
Really, this is about China’s work to boost trade between Asia and Europe and to bring this trade under Chinese control. The land route to Europe is easiest to dominate, so China is expanding that while simultaneously buying up ports and sea gates worldwide. China aims to send millions of shipping containers by rail to Europe each year, but its ports send and receive well over 100 million containers.
The New Silk Road is helping to connect a new system of alliances in Asia. Most importantly, this plan requires Russia and China to work together, since many of these connections travel through Russia.
Other routes travel farther south, passing through the Middle East en route to Europe. Here, potential profits prompt long-time rivals to set aside their differences. Alyssa Ayres wrote for the Council on Foreign Relations that the Silk Road was helping “an unusual work in progress, the relationship between China, India and Pakistan.”
America backed India to try to create a rival Silk Road network. But India chose to work with China instead and became a foundational member of the aiib.
“One of the unstated purposes of China’s entire Silk Road program is to buy political goodwill from countries along the way,” wrote Foreign Policy (June 1). The Silk Road entails massive investment in Central Asia. But, as Foreign Policy noted, “the ultimate prize in the Silk Road plan … is someplace else: Europe.”
Germany is by far China’s biggest trade partner in Europe and its fourth-biggest overall, excluding Hong Kong and Taiwan. Only the Netherlands sells more goods to Germany than China does. In Hamburg, home to Germany’s busiest port and the second biggest in Europe, one in three shipping containers comes from China. The first authorized yuan trading center outside mainland China, which began last November, was in Frankfurt.
It’s important to note that the German-Chinese relationship is balanced. America trades much more with China, but America imports far more than it exports. In February, Germany exported slightly more to China than it imported.
This hints at the most important part of this relationship: its potential. Germany and China are both export powerhouses. Trade with each other and German trade with Central Asia has great potential for growth. By improving the Silk Road, Germany and China can both profit.
This is partially why Germany is joining the New Silk Road project. In June, the two governments promised to support cooperation between German industrial giant Siemens and the China Railway Rolling Stock Corp., as well as between China Railways and Deutsche Bahn. These companies, they agreed, would work together in China, Europe and “third countries.” The new iron Silk Road will be built by Germany too. Dagmar Engel wrote in Deutsche Welle that this relationship “means a market power of entirely new dimensions” (June 14).
Germany and China also agreed to work together in countries across the world. “If we join forces and get active in markets such as Asia or Africa, we can all benefit from our combined strength,” German Chancellor Angela Merkel said in June.
This was a key theme of Merkel’s June visit to China. The second chapter of the joint statement produced at the end of her stay was titled “Cooperation in Third Countries and on Third Markets.”
Some have called the growing German-Chinese friendship a “special relationship.” The nations’ two cabinets meet together every year. “Not even Washington enjoys this sort of special status with China,” wrote Foreign Affairs, May 3. Merkel is greeted in China with a warmth not shown to other leaders. Premier Li Keqiang even invited her to his hometown because, as he put it, the two are “old friends.”
If China’s plans for the Silk Road work out, this relationship is just beginning. China currently transports the equivalent of 7,500 shipping containers by rail each year. Some predict this will rise to 7.5 million by 2020.
The process may not be smooth. Many economists believe China is heading for a slowdown, if not a major crash. If that happens, Beijing may not be able to invest its planned level of spending on infrastructure. But even if it is cut by 90 percent, this is still a Marshall Plan-size investment. If China slows, leadership of the New Silk Road project could shift to Germany and Europe, or to Russia.
The Biggest Loser
If China and Europe create their new world order, what happens to the old one? Revolutions always have losers. In this case, the United States, currently at the top of the global economic system, stands to lose the most.
Historically speaking, shifts in dominance among nations are almost never peaceful. When the Spanish Empire was at its height, it tried to halt Britain’s rise with an all-out invasion. When France and Britain fought over the global economic system, it led to a series of wars, the first world wars in history. With China openly creating a system opposed to America’s, it is logical that conflict will follow.
Meanwhile, Europe is no longer America’s sidekick. It has its own ambitions, and it has already chosen China over America with the aiib.
Developing a blue-water navy to rival America’s would be difficult and would probably take China decades. But there are other ways to contest America’s dominance.
Firstly, China is investing in technologies that revolutionize naval warfare. Just as the aircraft carrier overhauled the way navies functioned during World War ii, China is developing antiship missiles that it hopes will eliminate America’s naval advantage.
Secondly, China controls a huge number of naval choke points. Even the Panama Canal is essentially under Chinese control, and China is building a series of sea gates to lock up the South China Sea.
If China closes these gates, it would be difficult for America to open them. Trying to assault these gates would expose a navy’s weaknesses. As arguably the greatest admiral in all of history, Horatio Nelson, said, “A ship’s a fool to fight a fort.” This still applies today. The Center for International Maritime Security wrote: “Sending aircraft carriers close to coastlines and into the littorals has always been dangerous and against their designed purpose.” There’s a reason why nations vied for these sea gates. If China wanted to bring down America, these gates are its best option.
The current state of affairs matches forecasts that the Trumpet has been making for years, based on Bible prophecy. Numerous biblical passages refer to modern Britain and America under siege. Ezekiel 4 describes a siege against Jerusalem and “the house of Israel” that has never happened in history. It can only be prophecy for modern times.
In Genesis 22:17, God promised Abraham that his descendants would possess “the gate of his enemies.” Deuteronomy 28:52 says that the enemies of modern Israel—the nations of Britain, America and Israel in the Middle East—would besiege them using those same gates.
These prophecies are almost fulfilled. Britain and America once possessed those gates. They have now given most of them away. It just remains for these rival powers to shut Britain and America out of the global commercial network.
The Bible clearly prophesies the rise of this new economic system. Isaiah 23:3 describes a “mart of nations,” a trading bloc that allows merchants to grow rich. This chapter describes Tyre and its allies (such as Zidon) as a type of the new “commercial center” of the world—coming as a rising European power in modern times, as editor in chief Gerald Flurry writes in his booklet Isaiah’s End-Time Vision. The Bible describes China and Japan as the other major members of this “mart.”
When you put prophecies of this new global economy alongside prophecies of a siege, a clear picture emerges. Europe and Asia work to create a new economic system. They dominate the globe’s choke points and together use them to besiege Britain and America. Mr. Flurry writes: “When the Holy Roman Empire attacks North America, there will be no help or sympathy from Asia. In fact, considering that China has come to possess most of the world’s strategic sea gates … we believe there may be a brief alliance between the German-led Holy Roman Empire and certain Asian powers (Russia, China, Japan—the kings of the east). Should Europe, the resurrected Holy Roman Empire, find a way to take advantage—even for a moment—of key resources and strategic holdings of China, Russia and Japan, it would have more than enough power to besiege the Anglo-Saxon nations and enslave them.
“This is why Isaiah’s prophecy of an end-time ‘mart of nations’ that includes both European and Asian powers is so intriguing. And why the trend of collusion between these two great economic blocs is worth watching” (Isaiah’s End-Time Vision ).
But this is a brief alliance of rivals, like the Russo-German alliance in World War ii. Once America’s power has crumbled under the siege, Europe invades. It may do so swiftly, out of fear that Russia and China will get there first.
Just like in the days of Columbus, wealth will flow out of America. And like the days of Columbus, both Europe and Asia will experience a golden age. Wealth pouring out of America into Europe and then on into Asia enabled India to build the Taj Mahal, for example. Soon there will be a similar boom: Wealth will travel the New Silk Road that China is now building.
The merchants of Tyre are “as princes” (verse 8). Many prophecies describe the great future wealth of Europe. Revelation 18:3 states that “the merchants of the earth are waxed rich through the abundance of” the “delicacies” from this power. Verses 12 and 13 give a long list of its riches. Once again, slaves will be traded along the Silk Road in huge numbers.
But the boom will be short-lived. Before long, Europe and Asia will be at war.
The initial phases of these prophecies have already been fulfilled. Mr. Flurry wrote about this mart of nations in 2010, even before China unveiled its “One Belt, One Road” initiative and before it began building artificial islands to create new sea gates in the South China Sea. Now China plans to spend $1 trillion on creating this mart of nations.
We are seeing the post-American economy being constructed right now.
When American leaders see an alliance that includes most of the rest of the world openly constructing an alternative economic system, they should be very worried.
America has already surrendered its dominance of world trade. History tells us its fall as a major power will follow very shortly. ▪