One Belt-One Road' project aims to consolidate China's rise as a superpower

The ambitious initiative launched by Xi Jinping to connect China with the rest of the Eurasian continent may prove costly and difficult. But unlike the overland route through the Central Asian republics, the sea route may not take long to become a reality on certain stretches, as China has already built some ports on part of the route.

▲The land and sea lanes of the Chinese initiative [yourfreetemplates].

article / Jimena Puga Gómez [English version].

Following Chinese President Xi Jinping's 2013 speech on the revitalization of the ancient Silk Road, the initiative that started out as just an idea has become the Beijing government's biggest economic challenge: a revolution that, if carried out, will change the Asian continent's passenger, freight and hydrocarbon transport infrastructure, as well as high-tech. Dubbed OBOR-OneBelt-One Road, the plan is intended to be the core topic of China's rise as a regional superpower.

The OBOR initiative is a grand plan to redesign China's strategic environment, project Beijing's economic power, secure the communist country's access to energy and mineral supplies, and boost economic growth in the west of the People's Republic. OBOR seeks to achieve these goals by fostering greater and faster connectivity between China and Europe through intermediate points in Central, West and South Asia, as well as with Russia.

For its part, the maritime route that will form one of the core topic of the OBOR initiative, also known as the Silk Road of the 21st century, counts on the fact that seven of the ten largest ports in the world are in China and, as is well known, these infrastructures make the Asian giant an important exporter of port management services. 

The Eastbound Maritime Silk Road will start in Fujian province and pass through Guangdong, Guangxi and Hainan, before heading south to the Strait of Malacca. From Kuala Lumpur, the Route will continue to Kolkata and Colombo, then cross the rest of the Indian Ocean towards Nairobi. From there, it will travel along the Horn of Africa, seeking to cross the strategic Gulf of Aden until it reaches the Red Sea. Beijing's plan aims to create sufficient infrastructure to enable Chinese ships to safely reach the Mediterranean after sailing through the Suez Canal. But the ambition of the People's Republic does not stop at the gates of the European Union, since China wants to reach Athens by sailing the Aegean and from there to Venice, where it will look for land routes that will make it possible to move its goods throughout the Union. Chinese investment has focused, among other things, on the port of Piraeus, with a new logistics center, and on the development of a network of logistics infrastructures through the Balkans and Hungary.

The South Pacific has also been included in this strategic map of routes devised in Beijing. Thus, the maritime Silk Road has two routes. The first, as mentioned above, originates on the east coast of China and, via the South China Sea, aims to establish strategic control of the Spratley Islands, the Strait of Malacca and the entire Indo-Pacific area, including the Bay of Bengal, in order to reach the heart of Europe. The second sea route will also cross the South China Sea to direct its ships to the coastal ports of the South Pacific. With this, China would also control the routes of the essential raw materials that come from Latin American countries.

Although this is a long-term economic project , the Chinese government has already begun the construction of certain infrastructures and the necessary negotiations with various countries. A clear example is Germany. The European Union is China's largest trading partner , while the People's Republic is the Union's second-largest provider . Germany, for sample , not only enjoys an excellent reputation as a reliable partner for China, but is also regarded as "Europe's trade gateway". test of this is that, at a meeting in Duisburg, the world's largest inland port and an important transport and logistics hub in Europe, Chinese President Xi Jinping proposed to Germany "to work together to realize the ambitious project of the revival of the economic belt of the new Silk Road of the 21st century". Germany and China are currently connected by the Chongqing-Xinjiang-Duisburg international railroad line.

The ports built by China at Hambantota and Colombo in Sri Lanka; the China-Suez Economic and Trade Cooperation Zone in Egypt; Kazakhstan's negotiation of the right to clear its imports and exports through the Chinese port of Lianyungang; and a new alliance between ports in China and Malaysia are additional examples of China's ability to leverage its newfound skill as a port modernizer and manager to support its strategy.

The New Silk Road initiative is a project that will require multi-billion dollar investments in order to build smooth, safe and efficient transport infrastructures. The effects of this economic network ensure benefits not only for China, the leader of the OBOR initiative, but also for all the countries affected by it. However, the financing of the project is still an unknown quantity that should be clarified.

The busy passage, decisive in the strategies of the two countries to counteract each other

The Strait of Malacca, a core topic for the connection between the northern part of the Indian Ocean and the Asia-Pacific region, will be a thermometer for measuring the future balance of power between China and India. India is responding to the further expansion of Chinese maritime interests, which are forcing Beijing to pay close attention to Malacca, by advancing its positions towards the western mouth of the strait.

▲Map of the Indo-Pacific [US DoD].

article / Alejandro Puigrefagut [English version].

Maritime routes are the basis for trade and communication between more than 80% of the world's countries. This fact makes the natural geographic location of states of great strategic importance. A particularly important point for maritime traffic is the Strait of Malacca, a core topic for trade in the most populated region of the world.

The Strait of Malacca, which links the South China Sea with the Burma Sea en route to the Bay of Bengal, is the busiest commercial passage in the world and is therefore a strategic location. Approximately 60% of the world's maritime trade passes through this corridor that surrounds the western coast of the Malaysian peninsula and the Indonesian island of Sumatra, with more than 150 ships per day, and it is the main oil supply route for two of Asia's main consumers: the People's Republic of China and Japan. This geographical point is a core topic for the entire Indo-Pacific region, so ensuring the free movement of ships is strategic. This is why many states in the region, including China and the United States, see the protection of this passage as necessary in order to be able to supply themselves, export their goods and not be blocked by the control of a third country over this area.

With regard to China, it is not easy to imagine that a blockade of its supplies due to problems in the Strait of Malacca would happen. For this to happen, an armed conflict of extraordinary dimensions would have to be generated, leading to such a blockade by a subject that could control -and potentially interrupt- the passage to the other countries in the region. This potential risk, which today can only be generated by the US Navy, forces China to be alert and to develop sufficient military capabilities to protect what it considers its territories in the South China Sea and, by extension, the supply of vital resources that must necessarily cross the Strait of Malacca.

The Asian giant's positions and presence in the South China Sea and in the areas around the Strait of Malacca have increased in recent years in order to increase its influence over the states in the region. Moreover, in order to defend its oil and natural gas supplies (from the Persian Gulf), China has extended its presence as far as the Indian Ocean, although this is not enough. The reality is that in this area there is a great skill between two of the most influential Asian powers in the region: China and India. Due to the growing presence and influence of the People's Republic in the Indian Ocean, India has been forced to take proactive steps to enhance peace and stability in the region by mobilizing and expanding its presence from its east coast to the vicinity of the Strait in order to rebalance the regional balance of power. In this way, India can dominate the western access to the Strait and, consequently, have greater reaction time to maneuver in the Indian Ocean as well as in the Strait itself and even gain more agile access to the waters of the South China Sea.

At the same time, India's growing closeness to the South China Sea is viewed with concern in Beijing, and some analysts even see India as a threat in the event of a hypothetical conflict between the two regional powers and India blocking the Strait and, therefore, China's access to certain raw materials and other resources. For this reason, over the past three years China has carried out various military maneuvers jointly with third states in the Strait of Malacca, especially with Malaysia. During the first exercises in the area, the Ministry of Defense of the People's Republic of China concluded that bilateral relations with Malaysia in terms of security and defense cooperation were strengthened and that "joint response capability to security threats was enhanced". Moreover, for China the protection of the Strait is a priority because of its great strategic value and because countries such as the US and Japan also wish to control it.

Continental U.S. neighbors are having a hard time interpreting the first year of the new Administration.

Donald Trump arrives at his first anniversary as president having sparked some recent fires in Latin America. His rude disregard for El Salvador and Haiti, for the Issue of refugees welcomed in the United States, and his intemperate attention to Colombia for the increase in cocaine production worsen relations that, although already complicated in the case of Mexico, have had some good moments throughout the year, such as the dinner of presidents that Trump convened in September in New York in which a united action on Venezuela was outlined.

▲Trump, on completing 100 days as president [White House].

article / Garhem O. Padilla [English version].

One year after the arrival of the 45th President of the United States of America, Donald John Trump, to the White House -the inauguration ceremony was on January 20-, controversy dominates the balance of the new Administration, both in its domestic and international performance. The continental neighbors of the U.S., in particular, show bewilderment over Trump's policies toward the hemisphere. On the one hand, they regret the U.S. disinterest in commitments to economicdevelopment and multilateral integration; on the other, they note some activity in relation to some regional problems, such as Venezuela. The balance for the moment is mixed, although there is unanimous agreement that Trump's language and many of his manners rather threaten relations.

From TPP to NAFTA

In the economic field, the Trump era began with the final withdrawal of the United States from the Trans-Pacific Partnership agreement (TPP) on January 23, 2017. This made it impossible for the TPP to entrance into force, as the United States was the market for which the agreement emerged, which has affected the prospects of the Latin American countries that participated in the initiative.

The renegotiation of the North American Free Trade Agreement (NAFTA), demanded by Trump, was immediately opened. Doubts about the future of NAFTA, signed in 1994 and which Trump has described as a "disaster", have been prominent so far in his administration. Some of his demands, which Mexico and Canada oppose, are to increase the quota for products manufactured in the United States and the "sunset" clause, which would oblige the treaty to be reviewed methodically every five years and would cause it to be suspended if any of its three members were not in agreement. All of this stems from the U.S. president's idea of fail the treaty if it is not favorable to his country. 

Cuba and Venezuela

If the quarrels with Mexico have not yet reached a conclusion, in the case of Cuba Trump has already retaliated against the Castro regime, with the expulsion in October of 15 Cuban diplomats from the Cuban embassy in Washington as a response to the "sonic attacks" that affected 24 U.S. diplomats on the island. The White House has also reversed some of the Obama Administration's conciliatory measures, when it realized that Castroism is not responding with open-minded concessions.

As far as Venezuela is concerned, Trump has made forceful efforts to introduce measures and sanctions against corrupt officials, in addition to addressing the political status with other countries, so that they support those efforts aimed at eradicating the Venezuelan crisis, thus generating multilateralism among American countries. However, this policy has its detractors, who believe that the sanctions are not intended to achieve a long-term goal , and it is unclear how they would promote Venezuelan stability.

Although in these actions on Cuba and Venezuela Trump has alluded to the democratic principles violated by the rulers of Havana and Caracas, his Administration has not particularly insisted on the commitment to human rights, democracy and moral values, as had been usual in the argumentation of U.S. foreign policy. Some critics point out that the Trump Administration is willing to promote human rights only when they fit its political objectives.  

This could explain the worsening opinion in Latin America about the United States and relations with that country. agreement to theLatinobarómetro 2017 survey , the favorable opinion has fallen to 67%, seven points below the 74% at the end of the Obama Administration. This survey sample a relevant difference for Mexico, one of the countries that, without a doubt, has the worst levels of favorable opinion towards the Trump Administration: in 2017 it was 48%, a drop of 29 points compared to 2016, when it was 77%.

Immigration, withdrawal, decline

The restrictive immigration policies applied would also explain the rejection of the Trump Administration by Latin American public opinion. In the immigration section , the most recent is the decision not to renew the authorization to stay in the United States of thousands of Salvadorans and Haitians, who once arrived fleeing calamities in their countries.

It is also worth mentioning Trump's efforts to achieve one of his main objectives since the beginning of his political campaign: to build a border wall with Mexico. The U.S. president has not been very successful so far in this goal, since despite having sought ways to finance it, what he has managed to introduce in the budgets is very insignificant in relation to the estimated costs. On the other hand, his decision

Trump's protectionism entails a retreat that may be accentuating the decline of the United States as a leader in Latin America, especially vis-à-vis other powers. China has been increasing its economic and political engagement in countries such as Argentina, Brazil, Chile, Peru and Venezuela. Russia, for its part, has strengthened its diplomatic and security relations with Cuba. It could be said that, taking advantage of the conflicts between the island and the United States, Moscow has sought to keep it in its orbit through a series of investments.

Security threats

This brings us to the new US National Security Strategy, announced in December. The document, presented by Trump, addresses the rivalry with China and Russia, and also refers to the challenge posed by the Cuban and Venezuelan regimes, because of the alleged security threats they pose and the Russian support they receive. Trump expressed his strong desire to see Cuba and Venezuela join in "shared freedom and prosperity" and called for "isolating governments that refuse to act as responsible partners in advancing hemispheric peace and prosperity.

Similarly, the new U.S. Security Strategy alludes to other challenges in the region, such as transnational criminal organizations, which impede the stability of Central American countries, especially Honduras, Guatemala and El Salvador. However, the document devotes only one page to Latin America, in line with Washington's traditional focus on the areas of the world that most affect its interests and security.

An opportunity for the United States to get closer to Latin American countries will be the Summit of the Americas, to be held next March in Lima. However, nothing is predictable given the President's characteristic attitude, which leaves a great deal of room for possible surprises.

Latin American Economics cycles are closely linked to mineral prices: the graphs are astounding

Public attention on the price of commodities is often focused on hydrocarbons, preferably oil, because of the direct consequences on consumers. But although Latin America has major crude oil producers, minerals are a more cross-cutting asset in the region's Economics , especially in South America. This is demonstrated by the largely parallel lines that follow the evolution of non-energy minerals and GDP growth, both in times of boom and bust.

article / Ignacio Urbasos Arbeloa [English version].

Mining is a fundamental activity for many Latin American economies. The sector has an enormous weight in exports and foreign investment, making it one of the main sources of foreign exchange. In contrast to the general perception of non-energy mining as a mature industry, the sector is still attractive to investors and capable of continuing to generate employment and wealth. Latin American mining receives 30% of the world's investment in the sector, which expects a recovery in prices. The impact of these fluctuations has direct consequences on the economies of the continent, some of which are highly dependent on the exploitation and sale of these resources. The goal this analysis is to articulate a convincing explanation of the Degree to which these price variations affect national GDPs.

First of all, it is important to detail the chronological evolution of prices of the main minerals exploited in Latin America. The general trend in commodity prices over the last two decades has been marked by enormous volatility. The so-called commodity super cycle [1] given approximately between 2003 and 2013, with a setback between 2008 and 2009, occurs at the same time as the so-called golden decade in Latin America. This status was produced by an unprecedented rise in world demand, thanks to emerging countries led by China, which has transformed foreign trade in the region, displacing the USA as the main partner of many of these countries.

The evolution of prices has followed a very similar patron saint in non-energy mining, which rule follows the price trends of the rest of the commodities. As we can see in Figure 1.1, the Latin American and Caribbean region has had an economic growth very similar to the average evolution of gold, silver, tin, nickel, lead and copper prices. It is important to mention that the relationship between these two variables is not isolated, and should be analyzed in the above-mentioned context of a general rise in the prices of other raw materials of vital importance for the region, such as hydrocarbons or agricultural products. 

The case of Chile can be extremely useful. Chile has an Economics particularly specialized in non-energy mining, highlighting the exploitation of copper, an activity in which it is a world leader and which accounts for 50% of its exports. The mining sector in Chile [2] reached almost 20% of GDP in the mid-2000s; in 2017 it has accounted for around 9%. In Figure 1.2 we see how the price of copper sets the country's economic path, with the greatest periods of Chilean economic growth coinciding with the increase in copper prices. Despite being one of the most developed economies in the region [3], with a 74% weight of the services sector in GDP, the country is still conditioned by the situation of its primary sector and specifically mining.

Another interesting case is Peru, a country whose exports include a good share of non-energy minerals [4], reaching 46% of exports in the case of gold (18%) and copper (26%). Similarly to Chile, the share of mining in Economics is 15% of GDP. Again, we can appreciate the correlation between the prices of certain strategic non-energy minerals and economic growth.

This relationship is logical and responds to several realities. On the one hand, the great quantitative value of raw materials in Latin American economies, which concentrate their exports in agricultural, mineral and energy products. On the other hand, its qualitative importance, since the sector generates large amounts of employment (up to 9% in Chile), is the object of many of the main companies in the region (5 of the 20 largest in Latin America are dedicated to extraction), is the main source of foreign exchange and leaves enormous benefits for the coffers of the States, since they are governed under a particular tax system more burdensome. Likewise, a large part of the payment of foreign debt is covered by these revenues, and price instability could bring back the ghosts of the debt crisis of the eighties, something that is already a reality in the case of Venezuela.

Although the countries of Latin America cannot be analyzed as a heterogeneous unit, in general terms the region does face a common challenge : to be able to reduce the dependence of its economies on the exploitation and export of raw materials. This activity has problematic elements such as its impact on the environment, a particularly complex issue in the region due to the reluctance of indigenous groups, or the quality and stability of the employment generated. In any case, industrial development in the region continues to be deficient and there are more and more voices warning that the golden decade of 2003-2013 was not used to make the necessary structural changes to mitigate this status [5].

The existence of complex partner realities in Latin America has often led to the use of the benefits derived from extraction in short term and electoral politics, a blight that increases the exhibition of social welfare to the ups and downs of the mining and energy sector. Although commodity price predictions point to an imminent recovery [6], a status similar to that of around 2008, when prices reached historic highs, is not expected. This new situation will demand the maximum from Latin American economies, which will not have such a favorable international Economics status .

Russia's GLONASS positioning system has placed ground stations in Brazil and Nicaragua; the Brazilian ones are accessible, but the Nicaraguan one is open to conjecture.

At a time when Russia has declared its interest in having military facilities in the Caribbean again, the opening of a Russian station in the Managua area has raised some suspicions. Roscosmos, the Russian space agency, has opened four stations in Brazil, managed with transparency and easy access; in contrast, the one it has built in Nicaragua is shrouded in secrecy. The little that is known about the Nicaraguan station, strangely larger than the others, contrasts with how openly data can be gathered about the Brazilian stations.

article / Jakub Hodek [English version].

It is well known that information is power. The more information one has and manages, the more power one enjoys. This approach should be taken when examining the station facilities that support the Russian satellite navigation system and their construction in close proximity to the United States. Of course, we are no longer in the Cold War period, but some traumas of those old days can perhaps help us to better understand the cautious position of the United States and the importance Russia sees in having its facilities in Brazil and especially in Nicaragua.

This historical background of the Cold War is at the origin of the two major navigation systems we use today. The United States launched the Global Positioning System (GPS) project in 1973, and possibly in response, the Soviet Union introduced its own positioning system (GLONASS) three years later. [ 1] Almost 45 years have passed, and these two systems no longer serve the purpose of Russians and Americans trying to obtain information about the opposing side, but are collaborating and thus providing a more accurate and faster navigation system for consumers who purchase a smartphone or other electronic device. [2]

However, to achieve global coverage both systems need not only satellites, but also ground stations strategically located around the world. For this purpose, the Russian Federal Space Agency Roscosmos has erected stations for the GLONASS system in Russia, Antarctica and South Africa, as well as in the Western Hemisphere: it already has four stations in Brazil and since April 2017 it has one in Nicaragua, which due to the secrecy surrounding its function has caused mistrust and suspicion in the United States [3] (USA, for its part, has ground stations for GPS in its territory and in Australia, Argentina, Argentina, the United Kingdom, the United States and the United States), for its part, has GPS ground stations in its territory and in Australia, Argentina, United Kingdom, Bahrain, Ecuador, South Korea, Tahiti, South Africa and New Zealand).

The Russian Global Navigation Satellite System(Globalnaya Navigatsionnaya Sputnikovaya Sistema or GLONASS) is a positioning system operated by the Russian Aerospace Defense Forces. It consists of 28 satellites, allowing real-time positioning and speed data for surface, sea and airborne objects around the world. [ 4] In principle GLONASS does not transmit any staff identification information; in fact, user devices only receive signals from the satellites, without transmitting anything back. However, it was originally developed with military applications in mind and carries encrypted signals that are supposed to provide higher resolutions to authorized military users (same as US GPS). [5]

In Brazil, there are four ground stations used to track signals from the GLONASS constellation. These stations serve as correction points in the western hemisphere and help to significantly improve the accuracy of navigation signals. Russia is in close and transparent partnership with the Brazilian space agency (AEB), promoting research and development of the South American country's aerospace sector.

In 2013, the first station was installed, located on the campus of the University of Brasilia, which was also the first Russian station of that subject abroad. It was followed by another station at the same location in 2014, and then, in 2016, a third one was placed at the Federal Institute of Education Sciences and Technology of Pernambuco, in Recife. The Russian Federal Space Agency Roscosmos built its fourth Brazilian station on the territory of the Federal University of Santa Maria, in Rio Grande do Sul. In addition to fulfilling its main purpose of increasing the accuracy and improving the performance of GLONASS, the facility can be used by Brazilian scientists to carry out other types of scientific research . [6]

The level of transparency that surrounded the construction and then prevailed in the management of the stations in Brazil is definitely not the same applied to the one opened in Managua, the capital of Nicaragua. There are several pieces of information that sow doubts regarding the real use of the station. To begin with, there is no information on the cost of the facilities or on the specialization of the staff. The fact that it is located a short distance from the U.S. Embassy has given rise to speculation about its use for eavesdropping and espionage.

In addition, the vague answers from representatives of Nicaragua and Roscosmos about the use of the station have failed to convey confidence about the project. It is a "strategicproject " for both Nicaragua and Russia, concluded Laureano Ortega, the son of the Nicaraguan president. Both countries claim to have a very fluid and close cooperation in many spheres, such as in projects related to health and development, however none of them have materialized with such speed and dedication. [7]

Given Russia's increased military presence in Nicaragua, empowered by the agreement facilitating the docking of Russian warships in Nicaragua announced by Russian Defense Minister Sergei Shoigu during his visit to the Central American country in February 2015, and also concretized in the donation of 50 Russian T-72B1 tanks in 2016 and the growing movement of Russian military staff , it can be concluded that Russia clearly sees strategic importance in its presence in Nicaragua. [ 8] [ 9] All this is viewed with suspicion by the U.S. The head of the U.S. Southern Command, Kirt Tidd, warned in April that "the Russians are pursuing a disturbing attitude" in Nicaragua, which "impacts the stability of the region".

Undoubtedly, when world powers such as Russia or the United States act outside their territory, they are always guided by a combination of motivations. Strategic moves are essential in the game of world politics. For this very reason, the financial aid a country receives or the partnership it can establish with a major power is often subject to political conditionality. In this case, it is difficult to know for sure what exactly is the goal of the station in Nicaragua or even those in Brazil. At first glance, the goal seems neutral - to offer a higher quality navigation system and provide a different option to GPS - but given the new value Russia is placing on its geopolitical capabilities, there is the possibility of a more strategic use.