From a geopolitical perspective, Belt and Road Initiative is a major historical breakthrough of China in the past decades. The geopolitics of China after the Three Worlds Theory expounded by Mao Zedong had not achieved major substantial breakthrough, but some great changes occurred from 2013 to 2014, when New Silk Road was first mentioned and then followed by Belt and Road Initiative.
Before we feel excited about this new breakthrough, we should calmly see things from world geopolitical angle, and examine the issues from the points of view of policy formation and interest balancing.
The Belt and Road Initiative stands for Silk Road Economic Belt and 21st Century Maritime Silk Road. The common explanation for Belt and Road Initiative is that it is not an actual entity, nor is it a mechanism, but rather it is an ideal and an initiative of cooperative development by relying on the multi-lateral mechanism between China and related countries, using the ancient Silk Road as a symbol to develop economic cooperation proactively with these countries.
The plan of Belt and Road Initiative has been approved and it is thought that Xinjiang, a major site of the ancient Silk Road, will receive extra attention. This year happens to be the 60th anniversary of the establishment of Xinjiang Uyghur Autonomous Region; the central government will give a "policy goodie bag" to Xinjiang, focusing on developing the core area of the Silk Road. West China is hungry for development, and the development policy of New Silk Road undoubtedly will greatly activate and improve economy of West China, including that of Xinjiang.
However, if the New Silk Road policy includes the 21st Century Maritime Silk Road, the “cake” of the policy might be divided into two halves.
Based on the current strategic thought of Belt and Road Initiative, the region that encompasses Belt and Road Initiative has the population of 4.4 billion people, 26 countries, USD 21 trillion, and that is basically the entire core area of Asia. According to the initial estimation of China International Capital Corp (CICC), in the next decade China's export to the Belt and Road Initiative region will increase one-third, with the total investment sum of USD 1.6 trillion.
In terms of export, the Maritime Silk Road’s first obstacle will be the strong opposition of ASEAN countries; in the past Indonesia even banned the import of Chinese garments. Increasing export of China involves in the competitiveness of internal politics in ASEAN and other countries and cannot be completely changed by investments.
From the perspective of investment, Chinese foreign exchange reserves is about USD 3 trillion, the investment would cost 1.6 trillion or more, if the return of the investment aiming to increase export fails to achieve intended result, the foreign exchange reserves would decrease, causing the development of Belt and Road Initiative unable to attain expected results.
China's foreign investments have always contained a number of hidden cost, which is the capital and commodities exchanges between the countries that include investment, debt relieves, loans, aids and actual materials. From the past experiences, the proportion of these hidden investments is rather high, and publicly available information shows that the ratio is at least 1:1. If we consider non-disclosed national hidden cost, the ratio would be even higher.
Therefore, China should gather its resources and focus on the development of New Silk Road and stabilize Xinjiang while developing Central Asia. In order to gain an upper hand in trade advantages and strategic dominance on the basis of land rights, China will need to start from the system and the mechanism, using Marshall Plan as its strategic tool.
For the coastal regions, the problem will have to be solved through market. Reformation and opening-up began in these regions and they have sufficient reserves of resources, so long as they reform actively and are supported by the state policies, the developments can easily come in place.
