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Source: ANBOUND
Thursday, September 14, 2017

Mr. Chen Gong, the Chief Researcher of Anbound Consulting, is not only the earliest scholar studying the links between economics and geopolitics, but also one of the earliest Chinese scholars studying the "New Silk Road" strategy. He, however, has different views on the subjects with the contemporary scholars, consistently upholding his supportive position on the strategy.

The traditional heartland theory believes that the heartland of the Eurasia continent will become the most significant strategical area as the evolution of land transportation.

These theories are proposed and summarized from Halford Mackinder's publication including "The Geographical Pivot of History", "Democratic Ideals and Reality" and "The Round World and the Winning of the Peace". Mackinder asserted that the world history is a history of the confrontation between continental and maritime hegemony. Despite the fact that maritime hegemony had the upper hands, but continental hegemony will eventually triumph over the maritime hegemony in the long run with their abundances in natural resources and population, and the gradually improved transport network. Mr. Chen, therefore, proposed a notion that the axis of the world power was laid on the Europe, Asia, and Africa continents, which comprised a world island because of the advanced land transportation, with the pivot located in the heartland area of the Eurasia continent.

Mr. Chen's research has persistently believed that the seemingly obsoleted "heartland" theory due to the highly developed maritime transportation system and the little marine transportation cost still has its unimaginable value and meaning to the contemporary world. The above assertion is based on Mr. Chen's long term research activity which he laid the ground work for his two important discoveries.

The first discovery is the close tie between capital flow and the reemergence of the "continental hegemony". Investors always pursue profit, which can only be provided by continents instead of the ocean. Therefore, capital plays the role of colonialism in the "Neo-heartland theory", driving the pivot of the globe from the sea to continents.

The second discovery is the evolution and transformation of the logistic technology including logistics in military and civilian use. The evolution of high-speed rail and comprehensive pavement of the network of high-speed highway across the globe will eventually lower the logistic cost and improve the efficiency of transportation. Meanwhile, the maritime shipping cost increases dramatically comparing to the peak era of shipping due to the urbanization within major harbors across the globe. Therefore, the significance of ocean has been decreasing compared to the past.

Perhaps, a simple mathematical function can be more appropriate to explain Mr. Chen 's "Neo-heartland theory". Mr. Chen believes that the strength of a nation can be illustrated in economic growth, which also can be presented in a function G=H(S). In this function, H is a dependent variable representing population; S is an independent variable representing space. The result of the function is the economic growth in the future represented by G, that is also a nation's strength.

As illustrated above, the key factor of this function is the control of space (S). Economic growth in every country shares the same objective, which is to serve the population. Economic growth will be meaningless if the population is not taken into consideration. Based on the assumption that there will be no structural change to global politics and economies in short run, and the population and the distribution of wealth remain constant in certain countries and areas, the result of the economic growth-tremendous products and commodities made from essential productive materials- will lose its value even meaningless unless the market continues its expansion. Therefore, factor S in this function representing the variable space has enormous significance.

The "Neo-heartland theory" has solved a mystery. When the world is inflated with oversupplied capital and productivity, the price for most of the merchandises are forcefully compressed. Meanwhile, the gradually thriving and inflating virtual economy, the gradual deviation/divergence of the financial system from the physical economic, and the emerging shadow of financial crises have severely impacted and interfered the stability and market order in countries across the globe with no solution in sight.

So what will be the solution for this difficult situation?

Normally speaking, economists always assume the space remains constant, which is also the foundation of economic growth theory, same as the calculation of GDP.

When the economist has no solutions, it is the time for geopolitician to come out from the shadow. The answer is not complicated, yet the key is to pursue the change in space. By changing the variable space, the scale of markets and the population will increase. Once the size of the population and market appears to be increasing, the real economic growth will also reveal, consequently increase the return on investment of all kind made by capitals.

War was the only mean to achieve alternation of space along the world history, therefore war and peace remain the most concerned issues for the public. Despite the cruelty of war itself, people are more likely to be influenced by the decision made by the politician without remembering the geoeconomic significance behind the politics. In fact, war appears more frequently in the contemporary era than any period in the history, war machines fighting for spaces have always been running across Iraq, Afghanistan, Syria, Ukraine and South Asia subcontinent in the name of inciting political concepts. The shadows of capitals and space contest are behind all these wars, the "Neo-heartland theory" only reveals the patterns between geopolitics and economics.

Differ with the ruthless and fear from wars, the space contest also has its modern way. An Economic alliance is a presentation of space expansion, in particular, the European union. On the basis of not altering the political reality of the member states, EU achieves initial expansion and union regarding space through uniting. There will be more EU alike economic alliance in different size sharing the mutual goal of expanding the variable space and consequently satisfy the requirements of capitals and values growth.

Mr. Chen's "Neo-heartland theory" announces the return of the era of continental power hundred years after the proposal of the Heartland theory, which can be tracked back to 1904. Despite controversy across the globe, the "Neo-heartland theory" has been unstoppably marching forward on the new foundation and a new route.

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