Golden Dragons Grand Strategy

Richard (Rick) Mills

Ahead of the Herd

Page 1 of 3

 

As a general rule, the most successful man in life is the man who has the best information

 

Zheng Bijian, a leading Chinese intellectual and reformer said: “The most important strategic choice the Chinese made  was to embrace globalization.”

 

China has made a new most important strategic choice – Asian Regionalization.

 

In the past few years, both Chinese and foreign analysts began to reach the conclusion that China has developed a fairly consistent and coherent grand strategy… Because economic development is taken as the only way for tackling all the pressing challenges that China is facing and will face, China’s grand strategy must serve the central purpose of development. Therefore, the central objective of China’s Grand Strategy in the past two decades (which may well last to 2050) can be captured in just one sentence: to secure and shape a conducive environment (security, economic, and political) so that China can concentrate on its development (economic, social, and political).” Tang Shiping and Zhang Yunling, China’s Regional Strategy

 

Today, trade with the United States, the European Union and the rest of the West is not the priority it use to be for China. Today the SCO (aka the Asian NATO), chaired by Russia and driven by China, has been ramping up its attention towards expansion and economic cooperation among its members.

 

That little nugget of information is going to have huge consequences for gold’s price. Let me explain.

 

Shanghai Cooperation Organization

 

Originally founded as the ‘Shanghai Five’ in 1996 it was reformed as the Shanghai Cooperation Organization (SCO) with the addition of Uzbekistan in 2001. The SCO is now an economic and security cooperation group consisting of six Central Asian countries: China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.

 

Afghanistan, India, Iran, Mongolia and Pakistan are observers while Belarus, Turkey and Sri Lanka are dialogue partners. India, Pakistan, and Iran will become new members in 2015.

 

At the end of 2013, the bloc had a combined economic output of over 11 trillion U.S. dollars - representing 14.9 percent of the global total.

 

The SCO seems to be completely off gold investor’s radar screens. It definitely shouldn’t be because China (and Russia’s) goal is to ‘create an Asian security architecture independent of the United States and its allies.’

 

But the SCO, as China envisions it is so much more than just security - China is going to mould Genghis Khan’s old stomping ground into a new economic bloc. A single cohesive market with a shared security blanket that will eventually encompass over four billion people.

 

The infrastructure and economic corridors have already been planned for and in many cases have been successfully implemented and built…

 

“Last year, China devised a ‘New Silk Roads’ policy to enhance connectivity with neighbouring countries. This policy has two components: a ‘Silk Road Economic Belt’ for land connectivity initially with Central Asia and a ‘21st century Maritime Silk Road’ to connect China with ASEAN and, ultimately, with the coastal cities of South Asia as well.

 

China’s actions have led to the revival of the Northern Silk Road. Cities in inner provinces such as Kunming, Chongqing, Chengdu, Xi’an and Xining have emerged as major metropolitan cities with urban infrastructure projects paralleling those in coastal areas. China has built an east–west railway line to connect far-flung cities like Urumqi and Kashgar to Xi’an and the coastal cities. This railway line has been extended to Moscow, using Central Asia as an economic corridor, and then on to Duisburg (in Germany) to become the China–Europe railway line. East–west pipelines such as the Kazakhstan–China and Central Asia–China pipelines have also been built.

 

In conjunction with India, which is actively implementing its ‘Look East’ policy, China is building the BCIM Economic Corridor to connect the Yunnan province of China with Myanmar, Bangladesh and India. This is an important segment of the less well-known Southern Silk Road.

 

In June this year, the Chinese Ambassador to New Delhi, Wei Wei, proposed the establishment of a ‘Trans-Himalaya Economic Growth Region (THEGR)’ to promote the interconnection and joint prosperity of China and India and neighbouring countries. As with many such proposals from China, details are not known as yet. Nonetheless, the proposal is welcome as it addresses an important missing link in connectivity in the region.” eastasiaforum.org

 

Silk Road Economic Belt, Maritime Silk Road

 

In May of 2014 China’s state-owned Xinhua News Agency unveiled an ongoing feature entitled “New Silk Road, New Dreams.”

 

“According to the map, the land-based “New Silk Road” will begin in Xi’an in central China before stretching west through Lanzhou (Gansu province), Urumqi (Xinjiang), and Khorgas (Xinjiang), which is near the border with Kazakhstan. The Silk Road then runs southwest from Central Asia to northern Iran before swinging west through Iraq, Syria, and Turkey. From Istanbul, the Silk Road crosses the Bosporus Strait and heads northwest through Europe, including Bulgaria, Romania, the Czech Republic, and Germany. Reaching Duisburg in Germany, it swings north to Rotterdam in the Netherlands. From Rotterdam, the path runs south to Venice, Italy — where it meets up with the equally ambitious Maritime Silk Road.

 

 

The Maritime Silk Road will begin in Quanzhou in Fujian province, and also hit Guangzhou (Guangdong pronvince), Beihai (Guangxi), and Haikou (Hainan) before heading south to the Malacca Strait. From Kuala Lumpur, the Maritime Silk Road heads to Kolkata, India then crosses the rest of the Indian Ocean to Nairobi, Kenya (the Xinhua map does not include a stop in Sri Lanka, despite indications in February that the island country would be a part of the Maritime Silk Road). From Nairobi, the Maritime Silk Road goes north around the Horn of Africa and moves through the Red Sea into the Mediterranean, with a stop in Athens before meeting the land-based Silk Road in Venice.

 


1|

2|

3|

Next»



Ahead of the HerdSponsors List


No Charge  Newsletter Signup



To contact us please email rick@aheadoftheherd.com

Ahead of the Herd
www.aheadoftheherd.com