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Belt and road initiative...

Mike Gaunt

I do not pretend that I know all of the ins and outs of each side of the argument, but I confess to feeling slightly uneasy.

It is this relatively recent initiative from China, the so-called ‘belt and road initiative’, which, on the positive side, is funding some pretty spectacular infrastructure programmes across the world.

From a more cynical viewpoint, is this the thin end of a big Chinese wedge to dominate geopolitically and take over from a less-committed Trumpian USA?

From Russia to Greece, from Pakistan to Ethiopia, China invests massively in building industrial parks, railways and deep-water ports.

It is good at building infrastructure and many countries genuinely benefit from the investment.

The initiative will reduce the time it takes for goods to move from China to the rest of the world (and the other way, of course) and will also mean that goods from China are cheaper when they arrive.

Clearly, reducing transport difficulties will aid trade.

Just last month, China signed an agreement with Portugal which will see the development of the port of Sines, south of Lisbon.

This is a hugely important strategic port, lying as it does, at the south-eastern tip of Europe and it allows the further development of what China is calling its ‘New Silk Road’.

This will bring investment and jobs into Portugal, which is a good thing. My concern is what will the price be?

Many countries in Western Europe, including the UK, Germany and France, have agreed a framework which seeks to regulate foreign investment.

This is aimed particularly at China, as many (more wealthy) European countries fear the influence which China could bring to bear on countries which effectively are beholden to China financially. China now owns 28% of EDP, the biggest energy utility in Portugal.

It also has an interest in Portugal’s biggest private bank, BCP, and its leading insurance company, Fidelidade.

There are plans for China to take a controlling interest in EDP, at a cost of nine billion euros.

Time will tell.

Portugal will clearly benefit and about that I am delighted. Jobs, the economy, more euros in peoples’ pockets are all to be welcomed.

I remain just a little worried that one day a favour will be asked. You can hear the conversation in the corridors of power: please just abstain from this vote, Portugal.

Can you manage to support China in this discussion, please? It is how lobbyists work with governments.

Power talks.

It also corrupts, however.

I am no economist and I do not have a problem with globalisation; I feel that the world’s trade should be more open and this belt and road initiative will encourage this.

My question is more to do with hegemony and imperialism. Britain and Portugal, along with other European nations, dominated the world for much of the period from 1600 to 1900.

These countries’ influence on other, poorer, developing parts of the world has now passed.

The USA is still seen as a hegemon by many, but has its time too passed?

Is China the new alpha male nation?

Will it expect anything in return?

Mike Gaunt is a former assistant headmaster at St Christopher’s School, Bahrain –

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