Series concludes with talk on Chinese economic policy

Category:  News
Wednesday, October 24th, 2018 at 6:49 PM

As much of the Al Stone lectures this fall have centered around economics — such as Professor Michael Morrison’s lecture on tariffs, or Dr. Gerald Gendlin’s presentation on international trade under President Donald Trump — professor Xin Chen took her lecture to a global level and examined one of China’s latest economic policies in her presentation titled, “China’s One-Belt-One-Road Policy: Mutual Aid or Hegemony?” 

A professor of the history, politics, language and cultures department at EU, Chen began her presentation on Oct. 18 outlining the latest economic policy, titled “One Belt, One Road.” This is one designed as a way for China to expand their economy while also providing economic development and infrastructure, such as roads to countries they are trading with. There were nine countries chosen for consideration under the project. 

China’s economy relies heavily on coastal cities and their exports, which bring in over $1 billion a year. Its rural, inland areas only bring in $1 million in trade. Therefore, they opted for the “One Belt, One Road” to expand past these limits. 

In 2015, the Chinese government identified six trade routes starting in China and going as far as the Netherlands, Indian Ocean, Singapore and Russia, with which they trade the most. There are three forms of transport: land (railroads and highways), air and port. The benefit of investing and developing infrastructure in neighboring countries is that China can secure a steady flow for supplies they need, such as oil and natural gas.

A $100 billion (in U.S. currency) pledge was made by the Asia Infrastructure and Investment Bank, backed by China and its members. And, since China joined the World Trade Organization (WTO) in 2001, leading to an accumulation of money in foreign exchange reserves, China has the money to invest in this sort of thing, explained Chen. 

This increased infrastructure also reduces China’s dependency on U.S. economy and U.S. dollar. According to Chen: “China in this trading bloc, would use its own currency, which is actually accepted by many countries for international trade and investment. The U.S. dollar is then irrelevant to them, to some extent, especially as China deals with their southern neighbors such as Pakistan, Myanmar [and] Vietnam, which use the Chinese yuan for trade.” 

Her PowerPoint also stated: “If such a trade bloc were ever created, it would, according to one Chinese economist, embrace 60 countries, 63 percent of the world’s population, occupy 29 percent of the world’s GDP, and 25 percent of China’s total trade.” 

In addition to the benefits for China, Chen also addressed the other concerns of this policy, consisting of hegemony and trade issues between the U.S. and China. 

With the presence of China in other countries, there is the possibility of economic and political influence. Although China is building an empire, it could lead to hegemony, or dominance over other Asian countries and their economies. Chen gave a brief reminder of previous practices of colonization and imperialism by European countries to increase the mother country’s economy and secure raw goods. 

“Now for China, in her continuous economy expansions, rather than create colonies, she is using her economic strength to build an empire by investing in those countries,” stated Chen. 

At the end of the lecture, Chen turned to the audience and asked for their questions and thoughts on the presentation. A discussion followed in the room of mostly older individuals as they debated the answer to the presentation’s question: “Mutual Aid or Hegemony?” 

Livia Homerski can be reached at ae.spectator@gmail.com.

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