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Infrastructure is the way to a united world

By Ernesto Gallo and Giovanni Biava | China Daily | Updated: 2017-01-10 07:40

Infrastructure is the way to a united world

The possibility of a policy U-turn by Washington to embrace the China-led Asian Infrastructure Investment Bank following Donald Trump's win in the US presidential election is to be welcomed, since it would be in the interests of the United States and Asia at large.

Soon after Donald Trump won the United States presidential election in November, Asian Infrastructure Investment Bank President Jin Liqun said Washington might now consider endorsing or even joining the AIIB. In fact, cooperation between China and the US is the only way ahead.

What are the benefits, advantages and characteristics of Beijing-Washington cooperation and China's investments in infrastructure overseas? What are Chinese companies doing in the infrastructure industry worldwide?

Chinese companies are very active in Southeast Asia, one of the world's fastest-growing regions. China Railway Construction Corporation won the bid to build the Jakarta-Bandung high-speed rail in Indonesia. And a similar project is in the pipeline in Thailand, which would connect Bangkok with Chinese cities. The CRCC may also get the contract to build the prestigious Malaysia-Singapore link. This "high-speed rail diplomacy" is important not only because it creates employment and opportunities of technology transfer, but also because faster links help bolster a sense of unity, which at present doesn't seem particularly strong in the Association of Southeast Asian Nations.

Even more interesting is China's engagement with Central Asian countries and Russia. The Belt and Road Initiative (the Silk Road Economic Belt and 21st Century Maritime Silk Road) could shift the center of world trade to Eurasia. Infrastructure investments already include the China-Kazakhstan oil pipeline and the Turkmenistan-China gas pipeline, which might be upgraded with a new line. With regard to railways, China will contribute to improve their quality in Kazakhstan.

China is also investing in Kyrgyzstan's outdated railway network and planning a new link with Kyrgyzstan and Uzbekistan, which already has a high-speed rail between Samarkand and Tashkent. China Railway Tunnel Group has meanwhile completed a key tunnel between Tashkent and Namangan in Uzbekistan, a crucial link on the new Silk Road, which shows Chinese investments in Central Asia are bringing to the region lots of benefits.

Moreover, Central Asia is the gateway to further investment and initiatives in Russia, Iran and ultimately Europe. China is working on the high-speed railway between Moscow and Kazan. The 770-km distance that now needs 12 hours to travel can be covered in 3.5 hours by the high-speed railway. Needless to say, China is using technology and creating opportunities in the region where for two decades Western recipes resulted in more poverty, deprivation and political chaos.

What about the ailing European Union? Since 2012 China has used the "16+1" official initiative for Central and Eastern European countries. The CRCC won a contract in 2015 to build a high-speed railway between Belgrade and Budapest to improve Intra-EU connectivity.

Chinese companies have already built the Ankara-Istanbul high-speed railway in Turkey, and are working to win a project to connect Turkey and Greece with Central and Northern Europe. Central and Eastern Europe (the Balkan region in particular) suffered a lot because of the neoliberal policies that forced them to depend on Western Europe and the US. Now China is offering them a truly "win-win" opportunity to catch up. Sadly, the EU is overwhelmed with problems and has so far found no way to tackle the rise of "populism", which is unfortunate because the EU was the first to highlight the importance of continental networks and high-speed rail links, at the time of the Delors Commission and the European Monetary Union's birth.

Today, the EU stands to strongly benefit from faster rail links with China and East Asia, which will greatly boost the continent's industrial capacity through further investment. China has shown the EU what a continent-scale state can achieve despite distances and regional imbalances; the EU, in contrast, has remained a prisoner of local and national interests. From another angle, the US, too, has to realize the importance of both domestic and international connections. US president-elect Trump and his incoming administration should take note of this.

Ernesto Gallo is a tutor of business, law and social sciences at Kaplan International College, London, and Giovanni Biava is an energy and gas consultant at Exelen group. The views do not necessarily reflect those of China Daily.

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