Silk Road Headlines_8th August, 2018

At a business forum in Washington DC, Secretary of State Pompeo recently presented ‘America’s Indo-Pacific Economic Vision’. In his speech, he pointed at the commitment of the US to maintain its involvement in Asia towards ‘2020, 2030, 2040, and beyond’ [Remarks on America's Indo-Pacific Economic Vision]. To demonstrate this commitment, Pompeo announced that the US will make US $113 million available for American economic cooperation with the region, focusing on digital economy, energy and infrastructure. He also stated that the United States is happy to cooperate with anyone ‘so long as that cooperation adheres to the highest standards that our citizens demand’, and that he will shortly follow up with announcements on security assistance. There is an element of continuity with regard to the Obama administration’s ‘Rebalance to Asia’ strategy. While Pompeo’s Vision, so far, is far more modest in scope, two of his messages were also core parts of the Rebalance concept: 1) the US has no intention to withdraw from Asia, and 2) it will oppose Chinese domination of the region.

Meanwhile President Xi made a visit to various countries in the Middle East and Africa that made clear that China’s approach is about more than infrastructure development. As Deborah Brautigam writes, China positions itself as a partner for Africa’s industrialisation: ‘Industrialisation is the next step in Africa’s development and would add value to Africa’s raw materials, land and the hands of millions of young workers. Yet Africa’s infrastructure and port logistics are notoriously poor’ [China can energise Africa’s quest to industrialise]. For many countries, the potential benefit of the Belt and Road initiative is not just increased trade through better infrastructure; rather it is industrialisation helped by Chinese investments in both infrastructure and industrial zones. Ethiopia has become a model for industrial development in Africa, and China’s BRI strategy plays a major role in this process. The ambition of Ethiopia is not only to establish itself as a major low-cost manufacturing hub along the Maritime Silk Road, but to ‘expand into more sophisticated and high-tech industrial manufacturing’ [Ethiopia becoming an industrial powerhouse and future ‘Wakanda’]. The recently imposed US import tariffs on Chinese goods may well accelerate the relocation of certain manufacturing activities from China to countries such as Ethiopia, a process that is facilitated by, and that further boosts, BRI.

By Clingendael