Suddenly, the Silk Road

While the West was busy guarding against the perils of climate change and politically incorrect attitudes, China stole a march on it by starting on their Silk Road project.  "Europeans are just beginning to come to grips with the realization that China’s 'One Belt, One Road' may be more than just an economic opportunity. The ambitious mix of economic, infrastructure and diplomatic initiatives—paired with a maritime road from the South China Sea to the Port of Piraeus—aims to create a new “silk road” from Yiwu in central Zhejiang Province to Madrid, Spain."

For the United States the prospect of a high capacity land logistics corridor through the Eurasian landmass means that China would be less vulnerable to maritime blockade, especially by naval forces in the Indian Ocean. It also raises the prospect of a new bipolar world, one where for the first time the US could potentially be the weaker state.

To the many impoverished countries along the planned Silk Road route -- many of them Islamic -- Beijing's announcement simply means a potential windfall. "Behind China's trillion-dollar effort to build a modern Silk Road is a lending program of unprecedented breadth, one that will help build ports, roads and rail links, but could also leave some banks and many countries with quite a hangover." China is offering -- some say giving away -- money which many of these countries probably have no hope of paying but they'll take it anyway.

At the heart of that splurge are China's two policy lenders, China Development Bank (CDB) and Export-Import Bank of China (EXIM), which have between them already provided $200 billion in loans throughout Asia, the Middle East and even Africa.

They are due to extend at least $55 billion more, according to announcements made during a lavish two-day Belt and Road summit in Beijing, which ends on Monday. ... For Laos, one of Asia's poorest countries, the $7 billion cost for the China-Laos railway was more than half its 2015 gross domestic product. Its concessionary loan from EXIM was set below 3 percent interest.

In Pakistan, where China has pledged to invest up to $56 billion in rail, road and energy infrastructure, its debt and other repayments on Belt and Road will peak at around $5 billion in 2022, according to the Pakistan government's chief economist.

Ding, from CDB, said loans to heavily indebted, poor countries were within the limit set by the International Monetary Fund, including interest rates and loan periods.

But borrower nations say there is also little choice as China presses its first international development push.

"It's almost a no-brainer," said Sima Kamil, CEO designate of Pakistan's United Bank.

"It's very easy to say there will be all of this debt, but if we don't get this, where are we going to go?"