Here’s what Xi Jinping’s new Silk Road can learn from the Marshall Plan

The sky over Beijing was a crisp, dark blue. With the arrival of 29 foreign leaders for the Belt and Road Summit last month, officials had made every effort to clear the air and roll out a bright red carpet. Representatives from more than 60 participating countries came to discuss China’s grand initiative: massive infrastructure investment to link China and Europe, and most countries in between, by land and sea.

The project has been under way for several years, launched by China’s President Xi Jinping in 2013. Since then, projects have sprung up across Asia and even parts of East Africa, stretching from ports in Pakistan and Sri Lanka to railways in Malaysia and Indonesia.

Well over 1,000 trains, up to 2km long, have already travelled from China’s interior to Western Europe, delivering electronics and other goods along the New Silk Road. For these, new tracks were laid and gauges harmonised across many countries. Vast sums, too, were spent in China’s border provinces to build terminals and logistics hubs.

The numbers, even if a little vague, are staggering. Chinese banks have already invested about US$250 billion in participating countries in recent years, financing roads, pipelines, rail tracks, container terminals and power plants.

The US$40 billion New Silk Road Fund provides additional firepower and the recently established Asian Infrastructure Investment Bank, potentially able to lend about US$250 billion, will also be able to finance “Belt and Road Initiative” projects. At the recent summit in Beijing, Xi promised another US$134 billion in funding. All up, new infrastructure worth US$1 trillion could be rolled out over the next 10 years.

That is serious financial muscle. And if implemented as envisaged, it could transform the economics of the region, especially in those countries currently cut off from easy physical access to global markets.