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SPECIAL REPORT: The Belt and Road: China’s ‘project of the century’ increasing China’s presence in Vanuatu

With so many remarks of the very strong Chinese presence moving in and out of Vanuatu, YTSNews decided to do a bit of research and see if there is anything related to Chinese Government policies that act as a catalyst to China’s involvement and growing interest in Vanuatu.

The involvement of the Chinese Government owned infrastructure company, CCECC, with a lot of Government projects have not gone un-noticed.

CCECC is currently the biggest operator in Vanuatu especially through major infrastructure projects.

YTSNews was intrigued on the fast growing CCECC presence as the streets and house whole talks became all about the Chinese moving into Vanuatu.

Social Media started to buzz, the topic on everyone’s lips is China, and that it is moving very fast into Vanuatu.

YTSNews researched news sites around the world and came across the SubChina website and from there gathered some vital informations to put together a simple explanation to China’s strong presence in Vanuatu and the Pacific.

Our findings briefly explained and as quoted by the SubChina website “a short explainer on the history and planned development of Xi Jinping’s signature initiative — to put China at the center of a global network of transport, commerce, and infrastructure.”

The brief history between the Vanuatu Government and China was always mutual before before Vanuatu’s Independence and after it gained it’s Independence. The relationship has grown and matured over the many years and China to date has always recognized Vanuatu as ‘an old friend.’

A lot is there to say about this relationship but one thing is certain, China’s presence in Vanuatu has been planned, directed and chosen specifically not just because of the many development opportunities, but mainly to achieve the Chinese Government Policies under it’s current leadership and what it had in mind for the Asia Pacific region.

Going through facts provided on China’s Road and Belt plans, YTSNews provides some insight to the significance of Vanuatu to China amidst the growing presence of China in the Pacific region.

Vanuatu is strategically located to be an advantage to China and its many polices to connect to the whole South Pacific. Given the history and involvement of the Chinese Government in Vanuatu, we try to outline a brief on why we think China is exerting so much visibility into one tiny Melanesian state.

The Belt and Road

The Belt and Road is basically a network of railroads, highways, gas and oil pipelines, and ports across Asia and beyond and President Xi Jinping first proposed Belt and Road as the “Silk Road Economic Belt with Central Asian Countries” during a visit to Kazakhstan in 2013.

The project name later changed to the “Silk Road Economic Belt and the 21st-Century Maritime Silk Road,” or “One Belt, One Road,” abbreviated to OBOR. By the time of the Belt and Road Forum of May 2017, Chinese official statements were calling it the “Belt and Road Initiative,” or BRI.

Belt and Road comprises two economic chains: a land route, stretching across Western China, Central Asia, and into Europe, as well as a maritime route, which flows along China’s eastern coast, threads through Southeast Asia, then turns to Africa and wraps up in Europe.

The project has received pledges of more than $1 trillion in infrastructure investments across more than 60 countries, with China recently committing $124 billion in funding. Belt and Road has signed on 65 countries as of 2016, with 28 heads of state attending China’s summit in May.

China’s Project of the Century

On September 7, 2013, Xi Jinping took the stage inside a wood-paneled lecture hall at Nazarbayev University in Astana, Kazakhstan. Earlier in the week, the new Chinese president — who was selected to become leader of the Communist Party of China in November 2012, and assumed the role as head of state in March 2013 — had attended his first Group of 20 summit in St. Petersburg, Russia. There, in his opening speech, he proudly declared China’s mission to expand the global market and create more development opportunities in other countries.

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In Kazakhstan, speaking in front of government officials, university faculty, and students, President Xi returned to his pledge of greater economic engagement, emphasizing stronger trade ties and regional cooperation to reach shared economic and development goals. To that end, he announced ambitions to revive the ancient Silk Road, on which merchants thousands of years ago transported silk, porcelain, and jade from China to Europe by way of Central Asia. “I can almost hear the ring of the camel bells and [see] the wisps of smoke in the desert,” he said. He was just as clear about what his objectives were not. “China will never seek a dominant role in regional affairs, nor try to nurture a sphere of influence.”

The announcement officially kicked off China’s Belt and Road Initiative, a sprawling network of railroads, highways, gas and oil pipelines, and ports that aims to trace the channels of the ancient Silk Road route.

Also known as One Belt, One Road (OBOR), the effort has drawn commitments from over 60 countries and international organizations, and has been described as China’s “project of the century” — many would go so far as to call it the most important initiative in 21st-century global trade, particularly now that Donald Trump has pulled the U.S. out of the Trans-Pacific Partnership — and its most important foreign policy under President Xi. Significantly, the initiative marks a bold separation from the self-contained course set by former Party leader Deng Xiaoping in the early 1990s, famously summarized in a phrase he used (韬光养晦 tāoguāng yǎnghuì), meaning to “hide our capabilities, bide our time,” and wait for a later moment for China to assert leadership.

In line with Xi Jinping’s vision to “rejuvenate” China and return it to its historical place of prominence in the world, Belt and Road has become a core piece of his legacy, and the success of its execution is widely viewed as a referendum on his leadership.

The massive undertaking is divided into two main components: the Silk Road Economic Belt and the 21st-Century Maritime Silk Road. The “Belt” is a series of overland routes that will collectively connect China with Western Europe through the resource-rich countries of Central Asia. The “Road,” counterintuitively, refers to a dizzying sea route that flows around Southeast and South Asia, through Africa, and into the Mediterranean.

Beyond the rhetoric, the true motivations behind China’s designs have been widely speculated upon. Government officials, analysts, and academics say factors driving the initiative include the search for new markets to sell Chinese goods, the need to unload the country’s excess steel production, and the desire to promote economic development to quell tensions in the country’s Western region.

Financing China’s grand plan has involved extensive negotiations with many of the partner countries tied to the project. Most observers agree that the Asian Infrastructure Investment Bank (AIIB), established in part to secure and bolster financing for Belt and Road, has stuck its landing in the international community. With investments in nine projects across Europe, Asia, and the Middle East in its first year, AIIB is viewed as advancing Belt and Road’s agenda with discipline.

One of the central debates that continues to hang over Belt and Road is the extent of its intentions to reshape the world’s geopolitical power structure. Drawing frequent comparisons with America’s Marshall Plan from the post–World War II era, Belt and Road’s vast ambitions and potential has been received with skepticism and mistrust from some parts of the world, while sparking controversy and backlash in others. The U.S., in particular, appears unsure of where to position itself, an ongoing uncertainty that may come as a detriment to itself and the global order.

Vanuatu can be seen as a primary base for China in the Pacific and why not? The Chinese Government approval rate for Vanuatu is visibly high and the ‘old friend’ has built the biggest Chinese Embassy in the South Pacific in Vanuatu, which will ultimately allow China a very strong and strategic base to expose it’s capabilities and influence throughout the region, a strategic location which will indeed be very vital to China given the huge interest from other major economies.

The Americans were based in Vanuatu during World War II and the same strategy we assume is being employed here by the Chinese, a base in the Pacific for Chinese Government to expands its global network of transport, commerce, and infrastructure.

CCECC are here in Vanuatu building wharfs, airports, roads, schools, and many more, they very developments “The Belt and Road: China’s ‘project of the century’” aims to accomplish.

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The South China Morning Post says that “the Belt and Road unit at the China International Association for Promotion of Science and Technology” is helping to “secure deals for projects such as telecom networks in the Pacific island nation of Vanuatu and a road information system in New Zealand.”

The emergence of Chia’s presence not only comes through CCECC and other businesses but is also supported by four Chinese State owned Banks namely, China Construction Bank, “the country’s second-biggest bank by assets, has been conducting roadshows to raise at least 100 billion yuan ($15 billion) from onshore and offshore investors, Bank of China, “the smallest of the country’s ‘Big Four’ lenders, aims to raise around 20 billion yuan ($3 billion), the remaining two of the Big Four banks, “the top lending” Industrial and Commercial Bank of China and “third-ranked” Agricultural Bank of China, are also “considering raising Belt and Road funds.”

Reuters reports: “China’s largest state-owned commercial banks are raising billions to fund investment under Beijing’s ‘Belt and Road’ drive, people close to the matter said.”

Reports indicate that aside from supporting the government’s Belt and Road plans, raising yuan for overseas investment would further its internationalization, which would help conserve China’s foreign reserves and mitigate exchange-rate risk.

One banker who spoke to Reuters put it this way: “Because those Belt and Road countries have close economic and trade ties with China, after they receive our yuan funds, they can use renminbi to pay for Chinese goods, equipment and labor.”

Vanuatu now does have a decision to make, a very big one given the facts provided. If Vanuatu is to become the center of China’s Belt and Road Initiative in the Pacific, then China needs to do more than just be a developing partner, it is time Vanuatu and China “talk real business.”

China’s presence can be felt in Melanesia and it is a powerful force in the South Pacific Region soon to take control in all of the Islands states.