The Grand Strategy Behind Eurasian Energy Markets: China’s New Silk Road


INSIGHT


    • ENERGY IS AT THE HEART OF THE NEW SILK ROAD, WHICH STRETCHES ACROSS THE EURASIAN CONTINENT AND CONNECTS ONCE SEPARATE PARTS.
    • ENERGY IS A KEY ISSUE FOR MOST COUNTRIES IN EAST AND WEST. EFFICIENT ENERGY NETWORKS REDUCE PRODUCTION COSTS AND ENABLE WEALTH CREATION.
    • BY COMBINING THE RESOURCES AND KNOW-HOW OF EAST AND WEST, EURASIA IS BECOMING THE HEARTLAND OF INDUSTRIAL MANUFACTURING.


1. CHINA HAS DRIVEN THE NEW SILK ROAD IN ITS INITIAL PHASE, BUT OTHER COUNTRIES WILL HELP COMPLETE THE PROJECT.


The new Silk Road initiative would significantly change the world’s trade flows. Over many more decades, the world’s geostrategic center of gravity would shift back to the center of Eurasia. This would be the heartland, according to geopolitical expert Halford John Mackinder in his Heartland Theory. Eurasia was the backbone of world politics in centuries past, before the United States rose to global status. It is no coincidence that Afghanistan plays such an important role in world affairs.

One could argue that the geopolitical center of gravity of the global economy, especially energy trade flows, has already shifted to Eurasia. Eurasia is the center of gravity for a spectrum of important criteria, including population density, resource availability and use, the interconnectedness of major world cultures, and trade flows.

Countries in Eurasia and near the center of the heartland would potentially experience some monumental changes in trade, economics, and international affairs, such as.

1.) A reduction in the cost of trading goods and lower costs for the production of goods.

2.) An international market for the provision of services, creating an international market that relaxes travel restrictions and allows the movement of people from one place to another to facilitate wealth creation.

3.) A variety of languages are learned to facilitate trade and cultural exchange.

4.) More generally, a shift from a global economy at sea to a global economy on land that is less similar to the current global economy at sea.

5.) Rail travel will become the primary mode of transportation, both within and between countries.

We have written more extensively about how energy flows are already being diverted to China, expanding interconnections throughout Eurasia and in Europe itself. Gradually, trade flows will shift eastward. Atlantic trade may gradually be replaced by transcontinental trade, but this is by no means certain, as transportation costs and insurance premiums may rise.

If you want to learn more about this topic and especially about the aspects related to the energy world, we recommend reading the following. The focus is on European energy markets and their importance to the trade relationships that are emerging across Eurasia.


2. WE DRAW A SUCCINCT CONCLUSION


  • Energy and productivity go hand in hand. Generating more energy than we consume is a basic requirement for our lives. To achieve a surplus of wealth, a surplus of energy must be created. Eurasian economic integration can help create a surplus of wealth based on effective management of energy resources.
  • The growth of the Eurasian economy is driven in part by the need to access energy resources, leverage resources in Central Asia, harness the productivity of China and East Asia, bring in Europe’s innovation capacity, and bridge China, Russia, and the European Union. 

Many thanks for the shared interest in the energy world!



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