The United States Needs the Belt and Road Initiative to Develop Infrastructure, the Backbone of Any Economy

China Investment Magazine, which is supervised by China’s National Development and Reform Commission, ran an article in its May issue by Schiller Institute founder and president Helga Zepp-LaRouche. That issue was distributed both in Chinese and in English to every participant in the May 14-15 Belt and Road Forum for International Cooperation in Beijing, which Zepp-LaRouche attended and during which she addressed the “think tank exchanges”.

The fact that this prestigious Chinese investment magazine chose to feature the Schiller Institute’s view of the shape that cooperation between the United States and China should take and to widely distribute the issue at that historical forum, is in itself highly significant.

Zepp-LaRouche focusses in her article, which is reprinted in full here, on articulating such cooperation around China’s Belt and Road Initiative (BRI) and President Trump’s stated intention to launch an infrastructure program amounting to some $1 trillion in investments.

Anyone who has been to the United States knows that the infrastructure there is terribly run-down, or even non existent, Zepp-LaRouche writes, but most Americans (and Europeans we could add) have no idea how advanced infrastructure development is in China.

The American Society of Civil Engineers estimates that current U.S. infrastructure investment requirements are $4.5 trillion. “There is no way that the financing of either of these amounts will come from the private equity market”, she points out. Especially since private companies have demanded “an 11-12% return per annum, and a full return of the capital invested within ten years,” which is impossible for long-term projects.

As for a toll system or other means of payment by the users, Zepp-LaRouche notes that that would not even work in densely populated areas, let alone remote areas. The state has a crucial role to play. In this article printed by China Investment, Zepp-LaRouche sums up succinctly the notion of physical economy, as follows:

“The quality and density of infrastructure is a necessary precondition for the productivity of an economy as a whole. A modern economy requires that approximately 50% of its total expenditures should be designated to be used for the expansion and modernization of infrastructure, since the life expectancy of infrastructure’s various categories is between 20 and 50 years. A well-planned infrastructure platform is an integrated system of high-speed rail lines, waterways, highways, energy production and distribution, and communications, as well as so-called soft infrastructure such as health and education systems. The higher the technological development and productivity of an economic space becomes, the more important the speed and efficiency of the transport and density of infrastructure in general will need to be, since all the various levels of production into semi-finished and finished goods work together like a complicated machine, where each part has a role for a harmonious function.

“Thus, the return on infrastructure investment is actually measured by the increase of the productivity of the entire economy. Therefore the financing can not be left to the private investor, but it must be the responsibility of the state, which is devoted to the common good of the national economy.”

Further reading: Helga Zepp-LaRouche Addresses a Forum at China’s Largest Publishing House