China Can No Longer Afford World Domination

China has run out of money. The $8 trillion headline figure for the New Silk Road is romantic fiction.

by Ambrose Evans-Pritchard
May 8, 2019

There’s just one flaw in Xi Jinping’s plans for global economic conquest. It’s that China has run out of money. The $8 trillion headline figure for the New Silk Road is romantic fiction.

The Belt and Road – as it has become known since maritime links were added to the original Marco Polo caravan route – is China’s plan of infrastructure development and investments in 152 countries and international organizations.  Yes, 152.

It may have made financial sense when China was running a fat current account surplus. This reached 10% of GDP in the final stages of the export boom from 2004 to 2008.

China had to recycle this money back into the global economy much as the US was compelled to recycle its vast surpluses through the Marshall Plan at the end of the Second World War. It was a temporary answer to a temporary distortion in global trade flows.

Or to take another parallel, it is akin to that misleading moment in the late Eighties when Japan was buying eve…