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For centuries churches across the West have celebrated the arrival of three wise men in Bethlehem to present the newborn Jesus with treasures from afar: gold, frankincense, and myrrh. Though the Bible doesn’t identify them by name, the Roman Catholic Church honored the Magi as saints: Balthasar of Arabia, Melchior of Persia, and Gaspar of India.

Scholars note that the gifts brought by the Magi were part of a global trading network that existed centuries before the birth of Christ. Those goods may have moved roughly from Chang’an, the capital of the Chinese Empire, through the Middle East and finally to Rome along the caravan-­packed routes known as the Silk Road. Gold was the currency of kings and Chinese silk the preferred fabric for aristocratic women, with spices, incense, and ceramics making up the bulk of merchandise flowing between the two empires that then controlled the Eurasian land mass.

The Silk Road presented such a powerful narrative that 12 centuries after the biblical events in Bethlehem, Venetian merchant Marco Polo wrote about his journey across Central Asia and his life as an official in the capital of the Mongol Empire, Dadu (now Beijing). Polo’s tale inspired Christopher Columbus to seek a maritime shortcut to China and the kingdoms of India and the East Indies, as the spice islands of Indonesia, Malaysia, and the Philippines were once known. Columbus, of course, accidentally traveled to the Americas, which eventually eclipsed the Far East in importance in terms of global trade.

Today the romance of the Silk Road is alive again, this time in modern China. The historical narrative remains so inspiring that China has advanced a plan to rebuild the ancient trade route in an era of air travel, container ships, and near-­instantaneous communication.

Though this may sound like a joke, it isn’t: Chinese President Xi Jinping has staked his foreign policy legacy on a grand strategy known as “One Belt, One Road,” or, more simply, “Belt and Road” — with “road” referring to an overland route across Central Asia and “belt” to maritime routes through Southeast Asia, South Asia, and East Africa.

Rebuilding the Silk Road is “a massive and transformative undertaking by China,” the largest the world has seen since the post–World War II Marshall Plan in Europe, says Patrick Mendis, a former American diplomat who is now a research associate at Harvard University’s Fairbank Center for Chinese Studies. “The Silk Road has both geoeconomic and geostrategic components to promote the new sphere of Beijing influence beyond the Chinese borders,” adds Mendis, who was born in Sri Lanka (itself once an ancient island kingdom) and is a commissioner of the State Department’s U.S. National Commission for UNESCO.

China’s New Silk Road strategy comes at a time when the West is flirting with retreating from the globalization it initiated and led for decades. At the recent World Economic Forum in Davos, Switzerland, Xi announced that China is willing to take up leadership of the pro-globalization camp. His message is particularly significant given the anti–free trade rhetoric of new U.S. President Donald Trump, who appears to be leading his nation toward a new isolationism. In fact, China’s New Silk Road strategy is good for that country’s business and economics, extending connectivity to frontier markets throughout Central Asia and stimulating demand for trade at a time when commerce with the West may be in decline. China’s economy still depends heavily on exports to propel its growth.

Xi’s strategy is being implemented by three new multilateral institutions based in China: the Asian Infrastructure Investment Bank (AIIB), the Silk Road Fund, and the New Development Bank. Most of the $240 billion in committed capital is coming from China and the rest from dozens of trading nations. The big exceptions: Japan, which so far has refused to join, and the U.S. The three institutions will work together to finance infrastructure projects such as power stations, superhighways, ports, and bullet-train lines across Central Asia, the Middle East, the Caucasus, and the Balkans in an attempt to reunite Eurasia in a network of transport links.

China’s new multilateral lenders, along with their private sector partners, can mobilize as much as $1.5 trillion of new capital in the coming decade for Asia infrastructure, estimates Peter Burnett, Hong Kong–based regional head of corporate finance for Greater China and North Asia at Standard Chartered, which is partnering with Chinese lenders to cofinance frontier market deals. However, the funds, though substantial, are not enough to meet the region’s infrastructure needs, which according to Burnett and others (including the Manila-based Asian Development Bank [ADB]) amount to $8 trillion just for 2010–’20.

China fueled much of its own explosive growth by investing in modern infrastructure, spending an average of more than 20 percent of gross domestic product annually over 25 years. Though that investment fell to 8 percent last year, the country’s infrastructure now is among the most modern in the emerging markets. For instance, China is investing $503 billion to build a national bullet-train network that spans almost 19,000 miles — more than 15 times the length of Japan’s Shinkansen. The trains can reach top speeds of more than 180 miles per hour, and China has ambitions to extend its lines to Europe. The Chinese Academy of Engineering in Beijing has drawn up plans to build a nearly 5,000-mile network spanning 17 nations; it would take passengers from Beijing to London in only 40 hours.

To facilitate these ambitions, China has begun to play a powerful role in the region as a financier, says Laurence Brahm, a Beijing-based American lawyer, entrepreneur, and adviser to the Chinese government. “China, together with other key developing nations, is forging an alternative global financial and economic development architecture, different from that of the Washington Consensus and post–­Bretton Woods order,” he says. Brahm is working with John Naisbitt, author of the best-­selling Megatrends, on a book examining Xi’s efforts to revive the Silk Road. According to Brahm, if Xi’s vision is carried out successfully, China will surpass the U.S. as the largest economy in the world.

“In 2001, I wrote that the 19th century was Britain’s, the 20th America’s, and the 21st China’s,” says Brahm. He was hardly alone in making that prediction, but the 2001 book he coauthored, China’s Century, predicted that China, then the No. 6 economy, with a GDP of $1.3 trillion, would become No. 1 in the 21st century. China surpassed Japan as the world’s second-­largest economy in 2010 and has since grown its GDP to $11.3 trillion — more than twice Japan’s $4.7 trillion and behind only the U.S.’s $18.5 trillion. Though China’s growth rate has slowed from a remarkable average of 9.9 percent a year, the Middle Kingdom posted 6.7 percent growth in 2016 and according to many economists should be able to grow between 3 and 6 percent annually over the next few decades.

Though only a year old, Beijing-­based AIIB has already hit the road running. Since early last year the bank has lent more than $1.7 billion to nine transportation, energy, and urban development projects in seven nations: Azerbaijan, Bangladesh, Indonesia, Myanmar, Oman, Pakistan, and Tajikistan. “We are off to a quick start — people see it is a bank operating to the highest international standards,” says AIIB vice president Danny Alexander. Not long ago Alexander was serving as chief secretary to the U.K. Treasury under then–chancellor of the Exchequer George Osborne; he lost reelection to his parliamentary seat in Scotland in September 2015.

Alexander was a key player in the U.K.’s decision to support China’s formation of AIIB. In fact, prime minister David Cameron’s government persuaded three other European nations — Germany, France, and Italy — to become founding members of the bank, much to the chagrin of the Obama administration, which viewed AIIB as a threat to U.S. hegemony. After Alexander’s parliamentary defeat, Beijing asked him to join AIIB.

Today the 43-year-old is based in Beijing and secretary to the AIIB board; he helps broker financing for infrastructure projects across Eurasia. The Chinese maintain that the new multilaterals do not replace or compete with Washington-led institutions and in fact complement existing multilaterals. AIIB is analogous to the Japan- and U.S.-led Asian Development Bank but focuses only on infrastructure finance in Asia. A primary difference: Whereas ADB’s goal is to alleviate poverty, AIIB focuses on deepening regional connectivity. The Silk Road Fund tends to take equity stakes in projects, while the New Development Bank finances and buys stakes across all emerging markets, including Africa and Latin America.

Alexander notes that most of the nine projects AIIB financed in the past year were in conjunction with the World Bank and other multilaterals, including ADB, the European Bank for Reconstruction and Development, and the European Investment Bank. “Of course, the Chinese government has taken the initiative to establish this institution, but we are not here to deliver Chinese government policy or British government policy or Indian government policy,” he explains. “AIIB is answerable to all 57 founding members.”

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