The Potential Impact of One Belt One Road
IMAGE VIA MERCATOR INSTITUTE FOR CHINA STUDIES
In 2013 China unveiled its ambitious One Belt One Road (OBOR) initiative. Funded extensively by Chinese, the infrastructure runs through the continents of Asia, Europe and Africa connecting the vibrant East Asia economic circle at one end and developed European economic circle at the other. The project has two components: the Silk Road Economic Belt (SREB),which would be established on the Eurasian land corridor from the pacific coast to the Baltic Sea, and the 21st century Maritime Silk Road (MSR). The SERB focuses on bringing together China, Russia and Europe, linking China with the Persian Gulf and the Mediterranean Sea through the central Asia and West Asia, and connecting China with Southeast Asia, South Asia and the Indian Ocean. The 21st century MSR in turn is designed to go from China's coast to Europe through the South China Sea and the Indian Ocean by one route, and from China's coast through the South China Sea to the South Pacific by another.
One Belt, One Road has the potential to be the world’s largest platform for regional collaboration. What does that actually mean? There are two parts to this, the belt and the road, and it’s a little confusing. The belt is the physical road, which takes one from China all the way through Europe to somewhere up north in Scandinavia. What is referred to as the road is actually the maritime Silk Road, in other words, shipping lanes, from China to Venice. This plan ambitiously covers about 65 percent of the world’s population, about one-third of the world’s GDP, and about a quarter of all the goods and services the world moves.
China is seeing a bit of a decline in its growth. A lot of people believe this is part of the next growth wave of Chinese exports. It is anticipated that China will attempt to expand its influence and its infrastructure build-out in many of the countries on these trade routes, most of them emerging markets, in an attempt to continue to capitalize on what has fueled the high growth in China over the past decade. What remains to be seen is if that can be replicated in a number of these countries in the next ten years. This is very significant as many of these emerging countries are lacking proper infrastructure to continue their growth. I remember reading about groups of delegates who went to China; they marveled at the trains, the railway stations, the airports, and everything else, which frankly has been a bit of a miraculous creation in the past two decades.The question is going to be how these are financed: whether there is going to be long-term planning that’s required, and whether the local governments and the state governments are able to take the Chinese model and the Chinese infrastructure and figure out how they can have their own version.