Silkroad

The old saying that “all roads lead to Rome” may soon become “all roads lead to Beijing”. Not necessarily - just enlarge the map.

Unveiled in September and October 2013, the Belt and Road Initiative (BRI) is China’s most ambitious infrastructure plan – a plan which involves more than 60 countries across Asia, Europe, the Middle-East and North Africa. 

The “Silk Road” or China’s Belt and Road Initiative (also known as One Belt - One Road, short OBOR) is one of President Xi’s most ambitious foreign and economic policies. It aims to strengthen Beijing’s economic leadership through a vast program of infrastructure building throughout China’s neighboring regions.

Many foreign policy analysts view this initiative largely through a geopolitical lens, seeing it as Beijing’s attempt to gain political leverage over its neighbors. There is no doubt that this is part of Beijing’s strategic calculation, but only a part. We the AEC Group, however, argue that some of the key drivers behind OBOR are largely motivated by China’s pressing economic concerns. One of the overriding objectives of OBOR is to address China’s deepening regional disparity as the country’s economy modernizes. Beijing hopes its transnational infrastructure building program will spur growth in China’s underdeveloped hinterland and rustbelt. The initiative will have a heavy domestic focus. The Chinese Government also wants to use OBOR as a platform to address the country’s chronic excess capacity. It is more about migrating surplus factories than dumping excess products. One of the least understood aspects of OBOR is Beijing’s desire to use this initiative to export China’s technological and engineering standards. Chinese policymakers see it as crucial to upgrading the country’s industry.

OBOR will see the development of six major economic corridors. Building transport and information infrastructure will generate the development of energy and industrial clusters along these economic corridors.

The OBOR is positive for developing countries, and an opportunity to improve their physical infrastructure stock. The initiative will also serve to strengthen the private sector in many countries, create positive spill-over effects beyond the initial projects, and facilitate further investment.

Asia and Europe will benefit from this development and “One Belt – One Road” will not only generate employment for hundreds of thousands of people but an enormous new market place. This perspective will overrule the domestic political and economical aims of China.