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Belt and Road Initiative

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The Silk Road Economic Belt and the 21st-century Maritime Silk Road
Traditional Chinese絲綢之路經濟帶和21世紀海上絲綢之路
Simplified Chinese丝绸之路经济带和21世纪海上丝绸之路
Transcriptions
Standard Mandarin
Hanyu PinyinSīchóu zhī lù jīngjìdài hé èrshíyī shìjì hǎishàng sīchóu zhī lù
Yue: Cantonese
Jyutpingsi1 cau4 zi1 lou6 ging1 zai3 daai3 wo4 ji6 sap6 jat1 sai3 gei2 hoi2 soeng6 si1 cau4 zi1 lou6
Southern Min
Hokkien POJsi-tiû-chi-lo͘ keng-chè-tài hô jī-si̍p-it sè-kí hái-siōng si-tiû-chi-lo͘
the Belt and Road
Traditional Chinese一帶一路
Simplified Chinese一带一路
Transcriptions
Standard Mandarin
Hanyu PinyinYídài yílù
Yue: Cantonese
Jyutpingjat1 daai3 jat1 lou6
Southern Min
Hokkien POJIt-tài It-lō͘

The Silk Road Economic Belt and the 21st-century Maritime Silk Road, also known as the Belt and Road Initiative (B&R) and The Belt and Road (B&R), is a development strategy proposed by Chinese President Xi Jinping that focuses on connectivity and cooperation between Eurasian countries, primarily the People's Republic of China, the land-based "Silk Road Economic Belt" (SREB) and the oceangoing "Maritime Silk Road" (MSR). The strategy underlines China's push to take a larger role in global affairs, and the desire to coordinate manufacturing capacity with other countries in areas such as steel manufacturing.[1][2]

File:Belt-road-forum-logo.svg
The Logo of the Belt and Road Forum (BARF)[3], 14-15 May 2017, Beijing

It was unveiled in September and October 2013 in announcements revealing the SREB and MSR, respectively. It was also promoted by Premier Li Keqiang during the State visit in Asia and Europe. It was the most frequently mentioned concept in the People's Daily in 2016.[4]

Vision

Map of Asia, showing the OBOR initiative
China in red, Members of the AIIB in orange, the six corridors[5] in black and blue

The Belt and Road initiative is geographically structured along 6 corridors, and the maritime silk road.[6]

  • New Eurasian Land Bridge, running from Western China to Western Russia
  • China–Mongolia–Russia Corridor, running from Northern China to Eastern Russia
  • China–Central Asia–West Asia Corridor, running from Western China to Turkey
  • China–Indochina Peninsula Corridor, running from Southern China to Singapore
  • China–Pakistan Corridor, running from South-Western China to Pakistan
  • Maritime Silk Road, running from the Chinese Coast over Singapore to the Mediterranean.

Infrastructure networks

The coverage area of the initiative is primarily Asia and Europe, encompassing around 60 countries. Oceania and East Africa are also included. Anticipated cumulative investment over an indefinite timescale is variously put at US$4 trillion or US$8 trillion.[7][8] The initiative has been contrasted with the two US-centric trading arrangements, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership.[8]

Bridging the 'infrastructure gap' in Asia and beyond

The Belt and Road Initiative is expected to bridge the 'infrastructure gap' and thus accelerate economic growth across the Asia Pacific area and Central and Eastern Europe: World Pensions Council (WPC) experts estimate that "Asia alone (excluding China) will need up to $900 billion in infrastructure investments annually in the next 10 years, mostly in debt instruments. This means there’s a 50 percent shortfall in infra spending on the continent."[9] The gaping need for long term capital explains why many Asian and Eastern European heads of state "gladly expressed their interest to join this new [Chinese-led initiative] focusing solely on ‘real assets’ and infrastructure-driven economic growth".[10]

Silk Road Economic Belt

The Belt and Road Economies from its initial plan[11]

When Chinese leader Xi Jinping visited Central Asia and Southeast Asia in September and October 2013, he raised the initiative of jointly building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road. Essentially, the 'belt' includes countries situated on the original Silk Road through Central Asia, West Asia, the Middle East, and Europe. The initiative calls for the integration of the region into a cohesive economic area through building infrastructure, increasing cultural exchanges, and broadening trade. Apart from this zone, which is largely analogous to the historical Silk Road, another area that is said to be included in the extension of this 'belt' is South Asia and Southeast Asia. Many of the countries that are part of this belt are also members of the China-led Asian Infrastructure Investment Bank (AIIB). North, central and south belts are proposed. The North belt goes through Central Asia, Russia to Europe. The Central belt goes through Central Asia, West Asia to the Persian Gulf and the Mediterranean. The South belt starts from China to Southeast Asia, South Asia, to the Indian Ocean through Pakistan. The Chinese One Belt strategy will integrate with Central Asia through Kazakhstan's Nurly Zhol infrastructure program.[12]

Maritime Silk Road

The Maritime Silk Road, also known as the "21st Century Maritime Silk Road" (21世纪海上丝绸之路) is a complementary initiative aimed at investing and fostering collaboration in Southeast Asia, Oceania, and North Africa, through several contiguous bodies of water – the South China Sea, the South Pacific Ocean, and the wider Indian Ocean area.[13][14][15]

The Maritime Silk Road initiative was first proposed by Xi Jinping during a speech to the Indonesian Parliament in October 2013.[16] Like its sister initiative the Silk Road Economic Belt, most countries in this area have joined the China-led Asian Infrastructure Investment Bank.

East Africa

East Africa, including Zanzibar in particular, will form an important part of the MSR after improvements to local ports and construction of a modern standard-gauge rail link between Nairobi and Kampala is completed.

In May 2014, Premier Li Keqiang visited Kenya to sign a cooperation agreement with the Kenyan government. Under this agreement, a railroad line will be constructed connecting Mombasa to Nairobi. When completed, the railroad will stretch approximately 2,700 kilometers (1677.70 mi.) costing around 250 million USD.[17]

In September 2015, China's Sinomach signed a strategic, cooperative memorandum of understanding with General Electric. The memorandum of understanding set goals to build wind turbines, to promote clean energy programs and to increase the number of energy consumers in sub-Saharan Africa.[18]

The China Pakistan Economic Corridor (CPEC) and the Bangladesh-China-India-Myanmar (BCIM) Economic Corridor are officially classified as "closely related to the Belt and Road Initiative".[19] In coverage by the media, this distinction is disregarded and the networks are counted as components of the initiative. The CPEC in particular is often regarded as the link between China's maritime and overland silk road, with the port of Gwadar forming the crux of the CPEC project.[citation needed]

China–Pakistan Economic Corridor (CPEC)

Main article: China–Pakistan Economic Corridor

China–Pakistan Economic Corridor (Chinese: 中国-巴基斯坦经济走廊; Urdu: پاكستان-چین اقتصادی راہداری; also known by the acronym CPEC) is a collection of infrastructure projects currently under construction throughout Pakistan. Originally valued at $46 billion, the value of CPEC projects is now worth $57 billion.[20][21][22] CPEC is intended to rapidly modernize Pakistani infrastructure and strengthen its economy by the construction of: modern transportation networks, numerous energy projects, and special economic zones.[23][24][21][22] On 13 November 2016, CPEC became partly operational when Chinese cargo was transported overland to Gwadar Port for onward maritime shipment to Africa and West Asia.[25]

Financial institutions

AIIB

The Asian Infrastructure Investment Bank, first proposed by China in October 2013, is a development bank dedicated to lending for projects regarding infrastructure. As of 2015, China announced that over one trillion yuan ($160 billion US) of infrastructure projects were in planning or construction.[26]

On 29 June 2015, the Articles of Agreement of the Asian Infrastructure Investment Bank (AIIB), the legal framework was signed in Beijing. The proposed multilateral bank has an authorized capital of $100 billion, 75% of which will come from Asian and Oceania countries. China will be the single largest stakeholder, holding 26% of voting rights. The bank plans to start operation by year end.[27]

Silk Road Fund

For the main article, see Silk Road Fund.

In November 2014, Xi Jinping announced plans to create a 40 billion USD development fund, which will be distinguished from the banks created for the initiative. As a fund its role will be to invest in businesses rather than lend money for projects. The Karot Hydropower Station in Pakistan is the first investment project of the Silk Road Fund, [28] and is not part of the much larger CPEC investment.

In January 2016, Sanxia Construction Corporation began work on the Karot Hydropower Station 50 kilometres (31 mi) from Islamabad. This is the Silk Road Fund's first foreign investment project. The Chinese government has already promised to provide Pakistan with at least 350 million USD by 2030 to finance the hydropower station.[29]

The Geoeconomics of continental integration

A new kind of multilateralism

In his 29 March 2015 speech at the Boao Forum for Asia (BFA) annual conference, President Xi Jinping said:

[T]he Chinese economy is deeply integrated with the global economy and forms an important driving force of the economy of Asia and even the world at large. […] China's investment opportunities are expanding. Investment opportunities in infrastructure connectivity as well as in new technologies, new products, new business patterns, and new business models are constantly springing up. […] China's foreign cooperation opportunities are expanding. We support the multilateral trading system, devote ourselves to the Doha Round negotiations, advocate the Asia-Pacific free trade zone, promote negotiations on regional comprehensive economic partnership, advocate the construction of the Asian Infrastructure Investment Bank (AIIB), boost economic and financial cooperation in an all-round manner, and work as an active promoter of economic globalization and regional integration

Xi also insisted that, from a geoeconomic standpoint, the Silk Road Fund and the Asian Infrastructure Investment Bank would foster "economic connectivity and a new-type of industrialization [in the Asia Pacific area], and [thus] promote the common development of all countries as well as the peoples' joint enjoyment of development fruits."[30]

Leveraging China’s infrastructure excellence

The deliberate underinvestment in transportation infrastructure in the industrialized world after 1980 and the pursuit of short-termist export-oriented neoliberal development policies in most Asian and Eastern European countries[31][32] has allowed China to develop quietly its preeminence in civil works and modern land transportation technology including high speed rail [33]

World Pensions Council (WPC) experts have argued the Belt and Road initiative constitutes a natural international extension of the infrastructure-driven economic development framework that has sustained the rapid economic growth of China since the adoption of the Chinese economic reform under chairman Deng Xiaoping,[34] which could eventually reshape the Eurasian economic continuum, and, more generally, the international economic order [35]

Culture and education

University Alliance of the Silk Road

Main article: University Alliance of the Silk Road

A university alliance centered at Xi'an Jiaotong University aims to support the Belt and Road initiative with research and engineering, and to foster understanding and academic exchange. [36][37] The network extends beyond the economic zone, and includes law school alliance to "serve the Belt and Road development with legal spirit and legal culture." [38]

Oversight

The Leading Group for Advancing the Development of One Belt One Road was formed sometime in late 2014, and its leadership line-up publicized on February 1, 2015. This steering committee reports directly into the State Council of the People's Republic of China and is composed of several political heavyweights, evidence of the importance of the program to the government. Vice-Premier Zhang Gaoli, who is also a member of the 7-man Politburo Standing Committee, was named leader of the group, with Wang Huning, Wang Yang, Yang Jing, and Yang Jiechi being named deputy leaders.[39]

In March 2014, Chinese Premier Li Keqiang called for accelerating the Belt and Road Initiative along with the Bangladesh-China-India-Myanmar Economic Corridor and the China-Pakistan Economic Corridor in his government work report presented to the annual meeting of the country's legislature.

Motivation and controversy

Motivation

A report from Fitch Ratings suggests that China's plan to built ports, roads and railways in under-developed Eurasia and Africa is out of political motivation rather than real demand for infrastructure. Fitch also doubts Chinese banks' ability to control risks, as they do not have a good record of allocating resources efficiently at home, which may lead to new asset-quality problems for Chinese banks that most of funding is likely to come from.[41]

The Belt and Road Initiative is believed to be a way to extend Chinese influence at the expense of the US, in order to fight for regional leadership in Asia.[42] China has already invested billions of dollars in several South Asian countries like Pakistan, Nepal, Sri Lanka, Bangladesh, and Afghanistan to improve their basic infrastructure, with important implications for both China’s trade regime as well as its military influence. China has emerged as one of the fastest-growing sources of Foreign Direct Investment (FDI) into India – it was the 17th largest in 2016, up from the 28th rank in 2014 and 35th in 2011, according to India’s official ranking of FDI inflows.

In Hong Kong

During his 2016 policy address, Hong Kong chief executive CY Leung's announced his intention of setting up a Maritime Authority aimed at strengthening Hong Kong’s maritime logistics in line with Beijing's economic policy.[43] Leung mentioned "One Belt, One Road" no fewer than 48 times during the policy address,[44] but the small amount of detail presented, in addition to the macro-economic measures related to the initiative, led commentators to complain of the address's irrelevance to Hong Kong people because it skirted over matters of importance to them.[45][46] Leung's apparent overemphasis was seen as a sycophantic promotion of Xi Jinping's concept, and was widely lampooned. The anchor of TVMost, Dong Fong Sing (東方昇), satirised it using a Chinese homophone – “one covered, one exposed” (一戴一露) instead of “One Belt, One Road” (一帶一路) – in a photograph of him half-wearing a brassiere in which one of his nipples was exposed.[47] An op-ed in Wen Wei Po said CY Leung was “horrendously scandalised” by the picture, which was considered obscene.[48]

See also

Further reading

References

  1. ^ "One Belt, One Road". Caixin Online. 2014-12-10. Retrieved 2016-04-13.
  2. ^ "Getting lost in 'One Belt, One Road'". Hong Kong Economic Journal. 2016-04-12. Retrieved 2016-04-13.
  3. ^ "World's biggest building project aims to make China great again". The Guardian News and Media. May 11, 2017.
  4. ^ 钱钢: 钱钢语象报告：党媒关键词温度测试，2017-02-23，微信公众号“尽知天下事”
  5. ^ China Britain Business Council: One Belt One Road
  6. ^ "One Belt One Road" (PDF). China-Britain Business Council. {{cite web}}: Cite has empty unknown parameter: |dead-url= (help)
  7. ^ http://www.ejinsight.com/20160412-getting-lost-one-belt-one-road/
  8. ^ a b Our bulldozers, our rules, The Economist, 2 July 2016
  9. ^ World Pensions Council (WPC) Firzli, Nicolas (February 2017). "World Pensions Council: Pension Investment in Infrastructure Debt: A New Source of Capital". World Bank blog. Retrieved 13 May 2017.
  10. ^ World Pensions Council (WPC) Firzli, M. Nicolas J. (October 2015). "China's Asian Infrastructure Bank and the 'New Great Game'". Analyse Financière. Retrieved 5 February 2016.
  11. ^ Based on <一帶一路規劃藍圖> in Nanfang Daily
  12. ^ "Integrating #Kazakhstan Nurly Zhol, China's Silk Road economic belt will benefit all, officials say". EUReporter.
  13. ^ "Sri Lanka Supports China's Initiative of a 21st Century Maritime Silk Route".
  14. ^ Shannon Tiezzi, The Diplomat. "China Pushes 'Maritime Silk Road' in South, Southeast Asia - The Diplomat". The Diplomat.
  15. ^ "Reflections on Maritime Partnership: Building the 21st Century Maritime Silk Road".
  16. ^ "Xi in call for building of new 'maritime silk road'[1]-chinadaily.com.cn".
  17. ^ Jeremy Page (8 November 2014). "China to Contribute $40 Billion to Silk Road Fund". WSJ.
  18. ^ "CMEC签署肯尼亚基佩托风电项目". {{cite web}}: Cite uses deprecated parameter |authors= (help)
  19. ^ "Vision and Actions on Jointly Building Belt and Road". Xinhua. March 29, 2015.
  20. ^ https://tribune.com.pk/story/1381733/cpec-investment-pushed-55b-62b/
  21. ^ a b Hussain, Tom (19 April 2015). "China's Xi in Pakistan to cement huge infrastructure projects, submarine sales". McClatchy News. Islamabad: mcclatchydc. Retrieved 16 May 2017.
  22. ^ a b Kiani, Khaleeq (30 September 2016). "With a new Chinese loan, CPEC is now worth $57bn". Dawn. Retrieved 19 November 2016.
  23. ^ "CPEC: The devil is not in the details".
  24. ^ "Ecnomic corridor: Chinese official sets record straight". The Express Tribune. 2 March 2015.
  25. ^ Ramachandran, Sudha (16 November 2016). "CPEC takes a step forward as violence surges in Balochistan". www.atimes.com. Retrieved 19 November 2016.
  26. ^ Wan, Ming (2015-12-16). The Asian Infrastructure Investment Bank: The Construction of Power and the Struggle for the East Asian International Order. Palgrave Macmillan. p. 70. ISBN 9781137593887.
  27. ^ "One Belt and One Road". Xinhua Finance Agency. Retrieved 2016-04-13.
  28. ^ "Commentary: Silk Road Fund's 1st investment makes China's words into practice". english.gov.cn. Retrieved 2015-07-15.
  29. ^ "Baidu: One Belt One Road". baike.baidu.com. Retrieved 2017-02-04.
  30. ^ Wang Huning; et al. (29 April 2015). "Xi Jinping Holds Talks with Representatives of Chinese and Foreign Entrepreneurs Attending BFA Annual Conference". PRC Ministry of Foreign Affairs. . Retrieved 9 May 2015.
  31. ^ M. Nicolas J. Firzli World Pensions Council (WPC) Director of Research quoted by Andrew Mortimer (14 May 2012). "Country Risk: Asia Trading Places with the West". Euromoney Country Risk. . Retrieved 5 May 2017.
  32. ^ M. Nicolas J. Firzli (8 March 2011). "Forecasting the Future: The BRICs and the China Model". International Strategic Organization (USAK) Journal of Turkish Weekly. . Retrieved 9 May 2017.
  33. ^ Firzli, M. Nicolas J. (2013). "Transportation Infrastructure and Country Attractiveness". Revue Analyse Financière. Paris. Retrieved 26 April 2014.
  34. ^ Firzli, M. Nicolas J. (2015). "China's AIIB, America's Pivot to Asia & the Geopolitics of Infrastructure Investments". Revue Analyse Financière. Paris. Retrieved 1 October 2015.
  35. ^ Grober, Daniel (February 2017). "New Kid On The Block: The Asian Infrastructure Bank". The Carter Center US-China Perception Monitor. Retrieved 13 May 2017.
  36. ^ Ma, Lie (11 April 2016). "University alliance seeks enhanced education co-op along Silk Road". China Daily. Retrieved 18 September 2016.
  37. ^ Yojana, Sharma (12 June 2015). "University collaboration takes the Silk Road route". University World News. Retrieved 18 September 2016.
  38. ^ Ma, Lie (12 November 2015). "Chinese and foreign law schools launch New Silk Road alliance". China Daily. Retrieved 18 September 2016.
  39. ^ "一带一路领导班子"一正四副"名单首曝光". Ifeng. April 5, 2015.
  40. ^ Dinesh, Singh Rawat. "Know Why China is All Out for Belt & Road Concept". No. Online. ABC Live. ABC Live. Retrieved 13 May 2017.
  41. ^ Peter Wells, Don Weinland, Fitch warns on expected returns from One Belt, One Road, Financial Times, 2017-01-26
  42. ^ Jamie Smyth, Australia rejects China push on Silk Road strategy, Financial Times, 2017-03-22
  43. ^ "Lawmakers should stop CY Leung from expanding govt power". EJ Insight.
  44. ^ "We get it, CY ... One Belt, One Road gets record-breaking 48 mentions in policy address". South China Morning Post. 13 January 2016.
  45. ^ "【政情】被「洗版」特首辦官員調職瑞士".
  46. ^ "2016 Policy Address: too macro while too micro". EJ Insight.
  47. ^ "Leung obsession with Belt & Road Alliance prompts BRA joke". EJ Insight.
  48. ^ "TVMost to livid state media: You break our heart but thanks". Hong Kong Economic Journal. 15 January 2016.
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