China’s “One Belt, One Road” (OBOR) concept for regional cooperation, which encompasses 65 countries along the land and maritime Silk Road routes, highlights China’s economic and strategic objectives as it faces slower growth and seeks to promote new growth drivers.
“This is beyond economics,” said Jin Liqun, President of the Beijing-based Asian Infrastructure Investment Bank (AIIB), in a session on the OBOR project at the Annual Meeting of the New Champions 2016. “This is more a strategic, geopolitical issue. It boils down to one single objective: peace and prosperity for people.”
“One of the main reasons ‘One Belt, One Road’ was created is to do something about [China’s] overcapacity domestically,” explained political scientist Ian Bremmer, President of Eurasia Group in the United States. OBOR has the backing of China’s leadership and is focused in large part on developing infrastructure in countries along the routes, which would bolster their commercial relations with China. “The infrastructure is badly needed,” Bremmer reckoned. “This fills a vacuum.”
The strategic dimension of OBOR, however, is important, he observed. “You are talking about China going out and creating supply chains that it will be eager to protect. It won’t be ‘not my problem’ anymore. The Chinese leadership will be much more in support of stability. The world absolutely welcomes this and needs it.” But initially, there may not be many investment-ready projects to give substance to OBOR, Bremmer cautioned. “The economics may be disappointing for a lot of people over the next decade.”
While it may be difficult to develop viable and profitable ventures, there are many such OBOR-aligned projects underway already, including ports, industrial plants and other infrastructure, asserted Benedikt Sobotka, Chief Executive Officer of Eurasian Resources Group in Luxembourg. “There is a strategy – and the Chinese government has been implementing it. It is absolutely impressive how systematically and efficiently this initiative is being implemented.” China, Sobotka remarked, is returning to the economic and commercial prominence it enjoyed in the days of the ancient Silk Road.
For Zhang Bingjun, Corporate Chairman of Tianjin TEDA Construction Group in China, OBOR is indeed a reality. His company, for example, has been collaborating with the Egyptian government on developing an industrial development zone near the Suez Canal. Many Chinese enterprises, Zhang noted, are now exploring opportunities in the international market. “The launching of this strategy is driven by the demand of Chinese companies,” he said. “China’s leaders have proposed ‘One Belt, One Road’ after in-depth analysis of the Chinese and world economies and with a holistic understanding of the countries and the complementarity of the countries in the region.”
China’s leaders have put forward a long-term vision, said Li Daokui, Dean of Schwarzman College at Tsinghua University in Beijing. By investing in infrastructure development in OBOR countries, China aims to promote the flow of capital, goods and commodities across the region. If the plan is successful over the coming decades, the countries in the region “will form a highly effective, efficient and socially developed region like the EU,” Li said. “The region will become highly converged economically rather than be in conflict.” He warned that China will need to be careful with its investments. “We need to have good environmental protection, or else local people will have regrets.”
China fully understands that responsibility, Jin stressed. The AIIB, another China-led initiative that parallels OBOR, will be involved to a large extent in funding projects in the region. “Any project that would be good for Asia, whether in or outside of Asia, would be good for the bank,” he said. “All projects which we can consider must be financially sustainable, environmentally friendly and socially acceptable.” Despite scepticism and suspicion among some critics of the AIIB and OBOR, China is aiming for mutual benefits and transparency, Jin insisted. “China is the proponent, initiator and promoter. But China itself cannot do all this. China proposes but does not impose. It is a response to the need. The need may not have been well expressed, but China has now expressed it.”