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China’s One Belt One Road Initiative : the Silk Road 2.0 ?
Since 2013 when President Xi Jinping first outlined the One Belt One Road initiative, it has attracted a huge amount of attention in the business community.
But little is known about what it means in concrete, commercial terms, whether within or beyond China. “One Belt One Road” (OBOR) is an initiative which aims to improve and create new trade routes, links and business opportunities with China, passing through more than 60 countries along the way, across Asia, Europe, the Middle East and Africa.
It is also described as a sort of upgraded version of the original Silk Road, established more than 2,000 years ago : a vast network of trade routes that promoted exchange between Asia, Africa, and Europe.
China’s new OBOR is touted as reviving the same concept, and thus as supporting global economic growth.
Gordon French, group general manager and head of global banking and markets at HSBC, estimates China will initially provide some US$240 billion to finance the first phase of the project.
Hong Kong tipped as the financial hub for China’s One Belt, One Road Initiative
Hong Kong is seen as the most likely financial center to recycle savings from China and provide resources for the gigantic OBOR project.
As China’s Belt and Road Initiative will strengthen economic cooperation in the vast regions of Asia, Africa and Europe, this huge infrastructure development is likely to open up a wealth of opportunities for a great number of countries and regions.
Last month, Xi outlined plans to direct as much as US$123 billion to construct roads, railways, ports and pipelines in more than 60 countries.
Thailand has recently sought closer relations with China, such as in defense procurement and infrastructure development. Just last week, Prime Minister Prayuth Chan-Ocha used his absolute power to hasten a delayed US$5.2 billion high-speed rail joint venture with China. He later rejected criticism that he overrode due process and said the order was in the nation’s best interests.
Economic benefits for Asean countries
During the Panel Discussion on Prospects for ASEAN, China’s Belt and Road Initiative came under scrutiny. More than 70 per cent (70.9%) of participants believe that the Initiative will bring significant economic benefits to most, if not all, ASEAN countries.
But for the time being, the global financial community is increasingly focused on China’s growth slowdown, seen as the biggest factor likely to impact Asia’s development.
Cooperative initiatives such as China’s “Belt and Road” Initiative, TPP and RCEP only accounted for 27% of the vote in an instant poll among participants at the AFF summit, against 44.8% for the slower growth trajectory in the Chinese economy.
Right now there is a lot of concern about the short-term performance of the Chinese economy, but the One Belt One Road brings a long-term perspective with better infrastructure, investment and economic development.
said yesterday Professor K C Chan, Secretary for Financial Services and the Treasury (HKSAR) during a briefing with journalists
One Belt, or One Road ?
Just to be clear : the Belt is actually designed to be a road, but the Road is actually a sea route…
In short, the One Belt component t is a land route designed to connect China with Central Asia, Eastern and Western Europe. It will link China with the Mediterranean Sea, the Persian Gulf, the Middle East, South Asia and South-East Asia
The oddly named One Road component is a sort of 21st-Century Maritime Silk Road that runs from China’ east coast to Europe passing through the South China Sea and the Indian Ocean.
Hong Kong aims to become a “super-connector” for the One Belt One Road plan
The China-led Asian Infrastructure Investment Bank (AIIB) will play an important role in financing the One Belt, One Road. But the resources of the new institution won’t be sufficient to fund the massive investment of this pharaonic development.
This is the main reason why Hong Kong aspires to fulfill the role of a “super-connector” between the Mainland and the a population that covers two-fifths of the world’s land mass and is host to some 60 per cent of the world’s population.
According to DBS chief executive Piyush Gupta, the Belt and Road initiative, “could be a game changer not unlike what the US did with the Marshall Plan after the Second World War”.
His words were echoed by Laura Cha, chairman of the Financial Services Development Council, who also believes Hong Kong will have an important role to play.
According to Mrs Chan, Hong Kong is well positioned to provide Mainland enterprises that are “going global” with financial and other professional services to support their international investment.
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