One Belt, One Road: The Silk Road
(OBOR)
by Moritz Rudolf
In autumn 2013, Chairman of the CCP and President of the PRC, Xi Jinping, announced the “One Belt, One Road (OBOR)” initiative. This core element of a more pro-active
Chinese foreign policy comprises of the land-based “Silk Road Economic Belt”, and the “Maritime Silk Road of the 21st Century”.
The OBOR initiative by far exceeds the development of linear connections between Europe and Asia. In fact, Beijing strives to establish a comprehensive Eurasian infrastructure network.
Trans-regional corridors are to link the land and sea routes. As the primary investor and architect of the Eurasian infrastructure networks, Beijing is creating new China-centred pipeline, railway and transport networks. In addition to this the Chinese leadership is focused on the expansion of deep-sea ports, particularly those in the Indian Ocean.
With the OBOR the Chinese leadership is primarily pursuing three main goals:
· Economic diversification
· political stability and the
· development of a multipolar global order
From an economic perspective, China strives that the development of new trade routes, markets and energy sources will result in growth impulses and at the same time reduce dependencies. Projects linked to the OBOR are to once again fill the order books of Chinese SOEs which are presently suffering from overcapacities. Furthermore, with the expansion of the Eurasian transport infrastructure Beijing aims to lay the foundations for China-centered production networks, for instance with Chinese companies relocating production to South-East Asia.
Politically speaking, the Chinese leadership hopes that the
OBOR initiative stabilizes Beijing’s western Provinces, as well as the neighbouring trouble spots, like Pakistan or Afghanistan. As China finances most infrastructure projects Beijing is also able to increase its political influence. Many countries along the Silk Roads depend on Chinese infrastructure investments.
The overarching goal is to be an active part in the establishment of a multipolar world-order.
China seeks to play a constructive role in the reform the international system. The OBOR-Initiative is intended to be the foundation of a new type of international relations. The Chinese leadership speaks of the establishment of a “community of common destiny”. Core elements are more connectivity in Eurasia, “win-win-cooperation”, “mutual progress and prosperity” as well as upholding the UN principle of non-interference in the internal affairs of other states.
So far, the OBOR-initiative has not been imbedded in an overarching international framework and primarily is a concept, a meta-strategy. It is still unclear whether the initiative will be realized through a bilateral or multilateral process.
The Chinese leadership speaks of an inclusive process, which means, that all involved parties are invited to shape and promote the
“Silk Road Economic Belt” and the “Maritime Silk Road of the 21 Century” in line with their own economic interests.
First steps of institutionalization are already emerging. The recently established AIIB and the Silk Road Fund serve to finance the projects. In May, China and Russia agreed to link the Silk Road Initiative with the Russian Far East Development Programme for Siberia. In addition to this Moscow and Beijing agreed to link the Eurasian Economic Union with OBOR. Moreover, in June
Hungary and China signed a Memorandum of Understanding to jointly promote the Silk Road Initiative.
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Thirty years of unprecedented growth
In just 30 years, China has developed from a poor inward-looking agricultural country to a global manufacturing powerhouse. Its model of investing and producing at home and exporting to developed markets has elevated it to the world’s second-largest economy after the USA.
Now faced with a slowing economy at home, China’s leadership is looking for new channels to sustain its appetite for growth at a time when developing neighbours are experiencing rapidly rising demand.
A new economic paradigm emerges
At the heart of One Belt, One Road lies the creation of an
economic land belt that includes countries on the original Silk Road through Central Asia, West Asia, the Middle East and Europe, as well as a
maritime road that links China’s port facilities with the African coast, pushing up through the Suez Canal into the Mediterranean.
The project aims to redirect the country’s domestic overcapacity and capital for regional infrastructure development to improve trade and relations with Asean, Central Asian and European countries.
Historical roots
The Silk Road was a network of trade routes, formally established during the Han Dynasty. The road originated from Chang'an (now Xian) in the east and ended in the Mediterranean in the west, linking China with the Roman Empire.
As China’s silk was the major trade product, German geographer Ferdinand von Richthofen coined it the Silk Road in 1877. It was not just one road but rather a series of major trade routes that helped build trade and cultural ties between China, India, Persia, Arabia, Greece, Rome and Mediterranean countries.
It reached its height during the Tang Dynasty, but declined in the Yuan dynasty, established by the Mongol Empire, as political powers along the route became more fragmented. The Silk Road ceased to be a shipping route for silk around 1453 with the rise of the Ottoman Empire, whose rulers opposed the West.
Rolling out the red carpet
Building a community of common destiny: Chinese President Xi Jinping and South Korea’s President Park Geun-hye inspect the honour guard of Chinese army, navy and air force personnel ahead the first China-Korea summit in Beijing. Source: South Korean Foreign Affairs Office
Making friends
The Asia Development Bank estimates that Asia needs US$ 8 tn to fund infrastructure construction for the 10 years to 2020. China well knows its development is linked to Asia and beyond and, in part, is banking its future on responding to its neighbours’ huge infrastructure needs via One Belt, One Road.
Meanwhile, China’s growing domestic market means the chance for the region and the world to capitalise by providing goods and services. The
initiative is not without its challenges; cooperation and coordination with partner countries over the long term are paramount for it to be a lasting legacy.
Key to One Belt, One Road’s success is the development of an unblocked road and rail network between China and Europe.
The plan involves more than 60 countries, representing a third of the world’s total economy and more than half the global population.
We have ranked each country’s relationship with China from 1 to 5 based on political, economic and historical factors. China’s ultimate goal is to extend the initiative to Africa and Latin America.
