Belt and Road initiative: the momentous feature for China and the region

Analytics | Muhammad Saeed | 30-05-2017, 14:30

Belt and Road initiative: the momentous feature for China and the regionOn May 14-15, 2017, Chinese President Xi Jinping hosted the leaders of 28 states and representatives from many other countries at the Belt and Road Forum in Beijing. Experts consider this event as an important milestone for China because Chinese investment projects in many countries are transforming from planning to development phase. 

For several years now, security of main energy and trade routes remained as the top most priority and a matter of national security for Beijing. Under this strategy, Xi administration has launched the initiatives to expand its communication links as the model of ancient Silk Route and Maritime Silk Route.   

Rapid industrial growth and economic development make China an influential economic power in the world. Today the People`s Republic of China realizes itself as the center of world and sole power of East Asia. The 21st century has brought prosperity to the country, which has inherited spirits of millennia-old civilizational superiority and reminiscences as the “Middle Kingdom”. And the ‘One Belt, One Road’ (OBOR) is a prime project of Chinese dream of global connectivity. 

The ‘One Belt, One Road’ (OBOR) is a project estimated at $140 billion that would provide land-based pan-Eurasian connectivity. In fact, the OBOR initiative has a globally strategic significance. This project would link countries with a 4.4 billion population (63% global population) and economic value of $21 trillion (29% global economic volume). According to Chinese president Xi Jinping, the OBOR would be developed with consultation of countries included on this route; their concerns and priorities will be addressed to integrate all of their proposed development strategies with that of this project. This project is not solo of China; vice versa, it is the project of every regional country present along its routes and everyone can join it due to its open nature.

The OBOR is aimed not only at mere economic expansion but also has important geopolitical repercussions. For example, the New Eurasian Land Bridge is considered as “faster than sea and cheaper than air.” Similarly, development of Corridor through China - Central Asia - West Asia will provide access to important hydrocarbon resources present in Central Asia. And above all, China-Pakistan Economic Corridor (CPEC) which is the leading component of the OBOR and will offer China a short and easy access to Middle East and Africa via Gwadar. 

The OBOR brings a strategic attention which boosts Chinese companies for going overseas in order to search untapped markets and investment opportunities. Under this rationale, China plans to link free-trade agreements with more than sixty countries present along with the OBOR route. So far, Chinese government has finalized and signed twelve free-trade contracts with Pakistan, Chile, Peru, Costa Rica, Iceland, Switzerland, Hong Kong, Singapore and Taiwan. While, China is also effectively involved in negotiation process for eight agreements with Japan, Korea, Australia, Sri Lanka, Norway, the Regional Comprehensive Economic Partnership, ASEAN and the Gulf Cooperation Council.

Economically, China is not only building ports and harbors or road networks beyond its borders but it is also establishing its own financial structure. As regards, formation of the Asian Infrastructure Investment Bank (AIIB) is an important milestone. Many states are willing to join this bank, while experts are claiming that the AIIB is a vibrant move to counter the influence of Bretton Woods System and (Japanese) Asian Development Bank. The AIIB will also obliging to internationalize Chinese Yuan. Similarly, for the first time in the history, China has initialized many projects across the globe. From Europe to Asia-Pacific and from Africa to Latin America, China is investing trillions of dollars in various infrastructure projects.   

Ultimately, China has determinations to enlarge its sphere of influence from east to west, in coming decades. And for this purpose, it is increasing its economic ties and investing in infrastructure development within and beyond its region. While along with it, China is projecting its power and initiating strategic partnerships with different countries. These posters are unacceptable for America and its regional allies in Asia. 

The 21st century is Asian century and China is the important player in Asia. Global shift of wealth from west to east, rapid economic growth and massive investments in connectivity projects are changing the geopolitical scenarios in the region. Regional states have golden opportunities to strengthen its socio-economic sectors. But in order to achieve maximum benefits, in many countries domestic political stability and better law and order situation is the prerequisite. In order to tackle transnational threats all regional states must work together with higher level of farsightedness and consistency. 


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Muhammad Saeed

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