VOL 24 NO 192 REGD NO DA 1589 | Dhaka, Saturday, May 27 2017
http://print.thefinancialexpress-bd.com/2017/05/27/173572
OBOR to propel China to global leadership M. S. Siddiqui
A group photo of the participants in the OBOR Forum held in Beijing, China on May 14-15, 2017.
With nearly 10 per cent share in the global trade, China continues its drive to dominate the global trade. It is becoming more influential economically, diplomatically and geo-strategically with a shift from 'low-profile' international strategy to take on a greater role in global affairs. Its initiative is aimed at enhancing trade and political relations with Europe and Asia through export of its capital, technology and service globally.
On the other hand, China needs raw materials, oil from the Middle East, Central Asia and Africa and South-East Asia. China's international transportation routes, relating to exports or imports, have to be secure and stable.
Since 2013, China has taken two major initiatives - the Silk Route Economic Belt (SREB) and the 21st-century Maritime Silk Route (MSR), initially labelled under the slogan, 'One Belt, One Road' (OBOR). The term 'Silk Road' has been in use since the 19th century and refers to the traditional East-West trading network across Eurasia and the Indian Ocean region that flourished prior to the 16th century. This network comprised both overland and maritime trading routes.
The new Silk Road proposes to link China with Europe allowing trade and transport corridors across Central Asia and Russia. The Maritime Silk Road includes maritime links through the Straits of Malacca to the Indian Ocean, the Middle East and Africa. These ambitious plans are proposed to establish the Silk Road Economic Belt, aimed at facilitating land-based trade across the Eurasian landmass, encompassing three of the five routes: (i) linking China to Europe through Central Asia and Russia; (ii) connecting China with the Middle East through Central Asia; and (iii) bringing together China and Southeast Asia, South Asia and the Indian Ocean. The 21st CMSR uses Chinese coastal ports to: (iv) link China with Europe through the South China Sea and Indian Ocean; and (v) connects China with the South Pacific Ocean through the South China Sea.
By the term "Silk Road", the Chinese government emphasises the commercial and open nature of the modern version of this network. At the same time, the term evokes memories of China's past as a strong and prosperous country - a status China's current leadership is trying to restore under a drive it calls the Chinese Dream. The Chinese sometimes describe it as the country's 'second opening' after the 1979 model of opening up the economy towards the market system which led to China's rapid growth over three decades.
The other main element in this framework consists primarily of infrastructure that facilitates overland East-West trade such as railways, roads and pipelines.
The plan includes huge infrastructure projects in other countries along the routes, accompanied with a host of bilateral and regional trade agreements. The planned projects will focus on development of an array of assets including ports, roads, railways, airports, power plants, oil and gas pipelines and refineries and Free Trade Zones, etc., as well as support for IT, telecom and financial infrastructure.
The countries along the belt and road would be able to improve the connectivity of their infrastructure construction plans and form an infrastructure network, bringing together all sub-regions in Asia, Europe and Africa, taking into account each other's security and sovereignty concerns. The focus will also be on people-to-people relations upon implementation of this initiative, allowing extensive cultural and academic exchanges.
In short, the belt and road initiative would be devoted to enhancing financial integration between countries. There are plans to build a currency stability system, investment and financing system and credit information system in Asia. Financial institutions such as the Asian Infrastructure Investment Bank and BRICS New Development Bank have been established to expand the scope of multilateral financial cooperation. Also, financial regulation cooperation is addressed through increased cross-border exchange and cooperation between credit rating institutions and systems.
According to the OBOR implementation guideline released by China's National Development and Reform Commission (NDRC) in March 2015, development plans along the trade route will seek to improve connectivity in five areas: policy, infrastructure, trade, currency and people.
The focus of these five geographical routes is on developing and strengthening six international economic corridors. These are:
THE NEW EURASIA LAND BRIDGE ECONOMIC CORRIDOR: An international railway line from China's Jiangsu province through Xinjiang province to Rotterdam in the Netherlands. Together with the existing portion of the corridor in China, the line will cross over Kazakhstan, Russia, Belarus and Poland to reach coastal ports in Europe. The new Eurasian Land Bridge benefits China by providing faster access to the EU market. The current average of five weeks for container shipment will be reduced to three weeks. For EU companies it provides a more cost-effective route for exports and an efficient way for them to import their own production output that has been offshored to China.
THE CHINA-MONGOLIA-RUSSIA ECONOMIC CORRIDOR: In July 2015 at a summit in Ufa, Russia, the "Mid-term Roadmap for Development of Trilateral Co-operation between China, Russia and Mongolia" was officially adopted. Long established economic ties between the three countries connected by land will be strengthened by commitments to establish the Silk Road Economic Belt, renovate Russia's Eurasia Land Bridge and developing the proposed Mongolia's Steppe Road. Alongside strengthening rail and highway connectivity and construction, advance customs clearance and transport facilitation and cross-national co-operation in transportation will be taken care of.
CHINA-CENTRAL ASIA-WEST ASIA ECONOMIC CORRIDOR: The China-Central Asia-West Asia Economic Corridor runs from Xinjiang in China to the railway networks of Central Asia and West Asia before reaching the Mediterranean coast and the Arabian Peninsula. This economic corridor primarily covers five Central Asian countries (Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan) as well as Iran and Turkey.
THE CHINA-INDOCHINA PENINSULA ECONOMIC CORRIDOR: Chinese Premier Li Keqiang has proposed to deepen the relations between China and the five countries in the Indochina Peninsula by: (i) jointly planning and building an extensive transportation network; (ii) creating a new mode of co-operation for fundraising; and (iii) promoting sustainable and co-ordinated socio-economic development. The current projects include building of nine cross-national highways along the Greater Mekong Delta that will connect east and west and link the north to the south. An international rail line running from Nanning to Hanoi in Vietnam has also been opened and air routes to several Southeast Asian cities are under consideration.
THE CHINA-PAKISTAN ECONOMIC CORRIDOR: Since the concept of the China-Pakistan Economic Corridor was first raised by Premier Li Keqiang during his visit to Pakistan in May 2013, the plans have evolved. Currently a long-term plan between the two countries is to build highways, railways, oil and natural gas pipelines and optic fibre networks that connects Kashgar in China's north-western territory of Xinjiang with Pakistani port of Gwadar. The two countries issued a joint declaration in Islamabad in April 2015, committing to proactively advance key co-operation projects including renovating existing highways and building new expressways and a new international airport.
BANGLADESH-CHINA-INDIA-MYANMAR ECONOMIC CORRIDOR: This economic corridor is an initiative led jointly by China and India. A Bangladesh-China-India-Myanmar Economic Corridor Joint Working Group has been formed. The first meeting, convened in December 2013, resulted in several co-operation agreements. Consensus has been reached on co-operation in transportation infrastructure, investment and commercial circulation and people-to-people connectivity.
These ambitious programmes to be implemented at an investment of $300b will help China become an economic super power more influential than the USA. Its diplomatic and commercial interests in the regions concerned will thus be maximised.
The writer is a Legal Economist mssiddiqui2035@gmail.com