What is the Belt and Road Initiative (OBOR)?
The Belt and Road Initiative, the brainchild of Chinese President Xi Jinping, is an ambitious economic development and business project focused on improving connectivity and cooperation among multiple countries across Asia, Africa and the European continent. Dubbed the “Project of the Century” by Chinese authorities, the Belt and Road Initiative spans some 78 countries.
- The Belt and Road Initiative is a project dedicated to improving connectivity and cooperation among Asian, African and European countries.
- Over the years, the scope of the Belt and Road has expanded to include new territories and development plans.
- Kyrgyzstan and Tajikistan support the Belt and Road Initiative thanks to massive Chinese investment in local transmission projects in these countries.
How the Belt and Road works
Originally announced in 2013 to restore the ancient Silk Road linking Asia and Europe, the project has expanded over the years to include new territories and development plans. Also known as the Belt and Road Initiative (BRI), the project involves building a large network of roads, railways, seaports, power grids, oil and gas pipelines and related infrastructure projects.
The project consists of two parts. The first, known as the “Silk Road Economic Belt,” is dominated by land routes and is expected to connect China with Central Asia, Eastern and Western Europe. The second, known as the “21st Century Maritime Silk Road,” is based on the sea and is expected to link China’s southern coast to the Mediterranean, Africa, Southeast Asia and Central Asia. The names are confusing because “One Belt” is actually a network of roads, and “Road” is a sea route.
They contain the following six economic corridors:
- New Eurasian Land Bridgeconnecting western China and western Russia
- China-Mongolia-Russia Corridorconnecting northern China and eastern Russia via Mongolia
- China-Central Asia-West Asia Corridorconnecting western China and Turkey via Central and Western Asia
- China-Indochina Peninsula Corridorconnecting South China and Singapore via Indochina
- China-Pakistan Corridorconnecting southwest China via Pakistan to the Arabian Sea route
- Bangladesh-China-India-Myanmar Corridorconnecting southern China and India via Bangladesh and Myanmar
In addition, the Maritime Silk Road connects the Chinese coast with the Mediterranean Sea via Singapore-Malaysia, the Indian Ocean, the Arabian Sea and the Strait of Hormuz.
The Belt and Road Initiative spans 78 countries.
Special Considerations: The Importance of the Belt and Road Initiative for China
The Belt and Road Initiative is important to China because it aims to boost domestic growth and is part of China’s economic diplomacy strategy. By linking underdeveloped border regions such as Xinjiang with neighboring countries, China is expected to boost economic activity. The Belt and Road Initiative is expected to open up and create new markets for Chinese goods. It will also enable manufacturing powerhouses to easily control cost-effective routes for exporting materials.
Overcapacity can be effectively guided to areas along the “Belt and Road”. China has announced more than $1 trillion in investment in various infrastructure projects, funding it through low-cost loans to participating countries.
Many participating countries, such as Kyrgyzstan and Tajikistan, support the Belt and Road Initiative because of China’s large investment in local transmission projects in these countries. Landlocked Nepal recently joined the BRI by signing an agreement that will help it improve cross-border connectivity with China, and Pakistan will benefit from the $46 billion China-Pakistan Economic Corridor (CPEC), which will connect Southwest China and Pakistan allow access to the Arabian Sea route.
While China continues to see the Belt and Road as an all-encompassing regional development project, other countries see it as a strategic move by Asian powerhouses to gain influence and control at the regional level and play at the global level through construction and development greater effect. Take control of a China-centric trade network.
China sees this as an opportunity to become a regional leader. In the future, as usage increases in the Belt and Road region, we may see an appreciation of the renminbi.