BELT & ROAD INITIATIVE
The Belt and Road Initiative (BRI) was originally called the One Belt One Road (OBOR) or the Silk Road Economic Belt and the 21st-century Maritime Silk Road, It is a development strategy involving infrastructure development and investments in countries in Europe, Asia, Africa and beyond. "Belt" refers to the overland routes for road and rail transportation, called "the Silk Road Economic Belt"; whereas "road" refers to the sea routes, or the 21st Century Maritime Silk Road.
The purpose of the belt and Road initiative is a bid to enhance regional connectivity and embrace a brighter future for all counties so connected and hoist and many impoverished people in the less developed regions into the middle income class.
The accent is on the design and building of of infrastructure, construction materials, railways and highways, automobiles, power grids, education and real estate. The Belt and Road Initiative is one of the largest infrastructure and investment projects in history, covering more than 68 countries, including 65% of the world's population and 40% of the global GDP (gross domestic product) .
The Belt and Road Initiative has the potential to accelerate economic growth across the Asia Pacific area and Central and Eastern Europe requiring up to US$900 billion of infrastructure investments per year over the next decade.
The Belt and Road initiative has been suggested by China in 2013 and will be financed by various sources, including the recently launched AIIB, the Asian Infrastructure Investment Bank, of which more than 96 major nations are members and have subscribed to. Including:
Afghanistan, Australia ,Azerbaijan, Bahrain, Bangladesh, Brunei Darussalam, Cambodia, China, Cyprus, Fiji, Georgia, Hong Kong, India, Iran, Israel, Jordan, Kazakhstan, Korea, Kyrgyz Republic, Lao PDR, Malaysia, Maldives, Mongolia, Myanmar, Nepal, New Zealand, Oman,Pakistan, Philippines, Qatar, Russia, Samoa, Saudi Arabia, Singapore, Sri Lanka, Tajikistan, Thailand, Turkey, United Arab Emirates, Uzbekistan, Vanuatu, Vietnam and others
The Belt and Road projects are available to all nations, and aims to be independent from political, religious, economic, reciprocal, trade and other issues.
The Belt and Road initiative aims to design and build infrastructure connecting nations and to facilitate the movement of products and people enabling to the benefit of all without any strings attached.
The Belt and Road Initiative is geographically structured along several land corridors, and the Maritime Silk Road. Infrastructure corridors encompassing around 60 countries, primarily in Asia and Europe but also including Oceania and East Africa, and is estimated to cost an estimated US$4–8 trillion.
The initiative calls for the integration of the region into a cohesive economic area through building infrastructure, increasing cultural exchanges, and broadening trade.
The North Belt would go through Central Asia and Russia to Europe. The Central belt goes through Central Asia and West Asia to the Persian Gulf and the Mediterranean. The South belt traverses China and then to Southeast Asia, South Asia, to the Indian Ocean through Pakistan. The Chinese One Belt strategy will integrate with Central Asia through Kazakhstan's infrastructure program.
The land corridors include:
- The New Eurasian Land Bridge runs from Western China to Western Russia through Kazakhstan, and includes the Silk Road Railway through China's Xinjiang Autonomous Region, Kazakhstan, Russia, Belarus, Poland and Germany.
- The China–Mongolia–Russia Corridor will run from Northern China to the Russian Far East. The Russian government-established the Russian Direct Investment Corporation, partnered in 2012 to create the Sino-Russian Investment Fund, which concentrates on opportunities in bilateral integration.
- The China–Central Asia–West Asia Corridor will run from Western China to Turkey.
- The China–Indochina Peninsula Corridor will run from Southern China to Singapore.
- The Bangladesh-China-India-Myanmar (BCIM) Economic Corridor, runs from southern China to Myanmar and is officially classified as "closely related to the Belt and Road Initiative".
- The China–Pakistan Economic Corridor, also classified as "closely related to the Belt and Road Initiative," which is a US$62 billion collection of infrastructure projects throughout Pakistan that aims to rapidly modernize Pakistan's transportation networks, energy infrastructure, and economy. On November 13, 2016, CPEC became partly operational when Chinese cargo was transported overland to Gwadar Port for onward maritime shipment to Africa and West Asia.
The 21st Century Maritime Silk Road
The Maritime Silk Road, are the sea route corridors. It is a complementary initiative aimed at investing and fostering collaboration in Southeast Asia, Oceania, and North Africa, through several contiguous bodies of water: the South China Sea, the South Pacific Ocean, and the wider Indian Ocean area.
Ice Silk Road
In addition to the Maritime Silk Road, Chinese Premier Xi Jinping also urged the close cooperation between Russia and China to carry out the Northern Sea Route cooperation to realize an "Ice Silk Road" to foster development in the Arctic region. China COSCO Shipping Corp. has completed several trial trips via Arctic shipping routes, the transport departments from both countries are constantly improving policies and laws related to development in the Arctic, and Chinese and Russian companies are seeking cooperation on oil and gas exploration in the area and to advance collaboration on infrastructure construction, scientific expeditions and tourism.
Fully integrated electricity grids
The super grid project aims to develop six ultra high voltage electricity grids across China, north-east Asia, Southeast Asia, south Asia, central Asia and west Asia. The wind power resources of central Asia will form one component of this grid.
Typical examples of successful infrastructure improvement projects
In May 2014, agreement was reached to build the Mombasa–Nairobi Standard Gauge Railway connecting Mombasa to Nairobi. The railway cost US$3.2bn and was Kenya's biggest infrastructure project since independence. The railway cuts the journey time from Mombasa to Nairobi from 9 hours by bus or 12 hours on the previous railway to 4.5 hours. In May 2017, Kenyan President Uhuru Kenyatta called the 470 km railway a new chapter that "would begin to reshape the story of Kenya for the next 100 years". According to the Kenya Railways Corporation, the railway carried 1.3 million Kenyans with a 96.7% seat occupancy and 600,000 tons of cargo in its first year of operation. It is estimated that the railway line boosted the country's GDP by 1.5% and created 46,000 jobs for locals and trained 1,600 railway professionals.
Ethiopia's Eastern Industrial Zone is a manufacturing hub outside Addis Ababa that was built by China and occupied by factories of Chinese manufacturers. According to Chinese media and the vice director of the industrial zone, there were 83 companies resident within the zone, of which 56 had started production.
Construction commenced in October 2011 to replace the century-old Ethio-Djibouti Railways by constructing a new electric standard gauge Addis Ababa–Djibouti Railway and was completed in February 2012. The new railway line, stretching more than 750 kilometres (470 miles) and travelling at 120 km/h (75 mph), shortens the journey time between Addis Ababa and Dijbouti from three days to about 12 hours. The first freight service began in November 2015 and passenger service followed in October 2016.
Freight train services between China and Europe were initiated in March 2011. The service's first freight route linked China to Tehran. The China-Britain route was launched in January 2017. By 2018, the network had expanded to cover 48 Chinese cities and 42 European destinations, delivering goods both ways between China and Europe. The 10,000th trip was completed on 26 August 2018 with the arrival of freight train X8044 in Wuhan, PR China from Hamburg, Germany. The network was further extended southward to Vietnam in March 2018.
The China-Belarus Industrial Park is a 91.5 km2 (35.3 sq mi) special economic zone established in Smolevichy, Minsk in 2013. According to the park's chief administrator, 36 international companies have settled in the park as of August 2018 Chinese media claim the park will create 6000 jobs and be a city with 10,000 residents by 2020.
Indonesia's first high-speed rail project, the 140 km (87 mi) Jakarta-Bandung High Speed Rail was awarded in 2016, to the China Railway International company. The service will shorten the journey time between Jakarta and Bandung from more than three hours to forty minutes. The project, initially scheduled for completion in 2019, was delayed by land clearing issues. More than 2000 locals are engaged to work on the project.
The China–Pakistan Economic Corridor is a major Belt and Road Initiative project that encompasses investments in transportation, energy and maritime infrastructure such as harbours and ports.
Malaysia signed multiple investment deals with China, including a US$27 billion East Coast Rail Link project, pipeline projects worth more than $3.1 billion, as well as a $100 billion Forest City in Johor Bahru. With the recent change in government, some of these projects are being renegotiated.
Finance Minister Lim Guan Eng later announced that the East Coast Rail Link project was "still being reviewed" and further negotiated to see if drastic cost cuts are possible. The government also said it would continue to be part of China's BRI.
China's main investment in Sri Lanka was the Magampura Mahinda Rajapaksa Port, mostly funded by the Chinese government and built by two Chinese companies. It claims to be the largest port in Sri Lanka after the Port of Colombo and the "biggest port constructed on land to date in the century.
Construction of the 414 km (257 mi) Vientiane–Boten Railway began on 25 December 2016 and is scheduled to be completed in 2021. It will be the first overseas railway project that will be directly connected to China's railway network. Once operational, the Laos-China Railway will be Laos' longest and connect with Thailand to become part of the proposed Kunming–Singapore railway, extending from the city of Kunming and running through Thailand and Laos to terminate at Singapore. It is estimated to cost US$5.95 billion Laos's 30% stake will be mostly financed by loans from China.
In 2005, the Holley Group pharmaceutical company and Thai industrial estate developer Amata Group signed an agreement to develop the Thai-Chinese Rayong Industrial Zone. Since 2012, many solar, rubber, and industrial manufacturing plants in the zone have been established and the zone expects the number to increase to 500 by 2021. An important incentive has been Thailand's zero tax incentives on land use and export products as well as favorable labor costs, moreover, the zone created more than 3000 local jobs.
In December 2017, China and Thailand began the construction of a high-speed rail project linking the cities of Bangkok and Nakhon Ratchasima, which will be further extended to Nong Khai to connect with Laos, as part of the planned Kunming–Singapore railway.
During his 2016 policy address, Hong Kong chief executive CY Leung's announced his intention of setting up a Maritime Authority aimed at strengthening Hong Kong's maritime logistics in line with Beijing's economic policy.
Financial and research institutions
Asian Infrastructure Investment Bank
The Asian Infrastructure Investment Bank, first proposed by China in October 2013, is a development bank dedicated to lending for infrastructure projects. As of 2015, more than one trillion yuan (US$160 billion) of infrastructure projects were in the planning or construction stage.
The primary goals of AIIB,with an authorized capital of $100 billion, are to address the expanding infrastructure needs across Asia, enhance regional integration, promote economic development and improve the public access to social services. The board of governors is AIIB's highest decision-making body under the Asian Infrastructure Development Bank Articles of Agreement. 75% of the AIIB’s funds will come from Asian and Oceania countries. China is be the single largest stakeholder, holding 26% of voting rights.
On June 29, 2015, the Articles of Agreement of the Asian Infrastructure Investment Bank (AIIB), the legal framework was signed in Beijing. The proposed multilateral bank has an authorized capital of $100 billion, 75% of which will come from Asian and Oceania countries. China will be the single largest stakeholder, holding 26% of voting rights.
Silk Road Fund
In November 2014, plans were announced to create a US$40 billion development fund, to invest in businesses rather than lend money for projects. The Karot Hydropower Project in Pakistan (50 km (31 miles) from Islamabad) is the first investment project of the Silk Road Fund .The Sanxia Construction Corporation began work on the Karot Hydropower Station in 2016. This is the Silk Road Fund's first foreign investment project. The Chinese government has already promised to provide Pakistan with at least US$350 million by 2030 to finance the hydropower station.
University Alliance of the Silk Road
A university alliance at Xi'an Jiaotong University supports the Belt and Road initiative with research and engineering, and to foster understanding and academic exchange. The network extends beyond the economic zone, and includes a law school alliance to "serve the Belt and Road development with legal spirit and legal culture".
Leveraging China's infrastructure expertise
China is a world leader in infrastructure investment. In contrast with the general underinvestment in transportation infrastructure in the industrialized world after 1980 and the pursuit of export-oriented development policies in most Asian and Eastern European countries, China has pursued an infrastructure-based development strategy, which has resulted in engineering and construction expertise and a wide range of modern reference projects from which to draw, including roads, bridges, tunnels, and high-speed rail projects.
Members of the World Pensions Council (WPC), a non-profit policy research organization, have argued the Belt and Road initiative constitutes a natural extension of the infrastructure-driven economic development framework that has sustained the rapid economic growth of China since the adoption of the Chinese economic reform under chairman Deng Xiaoping, which could eventually reshape the Eurasian economic continuum, and, more generally, the international economic order.
Between 2014 and 2016, China's total trade volume in the countries along the Belt and Road exceeded $3 trillion, created $1.1 billion revenues and 180,000 jobs for the countries involved.
Local labour participation in Belt and Road countries
Between 2014 and 2016, more than 180,000 new local jobs were created in the countries involved. In that time, China's total trade volume in the countries along the Belt and Road exceeded $3 trillion and created $1.1 billion revenues sThe development of infrastructural ties with its neighboring countries will reduce physical and regulatory barriers to trade by the alignment of standards. China is also using the Belt and Road Initiative to address excess capacity in its industrial sectors, with the stated aim of, eventually, transferring factories from China into Belt and Road Initiative countries.