DEFINITION of One Belt One Road (OBOR)
The One Belt One Road (OBOR), the brainchild of Chinese President Xi Jinping, is an ambitious project that focuses on improving connectivity and cooperation among multiple countries spread across the continents of Asia, Africa and Europe. Dubbed as the “Project of the Century” by the Chinese authorities, OBOR spans about 78 countries.
BREAKING DOWN One Belt One Road (OBOR)
Initially announced in the year 2013 with a purpose of restoring the ancient Silk Route that connected Asia and Europe, the project's scope has been expanded over the years to include new territories and development initiatives. Also called as the Belt and Road Initiative (BRI), the project involves building a big network of roadways, railways, maritime ports, power grids, oil and gas pipelines and associated infrastructure projects.
The project covers two parts. First is called the “Silk Road Economic Belt” which is primarily land-based and is expected to connect China with Central Asia, Eastern Europe and Western Europe. The second is called the “21st Century Maritime Silk Road” which is sea-based and is expected to will China’s southern coast to the Mediterranean, Africa, South-East Asia and Central Asia. The names are confusing as the ‘Belt’ is actually a network of roads, and the ‘Road’ is actually a sea route.
They contain following six economic corridors: New Eurasian Land Bridge that connects Western China to Western Russia, China – Mongolia – Russia Corridor that connects North China to Eastern Russia via Mongolia, China – Central Asia – West Asia Corridor that connects Western China to Turkey via Central and West Asia, China – Indochina Peninsula Corridor that connects Southern China to Singapore via Indo-China, China – Pakistan Corridor that connects South Western China through Pakistan to Arabia sea routes, and Bangladesh – China – India – Myanmar Corridor that connects Southern China to India via Bangladesh and Myanmar. Additionally, the maritime Silk Road connects coastal China to the Mediterranean via Singapore-Malaysia, the Indian Ocean, the Arabian Sea and the Strait of Hormuz.
OBOR’s Importance to China
OBOR is of prime significance to China as it aims to boost its domestic growth, and is also a part of the country’s strategy for economic diplomacy. By connecting the less developed border regions like Xinjiang with neighboring nations, China expects to bump up economic activity. OBOR is expected to open up and create new markets for Chinese goods, and will also enable the manufacturing powerhouse to gain control of cost-effective routes to easily export materials. Any excess capacity in terms of production can be channelized effectively to regions along OBOR routes. China has announced investments over $1 trillion in the various infrastructure projects, and is funding them by offering low-cost loans to the participating countries.
Many participating countries, like Kyrgyzstan and Tajikistan, are positive about OBOR owing to massive investments by China in local transmission projects in these nations. Landlocked Nepal has recently joined OBOR by signing a deal that will help it improve cross-border connectivity with China, and Pakistan is set to benefit from the $46 billion China Pakistan Economic Corridor (CPEC) that will connect South Western China to and through Pakistan, allowing access to Arabian Sea routes.
While China continues to pitch OBOR as an all inclusive project for regional development, other nations perceive it as a strategic move by the Asian powerhouse to attain significance and control at a regional level, and to play a larger role at the global level by building and controlling a China-focused trading network. With US President Donald Trump posing challenges for Asian nations through measures like trade tariffs, China sees it as an opportunity to emerge as a regional leader. In future, one may see a boost in Chinese yuan with increased usage in the OBOR region.