The One Belt One Road Initiative (OBOR), also known as Belt Road Initiative (BRI), aims to strengthen China’s connectivity with the world.
It includes various investment projects designed to promote the flow of goods, investment and people. These connections could advance international relationships and reroute economic activity, which can bring benefit to both China as well as the countries around its periphery. Even though there has been much support for OBOR, there are also controversies surrounding this initiative.
(CSIS, 2017)To beneficiary countries, the most attractive parts of the BRI would be its provision of infrastructure like railways. The BRI provides China with an opportunity to use its considerable economic means to finance these infrastructure projects. If successfully implemented, the BRI could bring many benefits to China’s economy. Increasing the amount of trade, investment, and connectivity between China and countries throughout Eurasia make these countries more dependent on the Chinese economy, increasing China’s economic influence over them. This may empower China to decide the rules and regulations that govern the economic affairs near their region. (CSIS, 2017)While the effect of BRI on economic development has received much attention, little attention has been paid to its political impact.
Through the BRI, China may also achieve political gains. China may be able to influence partner countries’ policies to support its own political interests, especially in countries in Central and South Asia that lack good governance and robust rule of law.(CSIS, 2017) Some countries that are part of BRI rank unfavorably on Transparency International’s Corruption Perceptions Index (0, indicating high corruption, to 100, indicating low corruption) These countries include Turkmenistan (22), Pakistan (32), and Sri Lanka (36). (CPI, 2016) Joshua Kurlantzick, senior fellow for Southeast Asia at the Council on Foreign Relations, cast doubt on the success of the project’s soft power aims, particularly among China’s Southeast Asian neighbors. He explained that China, India and Japan are worried about China’s increasingly assertive military behavior in recent years, particularly in the South China Sea. However, the strategy was likely to work in Africa, some of Eastern Europe and Central Asia, where “Beijing is already relatively popular.
“(CNBC, 2017)Critics in China and in central Asia have remarked that the BRI initiative develops the use of renminbi in international markets, which could eventually allow China to achieve its goal of making it an international reserve currency. (Beijing: Renmin Ribao, 2015) Moreover, the Pakistani port of Gwadar, which is now Pakistani-owned but Chinese operated, can diversify China’s transport network for critical natural resources like oil and gas. It is seen as of great strategic interest to China, serving as an alternative route if the Malaccan Straits is ever closed to China. (CSIS, 2017)However, there are downsides to this initiative. China’s offers of investment may be met with indifferent responses from partner countries that are wary of Chinese motives.
This is shown in past cases of overseas investment by Chinese state-owned enterprises not tied to the BRI. Australia, for example, has been opposed to certain investments by Chinese state companies. (CSIS, 2017) A report from Fitch Ratings doubts Chinese banks’ ability to control risks better than international commercial banks and multilateral lenders, as they do not have a good track record of allocating resources efficiently at home, especially when involving infrastructure projects. (Fitch Ratings, 2017) This suggests that investing in this initiative may be too ambitious and is rather risky for China, as profit from the BRI project is not guaranteed.David M. Lampton, who specializes in Chinese domestic politics, argues that China may face financial problems regarding railways.
There will be long payback periods as poor countries cannot be charged with high ticket prices. Developing high-speed rail links were also aimed to deepen and market China’s expertise in this technology, which can cause competition with Japan, a country known for its high-speed rail.The debate on the question raised is mainly due to the fact that with the OBOR being an ongoing project, there are many theorising the pros and cons of this initiative. Therefore our goal is to attempt to analyse the topic from a non-biased perspective, by gathering data from multiple sources when comparing the benefits and drawbacks of OBOR.