The road to a thriving trade route | CD Voice

One Belt, One Road, (the Belt is the land route and the Road the maritime one) is the new Silk Road and is spinning a web of connectivity across central Asia and into Europe. Its ports, pipelines, railways, roads and airports are shaping a new trade route and reshaping the global economy.

Launched by President XI Jinping in 2013, it's a vision that in its potential exceeds that of the Marshall Plan, though this comparison differs, for two reasons. The plan that helped Europe emerge from the ravages of WWII was Washington’s way of rewarding friends. OBOR is non-political. 

Secondly, it involves much more money. The plan in today’s value amounted to less than $100 billion. Some estimates put the value of OBOR projects currently being built at just less than $1 trillion.

OBOR is reducing the Chinese economy’s dependence on investment in infrastructure at home and allows it to export some of its vast excess capacity in steel and cement. 

We have reached a tipping point, the significance of which was lost in many commentaries. Chinese investment overseas in 2015 outstripped foreign direct investment in China. 

China’s outbound direct investment in 2015 increased 18 percent to $145.7 billion, compared to $135.6 billion coming in as foreign investment. China has emerged as a net exporter of capital.   

OBOR has money. In 2015 the Chinese central bank transferred $82 billion to banks for OBOR projects. A new Silk Road Fund worth $40 billion was given the green light by China’s sovereign wealth fund and the government set up the Asia Infrastructure Investment Bank with $100 billion of initial capital. While not formally part of OBOR, the bank approved loans at its first general meeting for roads in Pakistan, to Tajikistan and Uzbekistan, all Silk Road countries.

OBOR is far from complete but it is functioning. 

Goods are being transported to Europe by land and sea. Overland trade from China to Europe mostly uses the “northern route” through Kazakhstan, Russia and Belarus. More than 1,250 trains made this journey in 2015, carrying 47,400 containers — a 40-fold increase from 2011. 

But it is still evolving. It involves about 60 countries, but this is fluid as more consider joining. This vagueness does not diminish its importance.  

Beijing has three major stated goals: the opening up of China’s west, establishing a moderately well-off society by 2020 and a prosperous one by 2050. 

The new Silk Road will allow China, Beijing predicts, to extend and showcase its soft power both culturally and economically. 

Finally, OBOR can shift the axis of world trade. Pacific and Atlantic trade is dominated by the US. OBOR considers Asia and Europe as one land-mass market.

It is worth noting, as the dawn of the era of the Trump presidency, that China’s leadership horizons extend beyond fantasies of building a wall.   

About the author & broadcaster

Tom Clifford is an Irish journalist, currently based in China. He has written for Japan Times, Irish Independent, Irish Times, the South China Morning Post, Gulf News, the Prague Post and many other publications. He covered the Georgian War in 2008 and the Iraq invasion and aftermath in 2003-4. 

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