To support the BRI, Beijing has injected massive amounts of capital into Chinese public financial institutions, such as the Chinese Development Bank (CDB) and the Export-Import Bank of China (EXIM). [37] Xie Lirong, “移动通信标准翻身战 [Turning the Table on Mobile Telecommunications Standards]”, Caijing Magazine, 7 September 2015, 59. Three coordinating government agencies (the National Development and Reform Commission, the Ministry of Foreign Affairs, and Ministry of Commerce) issued the first official blueprint on OBOR, the ‘Vision and Actions on Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Road’, just two years later in March 2015. Many state-owned firms in sectors with excess capacity borrowed heavily during the financial crisis. [24] Guo Jianwei, 新疆金融业支持‘丝绸之路经济带’战略发展的结构和路径, 读懂一带一路，国家智库顶级学者前瞻中国新丝路 [“Xinjiang’s Financial Services Industry Supports Strategic Development of ‘Silk Road Economic Belt’”, in Leading Scholars from National Think Tanks and Their Insights on China’s New Silk Road] (Beijing: CITIC Press, 2015). For this reason, the Chinese leadership wants to capture the higher end of the global value chain. It estimates the market for transport equipment to be around $263 billion by 2018. [30] Wang Erde, “中国制造2025应于一带一路无缝对接 [The Seamless Integration between Made in China 2025 and One Belt and One Road]”, 21st Century Business Herald, 20 May 2015, http://finance.sina.com/gb/experts/sinacn/20150520/17031264782.html. There are indications that Chinese financiers are demanding tougher terms to ensure OBOR projects are financially viable over the longer term. To control standards is more important than anything else.”[36]. [10] Justin YiFu Lin, 一带一路， 让中国市场经济体系更完善， 读懂一带一路，国家智库顶级学者前瞻中国新丝路 [“One Belt and One Road, Enables China to Perfect its Market Economy”, in Leading Scholars from National Think Tanks and Their Insights on China’s New Silk Road] (Beijing: CITIC Press, 2015), 5. [42] Charles Clover and Lucy Hornsby, “China’s Great Game: Road to a New Empire”, Financial Times, 13 October 2015. [41] The authorities are also trying to shut down polluting steel mills and blast furnaces. Chinese bankers will likely play a key role in determining the success of OBOR. China is racing ahead in many of these markets through its Digital Silk Road, which sits at the intersection of three major state-backed initiatives. [31] All of these countries are considered to be key strategic partners in OBOR. Similarly, China has a large reserve of savings that is not being invested productively. [54] Kamran Haider and Ismail Dilawar, “Militants Strike Pakistan, Hitting China’s Economic Corridor”, Bloomberg, 26 October 2016, https://www.bloomberg.com/news/articles/2016-10-25/militants-return-to-pakistan-hitting-china-s-economic-corridor. For instance, the Kara-Balta oil refinery – Kyrgyzstan’s largest Chinese investment – has faced significant problems with overcapacity in recent years. He called for the building of a Silk Road Economic Belt and a 21st Century Maritime Silk Road, collectively referred to as One Belt, One Road (OBOR) but which has also come to be known as the Belt and Road Initiative. For instance, some of China’s SOEs – such as cement, steel, and construction companies – have built up significant capacity (expanding factories and hiring workers) to serve the once booming domestic economy. This rapid pile-up of debts took place after the country’s massive stimulus package of 2008. Given the port’s proximity to the Persian Gulf, it could be used as a transhipment point for China’s energy supplies obviating the need to go through the Strait of Malacca in Southeast Asia. After Xi announced OBOR, Chinese state-owned financial institutions followed with a raft of policies that echoed the president’s grand vision. ... it is the smaller companies that generate the jobs. This makes the success of the first wave of projects all the more crucial. A Microsoft 365 subscription offers an ad-free interface, custom domains, enhanced security options, the full desktop version of Office, and 1 TB of cloud storage. From China’s perspective, investment into strategic locations like Gwadar will help diversify China’s transport network for critical natural resources like oil and gas, which could help reduce dependency on trade routes, such as the Strait of Malacca, through which China currently receives much of its oil and gas. [45] Jin Qi’s speech in Hong Kong on 18 May 2016 at Belt and Road Summit, http://www.silkroadfund.com.cn/cnweb/19930/19938/32726/index.html. This deeper integration may grant China more influence over other countries and a stronger hand in guiding development of the international economic system. ChinaPower provides an in-depth understanding of the evolving nature of Chinese power relative to other countries. In 2016, Canberra blocked two investment bids by Chinese SOEs in the energy and agriculture sectors citing national interest and security concerns. [9], At a broader strategic level, influential Chinese policymakers and analysts have also argued that OBOR could be used as a strategic tool to counter the Obama administration’s pivot to Asia. © 2021 by the Center for Strategic and International Studies. [38] Hu Huaibang, “胡怀邦：以开发性金融服务‘一带一路’战略, 中国银行业 [Using Development Finance to Serve the OBOR Strategy]”, China Banking, 13 January 2016, http://www.cdb.com.cn/rdzt/gjyw_1/201601/t20160118_2187.html. With a U.S. “Belt and Road” initiative, Nancy Pelosi, Mitch McConnell, Chuck Schumer, Joe Biden, and Donald Trump (will he run again in 2024?) The proposed corridor is expected to connect Kashgar in Xinjiang in China’s far west with the Port of Gwadar in the province of Baluchistan. Annual Report 2019 Read New America's 2019 Annual Report. [49] Liu Xiao, Wang Xu and Wang ShuQin, 一带一路的愿景与行动，读懂一带一路，国家智库顶级学者前瞻中国新丝路 [“One Belt and One Road: The Vision and Implementation”, in Leading Scholars from National Think Tanks and Their Insights on China’s New Silk Road] (Beijing: CITIC Press, 2015), 169. [33] “China Wins Indonesia High-speed Rail Project as Japan Laments ‘Extremely Regrettable’ U-turn”, South China Morning Post, 29 September 2015, http://www.scmp.com/news/asia/southeast-asia/article/1862459/china-wins-indonesia-high-speed-rail-project-japan-laments. Additionally, developing and connecting hard infrastructure with neighboring countries will help reduce transport times and costs. This equipment is of good quality. The regional development aspect of OBOR is perhaps one of China’s most important economic policy objectives. If countries across the region accept Chinese high-speed railway technology as their national standard, it could become the de facto standard across a vast geographical area. Being Chinese in Australia: Public Opinion in Chinese Communities. [53] Interview with Sameer Patil, Mumbai, India, August 2016. This site uses cookies to optimize functionality and give you the best possible experience. [43] Li Keqiang’s Official Speech at the 17th ASEAN–China (10+1) Leaders’ Meeting, Nay Pyi Taw, Myanmar, 13 November 2014, http://www.fmprc.gov.cn/web/ziliao_674904/zt_674979/dnzt_674981/qtzt/ydyl_675049/zyxw_675051/t1210820.shtml. It affects three-quarters of the known energy reserves in the world. Guan estimates all provinces have earmarked just over a trillion renminbi for OBOR-related infrastructure projects; 68 per cent of them will be related to railway, road and airports. Instead, Beijing wants to use OBOR to migrate whole production facilities. 31 Bligh Street Previously he was a journalist with The Australian, Business Spectator, The Age and Sydney Morning Herald, covering business and economic news. Its aim is to create a regional production chain, within which China would be a centre of advanced manufacturing and innovation, and the standard setter. [20] Wang Xiaolu, Yu Wenjing and Fan Gang, “王小鲁 余静文 樊纲 中国市场化八年进程报告 财经 [A Progress Report on Eight Years of China’s March Towards the Free Market Economy]”, Caijing Magazine, 11 April 2016, 20. These banks enjoy low borrowing costs, as their bonds are treated like Chinese government debt with very low interest rates and they have access to lending from the People’s Bank of China, allowing them to lend cheaply to Chinese companies working on BRI projects. Highlights. China is funding massive projects all over the world, and gaining influence. [4] For a full discussion of China’s Peripheral Diplomacy Work Conference, see Michael D Swaine, “Chinese Views and Commentary on Peripheral Diplomacy”, China Leadership Monitor 44 (Summer 2014), http://www.hoover.org/research/chinese-views-and-commentary-periphery-diplomacy. Analysts regard the work conference as a significant turning point in the evolution of China’s foreign policy. We must encourage and participate in the process of regional economic integration, speed up the process of building up infrastructure and connectivity. China Power Team. Xue Li, a senior researcher at the Chinese Academy of Social Sciences and a member of a semi-official OBOR expert panel, says China is likely to lose money on the Indonesian high-speed rail deal, which Beijing is treating as a one-off special case and does not want the generous funding terms to become the norm. http://news.xinhuanet.com/politics/2013-10/25/c_117878897.htm, http://carnegieendowment.org/2013/12/13/contradictions-in-china-s-foreign-policy-pub-53913 - comments, https://www.iseas.edu.sg/images/pdf/ISEAS_Perspective_2016_14.pdf, http://www.washingtontimes.com/news/2016/aug/2/singapore-pm-urges-congress-ok-free-trade-deal/, http://www.bbc.com/news/world-asia-china-38060980, http://www.reuters.com/article/us-china-philippines-idUSKCN12K0AS, http://paper.people.com.cn/rmrbhwb/html/2016-09/20/content_1713601.htm, http://www.economist.com/news/china/21707964-government-struggling-spread-wealth-more-evenly-rich-province-poor-province, http://www.icsin.org/uploads/2015/06/05/31e217cf46cab5bd9f15930569843895.pdf, https://www.csis.org/analysis/made-china-2025, https://www.uscc.gov/sites/default/files/Research/RiseofChinainTechnologyStandards.pdf, http://finance.sina.com/gb/experts/sinacn/20150520/17031264782.html, http://news.xinhuanet.com/finance/2015-11/26/c_128469565.htm, http://www.miit.gov.cn/n11293472/n11293877/n16553775/n16553822/16633922.html, http://www.scmp.com/news/asia/southeast-asia/article/1862459/china-wins-indonesia-high-speed-rail-project-japan-laments, http://news.xinhuanet.com/fortune/2015-10/17/c_128327911.htm, http://www.cdb.com.cn/rdzt/gjyw_1/201601/t20160118_2187.html, https://www.worldsteel.org/dms/internetDocumentList/statistics-archive/production-archive/steel-archive/steel-monthly/Steel-monthly-2015/document/Steel%20monthly%202015.pdf, http://www.gov.cn/zhengce/2015-11/19/content_5014521.htm, http://www.theaustralian.com.au/business/business-spectator/curbs-on-coal-and-steel-will-test-beijings-resolve/news-story/43dfa1b17bd88556d1b8746e0c7d2658, http://www.fmprc.gov.cn/web/ziliao_674904/zt_674979/dnzt_674981/qtzt/ydyl_675049/zyxw_675051/t1210820.shtml, http://www.silkroadfund.com.cn/cnweb/19930/19938/32726/index.html, http://www.hebei.gov.cn/hebei/11937442/10761139/12224328/index.html, http://www.gov.cn/guowuyuan/2016-08/17/content_5100177.htm, https://www.brookings.edu/blog/order-from-chaos/2016/03/14/what-india-thinks-about-chinas-one-belt-one-road-initiative-but-doesnt-explicitly-say/, https://www.bloomberg.com/news/articles/2016-10-25/militants-return-to-pakistan-hitting-china-s-economic-corridor, http://m.caijing.com.cn/api/show?contentid=3893051, http://www.straitstimes.com/asia/se-asia/thailand-rebuffs-railway-deal-with-china, Unregulated population migration and other future drivers of instability in the Pacific, Instability in the Pacific Islands: A status report, Trump, Kim and the North Korean nuclear missile melodrama.
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