By Jose Romero
China’s One Belt, One Road initiative, along with the Asian Infrastructure Investment Bank establishment, have been created to link China with Southeast Asia and South Asia, Eurasia, Africa and Brazil’s areas of cooperation. This article discusses how the One Belt, One Road initiative will strengthen China’s importance as an economic partner for its neighbours and as a political and strategic power in the region.
The One Belt and One Road (OBOR) initiative refers to the land-based Silk Road Economic Belt and sea-based 21st Maritime Silk Road proposed by Chinese President Xi Jinping in 2013. Xi moved for a 21st century maritime silk road connecting China with the members of the Association of Southeast Asian Nations (ASEAN), South Asian countries, Africa and Europe. Another initiative is the establishment of the Asian Infrastructure Investment Bank (AIIB) as a new financial tool to support regional inter-connectivity and further economic integration through network infrastructure. The two New Silk Routes by land and by sea are grand initiatives to link China with Southeast and South Asia, Eurasia, Africa and Brazil through trade, investments, transport and energy infrastructure projects, tourism, education, culture and other areas of cooperation. This is reminiscent of the galleon trade, which linked China and the Philippines with South America.
Beyond huge Chinese investments in the building of road and railway infrastructure, seaports and airports, high-speed fibre-optic networks and energy pipelines, along with the establishment of regulations and trade logistics and coordinating institutions in the participant countries, the One Belt and One Road initiative seeks to achieve policy coordination among the participating nations through inter-governmental cooperation, macro-policy coordination and new cooperative multilevel mechanism among the participating nations.
By constructing or upgrading transport, energy and communication infrastructure along the One Belt and One Road, and connecting it with existing infrastructure, to form a new, vibrant network, China is creating an opportunity to export technologies, creativity, management skills, as well as materials and labour, that will reduce the pressure of domestic overcapacity in sectors such as steel manufacturing and cement, etc., and sustain its moderately high economic growth rate.
The implementation of the One Belt and One Road initiative will also promote the deepening of regional economic integration. This can be achieved through increasing cross-border trade, which can benefit from the construction of new infrastructure and simplified procedures for visas and procedures for cross-borders trade, and from unified standards for trade and investment.
About the Author
Jose Romero is currently the Chairman and Managing Director of the Philippine Regional Investment Development Corporation and the President for the Philippine Council for Foreign Relations, Inc. and the Philippine Ambassadors Foundation, Inc. He was a former Philippine Ambassador to Italy, the Permanent Representative to the Food and Agricultural Organization and the International Fund for Agricultural Development, and an economist for the Central Bank of the Philippines.