{"id":2290,"date":"2017-03-27T17:34:55","date_gmt":"2017-03-27T06:34:55","guid":{"rendered":"http:\/\/yinghuiinternational.com\/?p=2290"},"modified":"2017-03-27T17:34:55","modified_gmt":"2017-03-27T06:34:55","slug":"one-belt-one-road-initiative-episode-one","status":"publish","type":"post","link":"https:\/\/yinghuiinternational.com\/index.php\/2017\/03\/27\/one-belt-one-road-initiative-episode-one\/","title":{"rendered":"One-Belt One-Road initiative: episode one"},"content":{"rendered":"

China\u2019s One-Belt One-Road initiative (OBOR1<\/sup>) is the core element in the nation\u2019s Eurasian foreign policy. This edition of Prospects will discuss OBOR from a high level perspective. A subsequent episode will build on this foundation to define what this ambitious initiative might mean for our portfolio of commodities in the longer run.<\/p>\n

China\u2019s four-decade long boom, coupled to its immense geographic and demographic scale, has returned it to its traditional position at the centre of the East Asian economy. Along the way it has built unprecedented reserves of foreign assets; become the largest trading partner of more than half the globe and risen to a leading position in multiple segments of the global manufacturing supply chain. China is the largest single market for everything from cars to mobile phones and e-commerce to international tourism. It is also the largest consumer of a wide range of commodities across the energy, minerals and agricultural fields. Despite this impressive catalogue, there is more to be done, as all of this effort has, at this stage, only raised the living standards of the average Chinese citizen to the middle income level.<\/p>\n

To become a prosperous twenty-first century society, the Chinese economy must continue to ascend the value-added chain by building up its innovation capabilities. It must also improve the long run allocation of capital whilst accommodating the rise of consumerism \u2013 all while managing the legacies of the old growth model. OBOR helps on all counts.<\/p>\n

The origins of the trillion dollar, continent-straddling version of OBOR we see today can be traced back to earlier, less ambitious policies. Some were aimed at developing China\u2019s regional sphere of influence. Others sought to spread the benefits of what was then predominantly coastal economic development into China\u2019s less developed interior provinces.<\/p>\n

In the late 1990s, a \u201cGo Outward\u201d policy was instituted, encouraging Chinese firms to invest abroad. In the early 2000s, the Shanghai Cooperation Organisation (SCO) was founded, which systematised high level Chinese engagement with a group of central Asian countries positioned along what is now the \u201cSilk Road Economic Belt\u201d. There was also a \u201cGo West\u201d strategy, aimed at developing China\u2019s poor interior provinces, many of which shared land borders with central Asian nations. In 2009, President Hu tightened relations with central Asia with a range of state visits, high profile investments and economic partnerships. And then, in 2013, President Xi Jinping introduced the names \u201cSilk Road Economic Belt\u201d and \u201cMaritime Silk Road\u201d on official visits to central and south-east Asian nations respectively.<\/p>\n

Under President Xi\u2019s sponsorship, serious money began to be ear-marked for projects under the OBOR banner, highlighted by the US$40 billion \u201cSilk Road Fund\u201d. A \u201cLeading Group\u201d2<\/sup> \u00a0reporting directly to the State Council was established. China is also the cornerstone investor in a new multilateral lending institution, the Asian Infrastructure Investment Bank (AIIB), which has already funded a number of major projects in OBOR countries.3<\/sup><\/p>\n

From a purely economic standpoint, OBOR provides a signal and a framework for Chinese firms to export their growing expertise in infrastructure, manufacturing and construction. The financing of OBOR projects offers an avenue for diversifying China\u2019s foreign assets away from low yielding sovereign bonds to higher yielding real assets. In the second wave, the increasing prosperity of recipient countries, where shortages of basic infrastructure4<\/sup> are a major impediment to improving the livelihoods of their citizens, will provide expanding markets for Chinese goods. China\u2019s heavy industries, many of which are experiencing excess capacity after a decade of very strong investment sentiment, will enjoy having an additional outlet for their wares in both waves of this journey. This could help soften the blow of the inevitable restructuring that domestic economic rebalancing will entail.<\/p>\n

\"One-Belt<\/a><\/p>\n

From an energy and trade security standpoint, OBOR protects and develops critical pipeline infrastructure and transport corridors on land; and it overlooks vital Eurasian shipping lanes on the maritime belt. Vast sums have been invested by Chinese firms to gain a foothold in multiple ports along the Indo-Pacific coast of Eurasia, with clusters of investment centred on major locations including the Straits of Malacca, Sunda, Hormuz, Gibraltar and Bab al-Mandab, as well as Suez. The links between the Belt and the Road (such as the \u201cChina-Pakistan Economic Corridor\u201d, which hits the Indian Ocean at the Port of Gwadar) also provide China with alternative routes to reach the European, African, South Asian and Middle Eastern markets. There is also a possibility that northern Australia, a strategically located region with a complementary resource endowment to China\u2019s, could become an important link in OBOR at some point.<\/p>\n","protected":false},"excerpt":{"rendered":"

China\u2019s One-Belt One-Road initiative (OBOR1) is the core element in the nation\u2019s Eurasian foreign policy. This edition of Prospects will discuss OBOR from a high level perspective. A subsequent episode will build on this foundation to define what this ambitious initiative might mean for our portfolio of commodities in the longer run. China\u2019s four-decade long … Continue reading “One-Belt One-Road initiative: episode one”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[6,36,7],"tags":[],"class_list":["post-2290","post","type-post","status-publish","format-standard","hentry","category-mines-and-quarry","category-new-ideas","category-news"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p83F9T-AW","jetpack-related-posts":[{"id":1504,"url":"https:\/\/yinghuiinternational.com\/index.php\/2016\/06\/24\/2016%e5%b9%b4%e7%9f%bf%e5%b1%b1%e5%8f%91%e5%b1%95%e8%b6%8b%e5%8a%bf3\/","url_meta":{"origin":2290,"position":0},"title":"2016\u5e74\u77ff\u5c71\u53d1\u5c55\u8d8b\u52bf3","author":"yinghui","date":"June 24, 2016","format":false,"excerpt":"Tracking the 2016 Trends \u2013 Part 3 June 24, 2016Features Cole Latimer Latest News Tracking the 2016 Trends \u2013 Part 2 Tracking the 2016 Trends \u2013 Part 1 The third\u00a0of a ten part series examining the trends that will drive the mining industry in 2016. 3. \u00a0 \u00a0 China\u2019s economic\u2026","rel":"","context":"In "New Ideas"","block_context":{"text":"New Ideas","link":"https:\/\/yinghuiinternational.com\/index.php\/category\/new-ideas\/"},"img":{"alt_text":"china_3.jpg","src":"https:\/\/i0.wp.com\/d9lhxyivbnow1.cloudfront.net\/wp-content\/uploads\/2016\/04\/06062445\/china_3-604x270.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/d9lhxyivbnow1.cloudfront.net\/wp-content\/uploads\/2016\/04\/06062445\/china_3-604x270.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/d9lhxyivbnow1.cloudfront.net\/wp-content\/uploads\/2016\/04\/06062445\/china_3-604x270.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":1751,"url":"https:\/\/yinghuiinternational.com\/index.php\/2016\/08\/17\/the-top-ten-trends-for-mining-in-2016\/","url_meta":{"origin":2290,"position":1},"title":"The top ten trends for mining in 2016","author":"yinghui","date":"August 17, 2016","format":false,"excerpt":"Mining is changing. 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