Belt & Road Initiative (BRI)
一带一路
WHAT IS IT
Reviving historic overland and maritime silk routes
FINANCE
FOREIGN AFFAIRS
What is Road?
21st-Century Maritime Silk Road, also sometimes called Blue Economic Passages
China-Oceania-South Pacific passage
China-Arctic Ocean-Europe passage
WHY CARE
First by Asian nation
No need to rectify power structure to get money
What is Belt?
Silk Road Economic Belt
Economic balance shift
China-Mongolia-Russia Corridor
China-Central Asia-West Asia Corridor
China-Indochina Peninsula Corridor
China-Myanmar-Bangladesh-India Corridor #
China-Pakistan Corridor
Why?
Forging alliances through economic relationships
BRI countries tend to struggle with infrastructural development and investment
Infrastructural investments can counter cyclical economic pressures
China balancing the world's financial architecture that has long been dominated by IMF, WB, and ADB
Internationalising the Renminbi (RMB) through loans and bonds
Institutions
Multilateral Banks
Shanghai Cooperation Organization
Asian Infrastructure Investment Bank #
New Development Bank #
Regional Investment Funds
BRICS
China-Central and Eastern Europe Investment Cooperation Fund
Founding members
China-ASEAN Investment Cooperation Fund #
China-Eurasian Economic Cooperation Fund #
State-Owned
Fund
China
Silk Road Fund
Policy Banks
China Development Bank
Russia
Kazakhstan
Export-Import (Exim) Bank of China
Kyrgyz
Tajikistan
Uzbekistan
Additional members
India
Pakistan
Members
Brazil
Russia
India
China
South Africa
New Development Bank
TRADE
Issues
Why?
Overcapacity
Opening new markets for construction industry
Reducing reliance on Eastern coastal areas for growth
Territorial Disputes
Power shift
USA
Going inland
Weaning US allies
South China Sea (Maritime Road)
Kashmir (CPEC)
Involved nations
So what?
New markets to diversify economy
Developing Western region as new economic frontier
Improving efficiency and reducing costs
Reduction of trade barriers
Cheaper land and labour
"Declaration, Inspection, Clearance" principle #
56 Member States and 24 Prospective Members
China has 28% voting share = veto power
Capital: US$100 billion
Key instrument of BRI
Key instrument of BRI
Investment fund prioritising Eurasia development
Capital: $US40 billion
So what?
Infrastructure, high-tech, manufacturing, consumer goods
3.5 billion combined population
Capital: US$500 million
Central and Eastern Europe
USD denominated
So what?
40% of world's population
25% of earth's land
Involved nations
Vietnam
Malaysia
Indonesia
India
Pakistan
May hinder BCIM progress
Infrastructure, energy, natural resources
Focus on Shanghai Cooperation Organization
Energy, resources, agriculture, logistics, infrastructure, information technology, manufacturing
Capital: US$5 billion
Capital: ~$US600 million
Focus on infrastructural projects of national priority
World's largest development bank
Development assistance in concessional funding
Promotes foreign trade and investment
Formed by BRICS
Mobilise resources for infrastructural and sustainable development
Member states have equal shares and voting rights
Capital: US$100 billion
New Eurasian Land Bridge
Connecting China, Mongolia, and Russia
Linking China with Mediterranean Sea and Arabian Peninsula
Covers Central Asian countries, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Turkmenistan. Also Iran, Saudi Arabia, and Turkey
China to India via Myanmar, ending in Bangladesh
Goes through disputed area of Kashmir
Connect China with Southeast Asian nations via land border with Indochina
Connect China to Gwador port in Pakistan, next to Arabian Sea
China-Indian Ocean-Africa-Mediterranean Sea passage
Connects China to Europe, Canada and US through the Arctic Ocean
Head south from South China Sea and into the Pacific Ocean
Improving economic security
EU is China's biggest trading bloc
Securing trade with Europe by creating more routes
So what?
Tipping the scales on global financing landscape
Potential to either revitalise economies in BRI, or saddle them with severe debts
Connects China to Africa by South China Sea and Indian Ocean
Developmental initiative
Connecting China with Europe through Kazakhstan, Russia, Belarus, Poland and Germany
Connects 65 countries across 3 continents
"Peace, Harmony, Prosperity"
IMPACT
Creating environments for Chinese foreign investments
Manufacturing & Agriculture
Research & Development, and Education
Environment
University Alliance of the Silk Road #
Energy, Transportation, Communication
REGIONAL DEVELOPMENT
Inland Region #
Southwest
East Coast
Northeast & Northwest
Liberalisation
Lanzhou
Xining
Ningxia
Xi'an
Develop regional transport and economic networks
Heilongjiang - Russia
Xinjiang
Liaoning
Jilin
Economic Liberalisation
Zhenghou
Wuhan
Changsha
Nanchang
Hefei
Chongqing & west
Develop major transport networks
China - Europe
Logistics route connecting China to East, Central and West
Connectivity with ASEAN
Develop and leverage unique locations of
Yunnan
Guangxi
Promote trade, travel, and cultural cooperation
Leveraging on locations for regional connectivity
Special Administrative Regions
Macau
Fujian as core region of The Road
Hong Kong
"proper arrangements" for Taiwan
Scholarships
2500 Chinese students per year to study abroad for 3 years
10,000 inbound students over 5 years
100 scholarships to BRI countries for masters or doctoral studies
132 Universities across 32 countries
Research Centres
City University of Hong Kong Research Centre on One Belt One Road
Center for China & Globalisation One Belt One Road institute
"Lean, clean, and green"
Negative consequences?
China Green Leadership: Belt and Road Green Development
Energy
Solar
Hydropower #
Pakistan
Southeast Asia
Philippines
So what?
May hinder Maritime Road progress
Regional Focus
Central Asia
Europe #
Southeast Asia
Lancang-Mekong Cooperation #
Green bonds
Fossil Fuel
Oil and gas pipelines
Coal-fired plants
Hydropower Development
Disrupting food security and river flow
European Union
China's largest trading bloc
ASEAN
Human capital
Vietnam
Thailand
Laos
Myanmar
Cambodia
China
Shanghai Cooperation Organization #
Thailand
Indonesia
New "world's factory"
Vietnam
Malaysia
Philippines
Singapore
Myanmar
Cambodia
Laos
Brunei
Mighty Five (MITI-V)
Malaysia
India
Thailand
Indonesia
Vietnam
"Make in India" campaign
Cultural
World's fifth largest manufacturing country in the world by 2020 according to Deloitte reports
FDI for manufacturing sector grew by 82% YOY (Apr-Nov 2016)
Increased tourism between countries
Manufacturing = 17% of GDP (World Bank 2016)
Target 25% of GDP by 2025
Possible joint applications on world heritage sites for UNESCO
Manufacturing = 20% of GDP (World Bank 2016)
Spread of languages
Manufacturing = 27% of GDP (World Bank 2016)
Spread of Chinese media
Manufacturing = 21% of GDP (World Bank 2016)
China extending digital television services to Pakistan
Manufacturing = 16% of GDP (World Bank 2016)
Natural resources
More cooperative food export laws = Improved food accessibility
More efficient logistics = less food loss
Concerns
Risk for smallholder farmers
"Dumping" of cheap food
Increased import food dependency = increased foreign affair risk
Concerns
"Dumping" of cheap goods
Improved communications
Expansion of Chinese social media platforms
Big-4 Commercial Banks
Industrial and Commercial Bank of China
China Construction Bank Corporation
Agricultural Bank of China
Bank of China
Combined investment of US$200 billion so far
400 projects worth hundreds of USD millions
Fund raise US$15 billion for BRI investment
Fund raise US$3 billion for BRI investment