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