October 12, 2018
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China is using its influence to build a global economic network for trade and development, with itself as the driver. China’s ‘One Belt, One Road’ initiative—known as OBOR as well as the Belt and Road Initiative, and unveiled by President Xi Jinping in 2013—has been touted as the blueprint for this new global vision. Beijing’s aspirations are clear in its claims to want to reshape world commerce through new trade routes and transportation links.
Yet even as China gears up to rain hundreds of billions of dollars on projects spanning Asia, Europe and Africa in the years ahead, it is far from clear what its vision is, or how it will make this plan a success. As a business-led initiative, OBOR looks like an obvious win-win for all involved. Most of the countries expected to receive Chinese investment badly need new infrastructure, but lack the financing and know-how to build it alone. And with growth slowing at home, China needs other markets for its homemade steel and cement, as well as construction contracts for its companies and workers.
But in making investments abroad, China’s record is far from perfect. China stands to reap handsome rewards, helping many "One Belt, One Road" countries develop in the process. But unless Beijing reconsiders its approach in light of past missteps, it could set itself up for more failed investments and future diplomatic troubles.
The Bugs in the Architecture of China’s ‘Belt and Road’
Five years after Chinese President Xi Jinping introduced the Belt and Road Initiative to the world, the ambitious multitrillion-dollar infrastructure scheme is experiencing major growing pains. Months of harsh media scrutiny, criticism from the United States and Europe, some surprising grumbling domestically, and backtracking from key partner countries have put a dent in what had been promoted as a seamless chain of China-funded transportation and development projects spreading out across the Asian continent. Xi’s signature foreign policy initiative now faces skepticism in the country that has been its most enthusiastic cheerleader and most willing testing ground: Pakistan.
How the ‘Belt and Road’ Could Pit the U.S. vs. China at the IMF
No stranger to political controversy, the International Monetary Fund may soon find itself embroiled in one that pits China’s interests against those of the United States. Beijing’s hugely ambitious international development project, known as the Belt and Road Initiative, is raising fears of debt crises in the developing world, and the IMF may be called in to clean up the mess.The U.S. is poised to oppose any IMF deal providing funds that would ultimately go to pay off Belt and Road-related tabs. How the IMF handles this situation could give clues about how the institution will deal with competing American and Chinese interests in an increasingly multipolar world.
Why China's 'One Belt, One Road' Initiative Will Fail
Even under the best of circumstances, China’s ‘One Belt, One Road’ initiative is unlikely to meet its goals, but it won’t be a complete waste of time and money. Chinese leadership seems to genuinely believe that ‘One Belt, One Road’ countries will become an integrated Afro-Eurasian supply chain centered on China. This conviction rests on a false understanding of economic geography. Right now and for the foreseeable future, the business rationale for integrated Eurasian supply chains just isn’t there. On the other hand, the initiative is likely to lead to improved infrastructure in countries that are desperately in need of outside capital and expertise. Chinese companies, most of them state-owned, will benefit from Chinese government contracts to build this infrastructure
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