The One Belt One Road Initiative

Document Type:Essay

Subject Area:Economics

Document 1

The initiative is anticipated to be carried out in two phases; the ‘one belt’ which refers to the ‘Silk Road Economic Belt’ and is situated mainly on land. It aims at improving the connection and cooperation of China, Europe, and Central Asia; Secondly, the ‘one road’ which refers to the ‘Maritime Silk Road Initiative’ which is placed in the sea. Its purpose is to connect China to Central Asia, South-East Asia, and Africa through maritime routes (Górski, Chaisse & Chi, 2017). There is more likely some good news that will emerge from the access of new markets for instance making products available and easier to access through improvement of transport routes. China on the other will play its domestic role in enhancing that domestic regulatory agencies will be in a position of giving licenses for member countries to be in a position to access the markets. The fact that the USA recognised the OBOR initiative makes it a key player on China’s political interests. This move is more likely to be attributed to signal a kind of acceptance of strategic pillars of securing leadership for China in Asia (Górski, Chaisse & Chi, 2017). OBOR development has featured some uncertainty due to the US administration approaches in the region particularly in the time period of President Donald Trump who implies to take this decision further to the Trans-Pacific Partnership which is made up of 12 nation agreement. Justin Yifu Lin, who served as a chief economist in the World Bank, contends that the intended OBOR structure is likely to bring about the development of most of the African states whose industries mainly rely on unskilled man labour (Górski, Chaisse & Chi, 2017).

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Thereby calling for confirming of MOU signing between the people’s republic of China and the African Union in order to ease the implementation of the project. However, he made some critiques to some of the African countries that made allegations to sway away from this policy and responded to them by altering to be as a result of some misunderstandings of intentions that China has on African region. This implies that participation by African states in the execution of the OBOR initiative will mainly be beneficial rather than detrimental. The benefits to the African countries will outweigh its drawbacks in the short run. However, China’s political influence in Africa will be highly boosted. Is Africa in need of the “One Belt, One Road”? This strategy is more entitled to the development of infrastructures on projects that are more likely to bring about connectivity among the regions, this is not any other apart from the transportation projects.

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First and foremost, by improving the transport channels, the mega-project will hugely improve trade in these countries. Local products will now be easily accessible in the international markets, due to the improved transport routes. Prices of products will also decrease considerably due to the reduced transport costs and competition from products from other countries that will now be easily accessible (Yilmaz & Changming, 2016). These factors will play a major role in boosting trade among the participants of the OBOR project. Furthermore, underdeveloped Asian countries will now enjoy better and reliable power supply due to the interconnection of power-grids, bringing growth to the local industries. Construction companies in china will also hugely benefit, due to the fact that many of these companies will be undertaking the OBOR project. China will also develop its underdeveloped provinces since they will now have access to international market.

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There will also be better security for energy due to the interconnection of power-grids and pipelines. This means that China’s industries will now be more efficient in production due to cheaper sources of power to carry out its activities. China will also have greater political influence in the underdeveloped Asian and African countries, due to the ties it will now have to these countries. We need to have in mind that this kind of development financing especially coming from China does not give a room for a free grant with some of the investment environment being volatile and often associated with political risks and this is likely to interfere with the planning process associated to make this project to be running. Britain is yet to agree on the OBOR claiming that it has not yet met international standards required.

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Górski, Chaisse & Chi, 2017). The ‘One Belt, One Road” is still seen to be in its early stages, it's wise for the Chinese government to acknowledge that they don’t have to wait till the implementation in order to sort out the known problems with some of its political foes. The World at large needs to pay close attention to China’s policy, as its enactment will not only bring about economic integration, but also a huge political power shift.

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