One Belt, One Road

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The Belt and Road Initiative, also known as the “One Belt One Road” (OBOR) and by the names of its two major routes, the Silk Road Economic Belt and 21st Century Maritime Silk Road, is undoubtedly already a major driver for investment in land and seabased connectivity from China to major markets in Asia, the Middle East, Africa and Europe.

Chinese companies will work with government and private enterprises in each of these regions to finance and deliver a multitude of projects, with a focus on energy and transport infrastructure.

The policy was first outlined by the Chinese government in 2013 and many have noted its broad scope and relative lack of specifics since. Many projects are being described as related to the Belt and Road, however the ambiguity allows flexibility in implementation across the very different economic and political landscapes along its routes.

China is offering loans to the governments of the countries along the OBOR ‘corridors’, to help develop infrastructure that will in turn help China to reach new markets.

There is one thing we can be certain of: the Belt and Road Initiative is not an aid package, nor a foreign direct investment policy, but a development lending plan. China is offering substantial loans on competitive terms to the governments of the countries along the OBOR routes, to finance the development of infrastructure designed to stimulate economic growth and connectivity.

We know that two new financial institutions launched by China in 2014 will play key roles: the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund.

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