By China-United States Focus (He Yafei, former Vice Minister, State Council Office of Overseas Chinese Affairs)

China’s One Belt, One Road (OBOR) initiative has been gaining attention since its proposal by President Xi Jinping in 2013, along with the recent Asia Infrastructure Investment Bank and the Silk Road Fund.

OBOR has been proposed as an innovative method of co-operation in global governance in the face of a worsening economic climate and simmering geopolitical problems worldwide. This solution follows eight years of slow recovery since the financial crisis of 2008, which arguably witnessed the failure of “neo-liberalism” and its infamous economic reform recipe enacted by the “Washington Consensus.” China’s economic growth might give the world its only hope, with an annual GDP increase of 7% that contributes over 30% to global economic growth.

The dire prospects for global development and the re-emergence of geopolitical troubles in the Middle East, Ukraine and elsewhere are pressing for elusive answers. What should we do to promote global peace and common development in the age of fast-paced globalization? Given the reality of the world today, what is so innovative and trailblazing about OBOR? Can it really offer a way out of the quagmire in which the world finds itself? I will try to illustrate my points as follows.

First, founded in the idea of building a new network of global partnerships, OBOR provides a fresh way of thinking about regional and global co-operation, by including both bilateral and multilateral co-operation in political, economic, cultural and other fields. It emphasizes the adaptability of development strategies in China and other participating nations, in order to produce benefits that are shared by all in an economic “win-win” outcome.

In a nutshell, OBOR envisions the creation of multiple economic corridors encompassing more than 60 countries in East Asia, Southeast Asia, Central Asia, South Asia, West Asia, North Africa and East Africa, linking the most dynamic East Asia Economic Zone with the advanced European Economic Zone. If we visualize OBOR, it is an economic partnership map with multiple interconnected rings. President Xi describes OBOR as a “chorus”, not a soloist singing. OBOR transcends different Free Trade Agreements (FTAs), including the newly concluded TPP, in both scale and content. It envisions regional integration beyond pure economic union, forming a political community founded on common interest in an attempt to forge, as much as possible, a common cultural identity.

Second, OBOR looks to build “five connectivities” with a view of creating a community of nations with a common destiny. These “five connectivities” include policy consultation, infrastructure connectivity, free trade, free circulation of local currencies, and people-to-people connectivity. In sum, these connectivities denote the “big trends” in economic globalization and socialization, the information revolution, and shared economic growth.

Policy consultation is placed first in the OBOR plan, because its success depends on the participants’ adoption of parallel development strategies and policies. Regular policy consultations align participants’ economic growth strategies, macro-economic policies, and major growth plans. The importance of infrastructure connectivity is easily understood, since OBOR’s economic growth and regional economic integration depends on the sophistication and connectivity of both “hard and soft” infrastructures.

Free trade is necessary for OBOR in that Asia as a whole needs to upgrade its place in global production and value chains, with a freer and more integrated production network that embraces individual countries’ advantages. Free trade should also come into play with regional production capacity realignment, i.e., moving excessive production capacity to countries that are in need to build up their own economic frameworks. The end result will be a more open regionwide economic system.

Free circulation of local currencies will be integral to the new economic structure OBOR creates. The Asia Infrastructure Investment Bank (AIIB) and the Silk Road Fund have shown the way to global financial system reforms and offer a new avenue of infrastructure investment funding. According to the Asia Development Bank, from 2010 to 2020 there was an $800 billion gap in Asia Infrastructure funding. Mackenzie Consultancy estimates that over the next two decades the global need for infrastructure funding will amount to a staggering $57 trillion. Intraregional free trade and infrastructure funding will enable a more efficient use and circulation of currency in the involved countries, thus reducing or avoiding the risks associated with a complete dependency on a U.S. dollar-centered financial system for project funding.

People-to-people connections result from more frequent exchanges at all levels and create a common cultural identity and affinity that will go a long way in providing a solid social foundation for building OBOR. People will only accept and engage with OBOR when they get to know other ethnic groups better.

Third, OBOR is not only a great opportunity for China to further her opening-up and reform, it also provides a large, multi-layered platform all countries along OBOR can use to reap greater economic and social benefits by opening up to one another. It is clear that China will be one of the major economic engines in the first half of the 21st century, with projected outward investments of $500 billion and over 500 million outbound tourists in the next five years. “Made-in-China,” Chinese capital, China’s market, and Chinese consumers will be hallmarks in the new round of worldwide economic growth.

Fourth, OBOR will be the cushion for China and the United States, as rising and incumbent powers seek to avoid falling into the proverbial “Thucydides Trap”: The Belt and Road initiative will help both nations in a profound manner to have an appropriate strategic assessment of each other’s intentions, by showing China can create solid co-operation in a strategically significant region. OBOR is also useful, as it involves both countries in policy consultation and economic collaboration, shaping the future of our bilateral relations.

I am happy to note that after the historic visit to the U.S. by President Xi, President Obama’s administration has reversed its position on OBOR and the related AIIB, adopting a more open and welcoming attitude. This year, as we celebrate the 70th anniversary of the founding of the United Nations, all nations big and small are reminded that it is necessary to improve the current global governance system. I am convinced that with joint efforts and determination, OBOR will prove its worth to China and its participants, including the United States, as a new path to mutual trust and a better future in global governance.

Please click to read the full article on the website of China-United States Focus.

By China-United States Focus

In 2015, the Chinese government unveiled a new slogan – “industrial capacity cooperation” – as it pursued trade and investment deals abroad. At the time, the Chinese economy was headed for serious trouble, with manufacturing profits dropping and worrisome bubbles preparing to burst in domestic financial markets. In essence, China now seeks to export its excess industrial capacity as a means to cope with its economic troubles. On the one hand, this is a strong sign that China is becoming a mature industrial power, following in the footsteps of nations like the United Kingdom and the United States before it. Yet global economic conditions suggest that China may not be able to export its way out of the present crisis.

A country exports its industrial capacity when it invests industrial capital – factories, machinery, and so on – overseas. For example, a Chinese firm might open a factory in Ethiopia with its own money and machinery. We can tell that China is trying to export its excess capacity by examining the international deals and statements that the Chinese government has made over the past year. In May 2015, the Chinese government announced a $70 billion plan to export spare capacity from industries including railway construction and telecommunications technology. Officials and state news agencies heralded the new plan during a Latin American tour that included stops in Brazil, Chile, Peru, and Colombia. Further ventures were announced throughout the year in countries as far apart as Ethiopia and Kazakhstan. Recently, China signed a memorandum of understanding with Saudi Arabia pledging to jointly pursue China’s One Belt, One Road (OBOR) initiative, including industrial capacity co-operation.

The industries China has highlighted as key priorities for its industrial capacity co-operation initiatives are those that suffer from chronic overcapacity problems: steel, construction materials, electrical power infrastructure, and rail manufacturing. During its economic rise in recent decades, China became the globe’s preeminent manufacturer of many of these industrial commodities. Now, global demand simply cannot keep up with China’s capacity to produce goods like steel, leading to a steep decline in prices. By exporting excess industrial capacity that simply cannot profitably produce in domestic conditions, China may hope to relieve some of the pressure on its industries.

Of course, investing capital abroad will help China increase its international influence. Exporting industrial capacity is a key component of Chinese initiatives like OBOR and the new Asian Infrastructure Investment Bank (AIIB), and most countries are more than happy to welcome Chinese investment. If Chinese construction equipment cannot be put to use in China, it can be used in Central Asia to develop infrastructure that will open markets to Chinese goods and allow further penetration of local economies.

Exporting both excess commodities and industrial capital is a classic strategy that developed economies use to cope with saturated markets and diminished opportunities for investment at home. Lenin famously argued that the struggle to export excess capacity motivated imperialism in the late 19th and early 20th centuries. Both the United Kingdom and the United States followed this path as they rose to global prominence, becoming creditor nations that dispensed industrial and financial capital around the world. Where economic power led, political influence often followed; where capital could not enter on its own, armed force opened the way.

Given these historical precedents, China’s transformation into a capital-exporting economy suggests that it is maturing as an industrial power and that its international influence will continue to expand. China and today’s United States occupy remarkably similar positions to yesteryear’s United Kingdom and a rising United States in the early 20th century, albeit with some notable differences. Foreign investment is still extremely asymmetric, with developed nations far outspending their developing counterparts. From 1980 to 2008, the foreign direct investment of firms from the advanced capitalist economies (the U.S., Europe, and Japan) grew from $500 billion to nearly $14 trillion. By the end of this period, the foreign employment and sales of these companies exceeded their domestic numbers. Firms from developing countries also increased their foreign investments, but these totaled up to less than a fifth of the advanced countries’ investments. The Netherlands, a country of only 16 million people, had more investments abroad than Brazil, Russia, India, and China combined.

Despite its implications for China’s international power and prestige, there is good reason to be skeptical that exporting excess capacity will rescue the Chinese economy in the short term. As I have written in earlier articles, today’s economic troubles reflect unique structural conditions that are unlikely to disappear without some kind of major destruction and devaluation of global capital.

The problem is that China is trying to export its way out a local crisis caused in large part by a global glut of commodities. Moving excess industrial capacity abroad will do little to alleviate the fact that the global supply of many key goods is now far in excess of demand unless those local markets happen to be heavily protected from international dynamics. Given that countries like Brazil, a key Chinese partner, are also experiencing collapsing prices, it is hard to believe that there are many suitable outlets for this strategy. Put simply: Building Chinese-owned factories in Brazil may not be particularly profitable if no one buys what they produce.

Like its historical peers, China is starting to mature as an economic powerhouse. However, it is coming of age in a time of severe economic turbulence and uncertainty. It remains to be seen how China’s rise will be impacted by the difficult conditions of the present day. Whatever the case, we should expect Chinese foreign investment to continue to grow, spurring a commensurate rise in its political influence.

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By BDO Singapore

“This initiative will directly affect 4.4 billion people with a collective GDP of US$2 trillion once completed.”

The “One Belt One Road” (OBOR) initiative was announced by President Xi Jinping of China in 2013. This initiative was brought forth during his visits to Kazakhstan and Indonesia in 2013, when he formally announced the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives. This subsequently became a vital foreign policy for China in many aspects, mainly with the intention of promoting economic cooperation amongst countries along the “Belt” and “Road” routes.

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By Julian Vella (Asia Pacific Head of Global Infrastructure, KPMG International)

China’s bold vision can make a significant contribution to bridging the Asian infrastructure investment gap. But Chinese investors should be aware of the heightened expectations that come with selecting and managing projects in new markets.

Over 2000 years ago, the Silk Road was established as a trade route connecting China with Eurasia and the mighty Roman Empire. The road, in various forms, lasted over 1500 years before a decline in political powers ended its influence. Fast-forward half a millennium, and China’s plan to rebuild its old trade links with Europe and Asia has aroused renewed excitement.

The “One Belt, One Road” initiative envisages a path by land from China through Central Asia to Europe, with the maritime route flowing through Southeast Asia, the Indian Ocean, the Middle East, and Africa to Southern Europe.

By building essential infrastructure and boosting financial and trade links, the belt and road aims to enhance commerce and spread prosperity across 60-plus countries with a combined population well in excess of 4 billion. Financing comes from a number of sources, such as the Asian Infrastructure Investment Bank (AIIB), the Bank of China, The China International Trust & Investment Corporation, (Citic), and the Silk Road infrastructure fund. To date, approximately 250 billion dollars (US$) of related projects have been contracted, much of them involving Chinese machinery, raw materials and construction firms.[1]

Choosing the right projects

Given its huge domestic development in recent decades, China is hardly a newcomer to managing major projects. However, taking its infrastructure show on the road, across such a diverse range of countries, raises a number of fresh challenges.

Firstly there is the sensitive issue of sovereignty. With China emphasizing that it will respect sovereign rights, project selection will in many cases be at the discretion of each of the nations along the route – whose priorities may or may not align with those of China. A proposed railway line that stretches through to Thailand, for example, could support the latter’s ambitions to become a regional logistics hub, and the former’s need to access key export markets, offering a win-win for both countries. On the other hand, some prospective projects could potentially be viewed as primarily benefiting either China (e.g. by securing its energy resources) or the country in question (e.g. building local infrastructure unrelated to the One Belt route). Under any circumstances, choosing the right projects to prioritize can be quite a challenge. When dealing with governments inexperienced in infrastructure development this is compounded, particularly as project selection can often become highly politicized. When you factor in concerns over lack of transparency, corruption, an uncertain legal and regulatory environment, unpredictable financial systems and foreign exchange exposure risks, then decisions become even more complex. China’s domestic infrastructure program has been largely government financed, and carried out at breathtaking pace to accelerate economic growth. Conducting projects outside of its borders, in emerging markets, is a far more complex and prolonged affair, with the involvement of an array of stakeholders, which can slow the pace considerably.

These issues make it doubly difficult to please financiers (either banks or funds), who expect a good return on their investment through carefully chosen, efficient and well-managed projects. Project leaders, must, therefore, show a high level of understanding of the unique regulatory, political, legal, financial and project risks associated with potential projects, such as resource nationalism, transparency and labor unrest. It’s especially important to earn a ‘social license to operate’ by creating a good working environment, contributing to communities and minimizing the carbon footprint.

Amidst this complexity, China should, therefore, exert ‘soft’ power through comprehensive and early engagement with all governments along the route, to ensure that every project is positioned as a collaborative venture that brings rewards to all parties. This may involve investment in areas of infrastructure that do not directly benefit China, such as healthcare, education and housing.

A new game with different rules

Chinese businesses have relatively less experience in managing overseas projects, except where they are directly tied to China’s economic and trade objectives. This opens up opportunities for players from more mature infrastructure markets such as Australia, UK and Canada, to offer new ideas and technical knowledge as part of their project development and project management support. With its recent US$880 million acquisition of Australian construction giant John Holland, The China Communications Construction Company (CCCC) has gained access to invaluable technical expertise; a move that could be replicated.

Hong Kong also has a significant role to play in supporting infrastructure development as well as facilitating trade and investment along the belt and road given its location, its connectivity with mainland China, and its strength in financial services, transport and logistics, and professional services.

In addition, Chinese investors must also acknowledge that some of the countries in the proposed route have traditionally strong links to other nations with a vested interest in the region, and may resist China’s overtures. Equally these powers, namely Japan, India and especially Russia (which has a big influence in central Asia) may not support China’s efforts, and could seek alternative trade routes and blocs. Japan has not signed up to the AIIB, having nailed its colors to the mast of the established Asian Development Bank (ADB) as one of the largest shareholders. Since the One Belt announcement, Japan has stepped up its game, pledging to increase its investment in the ADB by US$110 billion over 5 years, with an expressed intent to build infrastructure such as roads and railways while reducing pollution.[2]

India, meanwhile, has its own programs, namely the Spice Route between Asia and Europe, and the ‘Mausam’ project that revives ties with its ancient trade partners via the Indian Ocean, stretching from east Africa, along the Arabian Peninsula, past southern Iran to South Asia, Sri Lanka and Southeast Asia.

While commentators have sought to describe the “One Belt, One Road” in various ways, it is clear that the initiative does reflect the Chinese government’s recognition that its own prospects are inextricably linked with those of its trading partners, and that it must take a more global role to further these ambitions.

With an annual Asian infrastructure gap estimated to be US$800 billion[3], there is plenty of room at the table for the AIIB, the ADB, and, indeed, other interested investors from around the world. The ADB has said that it is prepared to co-operate with China and has welcomed the entry to the region of new institutions for funding and supporting development projects. Despite fears that the main players are trying to assert an unhealthy influence, their combined efforts can make a real contribution to sustainable, inclusive growth for dozens of emerging economies.


Please click to download the original PDF file on KPMG’s website.

[1] China’s ‘One Belt, One Road’ looks to take construction binge offshore, Reuters, 6 September 2015.
[2] Japan unveils US$110 billion plan to fund Asia infrastructure, eye on AIIB, Reuters, 21 May 2015.
[3] Building China’s “One Belt, One Road,” Center for Strategic & International Studies, 3 April 2015.

By Carolyn Dong & Simin YU (DLA Piper)

China’s 'One belt one road' initiative was first introduced by President Xi Jinping during his visits to Central and Southeast Asia in September and October 2013. With the dawn of 2016, it is appropriate time to take stock and review what has been done so far in implementing the initiative, and its future direction.

Set out below is an overview of the One Belt One Road (shortened to OBOR) initiative. As detailed further below, with the initiative successfully launched, key funding institutions established, a regulatory framework deployed and eager diplomats entering into multiple bilateral agreements across the globe, 2016 is now likely to see a rapid acceleration in the uptake of OBOR projects. The potential now exists for powerful partnerships to be established between international and Chinese enterprises to leverage off this initiative.

'One belt, one road' in a nutshell'

'One belt, one road' is a development strategy and framework, proposed by the highest levels of PRC Government that focuses on connectivity and co-operation among countries along two main routes, the land-based 'Silk road economic belt' and oceangoing 'Maritime silk road' which run through the continents of Asia, Europe and Africa, connecting vibrant East Asian economies at one end and developed Western European economies at the other, while encompassing more than 65 countries along the route. The OBOR initiative covers countries as diverse as Singapore, Georgia, Kenya and the Netherlands.

The strategy underlines China's push to take a bigger role in global affairs, and its need to export China's production capacity in areas of overproduction such as steel manufacturing and infrastructure construction. However, the OBOR initiative is a broad initiative and captures everything from regional arts festivals and book fairs through to the establishment of the $100 billion Asian Infrastructure Investment Bank (AIIB), the $100 billion BRICS New Development Bank and the $40 billion Silk Road Infrastructure Fund. In March 2015 China’s National Development and Reform Commission (NDRC), Ministry of Foreign Affairs and Ministry of Commerce jointly issued the Visions and Actions on Jointly Building Silk Road Economic Belt and 21st Centruy Maritime Silk Road ('Visions and Actions Plan') for the OBOR initiative, which, similar to a strategy paper, acknowledges that the OBOR is a pluralistic and open process of co-operation which can be highly flexible and does not seek conformity.

However, at its core OBOR demonstrates a high level political commitment in China to work with participating countries to facilitate an increase in trade and investment flows and interconnections. A key focus of this is on reducing barriers to trade – both overcoming literal barriers (such as inadequate port, rail and road infrastructure) and also overcoming less tangible barriers (such as enhancing trade liberalisation and easing customs and quarantine processes).

OBOR calls for an improvement on the region’s infrastructure, with a call for greater energy and power interconnections and to establish a secure and efficient network of land, sea and air passages across the key routes. Additionally, the initiative calls for greater policy co-ordination (such as opening free trade areas and improving co-operation in new technologies) and financial integration (such as carrying out multilateral financial co-operation in the form of syndicated loans and supporting foreign countries to issue RMB denominated bonds). Furthermore, whilst the OBOR is firmly rooted in the Silk Road’s thousand year old heritage, it also clearly looking to the future – greater e-commerce interconnectivity and advancing the construction of fibre optic cables is encouraged.

OBOR: 2+ years down the road

Since OBOR’s 2013 launch, we have seen the successful launch of the Asian Infrastructure Investment Bank (AIIB), the $100 billion BRICS New Development Bank and the $40 billion Silk Road Infrastructure Fund (SRF). The former two institutions (AIIB and BRICS New Development Bank) are not exclusively directed towards the OBOR (although they are indeed relevant), but the latter, SRF, as the name suggests, has OBOR projects as a prime focus. Moreover the SRF has already started being a particularly active investor along the OBOR routes. For example, in April 2015 the SRF announced its first OBOR investment project – Pakistan’s 720-MW Karot hydropower project. In June 2015, the SRF (together with one of China’s largest chemical enterprises, ChemChina) announced agreements to seek to acquire Italian tyre manufacturer Pirelli. In September 2015, SRF concluded a framework agreement with one of Russia’s leading independent gas producer, Novatek, on the acquisition by SRF of a 9.9% equity stake in the Yamal LNG project. The SRF has also been an active investor in recent Hong Kong initial public offerings, taking cornerstone stakes in each of China International Capital Corporation’s October 2015 IPO and China Energy Engineering Corporation’s November 2015 IPO.

Other projects announced in connection with the initiative include a number of private Chinese companies’ foreign expansion and joint venture plans in a OBOR countries, such as the strategic co-operation agreement between Anhui Conch Cement and the Bank of China to see Anhui Conch Cement investing to establish new project sites in South East Asia; and machinery maker XCMG Group’s opening of new joint venture factories in Uzbekistan.

Additionally, Chinese regulators have continued to lay the regulatory and diplomatic foundations to support the OBOR initiative. Domestically, under the guidance of the March 2015 of the Visions and Actions Plan (which lays out the broad strategy of the initiative (see above)), 2015 saw other key Chinese regulators issue supporting guidance. This included China’s State Administration of Taxation releasing the 'Notice Regarding the Tax Services and Administration to Implement the Development Strategy of the ‘One Belt One Road’' regarding tax services and improvements contemplated for the OBOR route and the Ministry of Transport drafting supporting plans and measures. Additionally a number of Chinese provinces have published guidance notes and plans relevant to their local areas, for example Guangdong (June 2015); Hunan (August 2015); and Henan (December 2015). Each of these localised plans focuses on the geographical benefits and respective strengths of each province. For example the Guangdong plan focuses on developing shipping and cross-boundary infrastructure in the Pearl River Delta (covering the Guangdong-Shenzhen-Hong Kong and Macau bay area); whilst the inland province of Henan plans on positioning itself as an access point for the opening up of China's inland regions to the outside world.

On the international front, China’s diplomats have been busily engaging with relevant counterparties, with international agreements or memoranda issued jointly with countries as diverse as India, Hungary, Kazakhstan and Russia.

Successfully utilising OBOR opportunities

A large portion of China’s foreign investment and trade going forward are expected to take place in OBOR countries. However, the OBOR is not only outward looking from China - it is a two-way street, with the Visions and Actions Plan specifically welcoming companies from all countries to invest in China whilst also encouraging Chinese companies to participate in infrastructure construction and undertake other investments in other countries along the route.

Key industries for the OBOR initiative include: infrastructure and projects; energy and power; transport and logistics; information technology and industrial development; and financial markets.

Successfully implementing projects along the OBOR will not be without risks and challenges. Overcoming these risks will require thorough due diligence exercises and robust partnership and joint venture arrangements. More importantly success will depend on enterprises finding the right partners and having the right support networks providing a thorough understanding of local conditions, regulators, market players and, more generally “ways of doing business” in both China and the foreign host jurisdictions. This will be essential to be able to adequately identify, quantify and overcome risks and opportunities; to achieve this, an on the ground presence and knowledge of suitable partners and relevant contacts (both for foreign parties in China; and for Chinese parties in the foreign jurisdiction) is a perquisite.

Importantly, whilst China has allocated significant capital and resources towards implementing OBOR, China cannot implement the OBOR alone. Success of this initiative requires co-operation between Chinese enterprises and foreign counterparties in a raft of sectors and regions, covering everything from small scale trade and investment, to the delivery of large scale multi-jurisdictional game-changing infrastructure... and consequently the OBOR initiative offers countless opportunities for foreign companies to partner with Chinese companies, enterprises and financial institutions.

Please click to view this article on the DLA Piper’s website.

by Jikkie Verlare & Frans Paul van der Putten (Clingendael Institute)

China’s initiative for a modern-day silk road, known as ‘One Belt, One Road’ (OBOR), aims to connect Asia, Africa, Europe and their near seas. Under the definition contained in Xi Jinping’s New Security Concept stating that ‘development equals security’, OBOR can be conceptualized as the most ambitious infrastructure-based security initiative in the world today. This has major implications for geopolitical relations and stability in various regions. It would be beneficial for the European Union (EU) member states to invest in a common response to OBOR, as opposed to engaging with this initiative primarily at the national level. This Clingendael Policy Brief explores how the EU’s existing policy tools and frameworks might be used for enhanced Sino–European security co-operation in relation to OBOR.  It is argued that if the European Union works with China under the framework of the EU–China strategic partnership, to align with, inter alia, the planned restructuring of its European Neighbourhood Policy, as well as projects included under its European Maritime Security Strategy and Partnership Instrument to link with the so-called ‘Belt’ and ‘Road’ projects, this would entail true added value for the EU. These steps should be part of the EU’s new Global Strategy for Foreign Policy and Security, which is due to be published in June 2016. This would go beyond the tendency of EU member states to compete for the benefits of increased Chinese investments on their own territories, but instead embed China’s initiative in the common European strategic goal of gaining a larger security footprint in neighbouring regions…

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AmCham China

Most analyses of China’s One Belt One Road (OBOR) initiative tend to focus on two core aspects of President Xi Jinping’s ambitious vision of a more interconnected Europe, Asia and Africa: the political motivations behind it, and whether the economic realities even render Beijing’s plans for a modern Silk Road feasible. While the political focus tends to be on Beijing looking eastward for alliances in the wake of an increasing post-pivot US presence and the recent conclusion of the Trans-Pacific Partnership (which includes the US, but not China), economic conditions in China are increasing the urgency and necessity of new opportunities to put its vast manufacturing powers to use. But despite the many criticisms and concerns over China’s political objectives and whether or not OBOR will realize its full potential, this initiative has already begun to alter the Eurasian economic and business landscape through its creation of financial capital, pushing of economic and legal reforms, and increased institutionalization of the region…

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By Graham Norris (Senior Director of Communications, AmCham China)

When facing adversity, it makes sense to draw on the experience of history, and with 5,000 years to review, China’s leaders have no shortage of comparisons to make with the current era. China is on the rise economically and politically, but the economy is struggling to transition to a more sustainable mode of development. Moreover, infrastructure-driven growth has created an overcapacity hangover that threatens to unravel excessively leveraged lending systems in the provinces. What to do?...

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By the Economist Intelligence Unit

It is no accident that China’s President, Xi Jinping, will attend the UK-China Business Summit during his visit to the Britain this week, since business, trade and investment lie at the heart of the future agenda for developing relations between the two countries. While deals are expected to be signed across a range of sectors, and there is anticipation of further co-operation in financial markets, there are five key elements in the future of UK-China economic relations, which can be encapsulated in the following acronyms: RMB, CIPS, OBOR, AIIB, and FTA. These are the steps on the ladder to help the UK achieve its stated objective of becoming ‘China’s best partner in the West’……

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By the Economist Intelligence Unit

The UK’s relationship with China was centre stage during President Xi’s visit to the West last week, with many wondering what’s next for the economic relationship. The answer is President Xi’s ‘One Belt, One Road initiative’ (OBOR), which could be a gamechanger for China, and open up new opportunities for British business……

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