By McKinsey & Company

China signaled its intention to revive the economic power of the ancient Silk Road with two new initiatives in 2013 - the Silk Road Economic Belt and a 21st-century Maritime Silk Road. Now is the time to put flesh on these concepts and make China’s One Belt, One Road (OBOR) initiative a reality.

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By Andrew Sheng

Andrew Sheng says the world needs a strong Chinese currency as much as the Chinese themselves.

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By Andrew Sheng and Xiao Geng

Andrew Sheng and Xiao Geng write on the influence China's AIIB could have on areas beyond infrastructure-building.

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By Pamela Mar

Pamela Mar says China's new infrastructure bank could underwrite Asia's efforts to build a sustainable future.

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By Patrick Low

Patrick Low writes on the need to avoid certain pitfalls as China seeks to push ahead with its One Belt, One Road Initiative.

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By the Economist Intelligence Unit

China has grown to be a significant force in global trade over its 36 years of reform, but for most of that time it has not assumed a strong leadership role in trade governance, opting instead to integrate into existing systems. With the launch of the One Belt, One Road (OBOR) initiative in 2013, and the creation of new multilateral financial institutions led and largely capitalised by China, the country may have turned a corner in its international economic policy.

Does this mark the beginning of the end of China’s engagement with the existing institutions of trade and investment governance? If China is pursuing a new paradigm of international trade liberalisation, what does that entail? This report looks at what China’s new economic diplomacy means for regional and global trade liberalisation, and for business.

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Presented by Thomas Chan, China Business Centre, The Hong Kong Polytechnic University on 26 Nov 2015

This is a presentation for a seminar on Myanmar – Its Future and Its Role in China’s Maritime Silk Road Strategy.

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Presented by Thomas Chan, China Business Centre, The Hong Kong Polytechnic University on 18 Nov 2015

This is a presentation for the session “Belt and Road Initiative”: Implications and Opportunities for Trade and Investments at Asian Logistics and Maritime Conference held in Hong Kong Convention and Exhibition Centre.

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Presented by Thomas Chan, China Business Centre, The Hong Kong Polytechnic University on 29 Oct 2015

This is a presentation for the Conference on Silk Road Strategy (Series II): Focus on Tajikistan” organised by the China Business Centre, The Hong Kong Polytechnic University and the Silk Road Economic Development Research Center.

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By Standard Chartered Bank

Summary

The China-led OBOR initiative aims to boost trade and investment growth through better infrastructure connectivity across Asia, extending to the Middle East, Africa and Europe. Simply put, ‘One Belt’ is a modern-day Silk Road, and ‘One Road’ is the maritime equivalent. The OBOR initiative has the potential to channel China’s savings and construction expertise to other countries to resolve their infrastructure bottlenecks, while making more efficient use of China’s excess capacity.

We estimate that official financing for OBOR could potentially top USD 1tn in the next decade. Infrastructure investment entails long-term investment commitments with uncertain returns, and official involvement is indispensable. We expect the recently established Asian Infrastructure Investment Bank (AIIB), New Development Bank (NDB) and Silk Road Fund (SRF), together with China’s policy banks, to play a leading role in supporting infrastructure development at the early stage. The AIIB, in particular, could potentially spur investment by other development banks and ‘crowd in’ private investment.

Commercial banks with substantial footprints along the OBOR are likely to play an important role in amplifying the effects of official funding. China’s strategy needs to be aligned with those of the other OBOR countries. The initiative has raised concerns in both OBOR and non-OBOR countries about China’s political and economic agenda. China-led investment in strategic industries such as telecommunications and energy may raise fears about the country’s expanding influence. To be successful, China needs to improve strategy alignment with other countries, gain the support of local communities, and embrace market principles and transparency. Domestically, China needs to better coordinate the investment plans of local governments to prevent a new round of over-investment.

If implemented effectively, the initiative can boost growth, Renminbi use and commodity demand. The expected infrastructure investment boom will not only lift demand immediately, but also raise potential growth rates by building physical capital. China will also benefit through more effective use of its excess capacity. In particular, we estimate that official financial support for the OBOR initiative may increase demand for crude steel by 200 million tonnes (mt) in 10 years, or 20% of China’s annual production capacity. Commodity-intensive infrastructure investment will also support commodity demand and prices. The initiative may accelerate China’s shift from being the world’s biggest goods exporter to a major capital exporter, and expand the use of Renminbi in international trade, investment and financial transactions.

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