OBOR: China’s Dream or Reality?


135444908_14661426174961nBy Hari Chand “Agnipunja”–

 Abstract–

One Belt One Road (OBOR) is a new initiative of China introduced by Chinese President Xi Jinping in 2013 during his official visits to Kazakhstan and Indonesia. Materializing this initiative is the core objective of building the “Community of Common Destiny” among countries in South Asia and beyond as envisioned by Chinese President Xi. It can be considered as the continuation of economic reform policy initiated by the Chinese paramount leader Deng Xiao Ping after the establishment of People’s Republic in China in 1949. Deng’s policy was related to the import of technology and education for the rapid economic development of China whereas the OBOR is related to the export of Chinese technology, investment, and the industries, abroad. This paper mainly deals with the history of Silk Routes, China’s dream, goals, potentialities and pertaining challenges of the OBOR.

Key Words: One Belt One Road, Community of Common Destiny, Five Principles of Peaceful Co-Existence, Double Diplomacy, Developing Countries, Peripheral Diplomacy

Introduction

One Belt One Road (OBOR) is a global initiative of China which was introduced by President Xi Jinping in 2013 during his visits to Kazakhstan and Indonesia.  The “One Belt” refers to the “Silk Road Economic Belt,” which is the revival of ancient overland silk routes of China to the Central Asia, the Middle East, and Europe. This is also called the “Modern Silk Road.” It is based on existing and new rail lines, highways and pipelines. The next one is “One Road” which refers to the “21st Century Maritime Silk Road”. It is also known as the “Maritime Silk Road”. It is envisioned that it will connect China with Southeast Asia, South Asia, Africa, the Middle East, and Europe (Enright, 2016, p. 3). Both the Belt and the Road connect more than 65 countries and 150 major cities physically, culturally, commercially and so on. Almost 4.4 billion combined population has belonged to those countries. The Belt and Road Initiative can be considered as China’s foreign policy towards developing countries (Chi, 2016, p. 55). This is because; it is assumed that the developing countries will be benefitted from OBOR. Authors Zheng Yongnian and Zhang Chi argue in their article “The Belt and Road Initiatives and China’s Grand Diplomacy” that the Belt and Road Initiative will not only help the mature products made by Chinese enterprises enter the vast overseas market, but also help transfer surplus capacity in China abroad in an orderly manner. According to them, China has been dependent upon her economy based on the production in China but now it is the time to transfer technology and industries abroad. Therefore; the OBOR is the worldwide path of the Chinese economy, technology, production and the industries, which will obviously create the win-win situation for developing countries through enhancing connectivity and regional economic integration.

History of Silk Road

The Silk Road is the world’s ancient and most important land trade route. It has a long history, closely linked with China which explains the political and economic reasons for its success. Historical Silk Road dates back to 2,000 years ago during China’s Han dynasty, which was mainly a trade route between Asia and Europe. The Han Government sent General Zhang Qian (200–114 BC) as an envoy for building relationships with other small nomadic states to enhance the Han business through the silk route.

The silk route crosses the Yellow River at Lanzhou and follows the “Gansu Corridor”. Furthermore, it stretches along the edge of deserts and mountainous regions and ranges. Therefore, it was very difficult geographically, however, most of the papermaking, gunpowder and printing technologies were sent to the West through this road whereas western medicine and other things used to be imported to China via the same route. The things which were sent to the West were three great inventions of China out of four. In this way, the ancient Silk Road had served as a corridor for bilateral trade and cultural exchanges between Asia and Europe.

It had begun from Xi’an, the capital of northwest China’s Shaanxi Province to Europe which was 7,000 kilometers long. South and central Asian countries were along the route in between the two continents. Most of the part of the Silk Road was in China. It is actually the collective name given to several of ancient trade tracks linking China and Central Asia. It is believed that this route was called the silk route because of the production and the export of Silk by China which is the most luxurious fabric. This valuable and attractive commodity attracted lots of merchants of Central Asian countries who used to exchange horses, cattle, furs, hides and so on instead of the silk. Chinese people and the most of the world scholars consider the silk route as Chinese civilization which is written in China Highlights. The historical Chinese economy was heavily dependent upon the trade through this route.

The OBOR Route

Xinjiang is the “Central Area” for the “One Belt” because of its geographic situation in the west in China. Similarly, Fujian is “Core Region” for the “One Road” since having the historical meaning which is considered as the home of the ports for the Maritime Silk Road. Xinjiang, Qinghai, Gansu, Ningxia, and Shaanxi are considered for focusing on connections with Central Asia through the One Belt. Sichuan, Chongqing, and Yunnan will make the links with Central Asia, South Asia, and South East Asia along the route of the One Belt. Moreover, Fujian, Jiangsu, Zhejiang, Guangdong, and Hainan are considered to focus on the links with South East Asia, South Asia, the Middle East, and Africa through the One Road.

China’s Dream

On November 29, 2012, Chinese president Xi Jinping addressed his idea of the “China Dream,” related to the “the great rejuvenation of the Chinese nation.” It was addressed during the visit of “the Road towards Renewal” exhibition at the National Museum of China. The most significant political slogan of new leadership, the idea of the China Dream symbolizes Xi’s vision for the future of China and its place in the world. Author Zhang Baohui writes on his article “Xi Jinping, ‘Pragmatic’ Offensive Realism and China’s Rise”, during the speech, Xi emphasized the humiliations suffered by china since the 19th century due to its weakness and backwardness. He suggested that China is nearing the end of a period of continuous striving for rejuvenation that began with the opium wars. “We are now closer than ever to the goal of china’s national revival,” “We are more confident and better equipped than ever to realize this goal (Baohui, 2014, p. 72).” From this famous statement, it is understood that China has risen again and marching towards the Super Power and the OBOR can just be considered the way of it.

On the other hand, China believes building the Community of Common Destiny. It refers the prosperity of all the neighbors of China, all developing countries and the rest of the world. Professor Dai Yonghong of Sichuan University, China, says that China has five points of the proposal to achieve this goal. 1) Build trust and develop good neighborliness, 2) Work for win-win cooperation, 3) Stand together and assist each other, 4) Enhance mutual understanding and friendship and 5) Stick to openness and inclusiveness. China believes that if China succeeded on those five points, the dream of ‘Community of Common Destiny’ will be more achievable and possible. Professor Dai argues, “if we win all the time and our partner lose all the time, then how can we become sustain?” His argument strongly supports the above points. The next point is that the prosperity of great power depends on the prosperity of its peripheral countries. This fact cannot be denied in the globalized and interdependent world. Even today, the USA has the huge debt of China for her annual budget. Therefore; no any country can be self-dependent in the globalized world.

China has adopted “Two Pillars and One Circle” diplomacy to achieve the dream. The first pillar refers new type of major country relationship. It relates the relationship with super and the great power like the USA, the UK, Japan, Russia, and India etc. China is well aware that the harmonious relationship with those countries determines the success of that dream. On the other hand, the second pillar of Chinese diplomacy refers the Belt and Road Initiatives which is a very hot debate in the current world. It has attracted the world’s attention towards China and Chinese leadership. One circle of Chinese diplomacy indicates the peripheral diplomacy that means the diplomacy of China for all the peripheral states including her number of neighboring countries. Good relationship of China with neighboring and other peripheral countries is another most important part of Chinese diplomacy. China has also the vision to be revived peacefully by applying “Two pillars and One Circle Diplomacy” as the super power by 2049 which is the main dream of China and Chinese people. To accomplish the vision, China highly prioritizes the political stability within China and beyond along the route of OBOR.

 

Goal of OBOR

One of the very important goals of the OBOR is to foster the significant economic cooperation as well as integration between China and Europe. President Xi Jinping’s address during the visit of Europe in 2014 indicates that China and the EU are agreed to make the twin engines themselves for global contribution to economic growth. Both the EU and China are facing slow economic growth which may bring the economic and financial crisis in the future. By keeping this fact in mind, the leaders of EU and China want to boost their economy through close cooperation in OBOR project. In a report of “One Belt One Road: Insights for Finland”, there is written that The OBOR initiative can also be viewed as a larger counterpart and potential partner for the EU’s own investment program, which hopes to mobilize public and private investment of at least €315 billion from 2015-2017.

Some of the western scholars argue that the other China’s goal of OBOR is to enhance China’s energy security, to enhance China’s hard and soft power,  to expand markets for Chinese industries, to increase the efficiency of Chinese companies with the comparison to other nations, to extend the influence of China in her economic and geopolitical dimension, to shift the epicenter of balance of power in Asia, to be the great power and super power, to enhance the development of China’s peripheral regions etc. But the Chinese perspective is different. Most of the Chinese professors and academicians argue that these all the things are blame imposed by western countries. Only one of the goal of OBOR is the prosperity of all human being in all the developing countries and the community of common destiny, they say.

For the prosperity, infrastructural development is major criteria which create the numerous opportunities in developing countries. Therefore, infrastructural development is another objective of OBOR in Asia. According to PWC estimation, almost $5 trillion is needed for OBOR countries for infrastructural development from 2016 to 2020. Also according to ADB’s estimation, $8 trillion is needed in infrastructure investment in Asia from 2010 to 2020 nevertheless, the investment is very low. It is because the most of the developing countries are fallen under the OBOR initiative having modest resources. In the other hand, many of the countries are affected by very weak systems and institutions. It seems that China is trying to see the lack of this investment as holding back the development of the region.

Moreover, China wants to take the prominent role worldwide. China does not seem so much happy with her global role and the position it deserves. There is also the initiation of the US-backed Trans-Pacific Partnership (TPP) which excludes China. Some of the academicians believe that OBOR is one manifestation of China which can be considered as the counter of TPP and more engaged in international affairs. China has promoted the OBOR in several international forums involving the Asia–Europe Meeting (ASEM), the Shanghai Cooperation Organization (SCO), ASEAN+1, the China–Arab States Cooperation Forum (22 members of the Arab League plus China), the Forum on China–African Cooperation (50 African countries plus China), and China–CEE 16+1 (the sixteen Central and Eastern European Countries plus China) (Enright S. a., 2016, p. 5). Similarly, Southeast Asia is also a key part of the “One Road”. There are excellent ports in Southeast Asian countries like Singapore and Malaysia but in the region, sufficient infrastructural development is lacked. China wants to fill up this gap in the ports of Southeast Asian countries through OBOR.

Central and South Asia are also strategic sub-continents for the OBOR initiatives. Shanghai Cooperation Organization (SCO) which includes Central Asian countries is playing the vital role in security, military, economic, cultural, and financial affairs. It furthermore has sponsored in transportation, communications, and energy related infrastructural projects. China wants to relate those infrastructures under OBOR. South Asia which can also be considered as the new epicenter of the balance of power is the heartland of OBOR. Because of the biggest challenge created by India in this sub-continent, this region is the heartland of China. Until and unless resolving all the problems with India about OBOR, there is the difficult situation for full implementation of OBOR in South Asia because India has perceived this initiation as the big security threats for her whereas China claims it as the initiation based on mutual cooperation, benefits, and win-win situation. China has had also a close relationship with Pakistan for decades and huge investment is invested by China under China-Pakistan Economic Corridor (CPEC).

In 1999, China had first announced an initiative called “Go Global” to enhance the internationalization of Chinese enterprises. It was expected to help Chinese companies for making more competitive both in national and international level. The underlying goal of this initiative was to promote the soft power and build the economic as well as diplomatic relations around the world. The OBOR will continue and expand the goal of “Going Global” practically in developing, underdeveloped and developed world simultaneously.

Ambitious Way

After 40 years since the enactment of ‘reform and opening up’ policy by Deng Xiaoping, President Xi Jinping had uncovered the new initiative. Taking historical resonance in the ancient Silk Road that connected China to Persia, the Arab Peninsula, and Europe, China has tried for the revival of the very pragmatic idea of connectivity of China with the rest part of the world where number of countries is strategically located along the route in between.

There is written in a report “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road” issued by the National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce of the People’s Republic of China that ‘One Belt, One Road’ is described in the ‘Vision and Actions’ document as ‘a systematic project which should be jointly built through consultation to meet the
interests of all and effort should be made to integrate the development strategies of the countries
along the Belt and the Road’ (National Development and Reform Commission, 2015, p. 4). Moreover; The OBOR is viewed as a major tool of multi-dimensional transcontinental economic development zone across numerous markets, continent, and the regions.

 

Crucially, this project has also not only been imagined simply as a huge infrastructure development programme but also building up the physical infrastructure is an essential aspect. China’s intention for OBOR is to create different links in different areas like enhancing and promoting policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bonds. According to the ‘Vision and Actions’ document, it is expected that ‘the connectivity projects of the Initiative will help the development of the countries along the route of Belt and Road. Furthermore, it will also help for tapping the potential market in this region, promoting investment, creating job opportunities, enhancing people-to-people and cultural exchanges and so on. Besides its political objectives, OBOR brings a strategic focus to the government’s “go out” initiative, which encourages Chinese firms to go abroad in search of new markets or investment opportunities (Unit, 2015, p. 3). It is the continuation of reform and opening up policy. Generally, after the enactment of the policy of paramount leader Deng Xiao Ping, modernization of China in agriculture, industry, science and technology and the defense was started (Chandra, 1994, p. 126). In other words, pragmatism and rational method of economic management had become a strong additional discourse in ideological politics. It seems China has been driven by the integration of pragmatic and ideological foreign policy. Deng had started to send tens of thousands of Chinese students in abroad to teach the new western education and technology to contribute to nation building process after completion (Kissinger, 2011, p. 330). The main strategy of China, especially after 1980s was to import the western technology and the education to produce the huge mass of commodity by Chinese well-trained expertise in China and then to export abroad. But the concept of OBOR is now to export the Chinese technologies and the industries abroad for massive production of commodity and infrastructural development in developing countries with the huge amount of the investment.

 

Some of the countries from the Middle East like Egypt, Iran, and Saudi Arabia, have signed up to the AIIB for further cooperation in infrastructure. According to South China Morning Post, November 2, 2015, almost $ 126 billion for 400 projects in OBOR regions by the end of 2014 was lent by the China Development Bank and it also had the plan to fund 900 more projects with $ 800 billion in investment which is the big amount.

As per another report, Chinese state-owned enterprises invested $ 12 billion in OBOR-related projects in the first nine months of 2015 which includes the projects in Singapore, Indonesia, Russia, Thailand, and Laos. Some analysts have estimated that Chinese investments in the OBOR initiative will reach $ 200 billion by 2018.

The next aspect of the OBOR initiatives is the individual announcements. Premier Li Keqiang had announced $ 20 billion to ASEAN countries for infrastructure development during China-ASEAN summit in 2014. Similarly, in May 2015, the agreements of $ 25 billion were made among China, Russia, Kazakhstan, and Belarus in May 2015 and China also signed investment agreements of $ 22 billion in total with India in the same month though the budget was not explicitly OBOR-related. Likewise, China signed agreements of $ 46 billion with Pakistan in April 2015 for the development of energy, infrastructure, and transportation projects along the China-Pakistan Economic Corridor which is considered under the OBOR initiative. On top of that, in 2014, Premier Li announced $ 10 billion loans to African Countries and an increase of $ 2 billion in the China-Africa Development Fund.

In this way, China has the huge plan to invest worldwide in most of the cases under OBOR initiative. In case of the total budget of OBOR, according to Chen Fengying, Research Fellow in ‘China Institute of Modern International Relations’, the OBOR will cover almost 63% of world population of 65 different countries and 2.1 trillion US dollar of common GDP and 1.4 trillion US dollar of total budget of OBOR is predicted. Almost 9% of total budget is committed from Bank of China, Silk Road Fund, and Chinese Corporate Houses. Based on all above information, we can say that the OBOR initiative is an ambitious project however it is quite practicable and possible in the dedication and commitment of Chinese government and the people.

 

Need of Revision

In my understanding, the world seems different than China has analyzed. The analysis of China about the countries along the route of OBOR seems in “Two Pillars and One Circle diplomacy”. As China highly emphasizes on major country relationship to implement the OBOR, the character of those countries is also different. Priorities and the interest of major countries are contested. Geopolitical factors and their alliance are not the same. Regional and global power dynamics are also complex. The discourse of regionalism and globalization sometimes seems in countered orientation. From the Brexit (Exit of Britain from the European Union) process, nationalism is becoming the prime agenda in current international affairs in the opposition of regionalism and globalization.

On the other hand, the USA has made the loose democratic alliance in Asia to encircle China. Japan, India, Australia, the Philippines, South Korea etc are the strategic partners of the USA in Asia which is not in favor of Chinese interest. Sometimes, it seems the alliance within the alliance and enemies within the enemies. According to Ashok Sajjanhar, there is a memorandum made on commitments of India and Pakistan with the goal of acquisition by them a status of Shanghai Cooperation Organization (SCO) member-states (Sajjanhar, 2016). SCO is, of course, China led security organization. Some western scholars argue that SCO is established to counter the North Atlantic Treaty Organization (NATO). But the perspective of China about it is different than that. India is also the founding member of Asian Infrastructure Investment Bank (AIIB) whereas the USA is totally denying and pressurizing to her allied countries not to join the AIIB. In this scenario, the question is raised that how the US alliance can go strongly in Asia together? So, it proves the above argument of ‘alliance within the alliance’ and ‘enemies within the enemies’. Therefore, it does not seem possible to analyze the major countries under the same pillar of Chinese diplomacy. The categories of major countries should be different in China’s perspective. The diplomacy of China with India will be obviously different than the diplomacy with the USA. Similarly, the diplomacy with Russia will be different than the diplomacy with Japan and so on and so forth.

Moreover, China talks about “One Circle” diplomacy. All the peripheral countries are put inside the same circle. My question is that the geopolitics of China’s neighboring countries and the geopolitics of other developing countries in Africa, Central Asia, and South East Asia is totally different. Different geopolitical situations determine the real international political actors. Its impact directly reflects on the foreign policy of that country. If the foreign policy is different, the diplomacy will obviously be different.

On top of that, the situation of developing countries in the Middle East is quite challengeable. Because of tension between Israel and Palestine and the war imposed by Islamic State of Iraq and Syria (ISIS), the governments are facing enormous difficulties and hence they are weak in reality. But the terrorist group is becoming strong day by day. In such condition, it will be quite impossible to deal with all the peripheral countries through one circle diplomacy.

Double Diplomacy

Terrorism is the biggest threat in the 21st century in the world. The OBOR more focuses on the developing countries to make them more prosperous. The terrorism is also being focused on the same countries. In such situation, the next crucial question can be raised that how China will deal if the condition of OBOR versus Terrorism was created in the future? Certainly, there is a high risk of such possibilities. Almost more than half of the population and the geography is being affected by the terrorist groups in those countries where the presence of the government is very weak. In such situation, there will be two ways for the implementation of OBOR successfully and safeguard the infrastructures. 1) The government of those countries should be strong enough and able to control the terrorism, which is less possible. 2) Next way is that if the government cannot control the situation, Chinese double diplomacy will be inevitable to deal with the government and the terrorist groups simultaneously for the successful implementation of OBOR.

Challenges

If the budget of Marshall Plan and the OBOR is compared, the total budget of OBOR is twelve times of Marshall Plan in current value. Actually, the Marshall plan was the policy of containment of communism in Western European countries in economic level. The plan was apparently meant for all the European countries, but its underlying aim was to save Western Europe from Communism. The sixteen European nations excluding communist countries had concluded that their rehabilitation required 15 billion dollars over the next four years (Chandra, 1994, p. 27). The aim of OBOR is the prosperity and the development of developing countries but the western scholars argue that the OBOR is the Chinese version of Marshall Plan. In their perspective, China is doing such huge investment in developing countries to pull out the countries from the influence of US influence. In other words, they argue that the OBOR has been initiated to contain the USA in Asia, Africa, and Europe but Chinese scholars argue that OBOR is only for common destiny of all human being rather than the rise of any one country. Therefore; the major challenge of OBOR is to deal with the USA and her alliance and to make agree on Chinese project.

The second challenge is about the management of rest of budget of OBOR. There seems almost 81% budget deficit now. What will be the source of that budget? How do the stakeholders can allocate a certain percentage of that budget? This may be the financial challenge of OBOR.

Next challenge can be the “Time and Space”. Currently, China has been conducting massive conference and seminars throughout the world about OBOR. In the mean time, Sichuan University of South Western China has begun the OBOR scholarship. China’s governmental news agency Xinhua has been publishing special series on OBOR. There seems also the strong cooperation between and among the likeminded media houses in other countries. These all sort of things fall under the software implementation of OBOR which may not be the big challenge but in hardware implementation (Construction of infrastructure), time and space play the vital role. Favorable local political situation and the time is most important but the many developing countries have been facing the political instability and its implication reflects on the process of OBOR implementation. According to Enright and Scott, OBOR initiative is about as high in profile as is possible in the Chinese context. Failure is not an option and success will be measured in investments made, projects completed, friendships and alliances strengthened, and geostrategic position improved (Enright S. , 2016, p. 11). This is also related to the time and space. Where we are and in what time? Is time perfect at the space for the project to begin or not?

There is also a high risk after the construction of infrastructure. 100% Chinese companies are not successful abroad due to different factors. Is it possible to return the investment and gain the financial profit in the long run? How China successfully faces those types of multiple challenges, the successful implementation of OBOR will depend on it.

Conclusion

Despite series of uncertainties, OBOR will be the way of development and prosperity not only for China but also for underdeveloped and developing countries. China has adopted the theory of peaceful co-existence in her foreign policy. Five principles of peaceful co-existence are the basic guidelines of China’s foreign policy. This is quite respected and favorable for developing countries. China never intervenes in domestic affairs of other countries. China can understand the hearts and minds of the leadership of other nations and the dignity of the people in poor countries. Therefore; all the underdeveloped and developing countries will stand in favor of China’s OBOR and this is the foundation for the success of OBOR. China has the dream and she has also the vision, technology, education, the commitment, passion and the way to achieve the dream. I believe that after the successful implementation of OBOR, China will peacefully rise as the super power in each and every domain in international affairs despite not having the clear example of peaceful rise and fall of the power in world politics which will prove the OBOR is not only the dream but also the reality of China.

Note: The Author is doing research on China’s foreign policy

 

Reference

Baohui, Z. (2014). Xi Jinping, ‘Pragmatic’ Offensive Realism and China’s Rise. Global Asia , 72.

Chandra, P. (1994). International Relations. New Delhi: Vikas Publishing House Pvt. Ltd.

Chi, Z. Y. (2016). The Belt and road Initiatives and China’s Grand Diplomacy. China International Studies , 55.

Enright, S. a. (2016). One Belt One Road:Insights for Finland. Länsi-Pasila: Finland Team-Tekes – the Finnish Funding Agency for Innovation.

Kissinger, H. (2011). Henry Kissinger on China. London: Penguin Group.

National Development and Reform Commission. (2015). Back to the future: China’s ‘One Belt, One Road’ Initiative. Beijing: National Development and Reform Commission,.

Sajjanhar, A. (2016, June 19). The Diplomat. Retrieved June 19, 2016, from www.thediplomat.com: http://thediplomat.com/2016/06/india-and-the-shanghai-cooperation-organization/

Unit, T. E. (2015). Prospects and challenges on China’s ‘one belt, one road’: a risk assessment report. The Economist Intelligence Unit.

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