Current Affairs 2022: China's One Belt One Initiative Plan and its Declining Investment

By Shubham Singh

China's One Belt One Initiative plan is a Multi-Billion dollar plan to build the modern silk route keeping China at the focus. Read here its significance and the reason of declining investment in the initiative.

China's Belt and Road Initiative, also known as the One Belt One Initiative Plan (OBOI) is an ambiguous and vague project of China to invest in infrastructure all over the world. It is the most expensive project that China has ever invested in. The project is often described as a 21st century Silk Road, consisting of a "belt" of overland corridors and a maritime "road" of shipping routes. In the five years since President Xi Jinping announced his grand plan to connect Asia, Africa and Europe, the initiative has become a broad buzzword describing almost all aspects of Chinese engagement abroad.

What are China’s belt and road initiatives?

The Belt and Road were announced in 2013 as an economic development initiative to create new trade corridors across Asia, Europe and Africa, putting China at the top of the geo-economic food chain while benefiting participants down the line. It aims to strengthen China's economic leadership through a comprehensive infrastructure development programme in China's neighbouring regions. The BRI is an ambitious plan to develop two new trade routes to connect China with the rest of the world.

By land, China wants to connect the country's underdeveloped bush with Europe via Central Asia. This route has been called the Silk Road Economic Belt. The second part of Xi's plan is to build a 21st-century maritime Silk Road linking the fast-growing Southeast Asian region to China's southern provinces via ports and railways.

82 per cent of the increase is in the Belt and Road Initiative area, with the largest percentage increase in East Asia. Second, globally, the Belt and Road Initiative could help lift 8.7 million people out of extreme poverty and 34 million out of medium poverty.

What is the reason for the creation of the belt and road initiative?

Although there are many reasons behind the creation of the belt and road initiative, to increase China's stature around the world is a significant one. There is no doubt that China also intends to make the participating nations dependent on the Chinese economy and thereby build economic and political influence for China.

Another reason behind the creation of the belt and road initiative is that the Chinese government responded to the emergency with a 4 billion yen stimulus package, awarding contracts for the construction of railways, bridges and airports, but saturating the Chinese market. The Belt and Road framework provides an alternative market for China's giant state-owned enterprises beyond its borders. The Belt and Road are seen as a crucial element in the Chinese government's efforts to boost the economy of the country's central provinces, which historically lag behind the richer coastal areas.

China’s Belt and Road initiative in various reason

The idea was first proposed by Chinese President Xi Jinping during a visit to Kazakhstan in 2013, and Central Asia is considered the most important region for the "belt" element. New maritime trade routes were established, known as the old Marco Polo route - a maritime Silk Road connecting China, Southeast Asia, Africa and Europe. Pakistan is perhaps the most important country in China's belt and road initiative.

Asia

China has land borders with 15 nations, including unstable states such as Afghanistan, Russia and many Middle Eastern countries. Investment in the Belt and Road is seen as a way to promote China's "periphery diplomacy" - trade and infrastructure partnerships with countries along this vast land border. Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan are part of its sphere of influence, and China's proposed belt challenges Russian power in the region.

Along with Russia, India is also a serious opponent to China for its belt and road initiative. The China-Pakistan Economic Corridor runs close to the disputed region of Kashmir, creating an alliance between two nuclear-armed neighbours that create territorial links on India's northern border. Malaysia and the ASEAN countries are major countries in Asia to be part of China's belt and road initiative.

Africa

China's banks have financed numerous projects in Africa, including a major gas pipeline and railways in Nigeria, as well as projects in Uganda, Egypt, Ethiopia and many other countries. Kenya took a massive investment loan for the High-speed railway between Mombasa and Nairobi, the first high-speed railway on the African continent.

Europe

One of the aspects of the Belt and Road Initiative that has most concerned Western commentators is the extension of Chinese influence into developed European countries such as Greece and Italy, a G7 country. In 2016, the Chinese shipping company Cosco acquired a majority stake in the port of Piraeus, Europe's seventh-largest port. Then, in August 2018, Greece announced that it was officially joining the BRI.

In March 2019, a populist coalition government led by the Five Star Movement agreed to officially include Italy in the Belt and Road Initiative by signing a memorandum of understanding with Xi Jinping in Rome.

Why is China’s Belt and Road declining?

The main reason behind this declining trend is China's debt trap policies. “Debt-trap diplomacy" is the accusation that China is using the Belt and Road as part of a manipulative global strategy, financing major infrastructure projects in developing countries with massive loans and Sri Lanka's Hambantota Port is the classic example of the debt trap.

There are many reasons as well why the debt trap has lost popularity in countries' diplomacy as a predatory, opaque enterprise and a threat to countries’ local interests. A unified proposal came only after the pandemic COVID -19 at the G7 Summit 2021, where a joint communiqué 'Build Back Better World' proposed an alternative infrastructure initiative driven by the major Western democracies.

Follow here for More Current Affairs Topics