One Belt One Road not only means it’s possible to take a direct 18-day train ride to China – it means opportunities for UK business
Twenty-eight world leaders gathered in Beijing in May to hear China’s new plan for global trade and development: the Belt and Road initiative (BRI). More than three years after China’s President Xi Jinping announced his ambition to revive the ancient Silk Road, a trade route which once connected China and Europe, the country has fully embraced this ambitious project, bringing nearly 70 countries along with it.
What is the Belt and Road?
What does the initiatve entail? The “Belt” refers to the Silk Road Economic Belt and the “Road” refers to the 21st century Maritime Silk Road – confusing, perhaps, because roads are usually on land. The Silk Road Economic Belt, or the northern routes, will be comprised of three trans-Eurasian corridors, and the 21st Century Maritime Silk Road, or the southern routes, will be made up of four maritime economic corridors originating from Southern China. Together, they’re intended to revive the ancient Silk Road trading routes. To advance the BRI, China has already signed memoranda of understanding with more than 30 countries in Central and South-East Asia, and has established free trade agreements with more than 20 countries or regions.
Hailed by President Xi as the “project of the century” and by foreign analysts as “China’s Marshall Plan”, the initiative fits into China’s narrative: the country is prepared to take up the mantle as the leader of globalisation, filling the void left by the UK, following the Brexit vote, and by the US under Donald Trump’s “America First” policy. During his speech at the opening of the Belt and Road forum, President Xi pledged at least $113bn in additional funding for the initiative, and urged leaders around the world to continue to push for peaceful globalisation: “What we hope to create is a big family of harmonious co-existence.”
The Chinese government announced ahead of the Beijing forum that some 50 Chinese state-owned enterprises have invested in approximately 1,700 “One Belt One Road” projects since 2013. The most notable of these projects include the $46bn China-Pakistan corridor, a 3,000km high-speed railway from China and Singapore, and gas pipelines spanning central Asia.
The $113bn in funding promised by Xi will come through three different sources: the state-owned Silk Road Fund, the China Development Bank and the Export and Import Bank of China. Two multilateral banks led by China will also be major project funders: the Asian Infrastructure Investment Bank or AIIB, which the UK joined in 2015, and the New Development Bank. In 2016 the AIIB approved $1.7bn in loans to nine development projects along the Belt and Road.
UK business opportunities
Where does the UK fit into the Belt and Road Initiative? It may be too early to tell. But since January 2017, the UK has been identified as the westernmost point of the initiative after the first China-UK direct train successfully launched from Yiwu on an 18-day journey to the UK. This was followed in April by the first export train from Britain to China, carrying good such as vitamins, baby products, and pharmaceuticals.
UK companies have already been involved in the initiative and the CBI will be following how British business is helping China on the Belt and Road and looking for opportunities.
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