Economics & Finance
• 6 minute read
One Belt One Road: An Initiative for All Countries
China’s One Belt One Road initiative is not only about the countries along the route and emerging markets, says Prof. Zhao Lei from CPC Party School
By Fang Ying, Senior Writer, China Business Knowledge @ CUHK
“One Belt One Road is about connectivity, connecting China and the rest of the world, ” said Zhao Lei, a professor from the Institute of International Strategic Studies of Party School of the Central Committee of the Communist Party of China (CPC), at a seminar jointly organized by Hong Kong General Chamber of Commerce and Sustainable Hong Kong Research Hub on 29 November, 2016.
“The aim of One Belt One Road is to enhance connectivity between East and West, continents and oceans,” said Prof. Zhao, whose research interests include international relations, Chinese diplomacy, cultural soft power, ethnic conflicts and infrastructures along the Belt and Road.
As the initiator and the chief expert of the One Belt One Road 100 Forum, Prof. Zhao published books include One Belt One Road: China’s Civilization Rise, and Ethnic Conflict Management in International Perspective.
In the seminar titled “The Belt and Road Initiative Framework and the Role of and Opportunities for Hong Kong,” Prof. Zhao shared his insights into the key issues on the initiative and the role of Hong Kong.
The One Belt One Road initiative consists of the Silk Road Economic Belt and the 21st Century Maritime Silk Road. The Silk Road Economic Belt was unveiled by China’s president Xi Jinping during his state visit to Kazakhstan in September 2013, and the 21st Century Maritime Silk Road was announced in October 2013 during Xi’s state visit to Indonesia.
The Silk Road Economic Belt is envisioned as three routes connecting China to Europe, the Mediterranean, and the Indian Ocean by establishing a network of railways, roads, pipelines, and utility grids. The 21st Century Maritime Silk Road is planned to create connections among regional waterways, linking China to the Indian Ocean (and from there, link to South Asia and Southern Africa.)
According to Prof. Zhao, the One Belt One Road comprises more than physical connections. It aims to create the world’s largest platform for economic cooperation, including policy coordination, trade and financing collaboration, and cultural cooperation.
“The One Belt One Road initiative offers considerable potential in economic, political, cultural, and strategic realms,” he pointed out. “It will deepen China’s infrastructural, economic, and particularly cultural connectivity with key parts of the globe.”
Misperceptions of One Belt One Road
When it comes to the key drivers behind the One Belt One Road, Prof. Zhao refuted the notion that One Belt One Road was to offload China’s domestic surplus capacity in commodities such as steel and coal to other developing countries.
“One Belt One Road is a two-way street. It encourages Chinese firms to invest in other countries and welcomes companies from other countries to fully participate as well,” he said. “If we are just talking about exporting China’s overcapacity, I believe there is no country would buy the idea and be willing to get involved.”
“One Belt One Road is not just about the countries with emerging markets; many developed countries are also relevant to the Belt and Road initiative.” Prof. Zhao Lei
He further pointed out that natural resource is not the rationale for the initiative either. “It’s true that many countries along the Silk Road have rich natural resources, like gas and oil, but that’s not the reason for China to start the initiative…There is also huge export potential for Western products, technologies and services to enter China.”
“In fact, the core idea of One Belt One Road lies in the principle of sharing and cooperation, not only on the physical level, but also and more on the psychological level. Only when the psychological barriers between people from different nations are removed will the potential of the One Belt One Road be fully released,” Prof. Zhao remarked.
Relevant to All Countries and Markets
There is a concern that many of the developing countries along the Belt and Road are politically unstable and economically vulnerable, so companies with the willingness to invest may find it difficult to get profitable returns.
To that end, Prof. Zhao pointed out that One Belt One Road is not just about the countries with emerging markets; many developed countries, such as Britain and Australia, are also relevant to the Belt and Road initiative.
“There are two kinds of ‘One Belt One Road countries’. First, there are the countries along the Belt and Road routes, then there are other countries, most of which with developed markets, that are relevant to the initiative” he said.
He said that the core areas of Silk Road Economic Belt and the 21st Century Maritime Silk Road are Northwest China, Middle Asia, and South East Asia, but these areas are connected to several mature markets such as those in East Asia and Europe, which are also the important counties for One Belt One Road. So companies can find opportunities in these countries as well.
And that is also why Hong Kong has its unique strengths to play a significant role in the One Belt One Road initiative.
The Relevance of Hong Kong
According to him, Hong Kong has what China lacks – a mature market environment and a pool of talents and experts in finance, law and many other professional areas, so the city can take advantage of these strengths to facilitate the collaboration between China and other countries, particularly the mature markets.
For example, there are just a few mainland lawyers who are the experts on World Trade Organization (WTO) rules, whereas there are many professionals in international business in Hong Kong.
“On the one hand, Hong Kong is located at the mouth of the Pearl River Delta on the coast of southern China, which is an important water gateway of China. On the other hand, Hong Kong offers an easy access to mainland China via several rail links,” he said. “Hong Kong is an ideally located city for companies that want to do business in mainland China and the rest of the world.”
“More than that, due to its unique history and location, Hong Kong is also a cosmopolitan city characterized by an East-meets-West culture. So it can also be a bridge between China and other countries, enhancing mutual understanding among people of different cultures as the city proceeds with the One Belt One road initiative,” he said.
“Hong Kong has the experience, the expertise and the connections to play a role in the initiative,” commented Prof. Zhao. “The city can be a professional service provider, project cooperation accelerator and cultural connector.”
However, the One Belt One Road initiative is not paved with gold.
“No risk, no business,” he said. “Like any new business realm, there is no lack of risks and uncertainties in One Belt One Road as well.”
“As any other key cities and ports along the Belt and Road routes, Hong Kong needs to take the initiative to explore and seize the opportunities. Such opportunities won’t be handed to us on a silver plate,” he concluded.