China has rapidly climbed the ranks to become the world’s second-largest economy. Now, the most populous nation on the planet wants to increase its influence by digging further into its pockets — flush with cash after decades of rapid growth — to splash out with its “One Belt, One Road” policy.
The initiative is meant to connect Asia, Europe, the Middle East and Africa to bolster trade and development. This weekend, hordes of foreign diplomats and business leaders are expected to descend on Beijing for a two-day meeting about the policy.
Here’s what you need to know:
What is “One Belt, One Road?”
President Xi Jinping first announced the policy in 2013; it was later named one of China’s three major national strategies, and morphed into an entire chapter in the current five-year plan, to run through 2020.
The plan aims to connect Asia, Europe, the Middle East and Africa with a vast logistics and transport network, using roads, ports, railway tracks, pipelines, airports, transnational electric grids and even fiber optic lines. The scheme involves 65 countries, which together account for one-third of global GDP and 60 percent of the world’s population, or 4.5 billion people, according to Oxford Economics.
Why does China want to do this?
This is part of China’s push to increase global clout — building modern infrastructure can attract more investment and trade along the “One Belt, One Road” route. It could be beneficial for western China, which is less developed, as it links up with neighboring countries. And in the long run, it will help China shore up access to energy resources.
Experts say China has an opportunity to step into a global leadership role, one that the U.S. previously filled and may now be abandoning, especially after President Donald Trump pulled out of a major trade deal, the Trans-Pacific Partnership.
It’s clear China wants to wield greater influence — Xi’s speech in January at the World Economic Forum in Davos touted the benefits of globalization, and called for international cooperation. And an article by Premier Li Keqiang published shortly after also called for economic openness.
How much is China spending?
In 2015, the China Development Bank said it had reserved $890 billion for more than 900 projects. The Export-Import Bank of China announced early last year that it had started financing over 1,000 projects. The China-led Asian Infrastructure Investment Bank is also providing financing.
What OBOR projects have already launched?
Wait, wasn’t China already heavily investing abroad?
Much of the projects heavily involve China’s state-owned enterprises, from oil & gas companies to railway construction — think oil firm Sinopec, rail car manufacturer CRRC and utilities like State Grid. Analysts say foreign construction machinery companies are also poised to benefit.
Full article: China is about to hold a giant meeting on spending billions to reshape the world (CNBC)