One Belt, One Road — the main beneficiary
In 2013, China’s president, Xi Jinping, proposed the ’One Belt One Road (OBOR) initiative, to create the world’s largest platform for trade and economic development. The State Council authorised the plan in 2015 comprising of two components, the silk road economic belt and the maritime silk road, creating a network of roads, railways and waterways. The project would enhance trading opportunities with more than 68 countries and will increase China’s export potential. Given that growth in China is slowing down and demand for various products such as steel and cement are also falling in the domestic market. OBOR will likely to help increase demand for these materials abroad and probably be a prerequisite in the Chinese sponsored construction and infrastructure projects around the silk route. Many infrastructure development projects have already been underway as a part of OBOR such as China-Pakistan economic corridor (CPEC).
There have been concerns about the high inflow of Chinese exports across the world and various action have already been taken to curb the flow. The EU, USA, and some major Asian countries have imposed anti dumping duties on various Chinese products including steel. There have also been some efforts in China to consolidate the market and remove excess capacity to balance the market. No doubt, OBOR will accelerate the economic development across the belt and increase FDI in developing countries. However, China is not planning a short term strategy to prop up its exports but will also be seeking returns on its investment and equity in the longer term.
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