According to HM Ambassador Barbara Woodward and Stephen Phillips Chief Executive, China Britain Business Council; “One Belt One Road” (OBOR) is an initiative, which was launched by President Xi Jinping in 2013, to focus on improving and creating new trading routes, links and business opportunities with China, passing through over 60 countries along the way across Asia, Europe, the Middle East and Africa. It has two main elements:
The Silk Road Economic Belt
Enhancing and developing land routes:
- Building a “Eurasian land bridge” – a logistics chain from China’s east coast all the way to Rotterdam/Western Europe; and…
- Developing a number of economic corridors connecting China with Mongolia and Russia, central Asia and South-East Asia.
The 21st-Century Maritime Silk Road
This is a sea route rather than a road (a reference to the old maritime Silk Road) which runs west from China’s east coast to Europe through the South China Sea and the Indian Ocean. The aims of the OBOR initiative include:
- Developing prosperity for underdeveloped parts of China, particularly in the west of the country
- Developing new opportunities for China to partner and co-operate with the various countries along the routes, many of which are developing countries.
- Increased integration, connectivity and economic development along both routes.
The initiative has been distributed in to 6 economic corridors involving over 60 countries:
1. New Eurasian Land Bridge
2. China – Mongolia – Russia Corridor
3. China – Central Asia – West Asia Corridor
4. China – Indochina Peninsula Corridor
5. China – Pakistan Corridor
6. Bangladesh – China – India – Myanmar Corridor
Risks and Challenges
OBOR is not only an economic initiative, but also a major geopolitical one. The diversity and different economic and political situations of countries along the routes inevitably mean there are inherent risks, ranging from the fundamental legal and financial challenges of accessing new foreign markets to political or social instability
and regional disputes. Companies should also remain live to the potential impact of territorial disputes along the OBOR routes, including within the South China Sea where claims over territorial sovereignty are yet to be resolved. Political instability in a range of countries may also lead to inconsistency in legal and financial policies, which could undermine business activities.
For UK companies who want to participate in and benefit from the development of OBOR, the key principle is to plan sufficiently by identifying the appropriate country, sector, project and Chinese partner. Careful planning and due diligence beforehand are strongly recommended. The China-Britain Business Council, together with UK Trade & Investment, supports UK companies in this process based on in-market experience and knowledge of suitable Chinese partners. Businesses are encouraged to consult the latest Foreign and Commonwealth Office travel advice and also UKTI Overseas Business Risk guides before taking investment decisions.
Please, visit CBBC website in order to extend above information.