What Is One Belt One Road (OBOR)?

What Is One Belt One Road (OBOR)?

Let me tell you about One Belt One Road, or OBOR, which is the brainchild of Chinese President Xi Jinping. This is an ambitious economic development and commercial project that focuses on improving connectivity and cooperation among multiple countries across Asia, Africa, and Europe. The Chinese authorities call it the “Project of the Century,” and it spans about 78 countries.

Key Takeaways

OBOR focuses on improving connectivity and cooperation among countries in Asia, Africa, and Europe. Over the years, its scope has expanded to include new territories and development initiatives. Countries like Kyrgyzstan and Tajikistan support it because of the massive investments China has made in their local transmission projects.

How One Belt One Road Works

OBOR was initially announced in 2013 to restore the ancient Silk Route connecting Asia and Europe, but its scope has grown to include new territories and initiatives. Also known as the Belt and Road Initiative (BRI), it involves building a vast network of roadways, railways, maritime ports, power grids, oil and gas pipelines, and related infrastructure.

The project has two main parts. The first is the “Silk Road Economic Belt,” which is land-based and connects China with Central Asia, Eastern Europe, and Western Europe. The second is the “21st Century Maritime Silk Road,” which is sea-based and links China’s southern coast to the Mediterranean, Africa, South-East Asia, and Central Asia. Note that the names can be confusing—the ‘Belt’ refers to roads, while the ‘Road’ is actually a sea route.

This initiative includes six economic corridors: the New Eurasian Land Bridge connecting Western China to Western Russia; the China-Mongolia-Russia Corridor linking North China to Eastern Russia via Mongolia; the China-Central Asia-West Asia Corridor connecting Western China to Turkey via Central and West Asia; the China-Indochina Peninsula Corridor linking Southern China to Singapore via Indo-China; the China-Pakistan Corridor connecting South Western China through Pakistan to Arabian Sea routes; and the Bangladesh-China-India-Myanmar Corridor linking Southern China to India via Bangladesh and Myanmar.

Additionally, the maritime Silk Road connects coastal China to the Mediterranean via Singapore-Malaysia, the Indian Ocean, the Arabian Sea, and the Strait of Hormuz. Overall, OBOR spans over 78 countries.

Special Considerations: OBOR’s Importance to China

OBOR holds prime significance for China as it aims to boost domestic growth and forms part of the country’s economic diplomacy strategy. By connecting less-developed border regions like Xinjiang with neighboring nations, China expects to increase economic activity. It will open up and create new markets for Chinese goods, allowing the manufacturing powerhouse to control cost-effective export routes.

Any excess production capacity can be directed effectively to regions along the OBOR routes. China has committed investments of over $1 trillion in these infrastructure projects, funding them through low-cost loans to participating countries.

Many countries support OBOR due to these investments—for instance, Kyrgyzstan and Tajikistan benefit from Chinese funding in local transmission projects. Landlocked Nepal has joined by signing a deal to improve cross-border connectivity with China, and Pakistan stands to gain from the $46 billion China-Pakistan Economic Corridor (CPEC), which connects southwestern China through Pakistan to Arabian Sea routes.

While China presents OBOR as an inclusive project for regional development, other nations see it as a strategic move to gain regional control and a larger global role by building a China-focused trading network. China views this as a chance to emerge as a regional leader, and in the future, you might see increased usage of the Chinese yuan in the OBOR region.