One Belt - One Road: China's Big Initiative Creating Massive Business Opportunities

One Belt - One Road: China's Big Initiative Creating Massive Business Opportunities

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In 2013, China announced One Belt One Road (OBOR) – an initiative that could potentially reshape the world order. OBOR comprises a land based “Silk Road Economic Belt” and an oceangoing “Maritime Silk Road.” The “Belt” is an infrastructure network of transport, energy and communication projects stretching from Xi’an in China through Central Asia to Moscow, Rotterdam and Venice. The “Road” is its maritime equivalent, a network of planned ports and other coastal infrastructure from South and Southeast Asia to East Africa and the northern Mediterranean Sea.

Over the last three years, the OBOR initiative has gathered significant momentum but its underlying concept, scope and framework remain fluid. Understanding these as well as the associated business challenges and opportunities were the objectives of the discovery.

China is the world’s first or second largest economy, the third largest global investor, and the largest and third largest trader of goods and services, respectively. However, its economic growth in 2015 stood at 6.9%, the slowest it has been in a quarter of a century. Lu Xiankun indicated that for many years a GDP growth rate of 8% was almost like a “holy number” for the Chinese government. Anything below that was alarming. It meant serious problems in many aspects, particularly employment.

But now, people are already talking about a growth of below 7%. Meanwhile, China is confronted by myriad internal challenges – a regional development gap between coastal and central/western regions, many people still living below the poverty line, massive migration from countryside to cities, serious industrial overcapacity and employment challenges for young graduates. The OBOR initiative could be the answer to some of these issues.

The Rationale