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Just what is this One Belt, One Road thing anyway?

Hong Kong (CNN)Spanning more than 68 countries and encompassing 4.4 billion people and up to 40% of the global GDP, China's One Belt, One Road project is not short on ambition.

Its boosters tout its massive economic promise and claim it could benefit the entire world and lift millions out of poverty.
But no one can say for sure what exactly the plan encompasses, and detractors warn it could be an expensive boondoggle at best or a massive expansion of Chinese imperial power at worst.
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So what is One Belt, One Road?

No one is totally sure. At the most basic level, One Belt, One Road (OBOR) is a collection of interlinking trade deals and infrastructure projects throughout Eurasia and the Pacific, but the definition of what exactly qualifies as an OBOR project or which countries are even involved in the initiative is incredibly fuzzy.
"It means everything and it means nothing at the same time," said Christopher Balding, a professor of economics at Peking University.
"One Belt, One Road" includes a number of hugely ambitious projects, including a train line stretching from eastern China to London.
<img alt=""One Belt, One Road" includes a number of hugely ambitious projects, including a train line stretching from eastern China to London. " class="media__image" src="//i2.cdn.cnn.com/cnnnext/dam/assets/170511120310-china-obor-london-yiwu-train-large-169.jpg">

Why is it so unclear?

While it might have originally had a comprehensible thesis behind it, OBOR has become such a popular buzzword that it's next to impossible to lock down criteria for how any given project would or could fit into the overall initiative.
Chinese officials tend to mention it regardless of what they're trying to promote, like a US lawmaker talking about "freedom."
Chenggang Xu, a professor of economics at the Cheung Kong Graduate School of Business, said it helps to think of OBOR as a "philosophy" or "party line," rather than anything concrete.
As an example of what an all-encompassing buzzword its become, state media has claimed OBOR will benefit: the Middle East peace process, start-ups in Dubai, currency trading, global poverty reduction, Xinjiang's medical industry, Australian hotels, nuclear power, Polish orchards, and, finally, the entire world.
Jörg Wuttke of the EU Chamber of Commerce in China, warned this week the initiative has increasingly "been hijacked by Chinese companies, which have used it as an excuse to evade capital controls, smuggling money out of the country by disguising it as international investments and partnerships."

What's with the name?

Confusion about OBOR isn't helped by its lack of a clear name or even a settled upon abbreviation.
The initiative consists of two major parts:
These two projects are known collectively as One Belt, One Road, or Belt and Road, or the New Silk Road.

What does China get out of this?

According to Chinese state media, some $1 trillion has already been invested in OBOR, with another several trillion due to be invested over the next decade.
There are two main benefits for Beijing from this: economic, and political -- both with their own significant risks.

What are the economic benefits?

As its runaway economic growth has slowed in recent years, China has suffered from widespread overcapacity in heavy industries such as steel, cement and aluminum.
Ways of dealing with declining domestic demand include cutting jobs -- more than 1.2 million in 2016 and 2017 -- and expanding demand overseas.
"China is looking to use OBOR as a way to ship its own domestic overproduction offshore," said Nick Marro, an analyst with the Economist Intelligence Unit (EIU).
The project will also open new markets for Chinese goods, shoring up the country's economy against any potential slowdown in demand from Europe or the US, said Jin-Yong Cai, former head of the International Finance Corporation.
"(China is) leveraging their own capital to get involved in helping (other) countries to get wealthier so they can become customers of Chinese products," he said.
<img alt="Workers prepare the "Silk Road Golden Bridge" in Beijing for the upcoming Belt and Road Forum." class="media__image" src="//i2.cdn.cnn.com/cnnnext/dam/assets/170511120806-china-obor-silk-road-bridge-large-169.jpg">

What are the economic risks?

While China stands to reap major benefits from OBOR projects, it is also footing a significant proportion of the risks entailed with them.
Many key countries targeted by OBOR -- in central Asia, Africa and southeast Asia -- are prone to economic and political instability and corruption.
What happens when an OBOR project funded by the Chinese government fails is unclear, said Xu. He warned that if a series of projects fail at the same time, "then the whole thing could collapse."
Balding said China "has a very poor track record of their investment overseas," pointing to widespread problems with Chinese projects in Venezuela, Sri Lanka and Myanmar.
He added that OBOR in particular is characterized by projects with "very little economic rationale for China."
Wuttke warned the project could be remembered as a "huge white elephant that left an enormous amount of wasted resources strewn along its path."
<img alt="China's vast container ports will play a major role in "One Belt, One Road."" class="media__image" src="//i2.cdn.cnn.com/cnnnext/dam/assets/170511120914-china-obor-ningbo-port-large-169.jpg">

What are the political benefits?

Most analysts agree that, for all its rhetoric about trade and development, OBOR is primarily a political project.
It has been compared to the Marshall Plan -- the huge redevelopment initiative undertaken by the US to rebuild Western Europe in the wake of World War II, after which it emerged as a global superpower -- though Chinese state media has vociferously rejected this analogy.
According to Tom Miller, author of "China's Asian Dream: Empire Building Along the New Silk Road," OBOR is part of a plan by China focused on "restoring its historical status as Asia's dominant power."
"China's new 'empire' will be an informal and largely economic one, posited on cash and held together by hard infrastructure," Miller writes.
Balding said the project is "more like a diplomatic effort for China to win friends and influence people," rather than a strictly economic program.
This effort will be on show in Beijing on May 14-15, when world leaders including Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan will be in attendance at the unfortunately acronym-ed Belt and Road Forum (BARF).

What are the political risks?

If successful, OBOR could see China supplant the US as the main superpower in much of the world -- but Xu warned the project could also backfire considerably because of its size.
As well as economic fragility, some projects in Asia also carry significant security risks, particularly the China-Pakistan Economic Corridor, where more than 13,000 Pakistani troops have already been deployed to protect the project, which runs through the South Asian country's restive tribal regions.
Previous Chinese overseas investments have also earned a bad reputation for not delivering for local economies, said Marro.
"The most notorious allegations have been levied against Chinese investment in Africa, which often sees large, state-owned companies set up shop, bring in workers from China -- as opposed to hiring locally -- and then re-export mined raw materials back home," he said.
Marro said Chinese overseas investment, and the way it is run, is maturing but expressed concerns that the OBOR project is so large, exercising effective supervision over the varying elements may prove difficult.
Given the vast size of the OBOR initiative, if things go wrong, it could be a major blight on China's reputation in much of the world.

China's big push for its global trade narrative

Image copyright Youtube/Chinadaily

China's President Xi Jinping intends to tell you a story.

But first he's going to try it out on the world's political leaders. Not those of the United States, Japan, India or much of the European Union. They've declined the invitation.

But this weekend Mr Xi is gathering all the presidents and prime ministers he can muster in Beijing, hoping to inspire them with a vision about China as a force for good in the world.

Xi Jinping came to power five years ago with a determination that China should stop hiding its light under a bushel. Instead of creeping up timidly on the world order, he felt it should walk tall as a mighty and ancient civilisation which had gone from marginal economic player to the world's biggest trading nation in less than four decades.

"The relationship between China and the rest of the world is undergoing historic changes. Tell China stories well," he urged the nation's media, diplomats and think tanks, adding that they must present China as a builder of world peace and contributor to global development.

This weekend he himself takes the stage as storyteller in chief at Beijing's Belt and Road Forum. It helps that there is currently no competing global narrative from the United States or the European Union, as President Trump turns inward to "Make America Great Again" and the EU struggles with Brexit and a slew of other challenges.

A geopolitical agenda?

China's underlying narrative is well known to all Mr Xi's guests. Economic transformation and breakneck growth have returned it to its traditional position at the centre of the East Asian economy.

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Media captionWhat China's One Belt, One Road really means

And now Mr Xi wants to use Chinese money and construction might to rebuild much of Eurasia's infrastructure of ports, roads and rails and put China at its heart. A giant exercise in joining the dots whose buzzword is connectivity.

Critics in Washington, Tokyo and New Delhi observe that some of the biggest belt and road projects seem to be for strategically significant assets. Like the oil and gas pipelines across Central Asia, and the Indian Ocean ports in Pakistan and Sri Lanka which might serve military as well as commercial uses.

Many observers see an obvious geopolitical agenda to the belt and road initiative, but in a suspicious and prickly neighbourhood China firmly denies it. To make the plan less threatening, it frames it as a revival of the ancient Silk Road whose camel caravans carried Chinese goods west across Asia more than 1,000 years ago.

Chinese freight trainImage copyright AFP Image caption China seeks to boost its connection with global markets

The aim is a soft-power message of a China which is mighty but peaceful, delivering what it can to the world in exchanges of mutual benefit. But the belt and road is much more ambitious than a camel caravan.

By land and by sea, through transport networks, telecoms, energy pipelines and industrial hubs, it promises to integrate more than 60 countries and 60% of the world's population.

And for domestic Chinese audiences, the story of the belt and road is told with a different emphasis, focusing less on the wins for foreigners and more on opportunities for China's impoverished west and assisting China's push up the value chain into industries like high speed rail and nuclear power.

Bedtime stories

There's even a narrative aimed at foreign children. Mr Xi may be the headline act on stage this weekend but in the scramble to offer the warm up, the state-owned China Daily newspaper is running online videos of an American father telling his daughter bedtime stories about the belt and road as "China's idea which belongs to the world".

Image copyright Youtube/Chinadaily Image caption The video insists that it's a win-win project

And in a catchy music video, ukulele strumming multi-ethnic children surrounded by cut-out camels sing the praises of the belt and road.

"We're paving new roads, building more ports, finding new options with friends of all sorts, It's a culture exchange, we trade in our wealth, we connect with our hearts, it strengthens our health," it goes.

Mr Xi has been telling the belt and road story for four years now. Why gather the world's decision makers in Beijing for a grand rendition now?

Personal and national ambitions

One short answer is that he needs to drum up growth. China's domestic economy is slowing and exporting Chinese construction capacity to the belt and road would help boost the domestic economy in the short and medium term.

If even some of the infrastructure projects succeed, they might in turn contribute to growth in the long term by spurring demand from China's neighbours.

But a more personal reason for the timing is Mr Xi's own political cycle. In the one-party state, being Communist Party leader is more important than being president and this year China will hold a vital Party Congress.

Hosting the world this weekend burnishes Xi Jinping's aura of invincibility by reminding his party and public that he is increasing China's clout on the international stage.

Image copyright Getty Images Image caption President Xi is happy to step in as the US becomes more isolationist

A third reason for the timing is the international picture. Many of America's friends and allies in the region were dismayed by Mr Trump's decision to walk away from the TPP trade agreement, an agreement which his predecessor had said was vital to the US setting the rules of the road in Asia rather than letting China set them.

Mr Xi's new push for the belt and road initiative is the same kind of canny political opportunism that spurred his defence of globalisation at the Davos forum in January.

Indeterminate outcome

So China's president has been lucky in his timing and bold in seizing the stage. And it will certainly look to his guests as if he usually gets what he wants. No country puts on a grand spectacle of purpose and progress quite like China does.

This weekend Beijing's sky will be blue. Smog, traffic snarl and ghost towns littered with white elephant infrastructure will be safely far from view.

This is the show and tell of Xi Jinping's story… China the can-do master builder inspiring awe in all beholders and giving hope that what China has achieved at home it might replicate elsewhere.

But the truth is that Mr Xi's will works as an organising principle only for some of the people some of the time, and usually only for a very small number of highly specific objectives. Even in Beijing, the sky is not always blue, the traffic is often snarled and resources are often misallocated.

How much more is this true beyond the glittering capital. China is an economy with a perilous debt overhang precisely because its investors are just as fallible as those of other countries.

Yes, on the right project and for the right price, Chinese money and Chinese master builders can work infrastructure wonders. But that was always the case. The belt and road is an important initiative, but one of indeterminate boundaries, duration and outcome.

Mr Xi's guests should not make the mistake of thinking all Chinese players will do his bidding and all bedtime stories will come true.

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  • 同墟 2017.05.15 12:05
    China invests $124bn in Belt and Road global trade project





    14 May 2017

    From the section Asia


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    Chinese President Xi Jinping at the opening ceremony of the Belt and Road Forum at the China National Convention Center (CNCC) in Beijing, 14 May 2017Image copyright Getty Images
    Image caption
    President Xi said Belt and Road was not an attempt to promote China's global influence

    The Chinese government is investing tens of billions of dollars as part of an ambitious economic plan to rebuild ports, roads and rail networks.

    China's President Xi Jinping has pledged $124bn (£96bn) for the scheme, known as the Belt and Road initiative.

    "Trade is the important engine of economic development," Mr Xi said at a summit of world leaders in Beijing.

    The plan, which aims to expand trade links between Asia, Africa, Europe and beyond, was first unveiled in 2013.

    Part of the massive funding boost, which is aimed at strengthening China's links with its trading partners, includes 60bn yuan ($9bn; £7bn) in aid to developing countries and international institutions that form part of the Belt and Road project.




    Mr Xi used his speech to assure Western diplomats that the plan, described as the new Silk Road, was not simply an attempt to promote Chinese influence globally.

    "In advancing the Belt and Road, we will not re-tread the old path of games between foes. Instead we will create a new model of co-operation and mutual benefit," Mr Xi said at the opening of the two-day summit.

    "We should build an open platform of co-operation and uphold and grow an open world economy," he added.


    Analysis: A bid for global leadership - By Carrie Gracie, BBC China Editor, Beijing

    A Chinese idea but for everyone's benefit. That's how Mr Xi presented his Belt and Road vision to drive trade and prosperity through Chinese built infrastructure.

    President Putin of Russia and President Erdogan of Turkey were among those applauding from the front row as the Chinese leader talked of a big family of harmonious co-existence and pledged billions of dollars in loans and investment.

    But neighbours Japan and India have stayed away from the summit, suspicious that China's development agenda masks a bid for strategic assets and geopolitical ambitions. And some economists are cautious about the viability of projects in areas of political instability and poor governance.

    In his keynote address on Sunday, Mr Xi ignored the doubters. He talked of a new model of win-win co-operation, an implicit bid for Chinese global leadership at a time when other big economic powers like the United States and the European Union are preoccupied with internal problems.

    Read more: China's big push for its global trade narrative












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    Media captionWhat China's One Belt, One Road really means


    Mr Xi said that it was time for the world to promote open development and encourage the building of systems of "fair, reasonable and transparent global trade and investment rules".

    "China is willing to share its development experience with all countries. We will not interfere in other countries' internal affairs," he said.

    "No matter if they are from Asia and Europe, or Africa or the Americas, they are all co-operative partners in building the Belt and Road."

    What is China's new Silk Road?

    Mr Xi did not give a timeframe for the distribution of funds pledged for the projects outlined on Sunday.

    Leaders from 29 countries are attending the Belt and Road forum, which ends on Monday, including Russian President Vladimir Putin and Turkish President Recep Tayep Erdogan.

    Several other European leaders, including the prime ministers of Spain, Italy, Greece and Hungary, are also attending the summit.