The long game

Under the “One Belt, One Road” initiative, stating: “a blue economic passage is envisioned leading to Europe via the Arctic Ocean” along the northern coast of Russia. It joins the China-Indian Ocean-AfricaMediterranean, and ChinaOceania-South Pacifc “blue economic passages” as part of the “Maritime Silk Road”. Welcoming Chinese investment in its aging infrastructure, Moscow has fagged its support.

China’s long-term infrastructure development plans underscore the gamechanging forward thinking reshaping regional — and global — development.

Officially launched by President Xi Jinping at a speech in Kazakhstan in September 2013, One Belt, One Road (yi dai yi lu) encompasses some 65 countries, and with projected funding of $1.3 trillion, is probably the most ambitious economic initiative in history.

The initiative is two-pronged. In tandem with the Maritime Silk Road, the “Silk Road Economic Belt” is a revival of the ancient silk-trade routes through Central Asia to Europe.

What China is doing

Beijing has signed of on: CPEC (the China-Pakistan Economic Corridor) and Bangladesh and Mongolia are next; port projects in Sri Lanka, Myanmar, Seychelles and Maldives (in Australia, the port of Darwin is run by Chinese company Landridge); rail links in Thailand, Laos, Indonesia and from the Kenyan port of Mombasa to Nairobi. It is investing in Cambodia and Fiji.

Meanwhile, a rail link between the Chineseoperated Greek port of Piraeus through Serbia and Romania to Budapest is meeting EU regulatory opposition. China is also building its frst overseas military base in Djibouti.

China’s best-case scenario

The renminbi replaces the US dollar as the world’s main trade/investment currency. China shifts to high-end manufacturing and channels excess capacity, encouraging growth in its hinterland.

New road and rail links enable Chinese companies to readily harvest raw materials and resources from poorer neighbours.

These emerging markets gobble up Chinese goodies like energy generation, telecommunications equipment and HSR. China’s poorer cousins get a lifeline out of poverty.

For example, the $62 billion CPEC could create up to one million jobs in Pakistan. There could be signifcant opportunities for Australian investment.

Not everyone is happy

Mutually beneficial trading opportunity or a fexing of strategic muscle? Regional political instability is a worry and neighbours like India are opposed (it sees CPEC, which runs through disputed Kashmir, as a violation of its sovereignty.