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THIS WEEK'S SILK ROAD HEADLINES
China is seeking out to strengthen its (economic) position through the Belt and Road Initiative (B&RI). Its regional investments are an important pillar. From a global perspective, the amount of Foreign Direct Investments on a global level by China has remained unchanged, according to the American Enterprise Institute [SE Asian economies get a lift from China. Later, they may get the bill]. This notion is supported by several BRI investment choices.
Infrastructure (mainly buying up ports and developing or refurbishing railroads) is a major investment choice for China to optimize trade within South-East Asia. Furthermore, it is well-known that China is selecting ports to invest in across the region, e.g. Philippines. Recently, actors within South-East Asia have been positioning and profiling themselves as a prolific investment opportunity, e.g. the Kra Channel project [Kra Canal Project Revisited As Part Of China’s Maritime Silk Road]. The question remains whether this is a successful strategy. Hitherto China has picked its own cherries.
Also, the geographic framework of the Maritime Silk Road is crystallizing through the (long-term) partnership with Oman [Why China Is Building A New City Out In The Desert Of Oman]. On the one hand this could be considered as increasing investments in energy supply for other BR&I projects. On the other hand, it could be seen as hedging China's regional economic position, e.g. trading oil within South-East Asia.
However, there are also certain hurdles that could challenge the endeavors of BR&I. The perceived whimsical position of Nepal may influence China to revise aspects of BR&I [ Belt and Road Initiative: China looks at Nepal’s commitments]. Another normative hurdle (albeit an embryonic one) could be the troika of Indonesia, Vietnam and Singapore, if superpowers decide to diminish their influence in that region [Who will replace the US in Southeast Asia?].
All in all, OBOR is materializing and provides a fruitful ground for China's position in the world order to blossom. Yet, the region is also becoming aware of their (market) position and might pick its cherries.
Halil Cikmazkara
To increase awareness of and facilitate the debate on China's Belt and Road Initiative, the Clingendael Institute publishes Silk Road Headlines, a weekly update on relevant news articles from open sources.
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