China's One Belt and One Road program (OBOR) is an ambitious undertaking but it has not been well understood by the world, not only the people in America and Australia, but also the people in the three continents, Asia, Europe and Africa. In this column we explain why so and most importantly we offer a description of OBOR, its historical origination, its economical significance and its future prospect gauging on its current momentum and reception by the world. Proposals like OBOR bear people’s welfare in mind; in the Chinese political philosophy, people extend to all people under the Heaven. One salient point, China must make and convince the world is that OBOR is a win-win global development plan not a hegemony scheme to gain national power as a few nay-sayers claimed. The OBOR investment is no different from any good infrastructure bond investment. The risk involved will quickly diminish as many countries are getting on board. The OBOR program is too attractive to be sabotaged by anyone.
China's One Belt and One Road program (OBOR) is an ambitious undertaking but it has not been well understood by the world, not only the people in America and Australia, but also the people in the other three continents, Asia, Europe and Africa, where OBOR passes through. It has an impact on one third of the world's GDP, and the welfare of 65% of the world's total population. The OBOR concept was first revealed by the Chinese leader, Xi Jin Ping, at Kazakhstan in 2013. With today's advanced communication infrastructure, one would imagine that such a visionary undertaking would have received world-wide attention reaching every person every corner of the Earth. Surprisingly, it isn't so; many people have never heard of the acronym, OBOR, even two years after its announcement.
The above situation is somewhat unusual to such a major global program. Perhaps it has caught every country by surprise thus ill prepared to take a position on it. In this column we explain why so and most importantly we offer a description of OBOR, its historical origination, its economical significance and its future prospect gauging on its current momentum and reception by the world. Naturally, the few intellectual elites on the world stage paying attention to international affairs have learned about OBOR, however, few of the few have engaged in communicating this amazing concept to the public in plain folks language. This lacking in mass communication in most countries obviously contributed to the mystic status of OBOR which could only be blamed on China for not doing an adequate PR work on OBOR and on some countries' lack of diligence in explaining OBOR to their citizens. There was also the possibility that a few nations might consider OBOR a threatening program and thus deliberately suppressing its news and messages. Hopefully, we will succeed to dispel that notion here.
On the positive side, there are international entities already engaged in studies and dialogues on OBOR. For example, the internationally recognized consulting firm, McKinsey & Company, has recently offered a podcast on the OBOR subject (hosted by Cecilia Ma Zecha, McKinsey Publishing Singapore) after her guests, Kevin Sneader, Chairman of McKinsey Asia, and Joe Ngai, Managing Sr. Partner in McKinsey Hong Kong, participated in a Hong Kong OBOR Summit where many ASEAN delegates attended. This podcast emphasized the magnitude and potential impact of OBOR as a significant trade platform across three continents and linking South China Sea, South Pacific, and Indian Ocean to Red Sea. It is no surprise coming from McKinsey that they probed many valid questions and implementation issues and urged international corporations and governments to take earnest studies of OBOR and what it may impact them economically and business wise if OBOR indeed took off.
OBOR Consists of two components, the One Belt, a land based "Silk Road Economic Belt" (SREB), inspired by the ancient Chinese Silk Road (used in 130 BCE to 1453 CE, Han Dynasty) a trade road linking Asia and Europe and an ocean based route "Maritime Silk Road" (MSR), which was inspired by the famous "Zheng He Voyages", a seven time ocean exploration in the Ming Dynasty (1371-1435) reaching as far as Indian Ocean and North Pacific Ocean. These historical accomplishments served as the basis and offered the confidence for modern China to offer these ambitious undertaking as global collaborative development programs for stimulating the world economy and advancing the welfare of global citizens. A modern version of the silk trading roads naturally requires tremendous amounts of investments in modernizing the physical infrastructure, roads, bridges, ports and canals, as well as upgrading the digital communication facilities to support the finance, banking and trading endeavors. As rightly pointed out by McKinsey, the establishment of Asia Infrastructure Investment Bank (AIIB*) and the New Development Bank (BRICS) exhibited the early accomplishment of the OROR program. (*The chronological account of the establishment of AIIB was described in an article in Understanding the US and China, pp 65-69, 2016, ISBN: 0977159442.)
Although not explicitly mentioned in OBOR, the history of the post-WW II Marshall Plan proposed by the U.S. to help restore Europe's economy, had a profound impression on the Chinese. Thanks to Marshall Plan, the Western Europe was quickly revived in the world economy. Similarly, In Asia, Japan was benefitted tremendously by the 'Occupation and Reconstruction of Japan' plan, whereas Mainland China, although an ally of the U.S., was treated as an enemy after the war hence never received any assistance from the West. It took a lot longer for China than Japan to rise up in her economic development. This historical background had not only taught the Chinese a lesson but also served as inspiration desiring to offer her development experience to her neighbors by proposing OBOR, in spirit, modeling after the Marshall Plan.
Unfortunately, the U.S., driven by her exceptionalism, did not gain the same inspiration that Marshall Plan has impressed on the Chinese. The U.S. China policy has been rooted in the Cold War legacy, viewed communism as a forever unchangeable evil. The U.S. state department has never seriously investigated the Chinese experience with communism under the deeply entrenched Chinese philosophy (including the political philosophy). China may have had the desire to implement a pure communist society prescribed by Marx in the 50’s but she had learned her lesson through bad experiments since the 60’s and 70’s to realize that she needed her own system compatible with her traditional political philosophy: People’s welfare must dictate the political policies but political policies must be delicately implemented and managed by a representative system derived from people’s political power. This representative system is not one person one vote which cannot be completely implemented on every level even in the democratic system of the U.S. China currently conducts her political reform under one dominant party (CCP) with her political platform shaped with people’s power (People’s Congress) in an unique way. Proposals like OBOR bear people’s welfare in mind; in the Chinese political philosophy, people extend to all people under the Heaven. One salient point, China must make and convince the world is that OBOR is a win-win global development plan not a hegemony scheme to gain national power as a few naysayers claimed.
On today’s global economy, many nations including the U.S. and China are heavily engaged in debt-financing, that is, borrowing money to finance programs which can yield returns in the long run. China’s OBOR must be viewed as such, not as an imperialist program. China’s old silk roads were never meant to be imperial road to expansion. China’s modern silk roads do not bear that trait either. Any country opposing OBOR either does not understand its historical background and source of inspirations or is jealous of its potential impact. In reality, OBOR is a program that will benefit every country and every person on earth. OBOR is no doubt a visionary program offering a common dream to more than half of the world population. China is in the right position to lead the effort. China is smart to kick off both SREB and MSR in the same time, since they are complimentary to each other and they serve as mutual insurance to each other to warrant China’s initial $100B investment. In my opinion, from private investor’s point of view, the OBOR investment is no different from any good AAA infrastructure bond investment. The risk involved will quickly diminish as many countries are getting on board. The OBOR program is too attractive to be sabotaged by anyone. One good advice McKinsey should have made in its podcast is to encourage Japan and the U.S. to take a positive stand to gain benefits rather than taking a negative position giving no one any benefit.