Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Here’s Why China’s One Belt, One Road Is Doomed To Failure

Economics / China Economy Jul 18, 2017 - 07:25 PM GMT

By: John_Mauldin

Economics

One Belt, One Road (OBOR) is China’s ambitious initiative unveiled in 2013. In fact, it’s two plans combined to form a larger framework of new trade routes.

The first of these is One Belt (the orange line in the above map). It refers to the development of new infrastructure—particularly railroads and highways—to connect China’s interior provinces with Europe by way of Russia, Central Asia, and the Middle East. It’s a tall order, and expectations are low that China would be able to build them.


The bigger problem with One Belt is geopolitical. Eurasia is in a state of crisis. Central Asia in particular is one of the world’s most politically unstable places. The region is a patchwork of states whose borders were drawn to make the countries more easily controlled from Moscow during the Soviet era. It is hardly a promising market for Chinese goods.

The other trade route is One Road. It’s essentially a new Maritime Silk Road.

This part of the plan is meant to create more Chinese ports in countries along maritime routes. Which makes sense: About 80% of global trade by volume and over 70% of global trade by value is conducted by sea, according to the United Nations Conference on Trade and Development.

So far, One Road has been a mixed bag for China. It has secured contracts to build ports in Myanmar and Sri Lanka, but a deal with Bangladesh fell through in 2016 when Dhaka opted for an offer from Japan instead.

From a US perspective, China’s projects along the Maritime Silk Road are overblown. Constructing ports will not provide China with permanent bases for Chinese destroyers or armies—the countries in question have yet to agree to host them.

More important, the Chinese navy is still not capable of extended, long-term deployments in countries far from the mainland.

In short, OBOR matters relatively little.

The initiative itself is ill-defined and has done very little for China since it was announced. Even if it’s successful, OBOR won't swing the global balance of power. But if OBOR is to be truly transformative, it will have to do what it was meant to do: right the wrong of the Chinese economy. Whether it can remains an open question.

Grab George Friedman's Exclusive eBook, The World Explained in Maps

The World Explained in Maps reveals the panorama of geopolitical landscapes influencing today's governments and global financial systems. Don't miss this chance to prepare for the year ahead with the straight facts about every major country’s and region's current geopolitical climate. You won't find political rhetoric or media hype here.

The World Explained in Maps is an essential guide for every investor as 2017 takes shape. Get your copy now—free!

John Mauldin Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in