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1 1 (August 6, 2015)

handle is hein.crs/govccxq0001 and id is 1 raw text is: F. ' -iE S .r , & t China's One Belt, One Road APl, , k,, - E ,,',, ' \o,-,m,¢ c Co., - , ,. In March 2015, Chinese Foreign Minister Wang Yi stated that his ministry's single key focus in 2015 would be making all-around progress in the 'Belt and Road' Initiative, highlighting the central place that effort has come to occupy in Chinese foreign policy. China envisions boosting economic connectivity among dozens of countries along a land route it is calling the Silk Road Economic Belt and a sea route it is calling the 21 Century Maritime Silk Road. The initiative calls for building transportation and energy infrastructure and industrial parks on three continents: Asia, Europe, and Africa. It also involves efforts to reduce investment and trade barriers, such as customs procedures and the lack of a regional credit information system. First proposed publicly by China's President Xi Jinping in 2013, the plans could, by some estimates, take 35 years to complete. Figure I. One Belt, One Road 1'a ....S; .......': 21ST CENTURY MARITMESILK RO'AD SLK KAD ECONOMrC BELT Source: Xinhua News Agency, March 29, 2015, adapted by CRS. Notes: Other Chinese OBOR maps depict the maritime route as also including Gwadar, Pakistan, and Nairobi, Kenya. Many details of the One Belt, One Road (OBOR) initiative remain unclear. China has signed a number of OBOR cooperation agreements with countries along the Belt and Road. The chairman of the China Development Bank (CDB), a state policy bank, told the media in March that CDB had compiled a database of approximately 900 potential OBOR projects in 64 countries, including China. China has not released a full list of involved countries or planned projects, however, or details about financing arrangements. Also uncertain is how OBOR will be coordinated with other countries' development initiatives, including the U.S.-backed New Silk Road initiative in Central Asia. The Obama Administration has cautiously welcomed the initiative, while urging use of global standards and best practices in OBOR projects. August 6, 2015 OBOR could serve multiple interests for China, not least of which is extending China's influence. OBOR provides China with a means to shoulder more responsibility for global development, but on its own terms. That might help it address charges, including from President Obama, that China has for too long been a free-rider in the international system. OBOR could also serve as a strategic coordinating framework for China's extensive overseas investments. China has suggested that it hopes the initiative will bring greater prosperity, and with it greater stability, to the countries to China's west, which could support China's efforts to stabilize its own Xinjiang region. China says it sees potential economic benefits for the economies of all its western provinces, which have lagged behind the coastal east in development, and for domestic industries facing overcapacity at home, such as steel and cement. New land transportation links stand to give China's trade-reliant economy alternatives to shipping routes across seas where the U.S. Navy is the predominant power. To the east, China has said that the maritime road may help it to repair relations with Southeast Asian nations frayed by maritime disputes in the South China Sea. C ',k \-, a I. ,,, , g e s China's OBOR vision faces myriad political, security, and economic challenges. Although they may spur greater economic activity, infrastructure investments themselves typically deliver only low rates of return. Physical security and political risk are challenges in key OBOR countries, particularly in Central Asia and the Middle East. China has to tread carefully with Russia, which may fear challenges to its influence in Central Asia. China must also overcome suspicions in India, which sees a strategic threat in the proposed China-Pakistan economic corridor and objects to its proposed route through Pakistan-controlled territory also claimed by India. For the maritime route, China faces deep- seated tensions in Southeast Asia caused by its assertive tactics in the maritime disputes, which remain unresolved. At home, advancing OBOR could require skillful management of competing bureaucratic and geographic interests. China's leaders may also need to confront the question of whether, by giving Chinese provinces incentives to invest in new infrastructure, OBOR might undermine China's efforts to rebalance its economy away from reliance on investment and exports and toward greater reliance on domestic consumption for growth. In February 2015, China established a leadership body to oversee OBOR led by Vice Premier Zhang Gaoli, a member of China's most senior decision-making body, the seven- man Politburo Standing Committee. In March 2015, China's National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce gognpo 'popmm- , goo g , q 'S a X 11LULKWALiN,

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