One Belt One Road Initiative Case Study

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One Belt One Road Initiative

China has always tried to introduce a new concept in the Asian market. Its latest movement is the One Belt One Road Initiative. More than 2000 years ago, China’s imperial envoy established the Silk Road that linked China to the Arab World. In 2013, China’s president Xi Jinping introduced the One Belt One Road Initiative that will link all of Asia. China has set up three financial entities - Asian Infrastructure Investment Bank, New Development Bank and Silk Road Infrastructure Fund. This enabled the initial capital to reach US$40 billion.
The One Belt One Road, expected to be completed in 2049, is envisioned as three routes connecting China to Europe, The Persian Gulf, The Mediterranean Sea and The Indian Ocean. This initiative aims to create connections among regional waterways. More than 60 countries, with a combined GDP of about $21 Trillion, have expressed interest in joining the One Belt One Road Initiative. All Asian counties, except Bhutan, have joined the One Belt One Road Initiative.
Malaysia is one of the 65 countries in the One Belt One Road initiative. Malaysia has long been a close ally of China. About 19.6% of Malaysia’s imports comes from China which is worth around MYR93.85
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Having so much advanced infrastructure will come at a cost. China will most probably lend money to the host countries at huge interest rates which the participating countries will have to repay. China also will have some motive for profit. China may have military bases in countries participating in the One Belt One Road Initiative, hence strengthening China’s military presence. Secondly, the One Belt One Road Initiative is expected to complete in 2049. This means that China is taking big risks with the economy to complete this project. If a repetition of the Great Depression of 1929 happens again, the project could fall and a crisis would occur both political and

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