strategy
73
There is so much money that the ropes used to string coins together rot and break…the granaries in the capital overflow and the grain goes bad and cannot be eaten Sima Qian, Chinese historian, 1st Century BC, describing consequences of the Silk Road
WrItINg
Michael Netzley ILLUstratION
Alex Mathers The Trans-Pacific Partnership was just the start. With the successful negotiation of the TPP trade deal, now awaiting ratification from participating countries, global attention is shifting towards China’s ambitious One Belt, One Road project (Obor). So what is Obor? And is it likely to be a success? Obor is essentially the vision of a new consumer-producer network in Eurasia, creating an integrated trading bloc in the East and rolling back the existing global model, where the East produces and the West consumes. The story began on 7 September 2013, when China’s President, Xi Jinping, gave a speech at Kazakhstan’s Nazarbayev University. Here, he articulated what seemed a simple vision to integrate and better connect Eurasian markets, with China at the hub. “We can innovate the mode of cooperation and jointly build the Silk Road Economic Belt step by step to gradually form overall regional cooperation,” he said. But its simplicity is questionable. When read today, the matter-of-fact reporting from 2013 questions few of the consequences from this ambitious plan to build a modern version of the ancient pathways described by Sima Qian. For two millennia, what is today known as the Silk Road – a complex patchwork of overland and maritime routes connecting China and southeast Asia with India, Africa, Rome and later western Europe – enabled the exchange of silk, spice, textiles, knowledge and religion. The centres of exchange – inland cities and coastal towns such as
Goa or Constantinople (now Istanbul) – became vibrant hubs of commercial and cultural activity. When put into a historical context, President Xi’s ambitions take on a much grander scale. How exactly does Obor differ from the TPP? What role will China’s new Asia Infrastructure Investment Bank (AIIB) play in this growing geopolitical tug-of-war over trade? And, finally, what does it all mean for executives who have a business to run? The answers are relatively simple. Increased connectivity on the scale proposed by China will bring substantially increased complexity to any business operating within this proposed network.
O N E B E LT, O N E R O A D : TWO PERSPECTIVES eXPert VIeW
Parag Khanna, global strategist, leading author, and senior research fellow in the Centre on Asia and Globalization at the Lee Kuan Yew School of Public Policy at the National University of Singapore.
What is One Belt, One Road?
Obor is all about the effort towards deeper Eurasian infrastructural connectivity from Shanghai to Lisbon. What China wants is more connectivity… All infrastructure projects in Eurasia serve the purpose of connectivity. Q3 2016 Dialogue
072-075_Dialogue_Q3_2016.indd 73
11/05/2016 12:55