4th September 2017
The 'Belt and Road Initiative' (BRI) or 'One Belt, One Road' (OBOR) is a project launched by China to develop countries and improve global connectivity. First unveiled in 2013 by Chinese President Xi Jinping, the initiative has and continues to grow in scale and popularity. The initiative is focused on creating networks that will allow for a more efficient and productive free flow of trade as well as further integration of international markets both physically and digitally. MSI's Chinese accounting member LehmanBrown Limited explains further.
The ‘Belt and Road Initiative’ (BRI) is comprised of the ’21st Century Maritime Silk Road’ and the ‘Silk Road Economic Belt’. Together they will connect more than 65 countries making up over 62% of the world’s population, around 35% of the world’s trade and over 31% of the world’s GDP. It will take the form of a series of highways, railways and ports as well as facilities for energy, telecommunications, healthcare and education.
The initiative includes 6 international ‘corridors’. These include; (1) ‘The new Eurasia land Bridge’, (2) ‘The China-Mongolia-Russia economic corridor’, (3) ‘China-Central Asia-West Asia economic corridor’, (4) ‘China-Indochina Peninsular Economic Corridor’, (5) ‘China-Pakistan Economic Corridor’, (6) ‘Bangladesh-China-India-Myanmar Economic Corridor’.
BRI focuses on five main goals. (I) ‘Policy Coordination’; meaning the initiative intends to encourage Countries to jointly work and cooperate with each other to achieve projects. (II) ‘Cultural Exchange’; this being the aim to promote people-to-people bonds and friendly interaction between enterprises as well as deeper cultural understanding so as to further international cooperation. (III) ‘Financial Integration’; BRI is designed to enhance monetary and financial cooperation when monitoring and dealing with risk as well as general financial interactions. In addition, it looks to expand currency exchange and scope. (IV) ‘Trade and Investment’; through BRI cross-border investments and trade are aimed at being made easier and more cooperative between countries on the Belt and Road, promoting economic integration. (V) ‘Facilities Connectivity’; this is the focus on building facilities to enable greater connectivity between countries on the Belt and Road e.g rebuilding and developing ports, removing barriers, fixing roads etc. As well as creating better networks through the development of highways, railways and fibre-optic lines between countries along the Belt and Road.
According to Chinese President Xi Jinping as of January 2017 more than 100 countries and international organisations have responded well to the initiative and over 40 have signed cooperation agreements. Already, over $900 billion USD of BRI related projects are under way. However, it is worth noting that The Asian Development Bank estimate that by 2030 the initiative will cost over $22.6 trillion. None the less the Initiative has received an immense amount of positive reactions.
Read more about China: The belt and road initiative
LehmanBrown International Accountants is a China-focused accounting, taxation and business advisory firm, operating in Beijing, Shanghai and Shenzhen.
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