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China's One Belt One Road plan explained

NZ Newswire logoNZ Newswire 15/05/2017 Lisa Martin

ONE BELT ONE ROAD, WHAT'S THE DEAL?

* In 2013 Chinese President Xi Jinping unveiled an ambitious economic and foreign policy - the "Silk Road Economic Belt" and the "21st Century Maritime Silk Road".

* China wants to revive the network of silk-trade routes across ocean and land of centuries past. It's instigating an infrastructure-building boom across Central Asia up to Europe to boost trade and improve transport logistics. The land-based projects are the belt. Various economic corridors are on the cards too, including with Pakistan, Mongolia and Bangladesh.

* The maritime route will connect up China's southern provinces to south-east Asia and the east coast of Africa with ports and railways.

WHY?

* Beijing wants to exercise regional leadership, and make the Renminbi the main trade and investment currency in countries involved.

* China needs to channel "excess capacity" somewhere.

* It's about standard setting. China wants to shift from lower-level manufacturing to higher-end industrial goods. It believes emerging markets in its neighbourhood will be more willing to accept Chinese-made high-speed rail, energy generators and telecommunications equipment than developed countries.

* China is trying to close the inequality gap between inland western provinces and its wealthy eastern seaboard.

* As the US seeks an "American First" agenda, many countries are rushing to be part of China's big plans.

IN NUMBERS...

* One Belt One Road has $US1.3 trillion ($A1.8 trillion) worth of projects already initiated.

* President Xi announced an extra $US124 billion at an international summit this week.

* One Belt One Road is more than seven times larger than America's Marshall Plan to rebuild Europe after the Second World War.

* Countries involved: 68

BENEFITS...

* It will fill gaps in infrastructure projects for developing countries. Afghanistan and Pakistan see it as a "path out of poverty".

* Economic growth.

* Increased trade and faster transit of goods.

* International cooperation.

* Peace building.

CHALLENGES...

* Lack of trust between China and some countries involved.

* Two out of three countries involved have a sovereign credit rating below investment grade.

* Some countries are unstable, which poses security risks to Chinese companies and workers.

* Some Chinese bankers are worried about the risks of investing, such as the feasibility of some projects and political instability.

* Critics fear China is seeking economic and strategic domination, and human rights and environmental standards could be undermined.

* There's concerns poor countries could be left laden with massive debts.

* It's unclear who is in charge of One Belt One Road.

* In Sri Lanka there have been protests against some of the projects.

* India is upset the $US57 billion China-Pakistan economic corridor runs through disputed Kashmir, saying it violates its sovereignty.

WHO WENT TO THE MAY 14-15 SUMMIT?

* Twenty-nine heads of state and government including Russian President Vladimir Putin, Indonesian President Joko Widodo, Turkish president Recep Tayyip Erodogan and leaders from Africa, South America, Asia, Central Asia and the Middle East.

* United Nations Secretary General Antonio Guterres and International Monetary Fund chief Christine Lagarde

* Flying the flag for Australia - Trade Minister Steve Ciobo, former prime minister Kevin Rudd, former Abbott government trade minister Andrew Robb and Victorian Premier Daniel Andrews.

* New Zealand Innovation Minister Paul Goldsmith

* 100-odd countries were represented overall.

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