One Belt One Road: New Opportunities in China and Beyond

“One Belt One Road” (OBOR) is an initiative, which was launched by President Xi Jinping in 2013,to focus on improving and creating new trading routes, links and business opportunities with China, passing through over 60 countries along the way, across Asia, Europe, the Middle East and Africa. It has two main elements:

One Belt: The Silk Road Economic Belt

Enhancing and developing land routes:

• Building a “Eurasian land bridge” - a logistics chain from China’s east coast all the way to Rotterdam/Western Europe; and

• Developing a number of economic corridors connecting China with Mongolia and Russia, central Asia and South-East Asia.

One Road: The 27st-Century Maritime Silk Road

This is a sea route rather than a road (a reference to the old maritime Silk Road) which「uns west from China’s east coast to Europe through the South China Sea and the Indian Ocean.

The aims of the OBOR initiative include:

• developing prosperity for underdeveloped parts of China, particularly in the west of the country

• developing new opportunities for China to partner and co-operate with the various countries along the routes, many of which are developing countries

• increased integration, connectivity and economic development along both routes.

"The aims of the OBOR initiative include developing prosperity for underdeveloped parts of China"

New Opportunities in China and Beyond

UK companies can play an important role by supporting the development and connectivity of China and beyond, thereby contributing to continued strong and sustainable growth in China while simultaneously benefiting from new commercial opportunities.

There will be new and exciting commercial opportunities both within China and in countries along the routes. These opportunities will be in the short, medium and long term, and many of the more immediate opportunities will be

within China itself as it gears up to deliver on the OBOR initiative.

We believe the potential exists for powerful partnerships between British and Chinese companies, playing to respective strengths. A wide range of business models may be deployed, including:

• Joint partnerships;

• Technology transfer;

• Investment funding;

• EPC;

• PPP;

• Changing supply chains.

These models are explained in Section 3 under “Effective Business Models”.

Sector opportunities will initially be in the major sectors of:

• Infrastructure,

• Financial and professional services,

• Advanced manufacturing,

• Transport and logistics.

Infrastructure projects will play an important role in connecting China with countries along the routes. Most Chinese provinces along the routes are also developing their own OBOR infrastructure plans. Further secondary opportunities will be found in many other sectors,such as agriculture, energy and environment, e-commerce, healthcare and life sciences. Each major sector has been considered in more detail in the Sector Opportunities sheets included as part of this report.

Certain provinces such as Xinjiang and Fujian are positioned as “core areas” of the OBOR initiative due to their geographical locations. Xinjiang aims to become a financial hub in West China and Fujian will focus on the further development of its logistics, shipping and marine sectors.

Many western regions, such as Chongqing, Shaanxi, Sichuan, Xinjiang and Yunnan will be chiefly focused on infrastructure and urbanisation projects and expanding international trade opportunities. Some underdeveloped western

provinces that have excellent natural and agricultural resources, such as Gansu, Ningxia and Xinjiang, will need to upgrade their technology and improve productivity and efficiency. Eastern coastal provinces such as Fujian, Guangdong, Jiangsu and Zhejiang are expected to present new opportunities in more advanced sectors, such as financial and professional services, shipping and logistics, advanced manufacturing, e-commerce, healthcare and life

sciences.

The report focuses on 13 key provinces along the OBOR routes and highlights some specific opportunities in each province.

"The potential exists for powerful partnerships between British and Chinese companies" 

Risks and Challenges

Projects associated with OBOR will not be without challenges and risks. Businesses should make a thorough risk assessment.

OBOR is not only an economic initiative but also a major geopolitical one. The different economic and political situations of countries along the routes inevitably means there are inherent risks, ranging from legal and financial challenges to political or social instability and regional disputes.

Careful planning and due diligence beforehand are strongly recommended The China-Britain Business Council, together with UK Trade & Investment, supports UK companies in this process based on in-market experience and knowledge of suitable partners.

Read more.

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