An Ambitious Initiative

Aiming to link a third of the global economy into a single trade loop, China's Silk Road (One-Belt-One-RoadOBOR) initiative is an ambitious dream of Eurasian integration. Though maps tend to differ, the 'Belt' is envisaged as a series of railways and energy pipelines linking western China with Europe by way of Central Asia and the Middle East. The 'Road', meanwhile, will be a maritime highway linking coastal Chinese ports with nations in Southeast Asia, India, Africa and the Mediterranean. If completed, over 4 billion persons would be affected by the colossal venture.

To fund it, China has set up the Asian Infrastructure Investment Bank (AIIB), backed by its US$4 trillion in foreign currency reserves. Launched with an initial capital of US$50 billion, the AIIB will seek to bridge the yawning infrastructure gap in Asia, which the Asian Development Bank (ADB) pegs at US$800 billion annually through 2020. "The world needs this bank," Wang Liping, Minister Counselor for the Economy and Commerce at the Chinese Embassy in Jakarta told Tempo last month. "Services from World Bank and ADB are not enough to meet the current demand from the developing countries."

September 22, 2015