Last Saturday, leaders from different countries met in China to discover the Chinese initiative OBOR (One Belt, One Road). Defined by Xi Jinping as “the project of the century”, it consists of the construction of infrastructures that connect Europe, Asia and Africa.
OBOR: connecting China and the world
OBOR is expected to become a new Silk Road that open three main corridors to China: one passing through Russia, another through Turkey and the last through India. Although the project is open to any country, China has identified 65 countries for the initial stages. Together, these countries make up 60% of the world’s population, and 30% of GDP according to the Fung Business Intelligence think tank.
Other actors involved in the project includes 50 Chinese state-owned companies that have invested funds or participated in almost 1700 projects in countries along the Silk Road within the last three years.
This is an excellent opportunity for Spanish companies to improve their international standing. We must remember that one of the first results of the OBOR has been the Yiwu-Spain rail line. In addition, we have the support of the Yiwu Foundation (Foundation for the Exchange between Yiwu and Spain), which seeks to improve relations between both countries by encouraging exchange and cooperation.
Other Chinese initiatives: becoming the world industrial leader
This initiative adds on to others such as the RCEP (Regional Comprehensive Economic Parnetship) in order to create an Asian free trade agreement, which the United States defined in January 2017. Or the Asian Infrastructure Investment Bank (AIIB), created with the goal of being more efficient than the World Bank, which has already obtained the support of 77 countries, including Spain; with a capital of 100,000 million dollars (half of the capital of the World Bank).
Another project that has rarely appeared in Western media is China Manufacturing 2025. In recent years China has sought to change from low-cost to high quality: 1 million new engineers a year, R&D support, first country in patent requests… The main goal of this proposal is to get China to produce 40% of high technology products (aerospace, robotics, biotechnology …) by 2020, and 70% by 2025; thus ending China’s dependance of imports in these products. The plan will provide billions of dollars of government funding so that companies invest in R&D, open research centers or acquire foreign companies with the necessary know-how.
In conclusion, China is promoting different projects to improve trade. Some political and commercial analysts are already speaking of the “Sino-European” century. China is currently the second commercial partner of the European Union, and its main source of imports. Spain must play its role in these opportunities, positioning itself as a key player that can also act as a bridge to Latin America.