China has institutionalized its approach towards the development of the Belt and Road Initiative (OBOR), also known as the 'New Silk Road'. The initiative aims to connect Asia, Africa, and Europe through new economic corridors, facilitating trade and investment across these regions. The Chinese government's strategy involves not only economic aspects but also geopolitical considerations, ensuring stability and access to markets and resources through financial and security cooperation.
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Institutional Framework: The Chinese government is setting up both political and financial frameworks to support the initiative. This includes cooperation with existing mechanisms like the Shanghai Cooperation Organization (SCO), ASEAN+China (10+1), Asia-Pacific Economic Cooperation (APEC), Greater Mekong Subregion (GMS), and Central Asia Regional Economic Cooperation (CAREC).
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Reform Efforts: Both within and outside China, reforms are being implemented in areas such as financial market integration, trade liberalization, and market opening. For instance, the General Customs Administration is reducing non-tariff trade barriers, and the Ministry of Commerce plans extensive cooperation in energy and infrastructure investments with neighboring countries.
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Financial Instruments: To meet the high financing needs in Asia, China established the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund as financing tools. The AIIB, headquartered in Beijing, focuses on funding infrastructure projects in the Asian-Pacific region. It has 57 founding members, including Germany, which holds a 4.5% share of the capital. China owns the largest share at 30.34%, giving it majority control over decisions.
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Strategic Decisions: Strategic decisions for the AIIB are made by the annual governors' meeting, where each member state is represented. The German governor is Finance Minister Wolfgang Schäuble. The AIIB signed a cooperation agreement with the Asian Development Bank to enhance each other's capabilities, generate additional value, improve institutionalization, leverage competitive advantages, and promote win-win situations.
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Economic Corridors and Opportunities: The initiative involves the development of various economic corridors along the old Silk Road routes, including maritime and land routes connecting Southeast Asia, the Middle East, Africa, and Europe. It promises significant economic opportunities in sectors like trade, finance, infrastructure, and energy.
The Belt and Road Initiative represents a comprehensive strategy for China's economic and geopolitical engagement, aiming to strengthen global connectivity and foster mutual benefits among participating countries.
