What is OBOR?

What is OBOR?

The One Belt One Road (OBOR) is a Chinese-backed grand plan of interconnected infrastructure projects stretching across around 60 countries from Western Europe to Southeast Asia. Initially unveiled in September 2013, OBOR sits at the centre of China’s plans for economic development, both of the countries surrounding China’s Western provinces and its surrounding countries. Cost estimates have ranged from $US4-8 trillion, with funding from existing and new Chinese financial institutions, including the newly-established Asia Infrastructure Investment Bank (the AIIB)

OBOR comprises ‘the Silk Road Economic Belt’ (‘the belt’), which will include integrated infrastructure projects across Asia and Europe intended to foster trade links and stimulate demand for Chinese manufactured products, while the Maritime Silk Road (‘the road’) aims at fostering cooperation across contiguous bodies of water, including the Pacific Ocean, the South China Sea and the Indian Ocean.

The core of OBOR is made up of six ‘economic corridors’ of infrastructure development that are designed to kickstart economic growth in some of China’s surrounding nations:

– China-Mongolia-Russia Economic Corridor (CMREC)
– New Eurasian Land Bridge (NELB)
– China-Central and West Asia Economic Corridor (CCWAEC)
– China-Indochina Peninsula Economic Corridor (CICPEC)
– China Pakistan-Economic Corridor (CPEC)
– Bangladesh-China-India-Myanmar Economic Corridor (BCIMEC)

Why OBOR?

OBOR is a sophisticated response to a number of interconnected problems that China is facing. From 1978 onwards, the Chinese Government began wide-ranging economic reforms that included the development of coastal export processing zonesthat encouraged Western multinationals to relocate production, giving China the nickname the ‘workshop of the world’. A number of factors were crucial to achieving this transformation, including the role played by large state-owned enterprises that developed infrastructure that facilitated the flow of goods to market, as well as the repressive state apparatus that kept wages low, not to mention lax environmental regulation and minimal levels of corporate taxation. The Chinese economy miracle always relied heavily on offshore investment and demand.

In 2008 as the global economy hit speed wobbles the rapid expansion of the Chinese market economy reached a barrier as global demand faltered. Beijing’s banks began lending at an alarming rate, while the restive SOEs, increasingly been looking offshore to find work, undertook an impressive array of enormous debt-fuelled building projects. The cost of maintaining economic growth has been increasing, and something must be done to keep the process of capital accumulation going and maintain demand for Chinese exports.

OBOR is a solution to all of these problems. By embarking on these large-scale integrated infrastructure projects, China can address both its overaccumulation of capital while simultaneously addressing the chronic overcapacity that exists in its construction and heavy manufacturing industries. It is hoped that the stimulus effect of these projects in the surrounding countries will boost demand for Chinese exports, while the infrastructure projects facilitate the movement of goods, services and people. The hope, it would appear, is to propel economic development both in China and in other OBOR countries.

Why OBORWatch?

OBOR presents itself as a global development plan that would make existing international financial institutions like the World Bank jealous of their scope and vision. However such large-scale development brings with in potential environmental and social risks. At the same time as exporting Chinese construction and manufacturing services, OBOR risks simultaneously exporting the Chinese model of workers’ rights, a model that relies on low wages, poor working and living conditions, systematic denial of the rights to freedom of association and almost non-existent health and safety.

Workers and unions have already seen these issues play out in the operations of Chinese multinational construction companies across Africa, Latin America and parts of Asia. OBORWatch has been inspired by the scope of the OBOR, and is committed to documenting the struggles of workers and unions to protect and expand those workers’ rights. At the same time, it hoped that these struggles will inspire workers in China while disciplining their employers, to help the world’s largest unorganised labour force improve their own working conditions.