China’s Silky Smooth Global Expansion

The Chinese construction juggernaut is rolling through Central Asia at a breakneck speed, reviving the once famous Silk Road. The One Belt One Road initiative is an attempt by the Chinese government to refocus its overextended domestic industries.

The project which launched back in 2014 has a war chest of $40 billion, a small chunk of China’s deep foreign exchange reserves.

Global Expansion
China’s Silky Smooth Global Expansion

They are casting their net far and wide building roads, tunnels, and bridges in everywhere from Kazakhstan to Pakistan and the boost to its international trade revenue has been substantial. But it is not only Asia that is being swept up by the Chinese powerhouse; South America was pledged $250 billion, and they have completed one thousand projects in Africa. Europe is no different; Beijing recently began work on an eight thousand mile cargo route from Yiwu to Madrid. Even in California, the Chinese momentum is building, where they are favorites to construct a high-speed rail; as global experts in the field.

In Pakistan, China has plans for a $46 billion China-Pakistan Economic Corridor (CPEC) which will be a combination of roads, rail, pipeline, bridges and more. The mission is to develop a trade route from Gwadar to north-west China. This forms part of China’s energy hedging strategy to place less reliance on sea import routes. CPEC is expected to exceed all foreign direct investment in Pakistan since 1970 and total 17 percent of Pakistan’s 2015 gross domestic product.

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CPEC also includes a 1,100-kilometer long motorway between Karachi and Lahore. “We are excited about the improved connectivity between these two key cities in Pakistan,” said Saad Arshed, managing director of Lamudi Pakistan—the Rocket Internet funded property platform. “Investors are more likely to buy real estate in a city that is accessible.” Arshed went on to say. Pakistan joins Russia, Kazakhstan, Thailand and Indonesia as the top cooperating nations. Russia claims the top spot followed by Kazakhstan in terms of policy communication, connectivity, trade, finance, and public support. 

If the targets of the initiative are achieved, it should improve trade and financial integration between Pakistan and China. The reduction of conflict between the two nations is likely to create opportunities, and enhanced supply chains will make it easier for Pakistan exporters to find new markets. Some think the advancement of China into new territories poses a significant threat. But China’s new global expansion should not be seen as such. China’s power and magnitude are rapidly shaping the economies of Asia, and this will be a positive change for the region.

Author: Shahzeen Haris