In 2007, work began on the Chongqing-Duisburg
freight railway, which has now been operating for five
years, and cross-Myanmar oil and gas pipelines that
terminate in Kunming. These have been operating for
over two years and, for the first time, China can now
receive some its oil and gas supplies directly from the
Middle East without going through the Straits of
The Chinese built port of Gwadar has been operating
for a number of years. When work on it first began, it
excited a great deal of interest from the Washington
and Delhi security communities that this was to be
one "pearl" in a "string of pearls" around the Indian
Ocean intended to support China's naval expansion
into the Indian Ocean.
Admittedly a port can have many uses, but on a drive
through the Hunza Valley of Pakistan in late 2006 the
tortuous, lethal mountainous road that links Pakistan
and China was already dotted with Chinese surveyors
as the first step in upgrading the road to make it
suitable for road freight to and from China. If Gwadar
was about China's projecting naval power, building
roads through the distant mountains seems hardly to
have been necessary. Running from Kashgar in
China's remote western province of Xinjiang, through
Gilgit and Islamabad to the port it is also well away from the Pakistan-Indian disputed territory of
Kashmir. It is curious that strategic analysts often have
a weak grasp of geography.
If there is a strategic challenge in the Kashgar-Gwadar
corridor, it is to Russian influence in Central Asia,
Moscow's traditional sphere of influence. Beijing
intends for Kashgar to become the major economic
hub in Central Asia. Planning is already under way for
a rail link along this corridor, which seems overly
OBOR has always had three major imperatives:
economic, internal stability by developing the poorer
remote border provinces and strategic. For over a
decade, China has been diversifying its holdings of
foreign assets away from US Treasury notes, as part of
its "Go Global" strategy. Investing in foreign
infrastructure also has the advantage of providing a
vent for China's growing excess capacity as own
infrastructure needs are increasingly built out.
Unacceptable strategic vulnerabilities
Building transport infrastructure from poor border
provinces to neighbouring countries not only
promotes growth through the capital investment but
opens these areas to adjacent markets creating new
opportunities for trade and attracting inward
investment. These provinces are mostly populated by
ethnic minorities, over which Beijing lives in a state of
existential anxiety about potential "separatist"
movements emerging. Its answer has always been more economic development.
Since the mid 1990s, China has increasingly relied on
international markets to supply ever greater amounts
of raw materials and energy to fuel its rising
prosperity. Until the mid 1990s, for example, China
was self-sufficient in crude oil. Today, it is the world's
biggest importer. Until the pipeline across Myanmar,
all of this went through the Straits of Malacca and the
South China Sea. From Beijing's perspective, this is an
unacceptable strategic vulnerability in view of the US'
overwhelming naval strength.
Over the past three years, Xi has elevated OBOR to
become the government's highest priority and the
signature policy of his tenure. It has now become
essential for overseas investment, and many domestic
infrastructure projects, to be badged with OBOR. With
this week's conference in Beijing, it has now become
the organising principle and narrative for China's
Australia's local OBOR confusion
Canberra continues to tie itself in knots over how to
respond, just as it did with the AIIB. Under the
influence of conservative Washington think tanks, a
prevailing view in Canberra holds that OBOR is an
attempt by China to impose a "Sino-centric" order on
the world. Accordingly, Canberra to Beijing's irritation
has pushed back on China's involvement in the
Northern Development Strategy because it is badged
with OBOR. Business is also perplexed.
The confusion in Canberra was again on display at the
OBOR Conference, when Australia's trade minister
attended for only part of the first day and left before
the welcoming dinner. These things are carefully
noted by Beijing. We are again, as with the AIIB,
having the worst of all worlds – neither in with
influence, nor out with our principles.
The problem for Canberra is OBOR is here to stay to
guide and endorse China's outward investment and as
the key organising principle for China's foreign policy.
It is not obvious what are the threats and risks. As a
major actor, China will definitely influence and shape
the international order as it has already done with the
AIIB, BRICS Bank, Silk Road Fund and the Shanghai
Security Cooperation Organisation. The world order is
evolving and China is playing a central role in this.
But it is far-fetched to see a "Sino-centric" order
emerging from this, whatever that might mean or look
like or that, despite China's great economic weight, it
could indeed alone impose a new order on the world.
After all, Australia's foreign minister has said that
China is unfit even for regional leadership.
Geoff Raby is chairman and CEO of Geoff Raby &
Associates and former ambassador to China