Chinese High-Speed Railway and One Belt One Road Projects - Report Example

Chinese High-Speed Railway and One Belt One Road Projects

Introduction

The Chinese high-speed railway and One Belt One Road projects are crucial in improving the efficiency of the global economy and the Chinese economy variously. China is spending on the high-speed railway project, which is part of OBOR - One Belt One Road initiative. The project consists two routes - the Silk Road Economic Belt and the 21st century Maritime Silk Road. The project aims at opening up various markets across more than 65 countries between Asia, Africa, and Europe. The project has an initiative of creating a vast network of rail and maritime links between various nations. One of the links is the high-speed railway project between Thailand and China that will link the Chinese border to the Thailand ports. China plans to become a high-speed rail power in South East Asia. The project is all about connecting the rest of the World and China in a bid to promote economic growth (Jinchen 2017).

Efficiency on the global economy

As economic uncertainty runs at high levels and the economic growth in the world relatively low, the China’s One Belt One Road will be crucial in improving the economy of China and the World. The OBOR project is making significant contributions to the engine of growth in the World (Chan 2016). The project has been in existence for the past four years, and it aims at connecting through railway China and Laos, Iran, Thailand, and Indonesia. The project will set up various zones that will help in creating economic corridors and promoting industry and Infrastructure in China and the countries involved. The project also aims at creating a connection of seaports in the South China Sea, the Indian Ocean, and Eastern Africa through Kenya. The project promotes Global efficiency because it allows an increase in transportation of cargo and people among different countries of the World. The project will also be critical in fostering industrialization in most of the underdeveloped countries.

Some of the projects in the OBOR plan have already been completed while others are undergoing construction. One of the significant finished projects that have been funded by China is the construction of the port of Gwadar in Pakistan. On the Gwadar, special Economic Zone China has developed a hydroelectric power sector in Myanmar and funded the development of a gas pipeline connecting the two countries. The China Rail Group Limited has also completed the construction of the longest railway tunnel in Central Asia known as the Kamchiq Tunnel. The projects will be crucial in enabling transportation between the routes. New production opportunities will also emerge because of the growth in infrastructure, which will improve trade between China and the countries involved. Trade will help in the growth of the economy of China, and the states included such as Pakistan (Chan 2016).

Most of the countries that are receiving funding from China are the developing countries. These countries are in need of economic growth but can only improve their economic efficiency by getting help from the developed nations. Some of the countries include Mongolia, Bangladesh, and Indonesia. In these countries, China is constructing high-speed rails that will link China and the states. The railway will be crucial in the transportation of exports from China to the countries, which will greatly improve the Chinese export market. In countries such as Kenya and Tanzania, China is creating ports that will be crucial in the transportation of goods between the countries. Most of the developing countries will significantly benefit from the increasing wealth in China and the rising imports. The countries will also greatly benefit from the growing infrastructure. The countries involved in the project will get a chance to explore the Chinese market through the construction of links between the states and China. Most of these countries did not have access to the Chinese market before the project began. Growth in the economy of such countries will lead to the overall growth of the global economy.

In these developing countries, the standards of living are low, and there are low job opportunities. The industrialization levels are also low in the countries because of lack of private funds for investments in infrastructure. Because the countries lack means of transporting their goods, it creates a vicious poverty cycle, which leads to a slow or lagging economic growth. With the investment of China in infrastructure in the developing nations, the countries will have an increase in industrialization. When the industrialization levels in the country improve, most of the citizens will get decent jobs, which will lower the poverty levels. The countries will have an increase in their export market because they have a direct link with China and other countries involved in the project. It will be crucial in the transportation of products among the countries and human capital. The provision of a mode of transport for goods and human capital will create the much-needed economic growth in the countries (Kastner 2017).

Efficiency on the Chinese economy

China stands to gain most from the project because the project links China directly with other countries. The project also gives China a chance to have foreign direct investments in other countries. The project will help the Chinese people to invest in other countries and sell their products in the countries. The project will increase the market for Chinese products such as steel. It also creates jobs for many Chinese workers who will work in the construction of the railway, ports, and roads. The project will not only improve the economic relations between China and other countries but will also improve the diplomatic relations. The project will be one of the largest platforms for regional collaboration (Jinchen 2017).

China will be able to maintain regional hegemony because China will bring most of the neighboring countries in its economic orbit. By pumping hefty loans to the developing nations, China is enabling infrastructure developments in the country and improving the relations with the countries. It will create an increase in the demand for Chinese products such as cement plants, Chinese steel mills, and construction companies (Chan 2016). It will help in keeping the employment levels in China intact and improving the chances for jobs in other countries. The projects in the OBOR plan such as the roads, ports, and pipelines will absorb the extra production of steel in China. The project creates many investment opportunities for the Chinese companies in foreign countries.

The OBOR project has brought up various changes in the foreign policy in China. The country is getting involved in various bilateral agreements that are improving the relations between China and other countries. By involving as many nations as possible in the OBOR project, China is improving the international environment of conducting business. The project has also enabled China to soften its previous foreign policies and create room for talks with other countries. The strengthening of relations will improve trade, finance, infrastructure, and the exchange of human capital. The presence of China in the world financial order will help in increasing business cooperation between various countries in the world (Ouyang 2016). China will have better returns in its foreign exchange as it seeks to boost economic growth in multiple regions in the country that lagged behind in development. The project is helping most of the domestic companies in China such as the high-speed rail manufacturers and the telecom companies to get experience and become global brands. These companies may grow worldwide and provide their products in different parts of the World. The companies are also learning the relevant management techniques in a global market scenario (Ouyang 2016).

Conclusion

As the construction of the OBOR projects is going on, China is taking the interest of all the involved parties into consideration. The project will improve trade between China and other countries and facilitate easier movement of goods between the countries. The project is creating up new export markets between the countries involved in the project. It is also creating mutual benefits between China and the countries involved in the project. The project is generating closer cultural exchange between China and other countries, and it improves the economic efficiency of China and the global economy. The project is creating Practical Corporation between various countries around the globe. While various developed countries such as the USA are turning inward, China is building investments and improving trade around the World. China is exerting its influence and growth machine in Asia, Africa, and Europe. The construction of the projects is taking place rapidly to provide the much-required global growth to counter the existing economic challenges.