CHAPTER 2

OBOR STRUCTURE

What is One Belt One Road (OBOR):-

 OBOR is a Chinese initiative that seeks to increase Eurasian countries' connectivity

and cooperation.
 It binds 78 countries at initial stage and accounts for about 40% of global GDP and
now covers nearly 140 countries.
 OBOR carries out development programmes and increases trade between the related
countries.
 The silk route from China to other countries used to sell silk was developed in the
Medieval era. Today, this Silk Road is being resurrected by China that it has called
OBOR.
 'One Belt' is the OBOR land corridor regarded as the Commercial Silk Road. 'One
Belt is the ocean-shaped 'Maritime Silk Road'.38

Negative impact: -

 China would encircle India in its ports, naval bases and observation posts in the
Indian Ocean. It is sometimes referred to as "perl string."
 "China-Pakistan Economic Corridor" (CPEC)—The Mega OBOR initiative flagship
project moves through the occupied Kashmir zone of Pakistan. China's intervention
violates the sovereignty of India because China has not been permitted to do so by
India.
 Through its investments, China will take over developing countries, impacting trade
between India and these countries.

38
P. Soja, ―Integration of the CLMV Countries with the Association of Southeast Asian Nations”, Vol. 26,
No.4, Pol Quarterly Int‟l. Affairs, 2017, p. 44.

50
 Chinese corporations will supervise ventures within the scope of OBOR in India, if
India enters OBOR. This is a drawback, because Chinese businesses cannot build jobs
for the local population or care for local development needs.

Positive impact:-

 Shortage of infrastructure is India's greatest downside. India would leverage China's

funding and technologies in order to solve this downside, if it collaborated with
OBOR.
 India's trading ties with Eurasian countries would strengthen if India becomes part of
the OBOR.

While India is surrounded by Chinese ventures, its presence in world affairs still lies deep
enough. Therefore, OBOR should not be concerned. However, for China to neglect
India's supremacy, India should be strict. India will solve its biggest infrastructure failure
by taking advantage of OBOR.

There are a propensity to arbitrarily separate economic corridors that connect up

countries into two areas: domestic and international. This dichotomy ignores the pivotal
relation between these two components – entry port (POE). In general, the POE has the
freedom to reach a country by citizens and by products and has three major categories:
Marina, terminal and port of shore. All six economic corridors of OBOR, therefore, on
ground, are linked to one type of port—land ports both domestic and foreign. Land ports
include road ports and railways on national borders, by limited description. In general,
though, land ports often have river harbours since certain national boundaries either cross
the river or have their own waterways.39

Indeed, Theoretical motivation of the construction of ports in the country along economic

39
‗Project Mausam‘ is an initiative announced by Indian Prime Minister Narendra Modi to increase India‘s
links with countries impacted by the MSR. Characterised in the Indian press as a ‗transnational initiative
meant to revive [India‘s] ancient maritime routes and cultural linkages with countries in the region‘, the
project is seen as a direct response to China‘s OBOR. See Sachin Parashar, Narendra Modi‟s „Mausam‟
Manoeuvre to Check China‟s Maritime Might, The Times of India, 16 September
2014, http://timesofindia.indiatimes.com/india/Narendra-Modis-Mausam-manoeuvre-to-check-
Chinasmaritimemight/articleshow/42562085.cms

51
corridors to facilitate mobility across infrastructures for economic factors movement,
including employment, capital, technology, knowledge, and so forth. In order to
undermine barrier position, two economic hypotheses more specifically.

The growth pole hypothesis, The economic core of a nation is called a "growth pole"
(Parr 1999). The growth pole also drives economic growth of neighbouring areas by the
creation of growth pole through the absorption and aggregation of different output factors
and economies. Land port is considered to have the economic capacity to function as a
development pole and could contribute to economic growth in borderlands, as a location
from which people and products travel. Therefore, ideally, the ports of land are built to
become commercial centres.

In addition to the theory of pole expansion, Also an important theoretical method for
encouraging port development is the principle of border advantage. It concentrates on
three aspects: (1) boundary duality, (2) border spatial gradients and (3) domestic border
criteria (Hu 1993). Firstly, the boundary duality applies to the positions of culture and
economy in frontier regions. The most significant aspect in borderlands, which offer a
conducive climate for the regional stability of the land ports, is cultural interaction and
economic growth in period of peace rather than militaries. Second, the regional boundary
gradient relates to the variation in the social characteristics of two countries that share the
border (Zhang and Shi 2017). This is that all countries will take part in trade, and will
both will be benefited. That is the distinction. Thirdly, it is important to find an inland
route through the sea to establish foreign trade with the landlocked countries. China is
significant in terms of neighbouring countries' economies as Mongolia and Kazakhstan,
with its long boundaries shared with landlocked countries and long coastlines. Land ports
are the point of communication to the sea and they have to cross boundaries to increase
commerce from domestic countries.40

Land Port: Reality

Of the 300 land-based ports spread along China's 22800 km long boundaries, the

40
Ivan Lidarev, ― Is a China–India ‗Reset‘ in the Cards?‖ , The Diplomat, 8 June 2018,
https://thediplomat.com/ 2018/06/is-a-china-india-reset-in-the-cards/

52
geographical location as far as the OBOR are concerned indicates few major land-built
ports, situated exactly on the crossing of the economic corridors.

Instead, The study looks at two pairs of land ports in the Inner Mongolian Autonomous
Zone of Alataw Pass and Khorgos in the Province Xinjiang, Manzhouli and Erenhot,
instead. In addition, it looks at all large land ports. Two key facts have contributed to the
identification of these two land ports. Second, all four of them can be counted as one of
China's largest land ports. Second, OBOR is typically a western-driven initiative to
connect China with western-driven countries, and these land ports are all gateways to the
west, which play a major role in OBOR.

This study is aimed at examining the interaction between OBOR and some ports. In this
portion, it will be studied how OBOR affects the multiple land ports' ecosystems and at
the same time how these land ports evolve and turn to promote OBOR's development at a
local stage. Since the literature on developing land ports mostly focuses on their
economic perspectives and lacks other factors, A significant approach from Arjun
Appadurai to set out an extensive paradigm used to examine OBOR's impact on land
ports: the five scenarios principle. In Appadurai's opinion (1991), conflict between
cultural homogenisation and Heterogenisation occurred in the post-Cold War
environment, and hence the global order is defined by divisions within economies,
culture and politics. Five "scapes" scapes: ethnoscapes — migration of individuals,
mediascapes — flows of society, technology, flows—financed funding and ideoscapes—
the philosophy flow. In this study, Technoscape is to characterise the growth of
technological-based infrastructure projects, ethnoscape to explore people's influx,
ideoscape and media environment, and finanscape to explaine the economic and financial
impact for the purpose of rendering the model more suitable to OBOR.

Alataw Pass

The Alataw Pass is Xinjiang Province's second largest land port, with route, bridges, etc
and pipelines, often referred to as the Dzungarian Gate. Altava pass is the most remote
point from the Eurasian ocean deep in the Eurasian hinterland and has a harsh geological
climate - heavy sun glare, exceedingly low rainfall and, more significantly, a powerful

53
breeze. Approx. 500 miles (46 ° 17′N, 86 ° 40′ E) from the Eurasian Pole of
Inaccessibility. The Alatav Pass is a powerful wind that blows in more than 160 days and
one of the four main "wind drought" in China at approximately 40 minutes per year (Xie
2016).41

However, At least from the 17th century when Manchu people dominated China, the
Alataw Pass had acted as a convenient conduit between China and the Eurasian steppe,
considering its extreme geography (Fan and Tian 2006). In 1883, the Alataw Pass was
formally bordered by the Qing Dynasty, signing the unjust deal with the Russian Empire.
In the following year, Alataw Pass's position as a node between China and Central Asia
was sadly considerably poorer as the ties between Qing and the Russian Empire at the
turn of the 20th century and the Sino-Soviet break of the 1960's were not so well
developed (Jiang 1990). Only in 1990 did the Council of State of the PRC authorise the
development of the Alataw Pass as land harbour. In China's 2000 Western Development
Plan, which had begun in the 29-year history of the reopening of the Alataw Pass, once
served as a major stimulus for its rise.

For the most visible transformation in the physical world of Alataw Pass since the start of
OBOR is the railway lines and container on which they travel and cross the boundaries
between China and Kazakhstan, first of any mark that OBOR introduced to the Alataw
Pass was the transport node. This nation port is the primary transport node of the New
Eurasian Land Bridge that more than 70% of all China-Europe Express train services will
traverse (Sohu 2018). To this end OBOR explicitly redefined its economy in a "corridor-
based" type, impacting the Alataw Pass financial landscape. In other words, the
significantly enhanced flow of goods by rail confirms the role of Alataw Pass as a
corridor or pass between locations. However, because of OBOR's impact on the Alataw
Pass Finanscape, the ideal style for the future growth of Alataw Pass is problematic.
Indeed, controversy emerged when scholars claim that a passage-based economy is not
able to greatly improve the financial well-being of local communities merely because the
values of commodities passing via the boundary of trains cannot be sustained on Alataw
Pass (Yao et al. 2012). The transformation economy must move towards a growth-pole-

41
Ibid.

54
based economy in order to further boost the economic output of Alataw Pass. In 2014, the
government of Alataw Pass developed a comprehensive bonded area which links rail
lines to attract more investment, a vital component of the Alataw Pass' current financing
landscape.

"A special trade area, a special business region with favourable tax policies managed by
customs officials," is often recognised as a complete bonded zone (CBZ), a detailed free
trade zone (Shira 2019). The CBZ in general incorporates the roles of a fiscal region, an
export manufacturing area and a bonded logistics zone with an emphasis on transport,
storage, warehousing, handling and intermediate trade (Wang 2016). As the first in
Xinjiang Province, Alataw Pass CBZ had traded in the amount of $8 billion up to 2018,
drawing more than 460 enterprises, including Anhui Huamao Corporation, Jiangsu
Huamao Corporation, Zhejiang Huamao Medical Textile Corporation and Kazakhstan
Sarbulak Corporation (Li 2017). The CBZ intends to further encourage investment and
accelerate the agglomeration of nonferrous metals, resources, farmland, etc. by
favourable taxation policies, to speed up transition from a changing economy into a
development pole.42

As growing numbers of companies arrived in Alataw Pass City, the financial condition
changed, and a the number of people moved for companies. Local ethnoscape has also
been transformed. It is worth mentioning that the establishment of CBZ not only brought
together citizens from CBZ, but also from Alataw Pass City. Luo Zhong, from Bole,
Having owned a supermarket among the most relevant in Alataw, Zhao Liansheng, from
Changji to find a job on a train station, was doubled in two years, and most of his drivers
and employees at the railway station 3 years ago; and Zhao Liansheng, who had been
from Changji, was the owner of the largest supermarket at Alataw Pass City. It is after the
steady shift in the Alataw Pass's finanascape that citizens of somewhat diverse origins
came here searching for opportunities.

However it was just the ideological influx from Beijing, core of OBOR that affected the

42
Srikanth Kondapalli, ―Why India is Not Part of the Belt and Road Initiative Summit”, The Indian
Express, 15 May 2017, https://indianexpress.com/article/opinion/why-india-is-not-part-of-the-belt-and-
road-initiative-summit-4656150/

55
Alataw Pass's mediascape and ideoscope. Specifically, the key source of ideas in Alataw
Pass instead of in Kazakhstan is the central Chinese government, Which controls Alataw
Pass architecture through local authorities to better serve OBOR purpose. The Alataw
Pass Administration coordinates many municipal activities, among the best ones, which
tried to encourage the "Social Thoughts with Chinese New Age characteristics" proposed
by President Xi Jinping of China during the 19th National Congress of the Communist
Party of China in 2017 (Ifeng News 2017). The Alataw Pass idea and media sets
essentially discussed the strong relation between the Alataw Pass and Beijing, with
activities such as panel discussions and entertainment events that tried to put the
"thoughts" from Beijing into the area. Moreover, shortly after the 19th Congress of the
CCP National, the word "Spirit of the Alataw Pass" was created. The "Ghost of Alataw
Pass" referves "take root, determination, and commitment to service" as the "thinking"
encouraged by the central government" (Zhang and Shi 2017). Alataw Pass government
has transformed the local ideoscope with a growing influence of philosophy in Beijing by
formulating this concept and gathering slogan that can carry this spirit to masses of the
people.43

On the other side, however, Kazakhstan and China remained constrained in cultural
contacts with Alataw, and one of the explanations for this may be the minor opening of
the Kazakhstan land port directly linking Alataw Pass—Dostyk. Dostyk is also not
completely accessible to the Chinese market because of a land port on the Kazakhstan
frontier, which is just 12 kilometres away to the north of Alataw Pass (Xinhuanet 2014).

Therefore, the launch of OBOR influenced many Alataw Pass environments, in particular
the financial and ethnic landscape. Meanwhile, OBOR's success was also encouraged by
the Alataw Pass' transition in recent years.

As one of OBOR's main ventures, first of all, China-Europe railway express crosses the
Chinese-Kazakhstan boundary at Alataw Road. The construction of rail transit networks
was only accelerated by the establishment of Alataw Pass City in 2012 and the start of
OBOR when the Alataw Pass was being used as a transport node on the China frontier in
43
Julien Chaisse & Mitsuo Matsushita, ―China‘s ‗Belt and Road‘ Initiative: Mapping the World Trade
Normative and Strategic Implications”, Vol. 52, Journal World Trade, 2018, p.p. 63–185.

56
1992. Without substantial expenditure in infrastructure in Alataw pass over recent years,
the Chinese-Europe Railway Express has stagnated both in frequency and in amount of
transported merchandise. Alatow Pass has seen over 6,000 Chinese-Europe Railway
Express trains run until August 2018 as a large transit node along the New Eurasian Land
Bridge (CINIC 2019). The Chinese express services, Europe should rely entirely on
Khorgos, another land port connecting China and Europe by trains without Alataw
Movement, limiting reliability and increasing costs.

Second, the building of pipelines at Alataw Pass led to the activity of the Kazakhstan-
China pipeline, the first pipeline for the oil import to China, on the strategic stage (Sun
2017). While not publicly accessible, this pipeline is important to OBOR's material
landscape along the Silk Path. Alataw Pass is an important destination on the Chinese
side for managing pipelines: the pipeline is being pressurised by the commercial customs
trading station Alataw Pass in pipelines passing China, via Urumqi, Xinjiang provincial
capital and Lanzhou provincial capital of Gansu to complete a Chinese pipeline (China
Machinery Industry Federation 2017). In 2017, total oil exports from Kazakhstan to
China were 100 million tonnes, as domestic demand for oil was raised, for industrial
purposes in China (Qin 2017).44

Thirdly, as already stated, the CBZ is the institutional experiment in favour of OBOR in
China's borderland. It is also planned to boost customs clearance services in addition to
stimulating the local economy. CBZ improves declaration performance, for example, by
integrating a custom document type with an inspection statement in one form. (News
2018) (Xinjiang). Nevertheless, Alataw Pass institutional enhancements are also
incomplete. A fascinating example is the impeded creation of electronic custom / port.
An integrated port that connects directly to the national telecommunications network
focused on Internet technology to monitor and handle all sorts of data on a single
physical land port (Zhu 2014). However the building of the Alataw Pass electronic land
harbour is slow because of the lack of funds from the Central Government in particular
(Guo 2014).

44
Irina Ionela Pop, ―Strengths and Challenges of China‘s ‗One Belt, One Road Initiative”, CGSRS, 9
February 2016, http://www.cgsrs.org/publicationDetail.php?id<hig>=</hig>46

57
The oldest and the largest land harbour of Xinjiang province is situated 200 kilometres
from Alataw Pass. In the Ili River valley, Khorgos is a safer geographical position than
the Alataw Pass, and it passes the Karasu River and the Khorgos River. Therefore it
unquestionably becomes a big portal between China and West owing to the unusual
position and climate benefit of Khorgos in Central Asia. The expression "Khorgos"
means "the place where the caravan passes" in the Mongol language (People's Daily
2014).

Khorgos was even longer than Alataw Pass as a land port. In the Tang dynasty, he had
begun his position as a transport node along the old Silk Route. Khorgos followed a
common development route in modern history with Alataw Pass: during Qing's Dynasty
it became the official border region, and Khorgos was closed from 1962 to 1983 because
of declining ties between the PRC and the Soviet Union. Following Khorgos reopening,
trade between the Soviet Union and China (later Kazakhstan) expanded steadily. Khorgos
was founded in 2010 (Zhang 2018).

Unlike the Alataw Pass, Khorgos' financial geography is influenced by another

experiment OBOR: the Chinese-Kazakhstan International Frontier Centre for
Cooperation (KIFCC). KIFCC is a model centre of Shanghai Partnership Organization as
the worldâ s first transnational economic and investment coordination centre (Wang
2012). KIFCC's principal functions include shipping, transportation, holding commercial
talks, presentation of goods, financial services, and more. In particular, customary taxes
and import value added taxes are not paid on products which enter KIFCC; people of
either country are entitled to enter a centre for companies without visa and any
marketplace individual is permitted to carry goods equal to 8,000 yuan in China without
taxes daily. By 2017, Infrastructure development KIFCC spent 1,5 billion yuan and
founded more than 4,000 traders (Ma 2018).45

The growth in Khorgos has entered another stage with the extension of Khorgos
International Frontier Cooperation Centre (KIFCC). From the economical standpoint, the
45
Samira Saran, ―India Sees the Belt and Road Initiative for What It Is: Evidence of China‘s Unconcealed
Ambitition for Hegemony‖, Observer Research Foundation, 19 February 2018,
https://www.orfonline.org/research/india-sees-the-belt-and-road-initiative-for-what-it-is-evidence-of-
chinas-unconcealed-ambition-for-hegemony/

58
proportion of facilities in Khorgos hit 80% in 2016, with a metropolitan population of
80,000 from a demographic point of view, with an urbanisation pace of more than 70%;
(Li and Yimamu 2016). Although Khorgos ethnoscape has increased over the modern
years in similarity to Alataw Pass, which attracts business people by offering business
opportunities and income, both the ideoscape and the media environment have evolved in
a different direction. More specifically, Kasachstan's cultural contact is more robust than
that of Alataw Pass between Kazakhstan and China, Ili River Valley is one of the only
fertile places for Chinese people in the country, which mainly reflects the customs of the
people of Han, to experience Kazakh and Uyghur cultures. The multidimensional
ideoscape and mediascape of Ili River valley, rather than natural resources, is the result of
the contact with people with their numerous life styles, which has a sense of mystery and
interest. The key way of influencing Khorgos' ideoscape and mediascape is tourism,
within the background of OBOR.

The arrival of OBOR rendered Khorgos, a common term for transport and exchange
along the Modern Eurasian Land Bridge, a name that had been previously quite peculiar
to most of the Chinese citizens in the interior provinces. The increasing prestige of
Khorgos is better seen by the the number of tourists. From 2011 to 2018, Khorgos
tourists expanded by 397% and tourism revenue rose by 580% (Xjhegs.gov 2018). In
effect, Khorgos has obviously joined the demand line, Kazakh, Uyghur and mongol
communities, with more Chinese tourists on the bid. In 2013, KIFCC launched the first
"border tourism," and tourists from China came here to purchase local objects and
souvenirs, as well as to experience ethnic minority dances and songs. The ideoscape and
media environment in the Khorgos are gradually combined with the conventional modes
of entertainment for ethnic minorities for Chinese tourists. In the meantime, Khorgos's
ideoscape is being turned into a wider geographic area: frontier tourism has stimulated
cultural solidarity in the autonomous prefecture of Ili Kasak, which is owned by the
Khorgos district. For eg, in their own homes local people host visits from China's inland
provinces to treat them to lavish festivals at the Nadam fair, A wonderful festival of
Mongolia (Zhang and Shi 2017).

In accordance with the four afore-mentioned "scapes," OBOR is transforming the

59
technoscape in Khorgos, mainly by constructing natural gas pipelines from Central Asia-
China. This gas pipelines are in reality major engineering systems dependent on
experience, skills and technologies. And the materiality of the pipeline itself is one of the
most exciting aspects of the technical structure of this unique infrastructure. By
incorporating two technical debates on materiality of pipelines, Present how the techno
cape of China's advanced Chinese technology infrastructure building processes.46

The first argument is over choosing utilising straight steel pipes to render manufacturing
easy and effective, or using spiral steel pipes that are tougher and more robust. Under the
rules of central Asia, particularly Kazakhstan and Uzbekistan, The key material for gas
pipels is selected as straight steel pipes while China, Known for the advanced industrial
growth of steel pipes in mass manufacturing, is superior to the last (Xu and Wen 2015).
This dispute lasted many months and finished with the acceptance of a spiral steel pipe
by Kazakhstan and Uzbekistan by both Chinese and Russian experts (Wang et al. 2014).
With Chinese steel companies travelling to China to and outside its borders, the decision
allowed Khorgos' underpinning techno limit to connect China's domestic pipes as
effectively as possible with Central Asian pipelines.

The second topic is the pipeline factor. The China National Petroleum Corporation
(CNPC) considered the availability of such pipelines too small for this plant, which was
initially designed for a single 1422 millimetre diameter pipeline, to have been confronted
with a challenging deadline (Li et al. 2015). CNPC, the primary pipeline development
firm, then recommended the use of double pipes each 1067 mm in diameter (Arranz and
Hernandez 2016). This plan has been adopted by all parties after agreements on the new
experiment between China, Kazakhstan and Turkmenistan are now protecting an
effective natural gas transit in Khorgos. Khorgos, the target of the pipeline from Central
Asia to China, then witnessed the growth of Chinese pipeline infrastructures, which
vastly strengthened the Techno cape in the Chinese frontier. Khorgos has witnessed a
drastic transition thanks to OBOR in the same way as Alataw Pass, but creation and
experimental work at Khorgos has also influenced local execution.

46
Paul Myron Anthony Linebarger et al., ―Far Eastern Governments and Politics: China and Japan” , 2nd
ed., Von Nostrand, 1956.

60
First of all, Besides its strategic value, its duality of place – both the destination and the
transportation node – contributs to the particularity of Khorgo in OBOR, Besides the tens
of thousands of railway and pipelines shipped from Central Asia by pipeline from China
to Europe, as mentioned in the previous field. On the one hand, the destination is the
national borders marker mounted over the border which provides the destination Central
Asia-China with a sense of domestic influence. The transfer from that pipeline to Chinese
home pipeline, which stretches through its eastern coast, applies to the transitional
position Khorgo performs as reporting agents between Khorgos and At the end of the
month in Khorgos, Chinese gas metering station. The transitional transition is also at the
Khorgos pipeline. The Khorgos space is therefore defined by the coexistence of both
national and global supremacy. In reality, Korgos is very significant to OBOR in two
respects. First, it demonstrates China's sacred supremacy and increased control in terms
of borderland knowledge and innovations, and second, it demonstrates the Chinese
government's increased connectivity to OBOR.47

Secondly, Khorgos also has committed capital to provide administrative support to

OBOR in an attempt to boost customs productivity, in addition to development of rail and
pipeline networks. In 2017, In order to improve customs declaration and clearance
efficiency, the KIFC has been established through the incorporation of declaration,
distribution and transport in a single internet system (China News 2017).

Unlike the Alataw Pass and Khorgos, which have been the transport node for decades, it
took just a century for Manzhouli to turn from a plain grassland region to the largest land
port of China. In 1901 the Russian Empire began running the old Far East Chinese train,
and Manzhouli began its growth as a stop along this route (Du 2018). Manzhouli took the
lead in freight traffic in China at the No.1 land port in the decade following the
establishment of the People's Party (PRC). The Korean war prompted China in particular
to buy vast numbers of Soviet military machinery, materials and manufacturing facilities
(Wang 2003). No surprise, after Manzhouli broke up in the 1960s as a land harbour,
Manzhouli became the largest land harbour in China after the 1980s, as Beijing-Moscow

47
Spencer Sheehan, ―The Problem With China‘s One Belt, One Road Strategy”, The Diplomat, 24 May
2017, http://thediplomat.com/2017/05/theproblemwithchinasonebeltoneroadstrategy/ed

61
ties eventually recovered.

In the context of three main economic experiments – an all-embracing integrated setting,

a bordering economic relationship and a foreign logistics network – and international
trains entering and ending in the Manzhouli area, from Suzhou province to Jiandsu, the
last Manzhouli finanscape in relation to OBOR appears as the merger of the two Alatew
Passes and Horgos. The Border Economic Cooperation Region, close to the Khorgos
International Center for Border Cooperation, is a business field that aims to improve the
border exchange and boost export processing content. Two forms of export: wooden
processing and vegetable development are the focus of the Manzhouli Border
Cooperation Area (Sun el al. 2017). Every year, after the Manzhouli processing,
vegetable exports to Russia have crossed 400 000 tonnes (CNR News 2017). The
International Logistics Park, on the other side, is a freight and logistical knowledge
delivery centre based on international deliveries (Jiang and Wang 2008). Substantial
investment was drawn by these three economic regions, located and beyond the pivot of
the economic corridor between China and Mongoly and Russia, by making it a cost
effective model of all other ports in China, shaped Manzhouli's finances.48
As for the Manzhouli philosophy and media, It is quite diverse as the nomadic
population, pasture and culture are distinctly mixed. "red" (culture of Chinese resistance
against foreign invaders in the past century). While three cultural forms may be present
back to the 20th century, the cultural combination came to popular notice only when
OBOR was introduced. The Manzhouli government, by supporting the enticing ideoscape
and mediascany, has taken the ability of OBOR to increase the Manzhouli's influence as a
land port. President Bu Xiaolin, Autonomous Zone of Inner Mongolia, reported that
culture's driving force is important for Manzhouli's growth in the 2018 official document
"Work of Government Reports" (Bu 2018). It is worth pointing out that in previous years
official government publications barely addressed the value of culture.
Tourism is also important in Manzhouli as tourists have stimulated the connection
between different cultures. It is better portrayed in grassland culture by ancient Xianbei
graves, the historically nomadic Mongolians of the Han dynasty, the old Liao sites, the

48
D.H. Brooks, ―Connectivity in East Asia”, Vol. 11, Asian Economic Policy Review, 2016, p.p. 94-176.

62
old castles of Genghis Khan, etc. (He 2018) Instead, the "red" culture is recollected by
large funds, which are spent by the city government to renovate historic sites such as the
Memorial Plaza and the Soviet Red Army (Pan 2017). Diverse cultural depictions were
connected to visitors travelling between sites and created a pluralistic ideoscape in
Manzhouli.49

Manzhouli was arguably the largest land port in China, and it helped improve
communication between China, Russia and Mongolia. In 2016, Manzhouli's government
unveiled the foreign road and railway upgrading and extension programme in order to
further improve the potential of freight transport (Guo 2017). The number of products
shipped by roads surpassed 10 million tonnes at the end of this project (Jia 2017).
Institutional reforms are exceptional in Manzhouli tradition. The Manzhouli customer has
developed the "one window" device at home, which allows the custom clearance
procedure far simpler. For eg, in Manzhouli "single window" reduces the amount of card
users who are stamped and signed by several custom departments (Li 2017). The 'one
window' replaces manual sorting with an internet device, saving drivers time over the
border to improve clearance performance. Manzhouli's tradition globally entered the
Universal Traffic Transport Scheme (UTTS) in June 2018, which encourages customs to
be able to bypass the examination process in countries other than countries of departure
or destination (Xinhuanet 2018).50

Erenhot

Erenhot is the biggest port of China opening up to Mongolia directly, located

halfway between Beijing and Ulan Bator. The first stop in 1899 on the telegrapher's line
between Zhangjiakou and Ulan Bator was Erenhot's history. The Beijing-Ulan Bator-
Moscow international railway began running in Erenhot City in 1956 (Qin 2018).

The transboundary economic cooperation zone between China and Mongol began in
2017 and is the bedrock of Erenhot's current financial climate. It has the same

49
S. Kim & J.W. Lee, ―Real and Financial Integration in East Asia”, Review of International Economics,
Vol. 20, 2012, p.p. 332–349.
50
L. Chunhao, ―The Asia–Africa Growth Corridor: Content, Motivation and Prospects‖, China
International Studies, Vol. 69, 2018, p. 131.

63
development patree with KIFCC: the electronic firms, transportation, Storage and
midsize firms are the main functions of this most recent experiment as another cross-
border commercial field following the cooperation centre for the Khorgos International
Frontiers (Yang 2016). This work is concentrating on the Erenhot technology painting
under the OBOR, which contains a dilemma about the selection of the rail gauge rather
than analysing this finanscape which shares many parallels with previous cases.

In 2018, Erenhot was China's largest port directly opening to Mongolia, and handled over
1000 train transactions to Russia with 80 percent development annually (Li 2019). But
when the number of trains went via Erenhot, there arose a logistical problem: Mongolia,
As China and Russia are using different rail gauges norms, Russia has been obliged to
choose an acceptable rail gauge between the China-Mongolia frontier between China and
its destination. Specifically, China is now using, the traditional measurement, the 1435
mm measurement, that is most used around the world. On the other side, Russia has
always used a gauge called "Russian Gauge," 1520 mm. The "difference in the gauge"
dilemma doesn't exist at the Russian-Mongolian frontier, as mongolia is pursuing Russia
internally to use the Russian gauge. In Erenhot, where Chinese railways are linked to the
Mongol railways, there was nevertheless this issue. As Mongolia tried to find a
compromise between Russia and Russia, the discussion was heated over the
implementation of a traditional China-Mongolia gauge to improve communication was
seen by what the then Minister of Transportation, Mongols Leader Khaltmaagiin
Battulga, said during 2016 presidential elections: (Hillman 2019). As this indicates, there
is therefore a dilemma between international connectivity and national protection,
particularly at ports, where divisions between countries and communities are easy to
observe.51

Thus a technical discussion about the rail gauge contributed vigorously to form the
Erenhot technoscape under the OBOR, which involved conflicts and disputes. Although
the transition in rail measurements is also taking place at some other ports, It highlights in
particular the problem of a nation between two main infrastructure authorities and the

51
Ankita Panda, ―If India Won‘t Put Up With the Belt and Road, Why Is It The Largest Recipient of AIIB
Funds?‖, The Diplomat, 19 March 2018, https://thediplomat.com/2018/03/if-india-wont-put-up-with-the-
belt-and-road-why-is-it-the-largest-recipient-of-aiib-funds/

64
likely implications for protection at Erenhot.

The effects of Erenhot's ethnoscape, The collaborative effort to create a model area of
citizens through community relations in the area might replicate media and ideoscape. In
this region the relations between populations, including schools and hospitals, are
improving, both from Mongolia and China. For eg, a total of 140 students from Mongolia
were at the 2016 Erenhot international institute, and the Erenhot Middle school with
Mongolia national university signed an agreement to promote over 1,100 students from
exchange (North News 2017). The ethnoscape became more and more diverse by
scholarly exchanges and contact. Moreover, the Erenhot Municipal Hospital has been
followed by guidance for the Mongolian-type Uyghur residents who talk mongolian
languages and for the Mongolian-type Cyrillic residents who cross the frontier to Erenhot
in a separate two languages: Uyghur-type Mongolian (Zhang et al. 2018). Thus in
Erenhot, which is rapidely dynamic because of its oberflächen, Erenhot has developed a
multicultural environment and diversified the media.

The attempts at local level to encourage OBORs at Erenhot are better demonstrated by
the customs clearance reforms. In particular, Erenhot avoided reliance on documents
processing in physical copies, through improved communication processes with the
respective Mongol land port, and all freight manifests from China to Mongolia are
electronic (People.cn 2017).

In short, the four OBOR studies have had a big impact on many local port ecosystems,
with economic power represented by various cooperative centres and areas, demographic
impacts from inland provinces, technology dependent on infrastructure skills, and the
cultural impact of inland provinces. Moreover, As ground harbour zones, the boundaries
representing the maximum territorial scale of the national state are both a global location
for shippings of goods and people, and national Supremacy, the frontier line, we have
noted in this region the economic and political disjuncture‘s with controversy, and
particularly with regard to technology. Meanwhile, developments in land ports in both
facilities and administrative cooperation have enabled the OBOR to advance by
improving communication between individuals, commodities and resources and growing
customs productivity, even if the reach of improvements is geographically flexible and

65
challenges still exist.52

This study examined the effect on the various regional scales of the One Belt One Road
Initiative. In the global arena, Beijing has made OBOR a tool to develop strong networks
boost multilateral exchange and reinforce cultural relations, all future impacts that other
major economies draw attention to. Discussions on the existence and the practical uses of
OBOR have given way to ample conflict between conflicting narratives from China, the
USA and the EU.

Apart from the rhetorical discussion, It dig through the key skeletons of this aggressive
effort—economic tunnels, examining both their hypotheses and facts to better grasp the
Obor's operating process and their effect on other scales. Six corridors spanning a broad
variety of countries and covering numerous geographical regions are infrastructural
passages that facilitate economic development, administrative cooperation and culture.
The effect of OBOR on a national level was both important and divisive in a review of a
variety of particular initiatives and events along the corridors. For example, infrastructure
programmers have improved the physical connections between countries and helped to
solve energy problems. However, as can be seen in mistrust of international politics or in
resistance to foreign interference, the 'connectivity' of cultures between China and other
countries faces further obstacles. In addition, by examining the position of Chinese
domestic policy, tried to imagine the scenario underlying economic corridors by
illustrating some main realities, including the advent of competing voices in China and
greater engagement by academics in OBOR.

China is funding and establishing new organizations to fund its new Asia Infrastructure
Investment Bank (AIIB) agenda ($ 100 billion to be raised) and New Silk Road Fund ($ 1
billion) 40), Asia Infrastructure & Investment Bank. China is also committed to the
establishment of the Recent Development Fund, BRICS Bank and the Reserve
Contingent Arrangement ($ 100 billion). The New Development Bank (NDB) is not
directly aligned with the OBOR programme, but is financing and working closely with

52
Times of India Editorial. ―India Shouldn‘t Join China‘s BRI Until Its Reasonable Demands are
Met”, 25 April 2018, https://blogs.timesofindia.indiatimes.com/toi-editorials/india-shouldnt-join-
chinas-bri-until-its-reasonable-demands-are-met/

66
AIIB projects worldwide. It also proposed the development of a bank for growth in
Shanghai cooperation. These new institutions and funding mechanisms contribute to the
lenient International Financial Institutions (IFI) reform in part and to high reserves in
China in part. The AIIB has been agreed by a host of European countries, including the
United Kingdom, Germany, Italy, Spain, Swiss, Australia, Korea and Russia, after some
initial resentment and resistance. Brazil has also agreed to become a founder member of
the AIIB to promote the participation of several Latin American countries.53

These are significant innovations, because the construction of any new system would
enable China recycle some of its big infrastructure and budget surpluses. This is contrary
to other oil-rich nations, mainly dependent on the West for their huge surpluses.
Nevertheless, the current IFIs – the IMF, the World Bank and Asian Development Bank
(ADB) – agreed to cooperate with established financial organisations sponsored by
China. In addition, 62 billion US dollars were recapitalized via the People's Bank of
China to launch the ambitious "One Belt, One Road" initiative by China Exim Bank and
China African Development Bank.

The One Belt One Road strategy of China focuses in several dimensions on
communication. This involves the so-called "Silk Road" trade, infrastructure and
telecoms communication. In the latest Silk Road, China hopes to sign 60 FTAs to
countries. Of these, 12 Free Trade Deals are actually in effect in China. However, the
strategies go even wider when talking about communication, cultural interaction and
benefiting from the growth knowledge of each other. It also speaks of peaceful growth to
ease concerns of China rising as a global hegemon or of opposing.

President Xi Jinping, At its conference held in Boao Forum for Asia (BFA) on 29 March
2015 he emphasised that "China's economy is highly integrated into the global economy
and is a big engine for both Asian and the broader world economies.

China's advance into Central Asia can be used in Russia as a push into its area of power.
The Shanghai Cooperation Development Bank has been against establishment, and

53
R. Sapkota, ―Nepal in the Belt and Road: New Vista on Building a China–India–Nepal Economic
Corridor”, China International Studies, Vol. 67, 2017, p. 105.

67
instead has invited China to join the Eurasian Development Bank that currently operates.
In Chinese financial institutions and structures funded by the US and Japan, their
governance and environmental practises were not so positive. They involve themselves.
The United States has campaigned vigorously against its AIIB participation for its
Western partners but since then has relented and agreed to work with it. To date, Japan is
always against the AIIB. They have not yet signed up to the AIIB to voice questions
about the arguments of China's South China Sea, Thailande and the Philippines identified
as Prospective founding members.

China has indicated that it is not opposed to the current international or other
organisations, its One Belt One Road policy. It aims to improve the international
cooperation system and allow the use of established institutions such as the Shanghai
Cooperation Organization, ASEAN and China (10 + 1), Asia-Pacific economic
cooperation in trade.

It is planned to collaborate with the Organisation of Islamic Nations, the Eurasian Union,
the international cooperation organisation, South Asian named SAARC and the European
Union. However, the complexity and scope of the Plan as it progresses also remain in
doubt. H Does China plan to collaborate with Latin America, Caribbean and Africa and
the Pacific to enforce its new Seed Route Policy? To date Latin America has not been
able to participate in OBOR while China also aims to involve Latin America and the
Caribbean more and more closely.54

Changes in the political environment also built obstacles to Chinese policy in various
countries. The decision to halt the Myitsone Dam was due to fears regarding
environmental problems in Myanmar and China's over-existence. Sri Lanka was blocked
by changes in the ambitious port Hambantota project and other Chinese investments. Due
to questions about China's South China Sea behaviour, the Philippines and Thailand have
not entered AIIB to this day. Maybe Africa has not so far favoured China's contribution.

The One Belt, One Road strategy to Africa has been suggested to extend by the phrase

54
S. Hongyuan, ―The Indian Ocean Policy of the Modi Government”, China International Studies, Vol. 69,
2018, p. 86.

68
"One belt-One Road-One Continent" China has an ongoing plan between China and
Africa to allow Africa to be included within the One Belt One Road Strategy to include
further support for Africa's growth infrastructure, however it is not solving many of the
difficulties of adopting the current China Africa strategy by itself.

The formal Chinese talks on the Current Silk Road in Latin America are mostly missing.
President Xi Jinping did not discuss the New Silk Street at any event during a visit to the
area in July 2014, But during his trips to Europe and South Asia last year, he spoke time
and time again about the plan. Similarly, no notice was made on the 'one belt, one lanes'
meeting of Ministers between China and the Society of the Latin Caribbean States this
month. According to Xinhua News, the existing Silk Path Map in May 2014 was no
longer being extended to South America but China declared it is going to make $100
accessible for new Latin American initiatives.

Commercial facilitation is a central factor of China's one-way strategy. It is not only

about building up infrastructure, but also ensuring quicker trade facilitation, customs,
warehousing, trade loans and commercial credit, so that China has reciprocal gain, the
countries and the communities along the routes of trade, monetary exchange would be
promoted as well.

China and several developing countries already have aid programmes, However, in ties
with less industrialised nations, they are similar to other arrangements and do not use the
word 'hilfs'. They conclude that government, though, cannot be utilised to establish better
governance with the usage of help conditionality.

It is not necessary to enforce better management from outside in their opinion. Often,
they do not support the DAC help values officially.55

Some also consider China's OBOR strategy as an answer to the Obama administration's
Asian "pivot" and, in particular, to the Trans-Pacific partnership (TPP). The TPP is a
potential trade deal on a broad spectrum of economic policy concerns between various

55
Ben Hillman, ―Silk Road Blocks: The Problem with China‘s ‗One Belt, One Road‘
Policy”, https://crawford.anu.edu.au/files/uploads/crawford01_cap_anu_edu_au/2015-11/silk_road_
blocks.pdf

69
Pacific Rim countries. The TPP aims, among other items, to reduce trade barriers such as
tariffs, to develop the universal system for intellectual property protection, to implement
labour and environmental standards and to create a process for the resolution of investor
conflicts in the state. The Agreement aims at "improving exchange and investment
between TPP member countries, fostering creativity, economic growth and development
as well as promoting work creation and retention.

The TPP has traditionally extended into 2006 Brunei, Chile, Singapore and Newland, and
in 2008, additional countries ratified a substantive deal: Australia, Canada, Japan,
Malaysia, Mexico, Peru, the US and Vietnam have added twelve TPP participating
countries (Trans-Pacific Strategic Economic Partnership Agreement, TPSEP and TPP4).

Some have indicated that Chinese internal systemic difficulties and political complexities
represent the OBOR strategy. China's development is slowing and re-equilibrated by an
expenditure – led growth paradigm – China now has tremendous surplus capacity in
several primary sectors, including steel, sheet glass, iron, cement, copper wiring, and
transport and construction machinery, among others. Others see this as an effort to move
economic growth from eastern to Western China and as a means of assisting China's
eastern wing to control impoverished communities.

The Vision of the OBOR Strategy in China describes the position of different regions
within China. The speed and effect of China's adoption of the new strategy would rely on
its own growth and on various political factors in the OBOR regions. There is a broader
controversy as to siphoning off Chinese stock markets. Some claim that China will reach
re-equilibrium and incremental slowdown with adequate economic reform. Others
assume China's attempts to boost an environment heading to a debt crisis. Obviously
China's willingness to project out is affected by internal financial problems. In that the
OBOR policy will only serve to mitigate debt pressure in demand for Chinese firms for
ventures outside China Continuous Middle East instability, critical for any plan for New
Silk Path, may become a restricting element. Central Asia is also demanding.

Cooperation is crucial in Kazakhstan - which often is recognised as the Buckle in Belt on

Silk Road - because this large, resourceful nation seeks to match the demand of China

70
with the interests of the Russian.56 There are still implementation issues on the ground in
the CPEC programmes. There is a great deal of concern about China's maritime
ambitions in the South China Sea and beyond. Chinese labour practise problems and
lower environmental standards that generate resistance from local civil society are
additionally affected by project implementing risk.

Infrastructure Finance Needs

In Asia and generally in the developing world, they need infrastructure. The first
explanations for the institutions and instruments of recent financial instruments are the
lack of sufficient funding for Investment Infrastructure. According to the Asian
Development Bank, for the duration from 2010 to 2020, the cumulative need for national
expenditure in infrastructure is projected at US $8.22 trillion. According to UNCTAD
(2015), between 2015 and 2030, developed countries need between $1.6 and 2.5 trillion a
year. More generally, the infrastructure funding needs are immense. The investment
infrastructure deficit of up to $1.6 trillion is still immense. In order to address this task,
the private sector and the public sector alone must be willing to fund such tremendous
expenditure requirements and involvement of the private sector in the core Sustainable
Desvelopment Goals. There is widespread scientific evidence that construction of
infrastructure will improve economic prosperity and reduce inequalities (Mwase and
Yang, 2012; Straub, 2008). Their infrastructural requirements are increasingly increasing
as countries evolve at many levels from low to medium-sized income to modern
economics. In addition, there is clear evidence that an infrastructure deficit is an obstacle
to progress, such that there is a parallel connection between infrastructure and level of
development. More growth raises infrastructure demand and infrastructure extension
produces more development. Large demographic transfers to metropolitan areas would be
a significant aspect of growth.57

There is an urgent need for substantial expenditure in urban development when about two
billion people are expected to migrate into urban centres in developed countries during
the next three decades.

56
G.V.C. Naidu, ―India and Southeast Asia”, World Focus, Vol. 17, 1996, p.p. 82–84.
57
Subhakanta Behera, ―The New Silk Road”, Economic & Political Weekly, Vol 52, 2017.

71
In terms of accessibility, it is important for facilities to improve access for the vulnerable
to public resources. With nearly 1.5 billion people without access to electricity, nearly 1
billion people without access to sauce and approximately 2.5 billion people without
access to sanitation, the lack of infrastructure is exacerbated. A precondition for a more
inclusive trend of development is to better provide these essential needs.

To achieve these targets, the annual infrastructural spending requires have been
calculated by Bhattacharya and Romani (2013). The wide initiative includes a rise from
roughly US$0,8 trillion a year (currently $1.8 to $2.3 trillion per annum per year) to
contributions in the infrastructure (excluding operations and maintenance) of developed
and developed countries by 2020. This will be a quantum leap from about 3-4 percent of
GDP to 6-8 percent of GDP in infrastructure spending. The highest demands in Asia, but
the main demands are in Africa as a share of GDP. Energy – particularly for power,
transport and water – will be the greatest proportion of infrastructure funding.

The established International Financial Institutionals could not allow adequate

maintenance financing accessible - interestingly because they were originally set up for
rehabilitation and infrastructure. Of the overall capital project funding of approx. $0.8 to
$.9 trillion over 50%, about 20% come from national development banks, 25% from the
private sector, and just 3 to 4% from current Multilateral Development Banks (MDBs).
Future public finances are often funded through local and private finances when private
insurers, insurance firms and pension funds and rich funds - can be addressed in the face
of financial and legal barriers to infrastructure support.

Surprisingly, there is no infrastructure financing supported by established Multilateral

Development Banks (MDBs). The International Bank for Reconstruction & Development
(IBRD) was established initially to fund roads, but then diverted a large portion of its
financing to other focus areas. One of the main critics of the Poverty Reduction Strategy
(PRSP)9 is its over-focused emphasis on the social sectors at the detriment of the
infrastructure system as the primary instrument for offering the basis for promoting
economic growth and the reduction of poverty. In Africa, about three quarters of the
money has been invested on infrastructure finance and has been hurt by social sectors.
The balance between social sectors and infrastructure in Asia, by comparison, was

72
improved and contributed to development.58

MDBs can be not only an infrastructure financing but also an important way to attract
private capital through Bhattacharya, Oppenheim & Stern (2015). They will achieve so
by the usage of modern and emerging financial products through co-financing policy and
regulatory risk assurances. It is anticipated that emerging financial entities will build
certain instruments more flexibly because they are not too bound to traditional financial
systems and regulations. China's OBOR reform would need new funding of at least $20
trillion.

Sustainable Development Pathways

It is essential for sustainability that environmentally friendly and climate stability are
assured, which would need modern infrastructure. Developing countries need to expand
to boost their livelihoods and alleviate poverty. This ensures that current infrastructure
has a decreased environmental effect, adapts it to emerging circumstances and
dynamically develops modern infrastructure to facilitate healthy environmental living as
well as a larger growth paradigm. An significant initiative for fostering sustainable
growth is infrastructure investment, which facilitates the usage of green energy.

Unlike today's developing nations, in view of still storing immense quantities of

greenhouse gases in the air, Asia-Pacific is not willing to "grow now and clean up later."
Due to its broad scale and strong economic development in recent decades, this area will
further speed up the accumulation. While per capita emissions continue to be high in
Asia-Pacific developments, total emissions continue to increase due to various regional
factors, and deprivation needs to be resolved and livelihood levels to improve. As As
Asia-share Pacific's of developed countries increased from 23% in 1990 to around 32% in
2005, global greenhouse gas emissions were 4 percentage points lower than in 2005,
which were the high-income OECD countries. The future share would grow rapidly, with
rapid economic growth, continued urbanisation, shifting habits, and subsequent increased

58
Morality: Does national interest always come first in Foreign Affairs?‖, (BBC News, Open
Politics)<http://news.bbc.co.uk/hi/english/static/in_depth/uk_politics/2001/open_politics/foreign_policy/
morality.stm> Accessed on 02 September 2018

73
energy demand.59
The average is projected to hit 2.4 per cent annually between 2005 and 2030 in Asia and
the Pacific, as opposed to an expected annual global energy demand rise of 1.5 percent.
In this sense, the country would have to take an alternate development direction utilising
energy-efficient technology, renewable energy sources and a quicker decline in carbon
intensity. This can be done not only because of the unsustainability of our common
world, but also through the ongoing detrimental impact of climate change on Asia-Patific.
Nature disasters have struck Asia-Pacific excessively. In the past three decades 45% of
natural disasters have happened in the area. The country was still unreasonably hit in
terms of economic damage, with 42 percent of the global economic casualties incurred by
a catastrophe, whereas 25% of the world GDP was represented. Any of the most
impacted ecological systems including glaciers, coral reefs and mangroves are also
affected as pollutants are cross-border. While some of them are natural reservoirs for the
impacts of climate change, the possibility of erosion and degradation is growing.

But the emerging world is becoming more and more conscious that they cannot evolve in
the same energy-intensive direction taken a century ago by the developed world. There is
a need for more environmental growth, and financing could also be utilised for emerging
energy-efficient technology with more focus on clean energy. China has also made
substantial gains with clean energy technologies, in particular wind and solar power, as
the world's largest emisor of CO2. This also allowed grid connections to remote areas to
be established. Similarly, India invests heavily in green energy - especially in solar
power.

There is no blueprint that the developing economies have to follow toward a less
energising sustainable development paradigm. These methods must be pioneered by
emerging financial organisations thus ensuring sustainable development in order to
support poverty alleviation. The key goals which must also be followed by the new
financial entities are providing access to electricity, healthcare, water and sanitation. The
United States and Canada projected that nine planets would prosper if the developing

59
Deng Xiaoping‘s ―24-Character Strategy‖, (globalsecurity.org)
<https://www.globalsecurity.org/military/world/china/24-character.htm> Accessed on 02 September
2018

74
world followed the United States and Canada's energy-intensive development paradigm.
China, India and other developed economies should adopt a low-carbon energy model.60

South-South Exchange

The latest financial entities must therefore have a larger south-south trade. Many current
MDBs facilitate interactions between South and South but remain a limited part of their
overall strategy and side-effect. South-South trade is a crucial aspect in the working
strategies by the modern financial entities. More recent successful growth experiences in
various rapidly rising emerging markets can maintain greater importance for developing
low-income countries. Those that have quickly evolved in the new global economic
climate are more important in the escalating world than those which have developed long
before. Information platforms must be created that allow use of these more applicable
ideas and solutions, that can be rendered more affordable by those who have recently
formed, processed to see what could be transported and made available to others in a
global solution exchange.

The North-South assist paradigm developed around the highest conditions has not
performed as good as anticipated. It is well established nowadays. Some called it "dead
support" (Moyo, 2012). Although maybe the prosecution of the old North-South aid
model is too far-reaching, it is true that there is a different growth framework. A modern
form of South-South collaboration is based on a real mutually advantageous relationship,
not just the emotionally solidity of the Old South in anti-colonialism. This modern South
rises and shakes the existing North-South paradigm established around a now disfigured
"Washington Consensus" Yet the world doesn't want the Washington Consensus to be
substituted with a Beijing Consensus or Delhi Consensus. The new South is now
expected to share ideas and opinions internationally.
What's the latest new South? It accepts that not all can suit one size and ideas for growth
in several areas of the world today can be sought.
Many who evolved the most rapidly was not those who adopted the "Washington
Consensus," but those who were willing to take on their growth problems and discover
60
Xi Jinping, ―Time for China to take centre stage‖, BBC News, 18 October 2017).
<https://www.bbc.co.uk/news/world-asia-china-41647872> Accessed on 02 September 2018

75
locally alternatives or take suggestions from elsewhere, but responding to local situations
in a way that is acceptable.

The modern South is therefore focused on the belief that solutions are more likely to be
identified by those that have recently evolved than in the growth process that went on
about a century ago. In the "development escalator," more applicable concepts and
knowledge would be extracted from those who evolved only a decade ago than those that
developed a century ago to address poverty, malnutrition and disease. There are several
emerging developments in telecommunications, electricity and IT that have already
arisen to allow developed countries to jump along the road of growth in the twentieth
century from the 19th to the 21st century. The new South is now characterised by certain
possibilities to jump.61
In the new South, construction options are far more accessible, capital-intensive and
satisfy lower income consumers' requirements. The current collaboration between South
and South is central for innovations of the 21st century, whether it be pharmaceuticals,
transport, agricultural technology, electricity, the transition of more suitable and
inexpensive solutions. We have also seen this as helping to move emerging technology
into a number of areas of the South, China, India, Brazil and South Africa. But the latest
South is not a one-way switch, so it's exciting. It can go in either way. Africa has a lot to
tell others in mobile banking, for example. The emerging South also helps to split the
traditional monopolies of the North-South. For eg, telecommunications price costs have
remained nearly nine percent per minute in old monopoly system, exorbitantly large for
much of Africa, Asia and the Pacific. The prices plummeted when new firms in South
joined the industry with a business plan focused on the idea that a vast amount of
customers were supplied at low costs per unit.
In the emerging South several new solutions are being pioneered, such as microfinance,
conditional cash flow systems and social business models, and have been implemented
with unprecedented results in the North. It is not a single method of flowing from north to
south but an interchange of thoughts and suggestions with solutions flowing in both

61
Tian Shaohui, ―Chronology of China‘s Belt and Road Initiative Xinhua”, Xinhua news agency,24 June
2016. <http://www.xinhuanet.com/english/2016-06/24/c_135464233.html> Accessed on 04 September
2018

76
directions.

Changes in Foreign Financial Institutions

The International Financial Institutions (IFIs) were founded around anachronistic systems
such as Bretton Woods. North-South conditionality paradigm focused on the idea that
money counts for governance framework. However, fresh innovations, entrepreneurship
and paradigms will emerge from the newly developing South and will be definitive
movers in the 21st century with the North, already wealthy and now exhausted and debt
laden. In this modern age, concepts are more relevant than resources and strategies, and
they are not just from north to south, but even throughout the new south. This growth is
in the interests of the Old North and is not regarded as an event since a competitive New
South would boost economic competitiveness and support the North. In the Emerging
South appears a new social model where a Hand-Shake replaces a Hand-Out.
The main complaint made by the current IFIs was quite high and exceeding
conditionality dependent on a standard size that matches all approaches. Such a strategy
arising from a "Washington Consensus," in particular in Africa, has been strongly
criticised. One main factor was the dismantling of state assistance to agriculture and
industry coupled with the premature liberalisation of trade that contributed to 'de-
industrialisation.' IFIs also have been criticised for the manner in which the economic
situation in East Asia was treated with when unnecessary fiscal tightening intensified the
crisis' magnitude. The opening of premature capital accounts was also a key aspect of the
IMF's guidance, which left emerging markets prone to abrupt reversals of capital
movement. Some of their dogmatic thought has already started to evolve and their
approaches have been made more versatile, which is ideally intensified in the face of
rivalry from the modern financial firms.62
In comparison to the United States, the vote power at IFIs is fiscal. This structures could
be knocked down by the wealthier industrialised economies. IMF is often guided by the
President of the World Bank in the United States and the President of the Asian
Development Bank in Japan. However, with shifts in the global economic power, voting

62
Jiayi Zhou, Karl Hallding, and Guoyi Han, ―The Trouble With China‘s One Belt One Road Strategy‖,
The Diplomat, 26 June, 2015. <https://thediplomat.com/2015/06/the-trouble-with-the-chinese-marshall-
plan-strategy/> Accessed on 04 September 2018

77
shares in existing financial entities have struggled to adequately shift. More than 40% of
the votes stay in the European economy, Europe has fallen to about 25 percent of the
world economy. In China or in other developing economies, their voting strength, in line
with their global economic force, has not increased. An agreement was achieved in
theory to amend IFIs but their development was quite sluggish.
The Zedillo report, which was produced for World Bank changes, made several
substantial recommendations that the Bank did not implement, but should be discussed in
the formation of new financial bodies. The research opposed a resident board's new
World Bank scheme approving any credit. The Resident Board is a large burden for the
Bank (70 million dollars per year) and an external administrative layer to minimise
project preparation. - so there is a strong focus on projects which fulfil all specifications
in their single-size formats and reduce the bank performance. Project slowness is one of
the biggest customers detractors of the multilateral development banks' bad results.
In the study Zedillo, the environmental and social security are noted, but the World Bank
is already so at risk as to place undue pressures on borrowing countries by enforcing
these policies. In fact, developing countries, owing to a sluggish bureaucratic process,
have shifted away from usage of established multilateral development banks to fund
infrastructure. Developing countries in Asia's enthusiastic response to the AIIB definition
show their understanding of the notion that a bank can have strong protections and stay
faster and more competitive than the current banks. Without the resident council, decision
making and drafting would pick up – with greater focus on execution.63

Important Recommendations in the Zedillo report

(a) Reducing the Board's composition by consolidating European positions, set up and
allocated much more equally among 20 chairs of the electoral divisions by establishing,
(b) a 50/50 voting arrangement and considerable growth in the core shares between
industrialised and developing countries, thereby voting in favour of the Bank. It sets a
specific goal to update control of the institution and c) to abolish the US veto. It also
suggested that the appointment of leadership be changed by eliminating the prerogative

63
Benjamin Habib and Viktor Faulknor, ―The Belt and Road Initiative: China‘s vision for globalisation,
Beijing-style‖, The Conversation, 17 May 2017. <https://theconversation.com/the-belt-and-road-
initiative-chinas-vision-for-globalisation-beijing-style-77705> Accessed on 04 September 2018

78
of the US World Bank and the European IMF. Although this concept was introduced at
the G20 meeting, it also needs to be enforced in reality.

The discontent of developing markets with their existing financial system signalled the
idea of the BRICS Bank, which resulted in a New Development Bank.

INDIA’S OPTIONS WITH THE NEW SILK ROAD

There are conflicting positions in India about the threat or opportunity of China's OBOR
approach. Some see the strategy as being used by China to surround India. Some consider
the concept of attracting much-needed infrastructure funding to help their infrastructure
development, growth and employment in India to be an excellent opportunity. And some
suggest that India should take full advantage of this to be an accomplished fact. The news
is the competitive and collaboration strategy of China and India, The Indian Ocean, the
Sea of South China and East Asia bits.

India did not sign OBOR and was particularly concerned about Maritime Silk Road
(MSR), although China refused interference by Southern China Sea Indians. The recent
pledge of the Chinese president to invest $47 billion on rail, bridge and Vehicular
Technology linkages to the Gwadar strategic port of Pakistan was a sad thing for India.
This will allow China, through a Gwadar port, also built by China, to transport oil and
gas from Turkey and Arab countries. India objects to the passage in Pak occupied
Kashmir of the trade corridor and railway link. India has nonetheless signed up to
become an Asian Infrastructure Investment Bank (AIIB) and National Development Bank
(NDB) founding member.

India has also initiated its long-running Indian Ocean efforts against the Chinese; ensure
the continued control by China of the Indian Ocean – through their "Pearl String." The
initiative for the Indian Ocean Maritime Project was described as the "Mausam Project,"
"Spice Road," "Sagar Mala Cotton Route," the Blue Revolution and "Sagar," the
protection and economic development in the region for all. Indian Ocean Maritime
initiative was diverse in scope. India was the main centre of the "Indian Ocean World,"

79
extending from West Africa to East Southeast Asia.64 Just like China's Maritime Silk
Road, the Mausam project will strengthen its regional business and cultural relationships
– but if the Maritime Silk Road (MSR) has all the roads that go back to China, The
Mausam project aims to bring India back to its role as the center of Indian trade. The
project has a three-pronged approach: first, deepening cultural ties; Secondly, to secure
maritime security; and third, to broaden economic ties with the Indo-Pacific countries.

China struggled to bring India together, finding ways to bring together the MSR and the
Indian Mausam Projects (Spice Route). Both projects have many things in common on
the surface – they are both intended to expand regional integration, especially in trade
and trade. But both the MSR and the Mausam project are expanding on a deeper level –
cultural, economic and even strategical. The Mausam project was planned by India to
address China's idea that it is the dominant force in the Indian Ocean. One fifth of the
Indian Ocean's global container traffic is borne by the Indian, one third by bulk, and two
thirds by the oil industry, while the remaining three-fourths by the Indian Ocean are only
exported to other areas of the world.

China has a lot to do with trade and infrastructure spending and China has been able to
put big money behind the MSR. The port of Gwadar is built in Pakistan, Hambantota (Sri
Lanka), Chittagong (Bangladesh) and Sittwe are built in Myanmar. In addition, China has
extended an easy loan of $500 million in infrastructure and housing to the Maldives and,
barring close economic ties with Pakistan, China's increasing involvement in South Asia
is a comparatively new development. The Axis between China and Pakistan, a peculiar
geopolitical logic unrivalled with other countries of South Asia, is a rare, isolated event.
This is an expansion of Chinese financial contribution to Pakistan – the last $46 trillion
announced for infrastructure growth and funding – though not an improvement of long-
term ties that goes back five decades. Its current volume of bilateral trade exceeds 16
billion dollars.

Over the last decade, China has grown in export-led growth strategies into South Asian

64
Syed Neyamul, ―One Belt, One Road and South Asian geopolitics‖, The Financial Express, 25 May
2018. <https://thefinancialexpress.com.bd/views/one-belt-one-road-and-south-asian-geopolitics-
1527260437> Accessed on 06 September 2018

80
markets as the leading exporter of commodities, including to India. Bangladesh is the
most important indicator of this pattern. In Bangladesh, India became the largest trade
partner in Bangladesh around 2005. Without the restricted trade challenge of visas, China
has moved many of the Indian goods to Bangladesh, offering cheaper Chinese products -
particularly cotton and other clothing textiles, transport and customs between India and
Bangladesh. But the Indian-Bangladesh 2015 Land Boundary Agreement provides a basis
for both countries to deal with trade issues at borders in the near future.65

China still lags behind India's trading in Sri Lanka, but the divide is worsening. Sri Lanka
belongs to South Asia's leading trading partners, and India is the biggest trading partner
for Sri Lanka. Since 2005, Chinese exports to Sri Lanka, however, are now nearer to the
Indian level, fourfold, at nearly four billion dollars. In addition, China and Sri Lanka
discuss a Free Trade Agreement (FTA) to boost exchange and increase access to Sri
Lankan commodities on China's markets.

The economic and cultural ties between the countries of South Asia express labour
migration. India is almost the same in South Asia as China. The money from these
migrations is a significant economic link. In 2014 about $7.5 billion is returned to India
by around five million migrant workers from South Asia while about 20 000 citizens
from India (including India) dispatched $107 billion. In the case of Bangladesh,
contributions from India are almost eight times the amount in the Bangladeshi economy
of $557 million in 2014, which is Bangladeshi's economy imported from India, making
transfers a vital economic component.

Much of China's growing springboard in South Asia has recently been concentrated in
development aid, in particular in large infrastructure projects and public investment
programmes. It is also the element for which apple-to-apple data can most easily be
found in this economic interaction. Development help abroad as described by the
Organisation for Economic Cooperation and Development (OECD), requires a "at least
25% grant element," Whereas Chinese loans often fall out of OECD standards under loan
service terms. In 2014, concessional loans accounted for more than half of China's aid, as
65
Apoorv Pathak, “China‘s Maritime Silk Road and Indian dilemma‖, Naval War College Journal, Vol.
27, 2015, p. 109.

81
stated in Beijing's 2014 Foreign Aid White Paper.

Chinese companies and suppliers of Chinese goods must also be granted projects
financed by Chinese concessional loans that connect Chinese aid to its government
investments. Failure to ensure transparency also impedes comparison: China only
provides outlines while India releases its figures in public. The data indicate certain
general trends, However, problems of categorising Chinese construction aid to well
established South Asian infrastructure projects worsen the image further.66

In South Asia, Sri Lanka saw a sudden increase in Chinese influence. Chinese aid for
development to Sri Lanka increased, mainly in the form of concessional loans, which
started in 2009 following the Sri Lankan civil war, and increased dramatically in 2011. In
Hambantota, Sri Lanka's birthplace, the Chinese harbour, airport and cricket stadium,
both countries are progressively closely related.

In 2013, the upgrade of relations between China and Sri Lanka to a strategic cooperative
relationship showed China's liberal support for Sri Lanka's geopolitical influence. There
has been a dramatic gap between Indian and Chinese contributions to the Sri Lankan
government detailed loan disbursements. China paid out nearly 2,5 billion dollars
between 2012 and 2015, more than 75% of which was provided by the Export-Inport
Bank of China. In the same period, India increased its credit lines by $660 million.

The OBOR strategy of China is a bold and new strategy that continues to evolve and
develop as new challenges arise. It is not a finite time and geographical strategy. While
based on the idea of reviving China's ancient Silk Road, it also developed beyond that
into more wide-ranging involvement with nations and regional and other groups of
countries through the Eurasian landmass.
It points to China's more external approach. It is a signal that China intends to use its vast
surpluses in a way new to China as well as the countries and groups which make this
commitment mutually beneficial. As the world is growing rapidly and as financial
institutions are at the limit of existing, this represents another opportunity to expand trade
and finance infrastructural deficits in more innovative ways and make better use of and
66
Ibid.

82
channel the global savings surplus.

There have been established new Chinese financial institutions – The Contingency
Reserve Facility (100 b) and the Asian Infrastructure and Investment Fund (10 b) and the
Latest Silk Road Fund (50-100 b) A new development bank; (40 bd US). These new
organisations begin activities and establish their processes.

Given the big expenditure requirements in the developed world, for infrastructure alone,
the scale of new institutions alone – over USD 1 trillion each year – between USD 290 to
340 trillion, adding up all three previously announced – but if the mechanisms are
leveraged and developed gradually, the financial architecture can play an important role
in and eventually reform it.

China and other BRICS countries are given an opportunity to demonstrate how they can
play a responsible role in addressing global challenges and contribute to the sustainable
development of people living in poverty. It is an indicator that the modern south would
not foresee established world solutions, it is striking for its own benefit.67

The Russian worries regarding the growing influence of China upon Central Asia, The
South China Sea War, Trans-Pacific alliance future routes, the Third-Party Administrator
(TPA), and the free trade union between Japan and Europe do remain. Area of ethnic and
other conflicts surround the new silk lane.

The OBOR in China, however, also provides a catalyst to stimulate exchange, investment
and employment development in many regions of the world. It needs to be seen if China
is applying this strategy. Near monitoring of the environmental and social problems and
the labour reform. Though not as great as expected, the full benefits of the new Silk
strategy will change the game in the coming years.

India and China play competitive but cooperative games at many levels. India is yet to
sign the OBOR and concerns about the China Pakistan Economic Corridor (CPEC) and
the Maritime Silk Road (MSR). China, in fact, along with Vietnam, has refused to agree

67
Ibid.

83
to the South China Sea oil exploration investment, India's Eastern Act Strategy. India's
Sea or Spice Road project has replenished the MSR by enhancing ties with ASEAN,
Japan, Mongolia, Iran and Central Asian countries.

India has quickly expanded its trade with China, but it has immense imbalances and
almost half of its trade deficit is the sole cause. India could profit from growing Chinese
investments, particularly if it helps to reduce China's big and increasing trade deficit, as
Chinese foreign investment rises by spring and spring, and India becomes a fascinating
FDI destination. If Chinese businesses learn to operate in Indian conditions, Chinese
infrastructure investment can help India make up for its infrastructure shortfall. Till now
FDI in China is very less in India.

The new financial institutions of the National Development Bank and the Asian
Infrastructure Investment Bank (AIIB) have joined India. The new banks are a potential
source to finance India's long-term infrastructure, but the enormous infrastructure gap of
India will allow it to cover only a very small number. They are nevertheless a visible and
tangible symbol of India-China cooperation that can bear fruit and growing. If China and
India cooperate instead of compete, almost 50% share of the world economy about 200
years ago could be with them. Contentions will only deprive them due to their objective.

84