Abstract

In this policy note, we examine the sufficiency of China’s planned financial reforms for its One Belt One Road (OBOR) initiative. Will the ambitious aims of OBOR and financial reform coincide? Are there deeper reforms to consider beyond the financial reforms laid out by the CPC Central Committee?

China’s One Belt One Road initiative is becoming increasingly better financed, expanding China’s reach into Europe, Asia and Africa. The $50 billion Silk Road Fund and the $100 billion Asian Infrastructure Investment Bank are to back the program, while the China Development Bank will invest over $890 billion into over 900 projects in 60 countries.

The projects will build up infrastructure, increase trade and finance, and boost connectivity across Europe, Asia and Africa. Details of the One Belt One Road plan were released on March 28, 2015 by the National Development and Reform Commission (NDRC) and the Ministries of Foreign Affairs and Commerce. The Silk Road Economic Belt is to extend through several corridors over Asia and Europe, while the Maritime Silk Road will include infrastructure projects that lie in South Asia, East Africa, and the northern Mediterranean Sea.