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Tom Miller: One Belt, One Road explained

Tom Miller: One Belt, One Road explained

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An old friend of Maritime CEO’s has just published a book, which should be essential for anyone in shipping with an interest in where China is heading under President Xi Jinping.

In China’s Asian Dream: Empire Building along the New Silk Road, Tom Miller heads across Central Asia and around China’s maritime periphery to give readers a greater insight into Beijing’s much discussed, though still nebulous One Belt, One Road (OBOR) policy; the grand yoking of continents via trade and infrastructure development.

The fact is OBOR remains opaque to most of us – its scale and reach hard to comprehend, a point observed by Khalid Hashim, the veteran managing director of Thailand’s Precious Shipping, who noted in an article for Splash last year that the outlay for the scheme ranges, depending on which reports you read, from $1.2trn to $21trn.

Miller, editor-at-large for the China Economic Quarterly and a former Beijing correspondent of the South China Morning Post, contends that the “crazy” headline numbers should not be taken at face value.

“Most of the outlay will be in loans, not Chinese investments, in any case,” he tells Maritime CEO in an exclusive interview.

Headlines such as ‘China will invest $46bn in Pakistan’ are meaningless, Miller agues.

“China has no idea how much it will loan or invest, because the Belt and Road initiative is not a defined project,” he says. “It all depends on Chinese companies doing deals with companies and governments abroad: no one knows how many of these will come to fruition.”

The funding for OBOR will come from Chinese banks. The Asian Infrastructure Investment Bank (AIIB) has grabbed the headlines, and is an important symbol, Miller says, of China’s attempt to augment – not reshape, he stresses – the global economic architecture. However, AIIB will lend no more than a couple of billion dollars per year for the medium term.

The Silk Road Fund, too, will only invest around $2bn per year through to 2020.

“The real money will come from the policy banks,” Miller says. China Development Bank and above all Exim Bank

“Exim is already the world’s biggest single financier of overseas development,” Miller points out.

Key pieces of the Belt and Road are being put into place, such as overland freight routes from China to Europe. In January, the first direct train to the UK arrived in London, carrying 44 containers loaded with clothes and consumer goods. Named East Wind, it took 15 days to travel 12,000 km across 10 countries, halving the time it would have taken by sea. Last year 1,702 freight trains from China arrived in Europe, double the number in 2015.

Nevertheless, Miller says shipping lines should not be too concerned by this development.

“I don’t see a big shift to overland freight,” he tells Maritime CEO. “Conventional shipping is cheaper and most consumer goods do not need to be delivered in two weeks,” he observes, adding: “The volumes will grow as more rail routes and services are added, but it’s not realistic to expect overland freight to account for more than few percent of overall freight volumes.”

With China’s Asian Dream, Miller puts Beijing’s plans in perspective, offering plenty of local colour, mixing data with travelogue. With a deft turn of phrase, Miller turns what could be a dry topic into a great read.

“China’s economic statecraft continues apace, whatever label is attached to it,” he concludes.

Miller’s previous books include China’s Urban Billion.

To buy China’s Asian Dream, head on over to this Amazon link.

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