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The U.S. Considers How to Limit Chinese Company and State Investments in the U.S.

ArmchairTechInvestor, June 28, 2018, by Brad Peery

Book-Simon and Schuster: China vs. U.S. 2018, A Police State vs. A Democracy. Expected publishing date: September 1, 2018
Book on Trump’s Political Agenda and Achievements

Blogs, China vs. U.S. Issues
www.ArmchairPolitician.US, Trump Political Achievements

We are in the process of writing a Conclusions Chapter for our book, China vs. U.S. 2018 A Police State vs. A Democracy. The three main issues that will be covered in the conclusions chapter are:
• China has underway continuing efforts to acquire the intellectual property of U.S. companies in China and the U.S.;
• U.S. companies are subject to discrimination by the Chinese government in seeking to invest in China;
• China perpetuates a U.S. trade deficit that is being used in part to finance an aggressive One Belt, One Road (OBOR) Initiative to form political, economic, and military relationships in about 70 countries in Asia, Africa, the Middle East, and Europe; and
• What does the U.S. need to do to meet these long-term threats to the U.S. and its democracy.

The China investment in the U.S. element of these issues is addressed below.

*There are substantial intellectual property theft issues that the U.S. has leveled against China both in the U.S. and regarding U.S. companies operating in the Chinese market. The Committee on Foreign Investment in the U.S. (CFIUS) screens foreign investments in the U.S. to determine whether they are a threat to U.S. national security. The U.S. has passed legislation in the House and Senate that would revise the Committee on Foreign Investment in the U.S. (CFIUS) legislation. A compromise bill had not yet been agreed upon by the two chambers as of June 2018. President Trump had proposed broadening the legislation to go beyond national security interests to include such issues as China making small venture capital investments in the U.S. However he may have relented on tightening the scrutiny.

The focus of additional restrictions on China could involve scrutiny of more transactions, including possible limitations on state-owned companies. An export-import section could examine the treatment of U.S. companies doing business in the China market.
*President Eases His Approach On China, Wall Street Journal, by Bob Davis, June 26, 2018

The issues of intellectual property theft from U.S. companies also extends to China. It has a plan, “Made in China 2025” that details 10 areas of technology that Chinese companies will try to dominate by 2025. From a military standpoint, the most important areas are information technology, aerospace, maritime, robots, and advanced materials. China has been downplaying its Made in China 2025 policies, but it is probable that these policies will continue to be pursued aggressively.

Two factors of importance in the China market are that there are only 3 Chinese companies that are allowed to directly access the web and foreign companies must go through them to use the Internet. The second important factor is that foreign companies must have Chinese partners with whom they must share their technologies to do business in China.

International trade with China has two aspects that are crucial to understand the situation. On one hand, China imposes tariffs on foreign companies that want to export into the China mainland market. The size of these tariffs is substantial, including 25% on vehicles exported from the U.S. There are also Chinese industries that are protected under an outdated World Trade Organization (WTO) that still treats China as an emerging country and allows them protections for sectors that are vital to their national defense. The U.S. has imposed tariffs on steel and aluminum that are based upon these industries being vital to the U.S. national defense, and domestic manufacturing needs to be revitalized. This is in line with what China is still allowed to do under the antiquated WTO structure.

**Made in China 2025
1. Information Technology:
a. Semiconductor chips;
b. Computers;
c. Cloud computing systems;
d. Industrial censors;
e. Artificial intelligence; and
f. Quantum computers.
2. Robots
3. Aerospace:
a. Airplanes;
b. Jet engines; and
c. Civilian space industry.
4. Maritime:
a. Ships; and
b. Out-at-sea engineering equipment and systems.
5. Railways
6. Smart Vehicles:
a. Electric; and
b. Hybrids.
7. Renewables:
a. Geothermal
b. Hydro;
c. Solar; and
d. Wind.
8. Farming:
a. Equipment
b. Genetically modified organisms; and
c. Tractors.
9. Materials:
a. Advanced basic materials; and
b. Strategic materials
i. Rare earths
ii. Alloys.
10. Drugs and Devices:
a. Biotechnology;
b. Drug development; and
c. Hospital equipment.
**Made in China 2025: Beijing’s big ambitions from robots to chips, Reuters, Adam Jourdan, April 20, 2018

China’s One Belt, One Road Initiative And Europe Is Destination For Links From Asia- European Region 2- Lithuania, Maldives, Moldova, Poland, Russia, Slovakia, and Ukraine

ArmchairTechInvestor, June 8, 2018, by Brad Peery

Book Under Development-Simon and Schuster: China vs. U.S. 2018, A Police State vs. A Democracy
Book on Trump’s Political Agenda and Achievements


Below are summaries of the OBOR initiatives in the countries covered in European Region 2.


*”Lithuania is bound by Latvia to the north and Poland to the south. Lithuania is the largest country among the Baltic States in terms of population, territory and economy. It is located at the intersection of three very large markets of almost 800 million consumers in total. Lithuania provides access to the Western markets of the EU and Scandinavia, and the Eastern markets of Russia and the other former Soviet states.”

Tensions between Russia and Lithuania has been increasing since the Ukrainian Crisis began in 2013. However, economic co-operation between China and Lithuania has been deepening. There is the 16+1 formula promoting regional co-operation between Central and Eastern Europe and China, plus the expressed interest of Chinese participation in the Rail-Baltic project. This project could looks enhance regional cooperation, and bring Chinese-Lithuanian relations to a higher level. The EU-backed railway will connect Lithuania with the other Baltic States, Finland and Poland.

Lithuania is improving its maritime access as a way of boosting its economy. The port of Klaipeda, which is a company owned by Lithuania, brings 6% of GDP. The OBOR Initiative is developing four modes of improvement.

“The port is well located, and can serve Scandinavia, Eastern Europe and Great Britain, using the very dense network of container lines connections. Currently Klaipeda serves 42 million tons of goods annually. This fact places it on the third place among the ports of this part of the Baltic Sea, behind the large Russian ports of Primorsk and Ust-Luga. The average annual increase in port operation efficiency is 6.4%”.

**The construction of infrastructure for LNG handling is in progress. Creating a transshipment center for railway transport in both directions for goods transported between China and Europe is also being considered, which will allow loading of goods directed to the Chinese market. Klaipeda is just starting cooperation under the OBOR Initiative. The contractor of the high quality terminals, which are currently being built, is a single company, named Company Investment Limited.
**Lithuania’s investments within the framework of ‘One Belt One Route’ projects, Coordinating Secretariat for Maritime Issues, “16 + 1”, October 26, 2017


Maldives is a small island country in the Indian Ocean, about 620 miles southwest of Sri Lanka. A middle-income country with a small population inhabiting some 200 of its 1,000 islands, Maldives relies on its tourism and fishery sectors for economic growth. Maldives is one of the countries along China’s Maritime Silk Road under the MBOR Initiative.

*”China provided financial aid, and assisted with the construction of China-Maldives Friendship Bridge, which will increase connectivity between the islands in Maldives. The project was started in 2015 and is scheduled to be complete in August 2018. In addition to inviting Chinese airlines to land in Maldives, the government is building a new runway at the Velana International Airport with Chinese loans and infrastructural assistance, which was expected to be completed in mid-2018”.

***The Maldives has and autocratic president, Abdulla Yameen. “If he cracks down on the opposition to consolidate power ahead of another election, analysts and diplomats warn that the small nation’s troubles could provoke a larger crisis that draws in China and India, which have long competed for influence in the Indian Ocean region”.

“Mohamed Nasheed, the opposition leader, has largely lived in exile since his term as the country’s first democratically elected president ended in a ‘coup of sorts’ in 2012. He expressed fears that an expansionist China is propping up Mr. Yameen to lock the country into a ‘debt trap’, a term that refers to China’s taking over of infrastructure projects when a country cannot pay back its loans, such as the recent takeover of a port in Sri Lanka.”

Indian officials have expressed concern about the situation, but have had a weakk response. Indian influence in the Maldives has declined since 2012, when it did not stand firmly behind Mr. Nasheed, who had been an ally, as he was removed from office. Anand Kumar, a fellow at the Institute for Defense Studies and Analyses in New Delhi, said “although India was clearly alarmed about losing influence to the Chinese in the Indian Ocean, it had struggled to respond”.
***Maldives Crisis Could Stir Trouble Between China and India, New York Times, By Mujib Mashal, February. 14, 2018


*Moldova is located in Southeastern Europe and is north of the Balkan Peninsula. Moldova is landlocked Moldova is located between Romania and Ukraine. “Its favorable location and good transportation infrastructure provides easy access to the EU and the former Soviet countries. The longest Pan-European Corridor IX (connecting Helsinki in Finland and Alexandroupoli in Greece) crosses Moldova from north to south, while the Corridor VII (connecting Passau-Germany with the Black Sea) passes through the Giurgiulesti Port on the Danube River.”

Historically, Moldova’s largest industries have been manufacturing, agriculture and food processing, textiles, apparel and footwear. However, Information, Communication Technology (ICT), medicine, automotive and renewable energy are emerging growth sectors, with many foreign investors entering the market.

Moldova is a member of the Central European Free Trade Agreement (CEFTA) which includes Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro and Serbia. Also, in June 2014, Moldova and the EU signed an Association Agreement (AA). The AA introduces a preferential trade regime. the Deep and Comprehensive Free Trade Area (DCFTA), which sets up a free-trade area between Moldova and the EU.

****If China can reach an OBOR deal with Moldova, it could set an example in the region. China has invested heavily in the country since the late 2000s, including agreeing a $1 billion loan in 2009. The former Soviet Union’s second-smallest state, by area, after Armenia, is anxious about getting foreign funds. In 2016, it had a gross domestic product of US$6.75 billion and a GDP per capita of $1,900, according to World Bank figures. The corresponding numbers for China were US$11.2 trillion and $8,123.

Moldova exported US$14.5 million worth of goods – mostly wine and furniture – to China in 2016, while the value of its imports from the world’s second-largest economy, including electrical machinery, plastics, rubber and chemical products, totaled US$394 million. This is another example of the very large trade deficits that countries such as Moldova run with China.

In addition to free-trade negotiations, representatives from China National Nuclear Power Company, and their Moldovan counterparts have held talks to boost cooperation in the energy sector.
****Can a China-Moldova free-trade deal give Beijing a foothold in Eastern Europe?, South China Morning Post, Liu Zhen, December 29, 2017


*Poland is a member of the European Union (EU), and its trade relations with the Chinese mainland are affected by EU’s common external trade policy and measures. Under a new structure, tariff preferences are removed for imports into the EU from countries where per-capita income has exceeded $4,000 for four years in a row. As a result, the number of countries that enjoy preferential access to EU markets was reduced from 176 to under 80 markets.

“While the Chinese mainland remains a beneficiary, many of its exports such as toys, electrical equipment, footwear, textiles, wooden articles, and watches and clocks have already been “graduated” from the preferential treatment. A number of Chinese mainland-origin products are subject to EU’s anti-dumping duties, including bicycles, bicycle parts, ceramic tiles, ceramic tableware and kitchenware, fasteners, ironing boards and solar glass.”

The author argues that at the moment cooperation with China neither poses a serious political threat per se, nor represents a source of sustainable economic growth in the region.

*****The underlying problems of Sino-Polish cooperation remain the same. In other words:
• The trade deficit has been growing steadily; while,
• The most needed greenfield investments have been minimal;
• The importance of China for the region is still marginal in comparison to Western Europe;
• Cooperation should be continued but it should focus more on areas that would actually be profitable for the CEE economies in the longer perspective, bearing in mind each economies’ comparative advantage:
o e.g. food processing or the aviation industry in Poland.
• When it comes to long-term risks, the biggest threat might come from potential Chinese acquisitions of European know-how in sensitive sectors, such as high-tech or telecommunications;
o This way, Central and Eastern European (CEE) countries should cooperate closer with the rest of EU in order to pressure Beijing to open up its domestic market, while closely monitoring Chinese investments in Europe in sensitive sectors.
*****China, Poland, and the Belt and Road Initiative – the Future of Chinese Engagement in Central and Eastern Europe, Geopolitica, Alicja Bachulska, December 12, 2017

Russia & Ukraine

*”To stimulate investment with an aim to diversify its economy, the Russian government is providing a wide array of incentives for investors developing new product, technology in the energy efficiency, nuclear engineering, space technology, medicine and IT industries. Other key sectors for development include pharmaceutical and medical, real estate, innovations and technology, infrastructure, aluminum, iron and steel, lead, platinum-group metals, precious metals, nickel, copper, zinc, coal, telecommunications, transportation, agriculture and food and gas.”

The Ukraine crisis made Russia embrace the OBOR Initiative by:
• Beginning confrontation with the West and Russia’s deteriorating economy due to U.S.-led sanctions and falling oil prices left Moscow little choice.
• Without Ukraine, the second-largest post-Soviet economy and a market of about 44 million people, Moscow’s hopes to create an integrated bloc that would be on par with the European Union and other centers of global economic power were essentially dashed.
• Lacking a market of sufficient size to create its own viable geo-economic area, Russia was left with the only option of moving into another nation’s economic orbit.
• Russia joined the China-controlled Asian Infrastructure Investment Bank in March 2015; but
• The most decisive step came a few months later in May, when Xi and Russian President Vladimir Putin met in Moscow to pledge to work toward a “link-up” between Russia’s Eurasian Economic Union (EEU) and China’s OBOR Initiative.

Still, while praising the OBOR Initiative plan, Moscow seeks to prevent China’s geopolitical domination of continental Eurasia. Instead of wholeheartedly endorsing China’s Initiative, Russia pushes its own vision of “a larger Eurasian partnership” or “Greater Eurasia,” a network of existing and emerging integration formats.” Beijing’s OBOR would be just one element, alongside the EEU, the Shanghai Cooperation Organization, the Association of Southeast Asian Nations and potentially even the EU.
Putin’s Silk Road gamble, The Washington Post, By Artyom Lukin. February 8, 2018


*Slovakia is uniquely situated in the heart of the Europe, between East and West, and between Poland, Hungary, Austria, the Czech Republic and Ukraine. The country has an inland hub. “It connects Europe with China over three transit corridors, the Trans-Siberian transit (Slovakia-Manchuria), the Kazakh transit (Slovakia-Alashankou) and the Trans-Caspian transit (Slovakia-Alashankou via Azerbaijan and Georgia). This location has enabled Chinese manufacturers to ship parts and components directly by rail in about 12 days to factories in Slovakia for processing near their final European market.”

*”With its strong industrial base, Slovakia’s economy has become one of the fastest-growing in the EU. It has had an average annual GDP growth of 1.9% since its adoption of the euro in 2009. It is the best-performing EU member in the 16+1 format (co-operation between 16 CEE countries and China)”.

Slovakia has had an economic concentration on export-led development. It has aggressively developed export-oriented manufacturing, especially in the automotive and electronics industries. It has also become strong shared services centers (SSCs) and business process outsourcing centers (BPOs).

******To further develop bilateral relations, China needs to take into account the public discourse of target countries. The importance of understanding other cultures and domestic settings is not a new concept in Chinese political philosophy. Recently, Zhao Lei, a professor at the Chinese Central Party School, recognized the need to use other countries’ domestic media outlets to spread a positive image of China.

******“To generate soft power, China will likely deploy narratives tailored to the specific perceptions of target audiences. Beijing already relies on controversial means to control media narratives, namely buying foreign media outlets. In 2015, it came to light that China Radio International (a state-owned radio broadcaster) was covertly backing at least 33 foreign radio stations that broadcasted positive news of China”.
******Do the Central European media show caution towards China?, Matej Šimalčík, East Asia Forum, Institute of Asian Studies, February 14, 2018


*”Ukraine sits at the crossroads of Eastern Europe and Russia. Aside from a heavy reliance on commodities such as coal and steel and industries like transport equipment manufacturing, Ukraine’s resources and economic strengths include rich agricultural land, a strong scientific establishment and significant mineral reserves.”

WTO membership in 2008 has brought Ukraine significant benefits, including access to steel and textiles to the EU. Recently, the EU has surpassed Russia to become Ukraine’s most important trading partner.

*******“Despite the 2014 Ukrainian revolution and the subsequent Russian annexation of Crimea, the Association Agreement with the EU, including a Deep and Comprehensive Free Trade Area, aims to deepen political and economic relations between the EU and Ukraine, and to pave the path to gradually integrate the country with the EU’s Internal Market.”
*******As Trump Is Distracted, The Chinese Are Moving In On Ukraine. Newsweek, By Nolan Peterson, December 12, 2017

China’s One Belt, One Road Initiative And Europe Is Destination For Links From Asia- European Region 1-Austria, Belarus, Czech Republic, Estonia, Hungary and Latvia

ArmchairTechInvestor, June 8, 2018, by Brad Peery

Book Under Development-Simon and Schuster: China vs. U.S. 2018, A Police State vs. A Democracy
Book on Trump’s Political Agenda and Achievements


Below are summaries of the OBOR initiatives in the countries covered in European Region 1.


*Austria has a population of about 9 million. It is a landlocked country in the middle of Europe. It borders Germany, the Czech Republic, Slovakia, Hungary, Slovenia, Italy, Switzerland and Liechtenstein. Austria is known for its political and economic stability, and is one of the richest countries in the world, having a per-capita GDP of more than $47,000.
*The Belt and Road Initiative: Country Profiles, Hong Kong Trade Development Council, May 17, 2018

**“According to the Central Bank of Austria, China’s total stock of FDI in Austria amounted to $773 million as of the end of 2017, a considerable increase on the $163 million recorded in 2009. With an Austrian FDI level of $3 billion as of the end of 2017, Hong Kong, however, was the largest Asian investor in the country overall.”

**“The China-proposed Belt and Road Initiative opens up opportunities for Austria and China to boost cooperation, Austrian Chancellor Sebastian Kurz told Xinhua. “I see transport, energy and telecommunications, sustainable technologies, rural development, financial services and e-commerce as attractive areas with special expertise” for bilateral cooperation within the framework of the Belt and Road Initiative, Kurz said.”
**Belt and Road Initiative spells opportunities for Austria-China cooperation, Xinhua, April 7, 2018


*“Belarus is a landlocked nation. It borders Russia, Latvia, Lithuania, Poland and Ukraine. Due to its strategic location, it is an important trade and transport route in Eurasia. The country’s transportation infrastructure consists of a broad network of motorways, railways and air routes. The thoroughfares crossing the country – including two Pan-European corridors (II and IX) – are the most important component of the European transportation system.”

Belarus is a founding member of the Eurasian Economic Union (EAEU). It is not only as a gateway to the other signatories, Russia, Kazakhstan, Armenia and Kyrgyzstan, but also to the whole regional market. Each year over 100 million tons of European cargo cross Belarus. Russia and the EU receive 90% of the cargo.

***“Belarus is implementing over 30 investment projects financed by Chinese loans, worth about $6bn. The Great Stone Industrial Park is the largest of them. Lukashenka insists that only high-tech companies with guaranteed sales markets should become residents of the park. Currently, eight residents are registered within the park, including China Merchants Group, Huawei, and ZTE. An imbalance in Belarusian-Chinese trade, however, is raising concern within the Belarusian government. In 2016 it exceeded $2.5bn.”
***Belarus and One Belt, One Road, alternative oil, SCTO, Belarus state press digest, May 20, 2017

Czech Republic

*The inroads that China and Hong Kong are making in improving their trade are nowhere more evident than in the Czech Republic. “Hong Kong’s total exports to the Czech Republic surged by 27% to $826 million in the first eleven months of 2017, while its imports from the Czech Republic grew by 14% to $180 million”, with the trade deficit expanding dramatically.

****The Czech president, Miloš Zeman, a populist who was re-elected earlier in 2018. He is on record calling Xi his “young friend”, and Belt and Road “the most remarkable initiative in modern human history”. The following are some details of China’s involvement in the Czech Republic:
• In 2014, the Czech government proclaimed that the country would aspire to become “China’s gateway to Europe”;
o It broke entirely with the pro-democracy principles;
• By 2015, Zeman had named as his honorary adviser Ye Jianming, the chairman of a Chinese mega-company: CEFC, which had arrived in the Czech Republic promising billions of dollars of investments;
• CEFC embarked on a buying spree:
o Travel services;
o An airline company;
o A brewery;
o A football club; and
o A media group. I
o It also lost no time hiring scores of former Czech elected officials, who often double as advisers at various ministries, or indeed within the presidential castle.
♣ CEFC’s main investments in the Czech Republic weren’t economic, they were about buying up the loyalty of Czech officials.
o As time passed, actual investments remained negligible. The few deals that did materialize were mostly real estate acquisitions.
• In March, 2018, Ye suddenly ran into trouble in Beijing.
o News broke that he’d been arrested and come under investigation for financial irregularities.
o Prior to that, in November, 2017, the head of CEFC’s non-profit arm, the former Hong Kong politician Patrick Ho, was arrested in New York and accused of bribing presidents and government ministers in Africa.
• The result was that the heavily indebted CEFC would effectively be taken over by the Chinese state, together with its Czech acquisitions.
o So much for the hopes that the company would save the Czech economy as a private investor.
• Debates have ensued about the wisdom of tying the country’s future to mysterious Chinese entities and to the Communist regime in Beijing;
• Some of the metaphors Chinese media have attached to the Belt and Road project are revealing. They often call it “globalization 2.0”, or the “New World Order”.
o What that vocabulary struggles to mask is that the whole endeavor is driven far more by politics than by markets.
• Other problems are:
o Deals are negotiated at state-to-state diplomatic summits;
o Open tenders are shunned;
o Contracts are awarded by political fiat;
o Ostensibly commercial companies put former politicians on their payrolls by the dozen;
• As it turns out, CEFC’s main investments in the Czech Republic weren’t economic, they were about buying up the loyalty of Czech officials. What China has to show for itself in my country is hardly innovation. Rather, it has brought us a new take on age-old crony capitalism.
****China’s gift to Europe is a new version of crony capitalism, The Guardian, Martin Hala, April 20, 2018


*Estonia as can be seen is the closest point of access to China in terms of rail connectivity. However, its not just China that OBOR connects. The South-East Rail section, when completed, will add countries such as Vietnam, Thailand, and Myanmar to that list, although there are serious infrastructure problems in linking these markets to China’s high-speed network.

*****“Among the three Baltic States, Estonia has the highest per-capita GDP. The Estonian economy largely relies on the sectors related to forestry, while its energy sector is based on oil shale. Estonia’s transportation abilities are enabling it to develop into an increasingly important logistics hub moving goods, knowledge and people in the east-west direction. Situated on a busy trading route between East and West, Estonia operates nearly 30 well-developed ports. Among them, the state-owned port of Tallinn is the largest.”

China’s OBOR Initiative reaches the markets of the EU by concentrating on Estonia and its infrastructure and logistics initiatives. Estonia, with a population of just 1.2 million, is among the smallest countries in the EU. China’s strategy has been to target Estonia as the nearest full EU member, and to take advantage of and help develop Estonia’s ‘smart’ IT driven interconnectivity.

Estonia has effectively become the world’s first ‘digital state’ where nearly all interactions between the government and its citizens are now online. This gives foreign nationals, with Estonian e-residency, access to the EU but without having to leave their homes. The current 10,000 e-residents are planned to grow to 10 million by 2025 and increase its services revenue. This speeds up the entire delivery and excise process and adds a digital layer of security, again a perfect match for China and the EU’s needs. This is one reason that Alibaba is interested in partnering with Estonian companies.
*****China Eyes Estonia as Smartest and Nearest Port for EU Access, Silk Road Briefing, July 20, 2017


*”Hungary has been a member of the EU since May 2004, and it has adopted the EU’s common external trade policy and measures. A number of Chinese mainland-origin products are subject to EU’s anti-dumping duties, including bicycles, bicycle parts, ceramic tiles, ceramic tableware and kitchenware, fasteners, ironing boards and solar glass, which are of interest to Hong Kong exporters”.

******“The centerpiece of China’s OBOR initiative in Eastern Europe is a planned 220 mile high-speed Chinese-funded railway connecting Budapest, Hungary to Belgrade, the Serbian capital. In 2013 it was described by commentators as China’s “express lane” to Europe. The $3 billion investment is set to be the first part of a much larger rail route linking the Chinese-run Greek port of Piraeus with Europe’s heartland.

The Belgrade-Budapest railway has encountered EU delays and contractual problems. Work on the Serbian portion of the line should have begun in November, 2017. But progress on the Hungarian part, which started in 2015, has stalled. This largely comes down to European Union rules. Serbia is only a prospective member of the EU and only has to abide by a looser set of rules.
******China’s Relationship With Hungary Is Being Tested As The EU And Russia Apply Pressure, David Hutt, September 5, 2017


Located between Lithuania and Estonia, Latvia provides a strategic location for business operations targeting developed economies of the EU as well as the emerging markets to its east. Latvia is also a natural gateway between the EU and Russia, and the other former Soviet states.

*“Latvia is the transport and logistics hub of the region, with three major, ice-free international ports –namely Riga, Ventspils and Liepāja – closely linked to the country’s well-developed rail, road and pipeline infrastructure. Meanwhile, Riga International Airport is the largest airport, serving about two-thirds of all flights in the region, whereas Ventspils is the busiest port.”

*******“In May 2018, several officials from Beijing showed particular interest in the Port of Riga. It was an opportunity for the Freeport of Riga Authority to present the Port of Riga as an effective transit hub for the transportation of Chinese container cargoes and as a good place for Chinese investment. The representatives of the city of Beijing were informed of the potential investment and cooperation opportunities in the Port of Riga.
*******Riga Port has the potential to become a significant transit hub for the New Silk Road, Embassy of the Republic of Latvia, June 4, 2018

China’s One Belt, One Road Initiative And The Balkans Are Seaport Links Between Asia And Europe- Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Macedonia, Montenegro, Romania, Serbia and Slovenia

ArmchairTechInvestor, June 7, 2018, by Brad Peery

Book Under Development-Simon and Schuster: China vs. U.S. 2018, A Police State vs. A Democracy
Book on Trump’s Political Agenda and Achievements


Below are summaries of the OBOR initiatives in the countries covered in the Balkans Region.


*“Albania is a small country in Southeast Europe, located across from Italy (less than 45 miles from the Italian coast) and bordering Montenegro to the northwest, Kosovo to the northeast, Macedonia to the east and Greece to the south and southeast. With a coastline on the Adriatic Sea to the west and on the Ionian Sea to the southwest, Albania is strategically placed at the center of a natural crossroad in Europe.”
*The Belt and Road Initiative: Country Profiles, Hong Kong Trade Development Council, May 17, 2018

**“China would like to take an active part in Albanian major infrastructural and energy projects such as roads, hydro-electric power stations and economic development zones, and strengthen cooperation on cultural and people-to-people exchanges, film-making, education and tourism, the Chinese vice premier said.”
**China, Albania agree to expand cooperation under Belt and Road, 16+1 framework, Xinhua|, Yameni, April 18, 2017

Bosnia & Herzegovina

Bosnia and Herzegovina (B&H) shares borders with Croatia, Serbia and Montenegro in Southern Europe. A number of agreements between the EU and B&H have been concluded, including the Stabilization and Association Agreement (SAA), which became effective on June 1, 2015. In addition to the SAA, B&H has signed the Central European Free Trade Agreement (CEFTA) with Albania, Kosovo, Macedonia, Moldova, Montenegro and Serbia. It has also signed free trade accords with Turkey and joined the European Free Trade Association, (EFTA), a common market that includes Switzerland, Norway, Iceland and Liechtenstein.

***Gen. Chang Wanquan said that Bosnia and Herzegovina is a trusted friend of China in Central and Eastern Europe. In recent years, mutual political trust between the two countries has been deepened, and exchanges and cooperation have been steadily advanced in various fields. Marina Pendes, the Defense Minister of B&H, said that the two countries and two militaries have profound friendship. Bosnia and Herzegovina firmly adheres to the One-China policy and firmly believes that the Belt and Road Initiative will benefit countries and people along the way and of the world as a whole.
***Chinese defense minister meets with Bosnia and Herzegovina counterpart, China Military, EditorYao Jianing, May 17, 2017


“”Bulgaria has a strategic location at the center of the Balkans and Southeast Europe, and the main roads of Europe to the Middle East and Asia pass through it. Ease of transportation is provided by five Pan-European corridors (IV, VII, VIII, IX and X), four major airports (Sofia, Plovdiv, Bourgas and Varna), two of the largest ports on the Black Sea (Varna and Bourgas) and numerous other ports along the Danube River.”

Bulgaria could become a bridge for Chinese cargo and open the “New Silk Road”(One Belt One Road Initiative) to Central and Western Europe, said Transport Minister Ivaylo Moskovski in response to a question on the Trans-Caspian transport corridor, reports Bgnes.

****“A meeting in early 2018 was attended by representatives of Georgia, Azerbaijan and Kazakhstan (rail and sea carriers, logistics companies). For the purpose of acquainting with the opportunities of the Bulgarian ports, visits to ferryboat complex Varna, port of Varna and port of Burgas (Port Bulgaria West and BMF Port) were organized within the meeting. In order to develop the cooperation with the participants in the project, representatives of BDZ – Freight Transport EOOD took part in various initiatives, within which the potential of the Trans-Caspian International Transport Route was presented.”
****Bulgaria can Open the “New Silk Road” to Central and Western Europe,, April 29, 2018


*Croatia is located in Southeast Europe, and is bordered by Italy, Slovenia, Hungary, Serbia, Bosnia and Herzegovina and Montenegro. “With three major Pan-European corridors (X, V and VII) crossing through it, Croatia provides one of the shortest routes linking Western Europe with Asia, Eastern Europe and the Mediterranean. This advantageous geo-strategic position, coupled with lower operating costs compared to the majority of other EU members, has made Croatia increasingly attractive as an investment destination in Europe.”

Pragmatic Croatian-Chinese cooperation has been considerably strengthened, Chinese Ambassador Hu Zhaoming said.

****”Over the past 25 years, the mutual understanding of the two peoples has deepened greatly. Pragmatic cooperation between Croatia and China has gained in strength and last year our trade volume reached $1.2 billion, which means that it grew over 30 times in the past 25 years,” Hu said, adding that “our relations are at a new starting point, facing new historical opportunities. Although the two countries have established a comprehensive cooperative partnership, the ambassador noted that bilateral cooperation lags behind China’s cooperation with Croatia’s neighbors.
****China, Croatia could enhance ties under Belt and Road Initiative: ambassador, Xinhua|, Yang Yi, September 15, 2017


*****In 2016, the Chinese state-owned firm COSCO Shipping completed the acquisition of a 51% stake in Piraeus Port, Greece, one of the biggest ports in Europe. “Greece, a key point along the route of the ancient Silk Road, will once again serve as the hub connecting Asia, Europe and Africa, according to the Greek Ambassador, Leonidas Rokanas. ‘Eventually, Piraeus will become the main entry point for Chinese exports to southern, eastern and central Europe,’ Rokanas told the South China Morning Post. To use a Chinese metaphor, Piraeus will form the ‘head of the dragon’ of the so-called land-sea express route, leading to the heart of Europe through Greece.”

For Greece, the deal could represent a major boost for its recovery following the debt crisis that started in 2009, and racked its economy. The port sale has ushered in a flurry of Chinese investments totaling $1.6 billion from companies including mobile giants Huawei and ZTE, the China Machinery Engineering Corporation as well as State Grid, Shenhua Group and Sinovel in the energy sector.

For China, the deal represents an important element of the OBOR Initiative as some 50 per cent of China’s GDP and around 90 per cent of the EU’s external trade depends on shipping. “The land-sea express passage connecting southeast and central Europe to China via Piraeus … has further upgraded the significance of Piraeus,” said the Greek envoy.

Greece has already taken concrete steps towards making the Port of Piraeus the entry point for an extended railway network into inland Europe. Greek Prime Minister Alexis Tsipras expressed the intent of Greece to upgrade the railway connection between Piraeus and Serbia’s capital Belgrade.

In September, Greece signed an agreement with Bulgaria on the construction of a high-speed railway network, named “Sea2Sea”, that will connect three ports in Greece, Thessaloniki, Kavala, Alexandroupolis, with three Bulgarian ports, Burgas and Varna on the Black Sea and Ruse on the Danube, Europe’s second-longest river.
*****Why Greece is banking on China’s modern-day Silk Road to help its economic recovery, South China Morning Post, By Catherine Wong, December 26, 2017


“Macedonia is a landlocked and mountainous country in Southeast Europe. One of the least developed of the Yugoslav republics to gain independence in 1991, Macedonia remains one of the poorest economies in Europe. However, given its considerable economic reforms, Macedonia was ranked 10th in the World Bank’s annual Ease of Doing Business Report 2016. Macedonia’s sea transport relies mainly on ports in neighboring countries, such as Port of Thessaloniki in Greece and Port of Durrës in Albania, through road and rail links.”

The infrastructural projects built with Chinese aid are extremely important for the region of Central and Eastern Europe, but we also need educational, scientific and cultural connection, Macedonian President Gjorge Ivanov admits.

******”China once again comes close to the position it had two centuries ago, and that is to be the biggest economy in the world. As a result of this progress, China has made a huge step forward in many other fields,” Macedonian President Ivanov says, pointing out that the countries from Central and Eastern Europe can benefit especially from the Chinese accomplishments in the area of technology and innovation.”
******”One Belt, One Road” initiative brings more than infrastructure to Central and Eastern Europe, Xinhua|, Editor, Mu Xuequan, October 8, 2017


*“Montenegro is situated at the center of the Balkan Peninsula in Southern Europe. Its southern coastline lies on the Adriatic Sea, while borders are shared with Albania, Serbia, Bosnia-Herzegovina and Croatia. With access to the Mediterranean Sea, and having the Port of Bar as its most important south Adriatic port, Montenegro serves as a link between Southern Europe and Africa, the Middle East, India, Russia and Asia.” Montenegro has free trade agreements with the EU, the European Free Trade Association (EFTA), the Central European countries (CEFTA) and Russia.

President Aleksandar Vučić said that Serbia is in the midst of a physical transformation that Vučić has promised his compatriots will end their isolation and open the door to the European Union. To turn his “passion” into reality, the Serbian president is relying not just on Europe, but on an old ally farther east, China.

*******For China, its investments are both economic and political. The Balkans form an important corridor along Beijing’s OBOR Initiative and also promise to further China’s influence in European politics. Chinese shipping giant Cosco has acquired a controlling stake in Greece’s Piraeus port, the country’s largest. The Chinese have already turned it into one of the world’s top 50 ports in terms of container volume.

That was only the first step. China wants to transform Piraeus into a European beachhead. For Europe-bound Chinese ships, which usually travel through the Suez Canal before heading to a northern port such as Rotterdam or Hamburg, Piraeus’ relative proximity makes is a more attractive option, if the Balkans can be provided with modern roads and rails on which the freight can travel.
*******Beijing’s Balkan backdoor, Politico, By Matthew Karnitschnig, July 13, 2017


*”Romania is located at the intersection of the EU, the Balkans and the former Soviet countries, Romania is crossed by three important Pan-European transportation corridors. As a major crossroad for international economic exchange in Europe, the country’s leading seaport, Constanta, is the biggest and busiest in the entire Black Sea region, capable of hosting vessels of more than 150,000 tons.”

Romania has abundant high quality natural resources. They include mineral deposits such as oil and gas, as well as highly fertile agricultural land. In recent years, investment has been made in energy, machinery, healthcare and transport, which should help Romania achieve its EU 2020 targets, particularly in R&D spending and improvements in energy efficiency.

********“Romania can develop an energy center and can become one of China’s long-term economic partners in the energy field. Romania has a huge processing capacity of 5 million tons in good, competitive refineries and this should be an asset to put on the table for Silk Road development. Romania was the first country to exploit petroleum by training petroleum engineers and building one of the first refineries, and it has not lost this knowledge and expertise.”

“OBOR is the project of the century because it has many stakeholders and will produce manifold effects on the countries involved. There are also a large number of challenges that lie ahead for the Chinese institutions in charge of this project,” believes Liviu Muresan, president of EURISC, a Bucharest-based think tank that has been working with Chinese academics, researchers, and China-based think tanks for many years.

Romania has expertise in critical infrastructures, ranging from the maritime field to space. Space is a key enabler for critical infrastructure that coordinates systems on Earth, and the field is usually approached through joint projects because one country cannot manage all the risks. EURISC has introduced the critical infrastructure dimension in the OBOR Initiative during discussions with Chinese partners, think-tanks, and the China National Petroleum Corporation.

“Expertise in resilience and critical infrastructure is something few organizations possess. The Shanghai Institute for International Studies, an influential Chinese think tank both in China and abroad, considered EURISC’s contribution on “Critical Infrastructure Perspective on the Belt and Road Initiative and its Opportunities and Challenges” to be a useful conceptual approach for research and cooperation within the 16+1 initiative and OBOR Initiative.”
********The Impact of China’s One Belt, One Road on Romania, Geopolitical Monitor, By Marcela Ganea, December 19, 2016


*”Serbia is a landlocked country situated in the centre of the Balkan Peninsula in Southeast Europe. As a viable platform for customs-free exports to a market of almost 800 million people, Serbia enjoys free trade with the EU. It is also the only country outside of the Commonwealth of Independent States (CIS) that has a free trade agreement (FTA) with Russia. In January 2014, Serbia officially commenced EU membership negotiations (with full membership expected in 2020).”

*******“President Xi Jinping of China chose an industrial town on the Danube River to announce that Serbia was at the center of a $900 billion OBOR infrastructure initiative. Standing on the grounds of a Communist-era steel plant in Smederevo, about 28 miles east of Belgrade, the capital, Mr. Xi promised to pour money into roads and railways to create a transport corridor for Chinese goods to flow to West European markets. Called the New Silk Road, the route would run from China to Germany, via the port of Piraeus in Greece, passing through the Balkans.”

During Mr. Xi’s state visit, he said China would bring more jobs, improve living standards and lift the country’s economic growth. More important, by opening its economy to China, Serbia cemented Beijing’s support against European Union pressure to recognize Kosovo’s independence.

Some in China have questioned the economic viability of Beijing’s investment spree. And outside of China, some fear that China’s ambitions would keep the authoritarian leaders of countries like Serbia in power and leave the nations deep in debt and stuck with environmentally flawed projects.

Now, China’s ambitions in the Balkan region have set up a potential clash with the European Union’s plans, with countries like Serbia placing themselves in the middle.
*******As China Moves In, Serbia Reaps Benefits, With Strings Attached, New York Times, By Barbara Surk, Sept. 9, 2017


*Slovenia borders Italy, Austria, Croatia and Hungary. It stretches across the Alps, the Dinaric Alps and the Pannonian Plain to the Mediterranean. “Slovenia, has a superb geographical position at the heart of the region. Intersected by traditional trade and transport routes, Slovenia is the location of choice for international companies. The two Pan-European transport corridors intersect at the Slovenian capital, Ljubljana. Shipping to Slovenia’s only cargo port, Port of Koper, means gaining 7 to 10 days for ships arriving from Asia compared with sailing to Europe’s northern ports.”

Slovenia’s key industries include logistics and distribution, automotive, chemicals and pharmaceuticals, electrical engineering and electronics, machinery, metalworking and wood-processing.

Slovenian Prime Minister Miro Cerar had a meeting with the Prime Minister of the People’s Republic of China, Li Keqiang that focused on deepening economic cooperation, the opportunities offered by the 16+1 initiative, and Slovenia’s role in the Silk Road Economic Belt and 21st Century Maritime Silk Road initiative, which it formally joined in November, 2017.

*********“The Slovenian PM placed particular emphasis during the meeting on a number of highly promising areas, such as cooperation in the civil aviation sector, the introduction of direct flights between Slovenia and China and investment in airport capacities, the automotive and high-tech industries, and science. Agriculture and tourism are two other promising sectors. The number of Chinese tourists visiting Slovenia and Europe has grown significantly in recent times, and further growth is anticipated.”
*********PM at summit of Central and Eastern European countries and China, Government of the Republic of Slovenia, November 29, 2017

China’s One Belt, One Road Initiative And Asia Is A Crucial Trade Route Starting Point, Part 6. Timor-Leste, Turkmenistan, Uzbekistan and Vietnam

ArmchairTechInvestor, May 30, 2018, by Brad Peery

Book Under Development-Simon and Schuster: China vs. U.S. 2018, A Police State vs. A Democracy
Book on Trump’s Political Agenda and Achievements


Below are summaries of the OBOR initiatives in the countries covered in the Asia Part 6 Region.


*Located on the eastern half of Timor Island in Southeast Asia, Timor-Leste lies close to Indonesia and about 375 miles away from Australia. Timor-Leste’s economy is very dependent on its offshore oil and gas resources. They generate more than 90% of the country’s revenue. A public-private partnership has been established to build a new seaport at Tibar Bay, west of the capital Dili, with an expected investment of about $490 million. Construction began in June 2017. “The new port is planned to handle the commercial cargo operations of the existing Port of Dili, which is highly congested with limited expansion possibilities.”

**Zhang Ping, special envoy and also vice chairman of the Standing Committee of the National People’s Congress of China said that China is willing to continuously make efforts with Timer-Leste to strengthen the alignment of their development strategies, actively engage in cooperation based on the OBOR Initiative and constantly push ahead a comprehensive partnership. Timor-Leste’s new President Francisco Guterres Lu-Olo said that his country supports and actively participates in the OBOR construction. Lu-Olo also said that Timor-Leste is willing to further strengthen its cooperation with China in various fields and constantly enhance relations between the two countries.


*Situated in the southwest of Central Asia and bordering Kazakhstan to the northwest and Uzbekistan to the north and east, Turkmenistan has budget surpluses resulting from the development of energy sources and commodities such as oil, natural gas and cotton. It has extremely large gas deposits underneath the Karakum Desert (which occupies 70% of the land area of Turkmenistan) gas is the core of Turkmenistan’s economy. These gas sources include the Galkynysh gas field, which has the second-largest volume of gas in the world after the South Pars field in the Persian Gulf.

It’s the Year of the Dog in China but here in Ashgabat, this year’s slogan is:”Turkmenistan is the heart of the Great Silk Road”. This, like much else in Turkmenistan, has been decreed by its strongman President Gurbanguly Berdimuhamedow. He has declared the nation to be a linchpin of central Asia’s new era of prosperity and promise. To illustrate its commitment, a container and ferry seaport has opened on the Caspian Sea, linking Turkmenistan with Azerbaijan, Kazakhstan, and Russia. There are also plans for a superhighway to Turkey, and more natural gas and oil exports.

***“Looked at from Turkmenistan, the motivation behind the OBOR Initiative includes promoting rapid economic development in China’s sprawling western Xinjiang province to contain its large, restive, Turkic language-speaking and Muslim Uyghur population. Many Uyghurs live in Turkmenistan, where the language spoken is close to their own.” Whatever the precise interpretations of China’s motives, Turkmenistan has climbed on board the OBOR Initiative.
***Turkmenistan dreaming: Gurbanguly Berdimuhamedow’s big bet on Belt and Road, Financial Review, by Andrew Clark, April 27, 2018


Uzbekistan Is very focused on the cultivation and processing of cotton, fruits, vegetables and grain (wheat, rice and corn).” Uzbekistan, is also a world leader in terms of its gas, coal and uranium resources, while also said to have more than 1,800 different mineral reserves.” It has population of over 30 million. It is the most populous country in Central Asia, accounting for 45% of the total population. This, however, has not led to the formation of a lucrative consumer market, despite the country enjoying average GDP growth of more than 8% per annum over the past decade.

Uzbekistan uses the Latvian seaport of Riga and also has some of the shortest overland routes connecting Europe and Asia.

****“Uzbekistan is located at the heart of Transport Corridor Europe–Caucasus–Asia (TRACECA) and three of the six Central Asia Regional Economic Cooperation (CAREC) corridors. Dating back to Soviet times, rail and road transport have been the country’s key and cheapest means of transport. According to current estimates, some 95% of cargo travelling through or to Uzbekistan still travels by road or rail.”

Uzbekistan was a key participant in the ancient Silk Road hundreds of years ago. When the OBOR Initiative was first raised by President Xi Jinping in 2013 the country responded to China’s initiative immediately, and signed agreements with the Chinese government, including investment and infrastructure construction for the Initiative.

Uzbek President Shavkat Mirziyoyev stated: “We believe participating in the OBOR Initiative meets the priority of our five-year development strategy for Uzbekistan 2017 – 2021.”
****Belt and Road a ‘great opportunity’: Uzbek official
China Daily, By Ren Qi, December 12, 2017


*”Vietnam is the sixth largest economy in the 10-member ASEAN bloc, trailing the Philippines yet followed by Myanmar. Its service, industry and agriculture sectors account for, respectively, 44%, 39% and 17% of GDP. Major industry and service sectors of the country include manufacturing, mining, construction, real estate and finance.

There were anti-Chinese riots in 2014, which damaged foreign-invested factories. The Vietnamese government undertook a series of remedial measures, including tax breaks and land rent exemption, to compensate the affected companies. Security conditions were reportedly enhanced that has improved foreign investors’ confidence has gradually improved, with investors remaining positive on Vietnam’s business environment and economic potential.

Vietnam’s top export markets in 2016 were the U.S., China and Japan.
Major imported items in 2016 consisted of machinery, equipment and parts, and electronics, computers and accessories. A large part of Vietnam’s imported capital goods is related to export assembly. China is the largest source of Vietnam’s imports, followed by Korea and Japan.

*****Vietnam, considered a key part of the maritime component of China’s ambitious OBOR Initiative, is a land full of opportunity. In particular, there has been a focus on Northern Vietnam’s Haiphong Port, with plans to complete a major facilities upgrade by the end of 2017. Haiphong is a key element along two of the proposed trade corridors. One is along a route connecting Nam Ninh, Lang Son, Hanoi and Haiphong, while the second connects Kunming, Lao Cai, Hanoi and Haiphong. “These proposals would see Vietnam playing an enhanced role in transporting goods produced in the Chinese mainland, while opening the local consumer market to external suppliers. Improved links are also expected to help develop Vietnam’s own industrial base.”
*****China’s One Belt One Road Initiative, WHAT IS BELT AND ROAD INITIATIVE?, Medium, By Markus Patrick Chan, September 9, 2017

China’s One Belt, One Road Initiative And Asia Is A Crucial Trade Route Starting Point, Part 4, Mongolia, Myanmar, Nepal, New Zealand, Philippines, and Singapore

ArmchairTechInvestor, May 30, 2018, by Brad Peery

Book Under Development-Simon and Schuster: China vs. U.S. 2018, A Police State vs. A Democracy
Book on Trump’s Political Agenda and Achievements


Below are summaries of the OBOR initiatives in the countries covered in the Asia Part 4 Region.


*“Mongolia has a land area of 600,000 square miles. The population of Mongolia was estimated at 3.06 million in 2015. According to Asian Development Bank, poverty remains widespread, with about 21.6% of the population living below the national poverty line.”

The leading economic sectors, including copper, gold, rare earth and coal mining. Some oil is produced in the south of the country. Because of the large mining sector, Mongolia is dependent on commodity prices, especially for cashmere wool and precious and industrial metals. China is the leading importer and accounted for 84% of total exports in 2015. It is reported that China is also the leading foreign investor in Mongolia.

**One of the corridors of OBOR Initiative linking China to Russia passes though Mongolia, with a plan underway to improve communication infrastructure between China and Mongolia.

Mongolia, unveiled its “steppe route” program. Planned are the construction of road links between its two neighbors and the development of the power grid. This national program must then be integrated into OBOR Initiative, as announced by the two countries several times.

“Thanks to the OBOR initiative, Mongolia hopes to reduce its dependence on extraction, diversify its economy and develop its industrial sector. Better integration into regional transport networks would enable Mongolia to increase its exports. Although the steppe route means greater integration with China. Mongolia also hopes that the new silk roads will diversify its economic partners, and attract European investors.
**Mongolia, a new link in the Belt and Road initiative, OBOReurope, April 10, 2017


Myanmar, being very small, is the seventh largest economy of the 10-member ASEAN bloc. It has a large service sector which accounts for about 46% of GDP. Industry and agriculture respectively account for 28% and 26% of GDP. Major sectors include agricultural processing, manufacturing, construction and transportation.

Myanmar’s GDP is forecast to expand by 7.7% in FY 2017/18 and 8% in FY 2018/19 on the back of improved global commodity prices and stronger demand from trading partners. Cumulative FDI into Myanmar had reached US$62.6 billion as of July 2017, with the Chinese mainland, Singapore and Hong Kong being the main sources.

***The Bangladesh-China-India-Myanmar (BCIM) OBOR Economic Corridor is the economic link connecting the Ganges River of India, the Ayerwaddy River of Myanmar, and the Mekong River of Indo-China. It is the lead bridge connecting the Pacific Ocean and the Indian Ocean. It is a market focus point for China, South and South East Asia. Therefore, building of the BCIM Economic Corridor could serve the common interests of the sub-regional countries’ economic and social development.”

The maritime route connecting Myanmar to India, is a transport loop which aims to provide maritime access of goods from Kolkata, via Myanmar’s port of Sittwe, to Paletwa by inland water transport along the Myanmar River, Kaladan, and back via highway to Mizoram in northeast India.
***”One Belt-One Road Initiative and MYANMAR” Connectivity: Synergy Issue and Potentialities, Global New Light of Myanmar, Than Zaw, March 11, 2018


*”Nepal is a landlocked Himalayan country sandwiched between China and India. It maintains close relations with the two countries, especially with regard to infrastructure investment. Its hilly topography, however, poses a significant challenge to the improvement of transportation facilities within the country.”

In September 2015, after Nepal adopted a constitution that was received angrily by India, It imposed a five-month-long trade blockade on Nepal. The blockade proved to be a turning point for China, pushing Nepal closer to its neighbor.

****“Faced with crippling shortages of fuel, cooking gas, and even medicine, the then coalition government led by nationalist communist leader Khadga Prasad Sharma Oli signed agreements with Beijing to secure sea access via Chinese ports and to import petroleum products from China, breaking India’s monopoly over Nepal’s fuel supplies and access to seaports.”
****Nepal joins China’s ‘One Belt, One Road’ initiative, possibly alarming India, South China Morning Post, October 10, 2017

New Zealand

*“New Zealand is largely a service-based economy, with its services sector accounting for almost 72% of the country’s GDP, and the industry and agriculture sectors taking up GDP shares of about 20% and 8% respectively. Major economic sectors include real estate services, professional, scientific and technical services, manufacturing and retail trade and accommodation.”

New Zealand has many free trade agreements (FTAs). It has bilateral FTAs with Australia, China, ASEAN, Singapore, Malaysia, Korea and Thailand. It is also a member of the Trans-Pacific Strategic Economic Partnership with Brunei, Chile, Singapore and New Zealand. The Trans-Pacific Partnership (TPP) Is trade deal that has not yet been approved by its members. Major pending FTAs are with Russia-Belarus-Kazakhstan, India and the EU.

*****New Zealand is wary of the Chinese objectives with regard to their OBOR Initiative, despite having signed a MOU with China. “In a statement, Foreign Affairs Minister Gerry Brownlee said Kiwi officials were still working with their Chinese counterparts on a detailed work plan, to be completed within the next 18 months. As a government, we are refining how we will engage with the Initiative. Brownlee said New Zealand’s approach to Belt and Road would ‘be consistent with our track record as an advocate for open, rules-based trading systems’.”
*****What does China’s Belt and Road mean for NZ?, Newsroom, Sam Sachdeva, July 21, 2017


*The Philippine economy is expected to have growth of 6.6% in 2017, led by strong domestic demand and a recovery in exports.

President Rodrigo Duterte remains popular after a year in office. Underlining his policy is opening the door to closer economic cooperation with China.

“Infrastructure development has become a top priority, with a list of mega infrastructure projects amounting to US$160 billion in the pipeline. Infrastructure spending is ambitiously targeted to increase from less than 2% of GDP in 2016 to 5% by 2017, then further expanding to 7% by 2019. Infrastructure investment is expected to be a major economic driver over the next few years.”

******China’s President Xi met with President Duterte in November 2017. Both sides committed to cooperate in infrastructure construction, agriculture, investment and other areas aligned with the OBOR Initiative and with the Philippines’ development strategy. The Philippines has entered into over 10 bilateral co-operation agreements with China.
******Nomura: Philippines a winner, but also most at risk, under China’s ‘Belt and Road’ By Ian Nicolas Cigaral ( – April 17, 2018


*“Singapore’s services sector contributes some 70% of the country’s GDP with the sectors of wholesale & retail trade, business services and finance & insurance being the prime drivers. The industrial sector takes up almost the remaining GDP share, as agriculture contributes to less than 1% of GDP. Construction, electronics, biomedical, petroleum and petrochemicals are the key industry sectors, while precision engineering is also gaining impetus as a driver too.”

*******The top export markets for Singapore were the Chinese mainland first, Hong Kong second, Malaysia, Indonesia and the U.S. Although, many of the trade corridors under the OBOR initiative will bypass Singapore, China’s OBOR Initiative will be a focal point in its relationship with Singapore, Prime Minister Lee Hsien Loong has said. Mr Lee said Singapore and China have identified four major areas of cooperation: infrastructure connectivity, financial connectivity, joint collaboration to help other OBOR countries, and offer of services to resolve cross-border commercial disputes. Singapore is a global financial center and one of the largest offshore yuan centers in the world.

Also, many Chinese companies use Singapore as a base of operations in the region.
*******Belt and Road Initiative a focal point for Singapore’s ties with China, The Straits Times, By Danson Cheong, April 8, 2018

China’s One Belt, One Road Initiative And Asia Is A Crucial Trade Route Starting Point, Part 5, South Korea, Sri Lanka,Tajikistan, and Thailand

ArmchairTechInvestor, May 30, 2018, by Brad Peery

Book Under Development-Simon and Schuster: China vs. U.S. 2018, A Police State vs. A Democracy
Book on Trump’s Political Agenda and Achievements


Below are summaries of the OBOR initiatives in the countries covered in the Asia Part 4 Region.

South Korea

*The South Korean economy grew by 3.1% in 2017, following a 2.9% expansion in the previous year. Korea is very dependent on trade, with total foreign trade accounting for about 80% of the country’s GDP. China was Korea’s largest export partner 2017, and accounted for about 25% of total exports. Other major export destinations were the U.S., 12%, and Vietnam 8%. Major sources of imports to Korea were China, 20%, Japan, 12% and the U.S., 11%.

**The tensions between North Korea, and South Korea and the U.S. have slowed any benefit South Korea might get from China’s OBOR Initiative. So far, China’s Initiative has focused on investments, particularly infrastructure projects, in Central and Southeast Asia, Africa, and Europe. “However, the Chinese government’s Vision and Action Plan also foresees the provision of economic opportunities to regions in Northeast Asia. Specifically, three northern Chinese provinces — Liaoning, Jilin, and Heilongjiang — are positioned to become part of a Northeast Asian economic zone that could link Russia, Mongolia, and possibly even the Korean Peninsula.”

South Korea has developed its own Eurasia Initiative (EAI). EAI is also based on economic cooperation in Eurasia through infrastructure projects, such as the trans-Korean railway, that ultimately hope to promote peace to the Korean Peninsula. By doing so, South Korea could also access train routes over the Eurasian landmass, reducing the logistics costs of its exports to Europe by up to 30%. This initiative could also benefit North Korea, should a unified Korean Peninsula come about.

The OBOR Initiative makes no mention of South Korea or North Korea. By creating new access to the Eurasian market, South Korea hopes to create an improved economy, while becoming less dependent on trade with China and the United States. At the same time, the initiative foresees possible North Korean economic integration into the region, which might trigger changes for South Korea.

***“Comparing the outlook of the two initiatives for the peninsula, it seems that they cannot coexist at this state without creating further tensions in the region. If China does not include South Korea in its initiative, but approaches North Korea for trade, then relations between Seoul and Beijing might deteriorate. Likewise, China will not be too pleased if the South pushes forward with an initiative that diminishes China’s economic grip on the peninsula.”
**One Belt, One Road, One Korea?, Together, China’s Belt and Road and South Korea’s Eurasia Initiative could help pave the path to peace on the peninsula.
The Diplomat, By Maximilian Römer, February 10, 2018

Sri Lanka

Sri Lanka’s economy is growing at about a 4.5% rate. Sri Lanka is a mid-sized country in South Asia in terms of GDP and population. The services sector is about 60% of the Sri Lankan economy. Information technology, financial services, tourism and telecommunications are the main growth engines. The industry sector accounts for about 26% of GDP.

In July 2017, the Sri Lanka Ports Authority (SLPA) and China Merchants Port Holdings (CMP) signed an agreement under which the joint venture majority-owned by the CMP, which will invest up to US$1.12 billion, will handle the commercial operations of the Chinese-built Hambantota Port on a 99-year lease, with the port expected to play a strategic role in the OBOR Initiative.
In 2016, Sri Lanka granted China the permission to build its flagship Colombo Port City under the Megapolis initiative. Huawei has also invested significantly in Sri Lanka and teamed up with the major Sri Lankan telecom operators. Sri Lanka defaulted on its Hambantota Port project, and China traded debt for equity and basically owns the project for 99 years.

Sri Lanka has abundant potential as an investment destination, especially its location in the middle of the Indian Ocean. It is adjacent to one of the busiest sea lanes in the world and in the middle of the OBOR region. Its opportunity should be leveraged carefully by policy makers. “The clumsy foreign policy misjudgments of early 2015 must be carefully rectified and left behind. While the OBOR opens up enormous possibilities, Sri Lanka is also in a position to exploit its strategic location in the centre of the rapidly expanding South Asian economies.”
***One Belt One Road – A Unique Opportunity For Sri Lanka, by Dr Palitha Kohona, February 10, 2018


*Tajikistan is the poorest country in per-capita GDP among the Central Asia countries. Surrounded by Afghanistan, China, Kyrgyzstan and Uzbekistan, Tajikistan is a landlocked mountainous country, with 90% of its country being mountainous. Tajikistan has close ties with Russia and is highly dependent on remittances coming from Russia. About half of its working-age males are working abroad, mostly in Russia. In 2014, the total volume of remittances amounted to US$3.9 billion, nearly 50% of the country’s GDP.

***“Tajikistan’s trade with China has been increasing. The value of bilateral trade increased from US$0.5 billion in 2007 to more than US$2.5 billion in 2014. Meanwhile, Chinese enterprises have been staffing more infrastructure projects in Tajikistan, including the Sahelistan Tunnel and Tajik-Uzbek Highway, as well as various resources extraction projects.”

Because of its geographical location and its isolated location, the government is focused on the development of transport infrastructure. Tajikistan has 14 bilateral and 12 multilateral agreements in place, has transport operations to 33 countries worldwide, and has a bilateral agreement on international road transport to China.

China’s OBOR Initiative opens up significant opportunities for the region’s carriers. It also gives them access to the sea. The OBOR development is also consistent with an important Tajikistan government strategic development initiative, which is to put an end to transport isolation and to transform Tajikistan into a transit country.
***Tajikistan – transport leader reveals how TIR in China will open up vast opportunities” for the region, IRU, September 5, 2017


*“Thailand is the second largest economy in the 10-nation ASEAN, following Indonesia. Service is the largest sector of the economy with a GDP share of 55%, followed by 36% in industry, with agriculture constituting 9% of GDP. Major sectors include electronics, car making, transport, storage, communication, tourism, finance and real estate.”

Thailand is a very important electronics manufacturer. The largest exports are computers and parts, automobiles and parts, machinery and equipment. The most important imports are crude oil, parts of electronics and electrical appliances, chemicals, automobiles and parts.

Thailand’s top three trading partners were China, Japan and the U.S. in the first half of 2017. Thailand is a member of ASEAN, which has an agreement with China to establish the China-ASEAN Free Trade Area (CAFTA), and over 90% of the products traded between China and Thailand are now tariff-free. In November 2015, ASEAN and China concluded an improved agreement on CAFTA that projected that bilateral trade would increase to $1,000 billion, from about $480 billion in 2014. The improved CAFTA deal also covers technological cooperation.

*****Thailand has plans to build a 540-mile railroad link to its border to connect with the Laos-China railway, which is under construction and will go to the eastern ports and industrial zones of the EEC.

Thailand said a $44 billion plan to add infrastructure and upgrade industry on its eastern seaboard can link up with China’s OBOR Initiative. The US$44 billion EEC project is planned to turn Thailand’s Eastern provinces into a trade and industry hub creating as much as 100,000 jobs a year by 2020. The majority of the jobs will be in the manufacturing and service industries.

“The EEC plan covers Rayong, Chachoengsao and Chonburi provinces. Under the project, Thailand will aim to take on Singapore’s dominance in aircraft maintenance, repair and overhaul as part of a US$5.7 billion upgrade of U-Tapao International Airport. The Thai government has given approval for a 138 mile high speed train project worth $6.25 billion to link three airports as part of the development of its eastern economic corridor (EEC).”

A high-speed China-Thailand railroad under OBOR is under construction and will be the first high-speed railway in Thailand. The railroad will connect Thailand to Laos and Kunming in China. Submarine cables will connect Bangkok with Hong Kong and mainland China. This extensive connectivity is expected to boost tourism and attract investment.
*****Thailand To Integrate The EEC With China’s One Belt One Road Initiative, The Thai government intends to connect the Eastern Economic Corridor (EEC) to China’s One Belt One Road (OBOR), Thailand Business News, By Olivier Languepin, March 2, 2018

China’s One Belt, One Road Initiative And Asia Is A Crucial Trade Route Starting Point, Part 3, Indonesia, Kazakhstan, Kyrgyzstan, Laos And Malaysia

ArmchairTechInvestor, May 29, 2018, by Brad Peery

Book Under Development-Simon and Schuster: China vs. U.S. 2018, A Police State vs. A Democracy
Book on Trump’s Political Agenda and Achievements


Below are summaries of the OBOR initiatives in the countries covered in the Asia Part 3 Region.


One Belt, One Road Network
ArmchairTechInvestor, May 27, 2018, by Brad Peery

“Indonesia is the largest economy in the 10-nation ASEAN followed by Thailand. Service and industry are Indonesia’s main economic drivers, accounting for 46% and 40% of GDP respectively, with the remaining 14% attributable to agriculture. Major sectors include manufacturing (tobacco, food and beverages, transport equipment and machinery), mining, construction, transport and communication, finance and real estate.”

Indonesia’s major trading partners include China, Japan, Singapore and the U.S.
Chinese enterprises are actively participating in Indonesian infrastructure projects. A Sino-Indonesian joint venture was formed in 2016 to build the 142km high-speed railway between Jakarta and Bandung. CAMC Engineering Company is participating in the re-development of container facilities on Batam Island, a free trade zone of Indonesia just to the south of Singapore.

Indonesia has an ambitious infrastructure building plan and President Joko Widodo in May, 2017 attended an international forum in Beijing to promote the One Belt, One Road Initiative.

****“Chinese Premier Li Keqiang has said his country wants to work closely with Indonesia to better link its Belt and Road Initiative to the South-east Asian nation’s development strategy. Xinhua news agency quoted Mr Li as saying: ‘The economies of the two countries are highly complementary and the potential for economic and trade cooperation is huge.’ He added that China attaches great importance to developing ties with Indonesia.”
****China wants closer ties with Indonesia, says Premier Li Keqiang, The Straits Times, Feb 9, 2018. Goh Sui Noi


One Belt, One Road Network
ArmchairTechInvestor, May 27, 2018, by Brad Peery

*“Kazakhstan is an important world energy supplier due to its significant reserves of oil natural gas and coal. It is estimated that proven reserves in Kazakhstan account for some 3% of world oil reserves, 1% of world gas reserves and 4% of the world coal reserve. It is also endowed with some other mineral deposits like chrome, lead, tungsten, copper, zinc, iron and gold.”

****A visit by Chinese Premier Li Keqiang led to economic deals totaling $14 billion. This was followed by China officials announcing that Kazakhstan would launch more than 20 joint projects with Chinese companies, focusing on priority sectors in the Kazakh manufacturing industry, such as mining, oil and gas, construction, chemical and light industry, and transport. “In March 2015, the two countries signed a series of cooperation agreements worth of $23.6 billion, on closer co-operations in various sectors such as railway, electricity, nuclear energy and agriculture.”

An oil-and-gas development project in Aktyubinsk region of Kazakhstan involved oil pipelines being built to allow direct oil exports to China, including the pipeline running from Kazakhstan’s Caspian shore to Xinjiang of China. Major participants in the projects include the China National Petroleum Corporation and the Kazakh oil company KazMunayGas.

****Kazakhstan needs to find alternates for growth, by diversifying and innovating, itself instead of relying solely on natural resources. The OBOR Initiative provides an opportunity for Kazakhstan to attract Chinese money and technologies, and become one of the largest transit hubs in Eurasia.
Practitioners’ perspectives, Kazakhstan and the Belt and Road, GRATA Law Firm, Shaimerden Chikanayev, April 27, 2017


One Belt, One Road Network
ArmchairTechInvestor, May 27, 2018, by Brad Peery

“Kyrgyzstan is a mountainous country located at the crossroads of Asian cultures. Its economy relies heavily on the exploitation and export of gold, mercury, natural gas and uranium, along with agricultural products such as cotton, meat, tobacco, wool and grapes,. Due to its mountainous landscape, livestock farming dominates its agricultural economy, while aluminium production represents the bulk of its industrial production. Meanwhile, the service sector, including banking and tourism, has become an increasingly important growth driver.”

Business ties are improving. Bilateral trade is also looking better, with
Russia being the largest trading partner, followed by China. “There are now more than 250 Chinese companies registered in Kyrgyzstan, including Zhongda China Petrol Company and Zijin Mining Group, and covering various industries such as mining, trading, construction, telecommunications, agriculture and metallurgy.”

At a meeting in May, 2017, the Kyrgyz President praised the OBOR Initiative. According to the head of the foreign policy department of the Kyrgyz president’s office, Aizada Subakozhoeva, Atambayev “noted the importance of expanding fiber-optic communication lines from China to Europe via Kyrgyzstan, e-commerce, and the creation of logistics centers. The project of construction of the China-Kyrgyzstan-Uzbekistan railway was noted as promising.”

Central Asia, especially Kazakhstan, may be a bridge between markets but are there benefits beyond transit fees? As Fallon pointed out in her RFE/RL interview, “China’s investment in [rail links and connectivity] could be beneficial for connecting these various economies. But some are concerned that the trains will just go through Central Asia and bring these goods to Europe and not really help Central Asian economies as much.”
*****Majlis Podcast: What Does China’s One Belt, One Road Project Mean For Central Asia?, OBORwatch, December 6, 2016
*****What’s Next for the Belt and Road in Central Asia?, Three regional presidents attended the Belt and Road Forum in Beijing last weekend. By Catherine Putz, May 17, 2017


One Belt, One Road Network
ArmchairTechInvestor, May 27, 2018, by Brad Peery

*“Laos is the only landlocked ASEAN country, bordering Myanmar, Thailand, Vietnam and Cambodia, as well as China. With GDP growth averaged about 7.7% over the past decade, Laos is one of the fastest growing economies in ASEAN. The economy of Laos is heavily reliant on the mining and hydropower sectors.”

Thailand, China and Vietnam are the largest trading partners of Laos. Laos has entered free trade agreements with China, India, Japan, Korea, Australia and New Zealand under the ASEAN agreement. Laos has signed bilateral investment agreements with 25 countries, including China, Japan, Korea and UK. It has also concluded a bilateral trade agreement with the U,S., which includes some investment requirements.

China’s OBOR railroad with Asean linking China’s border to Vientiane has started. Construction in Laos has progressed to more than 10 per cent of the project. Daochinda Siharath, deputy director of the Lao National Railway State Enterprise and deputy general manager of the Laos-China Railway Co, said that the Laos section of the China-Laos-Thailand railway is about 13.5 per cent built after construction began in January, 2017. The five-year project runs until December 2021, It has an estimated total cost of $5.9 billion. Laos owns 30% of the company while China is owns the rest. The Export-Import Bank of China is the main source of loans for the project, in which debt financing accounts for 60 per cent of the total cost.

“The Chinese government’s initial 2013 OBOR Initiative vision dared to imagine a network covering 65 countries with 4.4 billion people and aggregate economic value to $21 trillion or 29 per cent of global GDP. The Asian Development Bank estimated that to bring it to reality, Asia would need to invest about $26 trillion between 2016 and 2030 in order to maintain growth momentum. For Asean infrastructure alone, the investment would need to be about $3.2 trillion.”


*Malaysia’s economy expanded by 4.2% in 2016, slowing from 5% in 2015. The IMF expects GDP growth at around 5.4% in 2017. Major Malaysian exports include electronics and electrical products (E&E), palm oil and palm oil-based products and refined petroleum products. Major export markets include Singapore, China, the U.S., EU and Japan.”

Malaysia’s major imports were intermediate goods and capital goods, including electronics, machinery and petroleum products. The major imports came from China, Singapore, EU, Japan, and the U.S.

*****“The Belt and Road Forum (BRF) held in Beijing in May 2017, yielded a total of nine memorandums of understandings (MoUs) and agreements signed between Malaysian and Chinese companies. Among the major projects under the initiative is the Malaysia-China Kuantan Industrial Park in Pahang, Melaka Gateway, East Coast Rail Link and Xiamen University Malaysia.”

******These agreements were mostly trade based and boasted a total value of US$7.22 billion or RM31.26 billion. Prime Minister Datuk Seri Najib Razak met with his Chinese counterpart President Xi Jinping in May, 2017. “Najib said the ‘One Belt One Road Initiative’ would derive massive benefits to Malaysia in terms of excellent infrastructure, connectivity, social facilities, better living standards and abundant business opportunities.”

A digital free trade zone was set up by Alibaba Group Holding Ltd (Alibaba Group), is expected to begin at the end of 2019.

“In Malaysia the effect has also been observed as OBOR-related projects such as the Melaka Gateway deep-sea port have faced heavy criticism in regards to its necessity, contract awards and funding.”
******China’s Belt and Road: What’s in it for Malaysia? The Borneo Post, September 3, 2017, Sunday Rachel Lau

China’s One Belt, One Road Initiative And Asia Is A Crucial Trade Route Starting Point, Part 2, India Is A Problem

ArmchairTechInvestor, May 28, 2018, by Brad Peery

Book Under Development-Simon and Schuster: China vs. U.S. 2018, A Police State vs. A Democracy
Book on Trump’s Political Agenda and Achievements


Below are summaries of the OBOR initiatives in the countries covered in the Asia Part 1 Region.


*“India’s exports expanded by 9.9% year-on-year (YOY) to US$191.3 billion in the first eight months of 2017, while imports grew 27.2% YOY to US$288.8 billion in the same period. India’s major export markets included the UAE, the U.S. and Hong Kong. Major import sources were China, the UAE, Saudi Arabia, Switzerland and the U.S.”

India’s technology services sector is a very important export source. A “Make in India” initiative was launched in September 2014 to make India into a world class manufacturing hub through attracting foreign direct investment (FDI). India recorded an FDI inflow of $100 billion between October 2014 and June 2017, up 64%. As of June 2017, India’s cumulative inward FDI amounted to $342 billion. Mauritius was the largest FDI source for India, followed by Singapore and Japan Cumulative FDI from Chinese mainland amounted to $1.7 billion.

China expressed an interest in setting up economic corridors with many countries in the region, including the Bangladesh-China-India-Myanmar (BCIM) Economic Corridor, which was jointly proposed by China and India in 2013. However tensions with China have increased.

India has concluded several free trade agreements (FTAs) with countries and regions including Afghanistan, Bhutan, Ecuador, Singapore, Malaysia, Sri Lanka, Nepal, Korea, Chile, Japan, Africa, the ASEAN and the MERCOSUR (Brazil, Argentina, Uruguay and Paraguay). India also engages in the Agreement of South Asia Free Trade Area (SAFTA), and the Asia Pacific Trade Agreement (APTA). Currently, India is negotiating FTAs with Australia, Canada, Egypt, Indonesia, Israel, New Zealand, Thailand, the Gulf Cooperation Council (GCC) and the EU.

China’s promotion and financing of its OBOR initiative is creating strains with India. An increase in tensions between these regional heavyweights is not an outcome China advertises.

“A quadrilateral meeting was held between senior officials from the United States, Japan, India, and Australia on the future of a ‘free and open Indo-Pacific.’ India’s participation in the dialogue is yet another signal that China’s method of implementing the OBOR is driving a wedge between China and India and creating an opportunity for the United States to strengthen its ties with New Delhi.”

One result of China’s OBOR initiative is that the Indian Ocean part of the Initiative threatens to surround India. So far that has not occurred.

******Beijing’s handling of territorial disputes in the era of OBOR has increased tensions in the region. The OBOR vision statement claims “Principles of Peaceful Coexistence” which include a “mutual respect for each other’s sovereignty.” Contrary to this principle, China has escalated sovereignty disputes by pressing territorial claims against its neighbors.

In the South China Sea, China has challenged Vietnamese claims by moving a state-owned oil-rig into disputed waters and constructed on disputed features in the Spratly Islands:
• Airstrips suitable for military aircraft; and,
• Other military installations,

On the Doklam Plateau in 2017, China challenged Bhutan’s sovereignty by attempting to extend a road into disputed territory. This lead to a military standoff with India, Bhutan’s protector. These actions directly contradict the OBOR vision statement and send a signal to China’s neighbors that it will aggressively use its power to assert claims over disputed territories. Neighboring states are now forced to consider how China’s OBOR investments may be leveraged to strengthen its position on competing territorial claims.

China’s OBOR Initiatives are challenging India’s territorial claims in Kashmir. The China-Pakistan Economic Corridor goes through territory in Kashmir that Pakistan controls and India claims. India believes that China has abandoned its neutral stance and sided with Pakistan. “China’s failure to address Indian concerns was the initial cause of New Delhi’s reluctance to join the One Belt, One Road Initiative. China’s unilateral implementation of its vision for the OBOR Initiative over Indian objections has increased bilateral tensions.

India has additional concerns in the Indian Ocean. “China has invested in port facilities in states surrounding India including Pakistan, Myanmar and Sri Lanka. Investment in these ports has given rise to the “string of pearls” theory which speculates that China will leverage these facilities for military use. When viewed on a map, these maritime investments represent the encirclement of India at sea. The Chinese docked attack submarines at a Chinese-constructed port in Sri Lanka. This indicates a militarization of these OBOR-related investments in India’s island neighbor. Naval encirclement is a significant security concern, as India depends upon sea transport for about 90 percent of its international trade.

“India is also concerned about shifting regional security alignments because of Chinese investments in its land and sea neighbors. Indian Foreign Secretary Jaishankar commented on New Delhi’s concerns about the potential consequences of the OBOR in March 2016: The interactive dynamic between strategic interests and connectivity initiatives … is on particular display in our continent… We cannot be impervious to the reality that others may see connectivity as an exercise in hardwiring that influences choices” they make.

India pundits have expressed concerns that countries such as Sri Lanka will get trapped in debt and servitude to China, as they did. Sri Lanka’s debt default resulted in China getting control of a deep-water port at Hambantota for 99 years in a debt for equity swap. In this exchange, the PRC gained a potential “pearl” to add to its string. Sri Lanka has actually renewed ties with India due to concerns about undue Chinese influence stemming from its debt. “If future trends align with the projections of OBOR critics, the PRC could parlay economic investment into puppet states that encircle India on land and sea. Unfortunately, if other potential puppet states turn toward India instead, it could still result in increased tensions as Chinese debtors become more entangled with India.”

India signed a bilateral logistics exchange memorandum of agreement (LEMOA) with the United States in 2016, which granted reciprocal logistics access to military bases. With Japan, India has increased security cooperation by selecting Japan as a permanent participant in the traditionally U.S.-Indian Malabar security exercise in 2015. These actions signal an active effort by New Delhi to address its security concerns with China by keeping friendly military powers engaged in the region.

India has also sought to increase its economic relationships with democratic regional powers to promote its own vision for connectivity development. Indian Prime Minister Modi has unveiled the Asia-Africa Growth Corridor (AAGC), a connectivity initiative conceived by India and Japan and seen as a potential counter to the OBOR Initiative. “If India chooses deepened cooperation with democratic powers in the wake of the initial “quad” meeting, it will be another sign of the ever-increasing tensions between New Delhi and Beijing due to the OBOR. More troubling, the ‘quad’ meeting portends a trend toward military and economic polarization in Asia.”
******China’s Belt and Road Initiative Is Stoking Tensions with India, The National Interest, Mitchell J. Hays, November 16, 2017

China’s One Belt, One Road Initiative And Asia Is A Crucial Trade Route Starting Point, Part 1, Azerbaijan, Bangladesh, Bhutan, Brunei and Cambodia

ArmchairTechInvestor, May 28, 2018, by Brad Peery

Book Under Development-Simon and Schuster: China vs. U.S. 2018, A Police State vs. A Democracy
Book on Trump’s Political Agenda and Achievements


Below are summaries of the OBOR initiatives in the countries covered in the Asia Part 1 Region.


*”Azerbaijan is one of the most convenient routes from Northeast Europe to Central Asia and the Middle East. Situated on the shores of the Caspian Sea in Southwestern Asia, it shares borders with Russia, Georgia, Armenia, Turkey and Iran. It has the biggest port on the Caspian Sea (Baku International Sea Trade Port), Azerbaijan is a logistics hub for the Caspian region”.
*The Belt and Road Initiative: Country Profiles, Hong Kong Trade Development Council, May 17, 2018

**Azerbaijan is ideally situated to be an important part of China’s OBOR Initiative. It has a modern port at Baku and is an ideal partner for a land route through the North that goes through Barda its capital in the old days. The shortest way to approach West Asia from China is via Baku, the current capital of Azerbaijan. China is the manufacturer of the world’s fastest and most luxurious trains. A railroad track is already operational from Aktau and Turkmenbashi, transporting goods to the New Baku International Sea Trade Port and then westward to Turkey and Europe.

Barda, about 150 miles west of Baku, was a trading hub on the ancient overland Silk Road. The China-Central Asia-West Asia Economic Corridor is a land-based substitute for these two traditional routes.

“Azerbaijan is an ideal partner for construction of the Belt for three reasons:
• The Azerbaijan-located Caspian rim area is becoming a new joint zone of East Asian, European and Russian economic interest;
• Azerbaijan is the forerunner in the rejuvenation of the ancient Silk Road in terms of re-development multiple large-scale transnational transport systems; and
• Azerbaijan bears similarities with China, which contribute to mutually beneficial cooperation.”

Azerbaijan and China need to identify specific areas of cooperation.
**Azerbaijan forms a key link in the Silk Road chain, By Malik Ayub Sumbal, China Daily Europe January 20, 2017

***“Azerbaijan is a major supporter of the Transport Corridor Europe-Caucasus-Asia project, initiated by the EU and considered the backbone of the Silk Road.
The Baku-Tbilisi-Kars railway has been dubbed the Iron Silk Road.

China has initiated the Silk Road Fund, for which the Asian Infrastructure Investment Bank will allocate very large sums for the construction of these international corridors. “According to estimates, the trans-Caspian route could be transporting around 300,000-400,000 containers by 2020, bringing in hundreds of millions of dollars.”
***Relations between China and Azerbaijan are growing fast and Azerbaijan has great potential to become a valuable partner in the Silk Road project – one of the great initiatives of the 21th century.
Malik Ayub Sumbal is the Editor in Chief of Eurasia Media Network and The Caspian Times., China Daily European Weekly, January 20, 2017


1. *“Bangladesh is the third most-populated country in South Asia (after India and Pakistan). It shares borders with India to the north, west and east, and overlooks the Bay of Bengal to the south. It has two existing major ports, the Port of Chittagong and the Port of Payra, but should be converted to a deep sea port by 2025.

****“China intends to set up an economic corridors in alliance with other countries – with one covering Bangladesh, India and Myanmar (i.e. the BCIM Economic Corridor). The Corridor will link India’s Kolkata with China’s Kunming, with Myanmar’s Mandalay and Bangladesh’s Dhaka among the key points.” The Port of Dhaka is a major river port on the Buriganga River. The Chinese government has pledged to finance multi-billion infrastructure projects in Bangladesh.

Bangladesh and China have formed a joint venture, Bangladesh-China Power Company Limited, to invest US$1.56 billion to build a coal-fired electricity plant near the proposed sea port south of Dhaka.

During Chinese President Xi Jinping’s visit to Bangladesh in October 2016, the first of its kind in 30 years, he elevated the two countries’ partnership to the strategic level and committed to fully integrating Bangladesh into the OBOR Initiative.
****Xi Jinping’s infrastructure initiative will help power-starved South Asian nation fire up more manufacturing capacity, South China Morning Post, April 10, 2017, Sidney Leng


*”Bhutan, with the smallest population in South Asia, is a small, landlocked Himalayan kingdom set in between China to the north and India to the south. Bhutan has forged a close relationship with India, with its robust GDP growth driven primarily by selling hydropower to India in recent years. Indeed, about 90% of Bhutan’s exports go to India, which mainly composed of hydropower and base metals. As to imports, about 80% are sourced from India, including fuel and machinery. Other import sources include France, Japan, Singapore and China.

Bhutan has a weak relationship with China, and is being bypassed by China’s OBOR Initiative.


Brunei is located on the north coast of the island of Borneo, facing the South China Sea and surrounded by East Malaysia. Its economy is heavily resource-dependent, with the oil and gas sector accounting for some 60% of GDP and more than 90% of its export and fiscal receipts. Despite having the smallest population in ASEAN, Brunei’s per-capita income is the second highest in ASEAN after Singapore.

Brunei is a member of the ASEAN Economic Community (AEC), Brunei has entered free trade agreements (FTAs) with China, Korea, India, Australia and New Zealand under the ASEAN context. A bilateral FTA with Japan was also entered into. Also, Brunei has participated in the negotiation of the Regional Comprehensive Economic Partnership (RCEP), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

On a tiny island of Muara Besar, off Brunei’s northern tip on the South China Sea, thousands of Chinese workers are building a refinery and petrochemical complex, along with a bridge connecting it to the capital, Bandar Seri Begawan. It is a $3.4 billion complex, and is run by China’s Hengyi Group. When completed, it will be Brunei’s largest-ever foreign investment project, and comes at a time when the oil-dependent country badly needs it. The Muara Besar project is expected to provide over 10,000 jobs, but claims that thousands of Chinese workers have been shipped in to build the complex has angered some local residents.

“Brunei is an important country along the 21st century Maritime Silk Road,” China’s Ambassador to Brunei Yang Jian said at the opening ceremony in February 2017 for a joint venture, running Brunei’s largest container terminal.
*****As Western banks leave, China adds Brunei to new silk road, Reuters, By Praveen Menon, March 4, 2018


*Cambodia is part of the China-ASEAN Free Trade Area (CAFTA).
Foreign direct investment in Cambodia reached US$16.7 billion in 2016, with projects mainly in the sectors of banking and finance, manufacturing, real estate, agriculture, tourism, energy, transport and telecom.

*****“Cambodia has been an enthusiastic supporter of China’s Belt and Road Initiative (BRI) and has made significant in-roads linking its own development to Chinese expansion; however, with the influx of Chinese capital, Cambodia will find itself drawn further into the sphere of China’s economic and strategic influence.”

Cambodia has become an attractive country for Chinese foreign direct investment. It offers political stability, low labor costs, easy market access, and a strategic location in Southeast Asia that have all led to a very large increase in Chinese money.

“During Xi Jinping’s 2016 visit, China signed 31 economic agreements, including $237 million in soft loan deals with Cambodia. Xi also pledged to push for Chinese investment in Cambodian infrastructure and cancelled roughly $89 million in Cambodian debt.”

Despite having a rapidly growing economy, Cambodia has infrastructure problems that include:
• Electricity;
• Rural road transport; and,
• Water sanitation.

With few other financial alternatives sizeable enough to cover Cambodia’s infrastructure needs, the promise of a large, no-strings-attached loan makes China’s OBOR proposal difficult to resist.

“Participation in the OBOR Initiative, brings with it access to the enormous infrastructure funding of Chinese-led financial institutions, such as the Asian Infrastructure Investment Bank, the Export-Import Bank of China, the China Development Bank, and the Silk Road Fund.”

China is the largest foreign investor in Cambodia’s energy sector, with more than $7.5 billion of total investments in hydropower plants. Cambodia and China have agreed on several hydropower dam projects. Kemchay Dam was constructed with Chinese assistance and possesses an electrical capacity of 194 megawatts, enough to cover a very large area of the country.

“The biggest hydropower dam, Lower Sesan II Hydropower Plant, will generate up to 400 megawatts per hour once operational, providing enough power to radically transform Cambodia’s energy infrastructure.”

China also offers developmental assistance on Cambodia’s transportation infrastructure, including bridges, highways, railways, and ports.

China has also helped Cambodia to upgrade its deep water Sihanouk Autonomous Port, which could contribute to expand China’s growing influence and expansion in the Indian Ocean.

The Chinese investments involve economic and strategic risk to Cambodia. With an increasing number of plants to generate electricity, Some of China’s projects do not meet international standards, which has resulted in adverse impacts on local livelihoods and the ecosystem.

“Nearly 5,000 families are likely to be evicted from their villages when the dam’s reservoir fills, and the dam may block key fish migration routes, which would threaten loss of most of the fisheries resource that many people depend on. Deals between China and Cambodia have met with additional criticism over major land concessions, the disregard of human rights, and the extent of control over Cambodian development given to Chinese contractors.”

China is Cambodia’s largest creditor. As their debt grows, it may increase beyond their ability to pay it, and Cambodia may find itself in a similar scenario to Sri Lanka in which state property is used as equity to pay their Chinese creditors.

The China relationship may have the following negative effects:
• Lock this small state securely under China’s growing strategic sphere of influence;
• Cause Cambodian foreign policy to prioritize short-term benefits in a way that privileges Chinese political and diplomatic interests at the expense of ASEAN counterparts and other regional powers;
• Prejudice negatively Cambodia and their partners territorial claims on the South China Sea; and
• Cause concerns that China’s growing political and economic leverage over Cambodia will bring a future of Cambodian foreign policy as no more than an extension of Chinese regional influence.
*****Money talks: China’s belt and road initiative in Cambodia, Global Risk Insights, by Qi Lin, January 7, 2018