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ANU Australian Centre on China in the World presents

The financial origins of the ‘One Belt One Road’ initiative

Public seminar


9th June 2016


Seminar Room A, China in the World Building 188, Fellows Lane, ANU


David Murphy, PhD candidate, Australian Centre on China in the World, ANU



It has been two and a half years since we first heard of the One Belt One Road (OBOR) initiative. At first it presented as a set of vague aspirations tacked together out of two speeches President Xi Jinping delivered in September and October 2013. In the first he spoke of a ‘Silk Road Economic Belt’—his blessing of road and rail construction along a route roughly hewing to the ancient trade route connecting China and Europe through Central Asia. In the second he proposed an equivalent ‘Maritime Silk Road’ to link China’s eastern ports to Europe via Southeast Asia, around the Indian subcontinent, doubling back around the Bay of Bengal then across the Indian Ocean, grazing the east coast of Africa then straight up through the Suez Canal. Since then, Beijing’s continued elaboration of OBOR suggests the country’s leaders remain confident that the lessons of China’s unique experience of development can be applied on a wider stage than previously imagined.

OBOR as a policy statement and as a concept can and should be approached from many perspectives. Much of the analysis since its first announcement has understood OBOR as a function of industry policy, characterising it as a means to export China’s excess capacity in industries concerned with infrastructure construction as China’s economy slows and rebalances. At the same time, the breadth of its ambition has prompted strategic analysis of OBOR, framing it as an attempt to reshape the geopolitics of the regions it embraces. Both approaches are essential to our understanding of changes in the economic and strategic balances of power in the world.

Here, however, I argue that OBOR needs to be understood first as a financial concept. OBOR is fundamentally a pan-continental infrastructure plan. As such its impact will depend on its scale, which depends on who funds it and how.

I discuss how OBOR can be understood as a culmination of two trends in finance—first, the global shift in financial power from the developed to the developing world; and second, the evolution of a distinctive Chinese concept of development finance. Looking at OBOR through the prism of these two important trends can contribute to the broader discussion about how China’s leadership is managing the transition from important economic player to superpower with systemic significance.

About the speaker

David Murphy is a PhD candidate at the Australian Centre on China in the World at The Australian National University. His research focusses on debate within China on the development of its international trade and investment policies.

He has worked in both Australia and China in consulting and advisory firms specialising in trade policy analysis and advocacy, including China Policy in Beijing. He is an alumnus of the University of Melbourne and the Inter-University Program of Tsinghua University, Beijing.

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