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[av_heading heading=’What is the OROB? (Part 2)’ tag=’h3′ style=’blockquote modern-quote’ size=” subheading_active=’subheading_below’ subheading_size=’15’ padding=’10’ color=” custom_font=”]
BY JED JALECO DEL ROSARIO
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Sunday, June 4, 2017
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LAST week, we discussed the economic dimensions of the OROB, and how it serves as a safety valve for China’s investment-reliant growth model. This week’s piece focuses on the political side of the OROB, and how it serves China’s political and security interests.
On the political level, the One Road, One Belt or OROB initiative can be thought of as China’s attempt at creating its own Bretton Woods (a comparison that many in China strongly reject). Some analysts believe that by using their current economic power to invest and tie together the countries participating in the OROB, the People’s Republic of China (PRC) will be able to create its own power bloc to rival that of the United States, and thus secure its own status as a world power.
The trouble with the OROB/Bretton Woods comparison is that the latter came to fruition under very specific circumstances, namely after the end of World War II. With the Soviet Union poised to take over the shattered ruins of Asia and Europe, the United States implemented Bretton Woods to contain the Soviet Union.
In contrast, China’s OROB program is driven, not by the need for reconstruction after a cataclysmic global war, but by China’s need to secure its own supply chains and trading networks. Thus, the comparison with Bretton Woods is flawed.
However, this doesn’t mean that China’s political ambitions behind the OROB are flawed either. Of course PRC wants to expand and secure its sphere of influence. This is necessary due to China’s growth model, which relies on heavy investment and trade surpluses.
Moreover, China must also secure its access to oil and raw materials not only against the United States but also against its own ally Russia and perhaps even Japan, India and the Koreas. Therefore, when seen through the lens of security concerns, the OROB is more than just a trading bloc. It’s also a way for China to keep the raw materials coming in and the finished products to keep flowing out, because without the flow of trade, the Chinese economy could face very dire problems.
Now, whether or not the OROB will secure PRC’s major strategic and security objectives only time will tell. What we can say for certain, though, is that the OROB is very important for China’s long-term foreign interests, and should it fail for whatever reason then the PRC may be forced to adopt a more isolationist or regionalist strategy as an alternative to the more internationalist stance that they have now.
The final question is where does the Philippines fit in all of these? The answer – I believe – is that it is of marginal interest for our country. Yes, the OROB is a major undertaking but as I have mentioned last week, there is also an element of desperation with the whole thing in the sense that China is using the OROB to sustain their faltering economy. So it’s probably best to adopt the mentality of a skeptical investor with regards to the OROB.
Also, as an archipelagic nation situated between Asia and the Pacific, our trading and economic interests lie in bridging Asia with North and South America. In contrast, China’s OROB is meant to secure the trade routes between Europe, Africa and Asia. Draw your own conclusions./PN
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