China’s One Belt, One Road Initiative

Chinese President Xi Jinping attends a news conference at the end of the Belt and Road Forum in Beijing, China May 15, 2017. REUTERS/Jason Lee
Updated 10 December 2017
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China’s One Belt, One Road Initiative

LONDON: China is seeking to re-build an ancient network of land and ocean silk trade routes between Asia and Europe to help to increase trade and improve transport logistics.
The project involves many roads, railways, ports and maritime routes. The land-based projects are the belt. The road is the maritime routes that will connect up China’s southern provinces to south-east Asia and the east coast of Africa with ports and railways.
The project has already signed off on $1.3 trillion worth of projects, including major infrastructure works in Africa and Central Asia. It will involve 65 countries with a total population reach of 4.4 billion with a share of the global economy of more than 30 percent. It is said to be more than seven times larger than America’s Marshall Plan to rebuild Europe after the World War II.
China believes emerging markets in its neighborhood will be more willing to accept Chinese-made high-speed rail, energy generators and telecommunications equipment if it is instrumental in building mega infrastructure projects.
Pakistan, for instance, badly needs a proper power network as electricity outages are common for many hours of the day. An additional theory is that China wants to make the renminbi the main trade and investment currency as part of a bid to replace the dollar.
During a recent summit in Beijing, China’s President Xi Jinping said trade was the important engine of economic development, and he tried to reassure Western diplomats that the plan was not simply an attempt to promote Chinese influence globally.
“In advancing the Belt and Road, we will not re-tread the old path of games between foes. Instead we will build an open platform of co-operation and uphold and grow an open world economy,” Xi told delegates at the conference.


‘Huge increase’ in crude prices not expected: IEA executive director

Updated 19 July 2019
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‘Huge increase’ in crude prices not expected: IEA executive director

  • The International Energy Agency is revising its 2019 global oil demand growth forecast down to 1.1 million barrels per day
  • IEA’s Fatih Birol: Serious political tensions could impact market dynamics

NEW DELHI: The International Energy Agency (IEA) doesn’t expect oil prices to rise significantly because demand is slowing and there is a glut in global crude markets, its executive director said on Friday.
“Prices are determined by the markets ... If we see the market today, we see that the demand is slowing down considerably,” said IEA’s Fatih Birol, in public comments made during a two-day energy conference in New Delhi.
The IEA is revising its 2019 global oil demand growth forecast down to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, Birol told Reuters in an interview on Thursday.
Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd. But in June this year it cut the growth forecast to 1.2 million bpd.
“Substantial amount of oil is coming from the United States, about 1.8 million barrels per day, plus oil from Iraq, Brazil and Libya,” Birol said.
Under normal circumstances, he said, he doesn’t expect a “huge increase” in crude oil prices. But Birol warned serious political tensions could yet impact market dynamics.
Crude oil prices rose nearly 2 percent on Friday after a US Navy ship destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows.
Referring to India, Birol stressed the country could cut its imports, amid rising oil demand in the country, by increasing domestic local oil and gas production.
Prime Minister Narendra Modi had set a target in 2015 to cut India’s dependence on oil imports to two-thirds of consumption by 2022, and half by 2030. But rising demand and low domestic production have pushed imports to 84 percent of total needs in the last five years, government data shows.
Meanwhile, the IEA doesn’t expect a global push toward environmentally friendly electric vehicles can dent crude demand significantly, Birol said, as the main driver of crude demand globally has been petrochemicals, not cars.
He said the impact of a serious electric vehicle adoption push by the Indian government would not be felt immediately.