Question

How will China's one belt one road expand their economy? And how will it compete with the different types of intermodal?

Answer 1

The One Belt One Road (OBOR), Chinese President Xi Jinping's brainchild, is an ambitious project focused on improving connectivity and collaboration between multiple countries across Asia, Africa, and Europe. Dubbed by the Chinese authorities as the "Plan of the Millennium," OBOR covers some 78 countries.

OBOR is of prime importance to China as it seeks to improve its domestic development as well as being part of the economic diplomacy policy of the state. China aims to bump up economic activity by linking less-developed border regions such as Xinjiang with neighboring nations. It is expected that OBOR will open up and create new Chinese products markets.

While China continues to pitch OBOR as an all-inclusive regional development project, it is perceived by other nations as a strategic move by the Asian powerhouse to gain regional significance and control and play a greater role at global level by building and controlling a trading network focused on China.

To be efficient, a transcontinental intermodal rail corridor must receive continuous capital investment and maintenance to increase the length, speed and heaviness of trains. If investment is spread across too many corridors, it is unlikely to achieve any of the operational efficiency goals. For example, in the United States, the Burlington Northern Santa Fe (BNSF) is almost completed with a decade-long effort to complete the double tracking of its primary transcontinental southern corridor to increase cargo capacity and minimize transit time between Los Angeles and Chicago.

To combat this impact, China needs to highlight the potential benefits for Asia-Europe trains even for countries that are not sitting along the tube. Countries that do not engage directly in the Belt and Road, for example, can still benefit by increasing import costs if the path turns Eurasia from a dark market hole into a major trade conduit.