The answer is to understand how biased are the pro-China rhetoric? Then you will be able to understand and see for yourself whether China really have a free-wheel in this matter!
HSBC said China’s introduction of stricter capital outflow controls has raised concerns, but there should be little impact in the long term and the Belt and Road Initiative will be a key catalyst to accelerate China’s outbound investment flows.
To explain why that is so, the bank said with the depreciating value of the Chinese currency the renminbi, which depreciated 6 per cent against the US dollar resulting in a drop in China’s foreign exchange reserves, Beijing had to impose capital control.
The dilemma now is that while the capital controls may ease depreciation pressures on the renminbi, they have also curbed the overall volume of outbound acquisitions and investments.
Then the bank says it is a targeted solution and it is a short term one.
But they forgot to mention that it also targeted the expatriation of funds by property developers – like it is the case with the Garden Country Home company with its massive billion dollars project in Johor’s Forest City.
The project, so far, is kaput unless the Arabs from the Dubai-Saudi Arabia axis buys into it.
So it is not just the One Belt One Road that is affected then.
That clearly shows China does not have the clout yet to push for the OBOR or BRI that is the Belt and Road Initiative – a project that it wants to use to gain global influence in trade and geopolitics.
Thus, we can conclude that the BRI is an attempt by China to bring in a new round of opportunities for China and that is targeting the infrastructure construction – building roads, railways, bridges and ports across the Asia region.
To be successful, this initiative cannot have opponents working against it.
Well, India is one such opponent and it is scrambling to prevent the Chinese initiative to go fully global.
For the Indians, their counter activities start in East Africa.
There, Delhi and Tokyo are planning to fund infrastructure and capacity building projects.
And it also involves Iran with Japan expected to join India into the expansion of Iran’s Chabahar port and the adjoining special economic zone.
It does not end there.
India’s own OBOR reaches out to the eastern Sri Lankan region, where together with Japan they are expected to jointly expand the strategically located Trincomalee port.
They are also likely to join hands to develop Dawei port along the Thai-Myanmar border.
And this is not discussed in Southeast Asian newspapers or forums.
Yet those promoting the Chinese OBOR that desperately cannot ignore the fact that is more reasons now to believe the Chinese initiative is not really an all-go-ahead since China itself is seeking investment from ‘stakeholders’.
HSBC itself agrees that the OBOR or BRI does not have sufficient momentum to go ahead as it depends on what China is doing with its foreign direct investment which is in turn affected by domestic policies and curbs on funds outflow!
And with India’s reluctance to join the Chinese initiative, it is a massive roadblock indeed.
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