One give a clear image of the financial

     One Belt One Road:  The Role of Hong Kong as Super Connector

 

This paper would give a clear image of the financial
mechanisms of Hong Kong in One Belt One Road and how Hong Kong would acts as a
super connector and will play a central role in OBOR.

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This paper is divided into three phases, the first phase of
this paper would give complete introduction of OBOR so that before going
further the reader can get the complete picture of OBOR, second phase of this
paper consists the role of Hong Kong in OBOR and the last phase would give the
future prospects of this Project.

 

One Belt One Road (OBOR): Introduction

Belt and road is divided into two routes: Silk Road
Economic Belt (overland) and Maritime Silk Road (sea), also known
as one
belt one road (OBOR) is a planned road proposition propounded by the Prime Minister of China,
Xi Jinping in 2013 September.

This is the proposed route of OBOR,
the connectivity
and corporation of people’s republic of China with Eurasia, Middle East ,
Africa through the
landlocked Central Asia ( Kazakhstan , Uzbekistan and many more)
and south east Asia nations.

 

XI’AN is the
most important
city because the one road one belt will originate from here, which will connect the
China-Europe via Kazakhstan, Turkmenistan, Russia, Turkey etc. through
Silk Road Economic Belt. And the other route is 21st Century Maritime Silk Road which
prospects to connect China with Europe via South China Sea, suit canal, Bay
of Bengal and  Arabian Sea . The
remarkable
project tends to include 50 to 60 countries.

 

The latter pic is similar to former one but with more details.
It’s conspicuous that blue line is the sea route , black line indicate the road
infrastructure , red and green betoken gas and oil pipelines respectively .

 

This big picture of OBOR have the
following routes:

•Highways and Expressways – It target to
connect the inimical terrains of Central Asia like Karakoram, Himalayas etc.

•Overland Rail routes -This
is done to fasten the import and export, that too on a comparatively cheaper way.

•Ports – China
on its own making ports in various places like Gwadar port, Chittagong
and Hambantota port etc.

•Gas pipeline -The Central Asia is inundated
with gas and China is eying on it by making pipelines, so that
China and other countries can get gas.

• Other infrastructure – They’re
innumerable infrastructure project yet to be unveiled which aim to connect.

 

This is another image with lots of information. You will see a
dotted black line that represents the railway track, one line which is going to
connect Kazak, Uzbek, turkey, Spain, Warsaw, Moscow and Germany the other one
would  connects Myanmar and Bangladesh.
You can see the green line which denotes the pipeline which is connecting
Russia to Europe, Myanmar – Bangladesh. Secondly, Ports are being constructed
or undergirded by China in Gwadar (Pakistan), (Myanmar) and Chittagong (Bangladesh)
,this is all done to burgeon 21st century maritime silk route .

 

OFFICIAL AIM OF CHINA

• Historical
Heritage – China wanted to rejuvenate their ancient silk route.

• Cultural rejuvenation – This would increase the
import- export of cultural goods. People to people talk will be commonplace then.

• Standardized and
linked trade facilities – This means that there would be Standardized
rail and ship routes. For example train tracks in China broad gauze one and in
Kazakhstan its meter gauze, so do you think China can go to Russia through Kazakhstan?
No. This is why there will be a Standardized and linked trade facilities.

• Financial
integration – China is trying to replicate what’s in Europe:
European Union.

 

Overall the OBOR is the largest project in
the world in terms of not one geographical boundaries but also in terms of
investment, so the next part of this paper will describe the role of Hong Kong
in financing of this project.

As far financial centers are concerned in
Asia, Hong
Kong is the biggest financial center, according to the latest Global
Financial Centres Index (GFCI).

 The success of the OBOR initiative will not be an individual effort for
China, it needs a healthy supporting partnerships from participating countries.
Hong Kong’s strengths in finance, logistics, and trade and market
infrastructure allow it to play a critical role to give this initiative a way
to initiate. OBOR initiative recipients, it will support infrastructure project
development and additional local financing, which in turn will help regional
debt market development. As an integral part of China, Hong Kong is completely capable of
becoming the leading multichannel financing hub, from arranging debt financing
to private equity investment, as well as serving as a connector for mainland
enterprises to reach the global market. As one of the premier corporate
treasury center in Asia, Hong Kong also has a unique competitive advantage to
be the treasury center for the AIIB and businesses. Compared with other major
financial center, the city has proximity to the headquarters of the AIIB and
other project sites, a strong forex deposit base and trading, efficient money
market and cross-border payment systems, and low corporate tax rates

As far as
renminbi payments are concerned, Hong Kong is the main leading player to deal
with it including payments and liquidity options. Du to continuous improvement
of offshore renminbi infrastructure in Hong Kong, it will help attract global
investors trading debt in Hong Kong. Hong Kong is currently the world’s largest
center for initial public dealings. As terms of Market Capitalization, more
than half of the city’s stock exchange is accounted by its domestic mainland
companies. More Besides, Hong Kong has a strong position regionally in project
management for infrastructure construction. It is equipped with a rich pool of
top professionals in risk management, project insurance, and technical and
legal advice essential resources for managing and financing
infrastructure-related projects. OBOR initiatives aim to change the political and economic portrait of China and the
world. Hong Kong is well placed to finance its strengths to provide financing
support, treasury services, and serve as a springboard for mainland enterprises
to reach the global market. In return, grabbing this opportunity could
potentially change the center of gravity of Hong Kong’s economic growth in the
coming years.

In conclusion,
there are several unanswered question lies behind in which the biggest one is
the investment in Asian financial markets by the world is the mute point. Do
Asian emerging economies have such amount comparative cost advantage? These all
are up in the air. Of course, OBOR is an important factor here because it tries
to link a lot of Asia together and without any doubt China is the biggest
economy in the world and for OBOR, Hong Kong is playing is playing as a
dealmaker for the project. Hong Kong as an open city have a vast of capacity in
terms of finance and it is one of the biggest financial center for the world
because of its unique features like simple tax system, Project Management and geographical
location but we should not say that OBOR is the result of an individual efforts
rather it is the project of collective investment, collective efforts and
collective financing.