One Belt One Road To Strengthen Cross Border Between China and Southeast Asia

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One Belt One Road

Map of One Belt One Road. Source: Chinainvestmentresearch.org

HSBC’s Asia Pacific Chief Executive, Peter WongTung-shun has stated that the ‘One Belt One Road’ trade initiative will require the banking sector in the region to raise up to US$6 trillion of funding over the next 15 years. This is because no single government is able to raise a large sum of money without help from the banking sector.

The ‘One Belt One Road’ project was announced in Beijing in 2013, and aims to establish linkage between mainland China to India, the Middle East and Southeast Asia to promote cross-border trade.

The project leads have already visited Thailand and Malaysia in May to explore opportunities, and plans to visit Indonesia and Singapore next month to analyze the market potential there. The aim of the project is to serve governments, international firms and SMEs and boost logistics for these businesses. The new infrastructure should also provide trade linkages between the countries, which could then lead to the internationalization of the yuan currency.

One Belt One Road Ecommerce Potential

Alibaba founder, Jack Ma has expressed his interest in following the One Belt One Road initiative announcing that the most important regions for his company were countries involved. This aligns with Ma’s aspirations for SMEs to have access to global markets, but are held back by complex regulations, poor global access and lack of access to financing.

The potential for an inter-connected e-road will boost SMEs and potentially fix one of Southeast Asia’s biggest ecommerce bottlenecks; logistics and infrastructure weaknesses. Countries in the One Belt One Road path have large populations, but they are not utilizing their trade potential, and Ma has slowly been penetrating needy markets such as Thailand, investing in online payments and acquiring Lazada. If One Belt One Road receives the funding it requires to fully enable trade along the regions, then it could create even more opportunities for The Alibaba Group, ultimately enabling ecommerce as a whole.

A version of this appeared in South China Morning Post on June 19. Read the full article here.