Twelfth Global Studies Conference

Abstract

After decades of isolation from outer world, China has risen to the front and is now the dominant power in the world. The world, naïvely, had assumed that long run isolation and their political beliefs will have long term, negative impacts on economic and social aspects of China. Chinese President Xi Jinping announced the “One Belt, One Road (OBOR)” initiative in 2015, as a regional and global strategy which targets relatively large investment in infrastructure with the objective of economic growth of many nations. Involving sixty-eight nations from Asia, Europe, Africa, and Americas, OBOR’s plan is to have massive investment in road and sea-trade connectivity and other infrastructure projects in the signatories’ nations of OBOR. China’s ambitious plan with large amounts of money has reciprocal impacts for both parties. Receivers have to balance the repayments against the risk of collapse of their economy due to huge debt. Continuation of lending can shake the economy of lender too. China’s aim to be a major power and to gain respect in world led them to aggressively implement the OBOR that is not without its risks and impacts. This paper analyzes the motives and perspectives of China in the OBOR, explore the debt / investment conundrum and the politics behind it. The author conducted a literature review, interviews, scrutinized the current trends. The study concludes by providing a synopsis on whether OBOR is debt trap or a possible way of sustainable development through loans, with examples and trends.