One Belt, One Road—Implications for Connectivity and Regional Trade, Forecast to 2030

One Belt, One Road—Implications for Connectivity and Regional Trade, Forecast to 2030

Emergence of Lucrative Trade Corridors Laying Foundation for a Network of Intercontinental Multimodal Logistics

RELEASE DATE
04-Oct-2018
REGION
Europe
Research Code: PA39-01-00-00-00
SKU: TP00184-EU-MR_22417

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Description

Lack of seamless connectivity and poor infrastructure remain the major challenges for trade and logistics in many countries in the Eurasian region. China’s One Belt One Road (OBOR) initiative is expected to improve connectivity by inter-linking the transport infrastructure across East Asia, Southeast Asia, South Asia, Central Asia, Middle East, East Africa and European countries. It will help China to overcome some of the problems associated with its domestic economy such as a decline in export competitiveness due to increasing labor cost and excess capacity. Further, it will lead to improved connectivity to support the international expansion of domestic companies of the major trading partners along OBOR.

Developments of projects relating to OBOR are likely to be undertaken in phased manner at different time periods due to financial constraints, local administrative hurdles, pending clearances from government agencies, and, in some cases, public unrest due to a lack of transparency in funding allocation – i.e., absence of international standards on transparency, the rule of law, and adequate financing for projects. Macroeconomic stability, long-term impact on employment, industrial growth, infrastructure finance, and the capacity to service debt funds secured from international and infrastructure development institutions of participating OBOR countries are some of the key factors likely to determine the success of this massive exercise. Clarity relating to dispute handling mechanisms concerning OBOR related projects is expected to remain an important factor in determining the success of the projects. To this end, an international commercial court is being set up in Beijing to resolve any project related disputes.

Research Scope

The aim of this insight is to research and analyze the key developments relating to the China's One Belt, One Road initiative and assess the likely implications to the economy, trade, freight transportation, and warehousing sectors across Asia, Middle East, Africa, and Europe.


Research Highlights

This study specifically focuses on the development of economic corridors relating to BRI with  focus on improving connectivity with Europe, Central Asia, Middle East and East Africa, South Asia and Southeast Asia. Current and expected growth trends in trade are analyzed to evaluate potential implications for cross-border trade, connectivity, multimodal logistics, and the overall trade growth. New trade routes along the OBOR would enhance multimodal transportation across Asia, Middle East, Africa, Central Asia, and Europe, resulting in estimated trade volumes with China to around $3 Trillion by 2030.

Some of the key findings of the study include the following:

  • Infrastructure developments across all modes of transport would result in a shift in the modal mix from a road-dependent modal to a more balanced modal. This shift will augment the establishment of a sustainable transport system and encourage the usage of multimodal transportation. Connecting network of maritime terminals with inland ports and the development of major distribution and logistics hubs in the Middle East, Central Asia and Eastern Europe will help handle cross-border trade volumes. Rail-road connectivity in landlocked Central Asian countries will service major distribution hubs and economic zones.
  • The availability of adequate transport infrastructure is expected to have a favorable impact on promoting the economic development of countries due to the development of economic zones and industrial parks, innovation centers, logistics parks, bonded warehouses, and cold chain logistics facilities. Moreover, investments in industrialization tend to move into locations with adequate transport infrastructure. Development of industrial cities and special economic zones along the Silk Road is expected to boost the demand for specialized logistics services such as cold chain logistics, built-to-suit warehouses, and on-demand transportation services.
  • With rising labor cost issues, Chinese manufacturers are shifting their industrial bases to the country’s interior and other landlocked regions such as Chongqing and Chengdu, to reduce the cost of production. In some cases, projects are relocated to low-cost ASEAN countries. Thus, efficiency of connectivity becomes an important part of their expansion strategy to move raw materials and finished goods across regions. Development of the Silk Road across the region will facilitate manufacturers to establish better connectivity with key export destinations with sufficient transport mode options such as high-speed rail, highways, and modern ports. These factors would enable them to experiment on multimodal transportation.
  • The trade between Asia and Europe is significant and growing at a consistent pace. Driven by the high demand from Europe, automotive, consumer electronics, cosmetics, and toys are some of the major industry clusters that will benefit from the Silk Road. Most manufacturers would rely on third-party service providers to manage their logistics services. The logistics companies will prepare solutions including transportation and distribution, warehousing and fulfillment, integrated logistics, and multimodal transport solutions to meet the growing needs.
  • eCommerce is growing at a rapid pace, and China is one of the most preferred destinations for online shoppers worldwide, especially those from Europe, driven by the lower prices and wide variety of product offerings. Fulfillment of online orders within shorter timelines and at lower costs still remains a major challenge in the cross-border eCommerce industry. With development of the new routes, the transport time and costs between Asia and China would be reduced significantly.

 

Key Features

  • To provide an overview of the China's OBOR initiative and identify the measures undertaken by governments to improve freight transportation efficiency and reduce logistics costs
  • To provide an in-depth analysis on the development of economic corridors and analyze the role of transportation and logistics sector in driving growth
  • To provide a holistic view on how the trade is expected to transform as a result of infrastructure developments, cross-border eCommerce growth, and development of economic zones
  • To assess the expected changes in China's trade with the Silk Road participating nations by 2030 and provide implications for the overall logistics growth in these regions
  • To analyze the industry segments that would pop up along the routes and identify the potential opportunities for the logistics participants.

Table of Contents

One Belt One Road (OBOR)—6 Economic Corridors

Key Findings

Research Scope

Silk Road—Overview

History of Silk Road

Ancient Trade Routes

International Maritime Routes

Selected Intra-Region and Inter-Region Trade Flow

Participating Nations

Investments

China’s Trade Scenario

Silk Road—An Overview

China – Pakistan – Economic Corridor

Bangladesh – China – India – Myanmar (BCIM) Economic Corridor

Bangladesh – China – India – Myanmar

China – Indochina Peninsula Economic Corridor

China – Central and West Asia Economic Corridor

China – Mongolia – Russia Economic Corridor

New Eurasia Land Bridge (NELB) Economic Corridor

Cross-border eCommerce

New Eurasia Land Bridge Economic Corridor

Blue Economic Passage

Key Ports Along the Blue Economic Passage

Blue Economic Passage

Competing Visions

Trade

3Cs—Cost, Capability, and Competitiveness

Challenges

Logistics Implications

Growth Opportunity—Logistics Services

Strategic Imperatives for Success and Growth

The Last Word—3 Big Predictions

Legal Disclaimer

Project Details—Europe

Project Details—Central and South Asia

Project Details—Southeast Asia

List of Exhibits

List of Figures
  • 1. Top Product Segments Traded in the Economic Corridors, Global, 2017
  • 2. Top Trade Regions, Global, 2017–2030
  • 3. Economic Corridors in the Region, Global, 2017
  • 4. One Belt, One Road: China—Region Wise Trade, 2010–2030
  • 5. OBOR: Benefits, Global, 2017
List of Charts
  • 1. OBOR: The 6 Economic Corridors, Global, 2017
  • 2. Key Implications, China, 2017
  • 3. Key Implications, Global, 2017
  • 4. OBOR: Silk Road Timeline, Global, 130 BC–2030 AD
  • 5. Silk Road: Ancient Trade Routes, Global, 300 BCE–400 AD
  • 6. OBOR: Maritime Traffic, Global, 2017
  • 7. Key Trade Routes, 2017
  • 8. OBOR: Inter/Intra-region Trade, Global, 2016
  • 9. OBOR: Participating Nations, Global, 2017
  • 10. Major Investors in the Belt and Road Initiative, Global, 2018
  • 11. BRI Investment Destinations, Global, 2018
  • 12. World Merchandise Trade Contribution by China, 2017
  • 13. China—OBOR Region Trade, 2017
  • 14. OBOR: The 6 Economic Corridors, Global, 2017
  • 15. OBOR: China – Pakistan – Economic Corridor, 2017
  • 16. Historical Export and Import Value, China and Pakistan, 2010–2017
  • 17. OBOR: Exports, China and Pakistan, 2017
  • 18. OBOR: Imports, China and Pakistan, 2017
  • 19. GDP Growth Rate, China and Pakistan, 2017–2020
  • 20. OBOR: Major SEZ/Industrial Corridors along CPEC, Pakistan, 2017
  • 21. OBOR: CPEC Overview, China and Pakistan, 2017
  • 22. OBOR: Logistical Benefits of CPEC, China and Pakistan, 2017
  • 23. OBOR: Bangladesh – China – India – Myanmar Economic Corridor, 2017
  • 24. OBOR: Overview, BCIM, 2017
  • 25. GDP Growth Rate, BCIM, 2017–2020
  • 26. Historical Trade, BCIM, 2010–2017
  • 27. Kaladan Multimodal Transport Project, South Asia, 2017
  • 28. OBOR: China – Indochina Peninsula Economic Corridor, Asia, Middle East, Africa, 2017
  • 29. OBOR: Kunming-Singapore High-Speed Rail Network, Southeast Asia, 2017
  • 30. Trade Share by Country, China and Southeast Asia, 2017
  • 31. Historical Export and Import Value, China and Southeast Asia, 2010–2017
  • 32. GDP Growth Rate, China and Southeast Asia, 2017–2020
  • 33. OBOR: China – Central and West Asia Economic Corridor, Central Asia, Middle East, 2017
  • 34. OBOR: Trade Forecast, Central Asia, 2017–2030
  • 35. OBOR: China – Mongolia – Russia Economic Corridor, East Asia, South Asia, 2017
  • 36. Historical Export and Import Value, China and Russia, 2010–2017
  • 37. GDP Growth Rate, China – Mongolia – Russia, 2017–2020
  • 38. Historical Export and Import Value, China and Mongolia, 2010–2017
  • 39. OBOR: New Eurasia Land Bridge Economic Corridor, East Asia, Central Asia, Europe, 2017
  • 40. Historical Trade, China and Europe, 2010–2017
  • 41. GDP Growth Rate, Europe, 2017–2020
  • 42. eCommerce Market: Major Markets, eCommerce Size ($B), Share of Cross-border (%), Global, 2017
  • 43. OBOR: Blue Economic Passage, Global, 2017
  • 44. OBOR: Key Ports Along the Blue Economic Passage, Global, 2017
  • 45. Planned Investment by the United States, 2018
  • 46. OBOR: Competing Visions, Global, 2017
  • 47. OBOR: Trade Forecast, China – Other Regions, 2017–2030
  • 48. OBOR: Key Highlights, Global, 2017
  • 49. Maritime Rate, per TEU, Global, 2010–2017
  • 50. Transport Time from China to Europe, 2017
  • 51. OBOR: Challenges, Global, 2018
  • 52. Key Projects, Europe, 2017
  • 53. Key Projects, Central and South Asia, 2017
  • 54. Key Projects, Southeast Asia, 2017
Related Research
Lack of seamless connectivity and poor infrastructure remain the major challenges for trade and logistics in many countries in the Eurasian region. Chinas One Belt One Road (OBOR) initiative is expected to improve connectivity by inter-linking the transport infrastructure across East Asia, Southeast Asia, South Asia, Central Asia, Middle East, East Africa and European countries. It will help China to overcome some of the problems associated with its domestic economy such as a decline in export competitiveness due to increasing labor cost and excess capacity. Further, it will lead to improved connectivity to support the international expansion of domestic companies of the major trading partners along OBOR. Developments of projects relating to OBOR are likely to be undertaken in phased manner at different time periods due to financial constraints, local administrative hurdles, pending clearances from government agencies, and, in some cases, public unrest due to a lack of transparency in funding allocation – i.e., absence of international standards on transparency, the rule of law, and adequate financing for projects. Macroeconomic stability, long-term impact on employment, industrial growth, infrastructure finance, and the capacity to service debt funds secured from international and infrastructure development institutions of participating OBOR countries are some of the key factors likely to determine the success of this massive exercise. Clarity relating to dispute handling mechanisms concerning OBOR related projects is expected to remain an important factor in determining the success of the projects. To this end, an international commercial court is being set up in Beijing to resolve any project related disputes.--BEGIN PROMO--

Research Scope

The aim of this insight is to research and analyze the key developments relating to the China's One Belt, One Road initiative and assess the likely implications to the economy, trade, freight transportation, and warehousing sectors across Asia, Middle East, Africa, and Europe.

Research Highlights

This study specifically focuses on the development of economic corridors relating to BRI with  focus on improving connectivity with Europe, Central Asia, Middle East and East Africa, South Asia and Southeast Asia. Current and expected growth trends in trade are analyzed to evaluate potential implications for cross-border trade, connectivity, multimodal logistics, and the overall trade growth. New trade routes along the OBOR would enhance multimodal transportation across Asia, Middle East, Africa, Central Asia, and Europe, resulting in estimated trade volumes with China to around $3 Trillion by 2030.

Some of the key findings of the study include the following:

  • Infrastructure developments across all modes of transport would result in a shift in the modal mix from a road-dependent modal to a more balanced modal. This shift will augment the establishment of a sustainable transport system and encourage the usage of multimodal transportation. Connecting network of maritime terminals with inland ports and the development of major distribution and logistics hubs in the Middle East, Central Asia and Eastern Europe will help handle cross-border trade volumes. Rail-road connectivity in landlocked Central Asian countries will service major distribution hubs and economic zones.
  • The availability of adequate transport infrastructure is expected to have a favorable impact on promoting the economic development of countries due to the development of economic zones and industrial parks, innovation centers, logistics parks, bonded warehouses, and cold chain logistics facilities. Moreover, investments in industrialization tend to move into locations with adequate transport infrastructure. Development of industrial cities and special economic zones along the Silk Road is expected to boost the demand for specialized logistics services such as cold chain logistics, built-to-suit warehouses, and on-demand transportation services.
  • With rising labor cost issues, Chinese manufacturers are shifting their industrial bases to the country’s interior and other landlocked regions such as Chongqing and Chengdu, to reduce the cost of production. In some cases, projects are relocated to low-cost ASEAN countries. Thus, efficiency of connectivity becomes an important part of their expansion strategy to move raw materials and finished goods across regions. Development of the Silk Road across the region will facilitate manufacturers to establish better connectivity with key export destinations with sufficient transport mode options such as high-speed rail, highways, and modern ports. These factors would enable them to experiment on multimodal transportation.
  • The trade between Asia and Europe is significant and growing at a consistent pace. Driven by the high demand from Europe, automotive, consumer electronics, cosmetics, and toys are some of the major industry clusters that will benefit from the Silk Road. Most manufacturers would rely on third-party service providers to manage their logistics services. The logistics companies will prepare solutions including transportation and distribution, warehousing and fulfillment, integrated logistics, and multimodal transport solutions to meet the growing needs.
  • eCommerce is growing at a rapid pace, and China is one of the most preferred destinations for online shoppers worldwide, especially those from Europe, driven by the lower prices and wide variety of product offerings. Fulfillment of online orders within shorter timelines and at lower costs still remains a major challenge in the cross-border eCommerce industry. With development of the new routes, the transport time and costs between Asia and China would be reduced significantly.

 

Key Features

  • To provide an overview of the China's OBOR initiative and identify the measures undertaken by governments to improve freight transportation efficiency and reduce logistics costs
  • To provide an in-depth analysis on the development of economic corridors and analyze the role of transportation and logistics sector in driving growth
  • To provide a holistic view on how the trade is expected to transform as a result of infrastructure developments, cross-border eCommerce growth, and development of economic zones
  • To assess the expected changes in China's trade with the Silk Road participating nations by 2030 and provide implications for the overall logistics growth in these regions
  • To analyze the industry segments that would pop up along the routes and identify the potential opportunities for the logistics participants.
More Information
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Table of Contents | Executive Summary~ || One Belt One Road (OBOR)—6 Economic Corridors~ || Key Findings~ || Research Scope~ | Introduction~ || Silk Road—Overview~ || History of Silk Road~ || Ancient Trade Routes~ | One Belt, One Road~ || International Maritime Routes~ || Selected Intra-Region and Inter-Region Trade Flow~ || Participating Nations~ || Investments~ || China’s Trade Scenario~ | The 6 Economic Corridors~ || Silk Road—An Overview~ || China – Pakistan – Economic Corridor~ || Bangladesh – China – India – Myanmar (BCIM) Economic Corridor~ || Bangladesh – China – India – Myanmar~ || China – Indochina Peninsula Economic Corridor~ || China – Central and West Asia Economic Corridor~ || China – Mongolia – Russia Economic Corridor~ || New Eurasia Land Bridge (NELB) Economic Corridor~ || Cross-border eCommerce~ || New Eurasia Land Bridge Economic Corridor~ | Blue Economic Passage~ || Blue Economic Passage~ || Key Ports Along the Blue Economic Passage~ || Blue Economic Passage~ | Competing Visions~ || Competing Visions~ | Way Forward~ || Trade~ || 3Cs—Cost, Capability, and Competitiveness~ || Challenges~ || Logistics Implications~ | Growth Opportunities and Companies to Action~ || Growth Opportunity—Logistics Services~ || Strategic Imperatives for Success and Growth~ | The Last Word~ || The Last Word—3 Big Predictions~ || Legal Disclaimer~ | Appendix~ || Project Details—Europe~ || Project Details—Central and South Asia~ || Project Details—Southeast Asia~ || List of Exhibits~ | The Frost & Sullivan Story~
List of Charts and Figures 1. Top Product Segments Traded in the Economic Corridors, Global, 2017~ 2. Top Trade Regions, Global, 2017–2030~ 3. Economic Corridors in the Region, Global, 2017~ 4. One Belt, One Road: China—Region Wise Trade, 2010–2030~ 5. OBOR: Benefits, Global, 2017~| 1. OBOR: The 6 Economic Corridors, Global, 2017~ 2. Key Implications, China, 2017~ 3. Key Implications, Global, 2017~ 4. OBOR: Silk Road Timeline, Global, 130 BC–2030 AD~ 5. Silk Road: Ancient Trade Routes, Global, 300 BCE–400 AD~ 6. OBOR: Maritime Traffic, Global, 2017~ 7. Key Trade Routes, 2017~ 8. OBOR: Inter/Intra-region Trade, Global, 2016~ 9. OBOR: Participating Nations, Global, 2017~ 10. Major Investors in the Belt and Road Initiative, Global, 2018~ 11. BRI Investment Destinations, Global, 2018~ 12. World Merchandise Trade Contribution by China, 2017~ 13. China—OBOR Region Trade, 2017~ 14. OBOR: The 6 Economic Corridors, Global, 2017~ 15. OBOR: China – Pakistan – Economic Corridor, 2017~ 16. Historical Export and Import Value, China and Pakistan, 2010–2017~ 17. OBOR: Exports, China and Pakistan, 2017~ 18. OBOR: Imports, China and Pakistan, 2017~ 19. GDP Growth Rate, China and Pakistan, 2017–2020~ 20. OBOR: Major SEZ/Industrial Corridors along CPEC, Pakistan, 2017~ 21. OBOR: CPEC Overview, China and Pakistan, 2017~ 22. OBOR: Logistical Benefits of CPEC, China and Pakistan, 2017~ 23. OBOR: Bangladesh – China – India – Myanmar Economic Corridor, 2017~ 24. OBOR: Overview, BCIM, 2017~ 25. GDP Growth Rate, BCIM, 2017–2020~ 26. Historical Trade, BCIM, 2010–2017~ 27. Kaladan Multimodal Transport Project, South Asia, 2017~ 28. OBOR: China – Indochina Peninsula Economic Corridor, Asia, Middle East, Africa, 2017~ 29. OBOR: Kunming-Singapore High-Speed Rail Network, Southeast Asia, 2017~ 30. Trade Share by Country, China and Southeast Asia, 2017~ 31. Historical Export and Import Value, China and Southeast Asia, 2010–2017~ 32. GDP Growth Rate, China and Southeast Asia, 2017–2020~ 33. OBOR: China – Central and West Asia Economic Corridor, Central Asia, Middle East, 2017~ 34. OBOR: Trade Forecast, Central Asia, 2017–2030~ 35. OBOR: China – Mongolia – Russia Economic Corridor, East Asia, South Asia, 2017~ 36. Historical Export and Import Value, China and Russia, 2010–2017~ 37. GDP Growth Rate, China – Mongolia – Russia, 2017–2020~ 38. Historical Export and Import Value, China and Mongolia, 2010–2017~ 39. OBOR: New Eurasia Land Bridge Economic Corridor, East Asia, Central Asia, Europe, 2017~ 40. Historical Trade, China and Europe, 2010–2017~ 41. GDP Growth Rate, Europe, 2017–2020~ 42. eCommerce Market: Major Markets, eCommerce Size ($B), Share of Cross-border (%), Global, 2017~ 43. OBOR: Blue Economic Passage, Global, 2017~ 44. OBOR: Key Ports Along the Blue Economic Passage, Global, 2017~ 45. Planned Investment by the United States, 2018~ 46. OBOR: Competing Visions, Global, 2017~ 47. OBOR: Trade Forecast, China – Other Regions, 2017–2030~ 48. OBOR: Key Highlights, Global, 2017~ 49. Maritime Rate, per TEU, Global, 2010–2017~ 50. Transport Time from China to Europe, 2017~ 51. OBOR: Challenges, Global, 2018~ 52. Key Projects, Europe, 2017~ 53. Key Projects, Central and South Asia, 2017~ 54. Key Projects, Southeast Asia, 2017~
Author Senthil Kumar
Industries Transportation and Logistics
WIP Number PA39-01-00-00-00
Is Prebook No
GPS Codes 9800-A6,9B01-A6,9674-A6,9694,9968-A6,9AF6-A6