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

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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.Dev

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

1. Executive Summary
One Belt One Road (OBOR)—6 Economic Corridors
Key Findings
Research Scope
2. Introduction
Silk Road—Overview
History of Silk Road
Ancient Trade Routes
3. One Belt, One Road
International Maritime Routes
Selected Intra-Region and Inter-Region Trade Flow
Participating Nations
Investments
China’s Trade Scenario
4. 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
5. Blue Economic Passage
Blue Economic Passage
Key Ports Along the Blue Economic Passage
Blue Economic Passage
6. Competing Visions
Competing Visions
7. Way Forward
Trade
3Cs—Cost, Capability, and Competitiveness
Challenges
Logistics Implications
8. Growth Opportunities and Companies to Action
Growth Opportunity—Logistics Services
Strategic Imperatives for Success and Growth
9. The Last Word
The Last Word—3 Big Predictions
Legal Disclaimer
10. Appendix
Project Details—Europe
Project Details—Central and South Asia
Project Details—Southeast Asia
List of Exhibits
11. The Frost & Sullivan Story


List of Figures & Charts

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



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