26 NOV 2017
The new silk road the $1 trillion plan that could fast-track clean energy
The revival of China’s ancient Silk Road into the One Belt One Road (OBOR) strategy has sent a clear signal about the country’s ambitious approach to global issues and challenges.
First announced as the ‘Silk Road Economic Belt’ by President Jinping in September 2013, OBOR was initially meant to be a framework for greater cooperation between Central Asia and China's western provinces in order to ensure more balanced development within China. The policy has, however, evolved into a broader strategy for China's engagement with the world.
For more than three decades, China has been working to attract foreign investment and technology development from the west. This inward-looking approach has allowed China to grow its economy and give it the opportunity to become technology innovators, rather than replicators. With the new Silk Road strategy in place, China intends to export its new expertise in areas like infrastructure, renewable energy, finance and trade to new markets like Africa and the Middle East.
This outward-oriented strategy by China will create new trade and connectivity throughout Asia with road and maritime links to Africa, the Middle East and on towards Europe. The trillion-dollar initiative, which involves nearly 70 countries, is perhaps the foremost example of the global power shift towards Asia. Its implications are far-reaching and, encouragingly, they include the potential to fast-track clean energy adoption across Africa and Central Asia.
China has already stated its commitment to driving the global agenda to combat climate change. The OBOR initiative is a conduit to this which will present significant opportunities for China to build on its leadership in renewable energy and clean technologies.
The energy transformation across the Middle East and North Africa (MENA) region alone is estimated to need more than USD $300 billion in investment over the next five years, according to APICORP Energy Research. Across the energy markets of sub-Saharan Africa, China has been establishing a strong position for some time and according to research by the International Energy Association, Chinese contractors will be responsible for 30% of all energy access projects in the region between 2010 and 2020, spurring industrialisation and economic development. With the OBOR initiative now underway, this is set to intensify.
The new Silk Road is also presenting important strategic partnership opportunities as China seeks to unlock entry into new markets. The UAE and the Kingdom of Saudi Arabia, for instance, offer vital logistics and trade gateways across the Middle East and into Africa, as well as opportunities to co-invest in regional economic development. Again this presents strong potential to catalyse renewable energy adoption.
The UAE, in particular, has established itself as a leader in the clean energy sector during the past decade. It is also a hub for partnership and collaboration thanks to platforms such as Abu Dhabi Sustainability Week, at which Chinese companies always have a significant presence. With strong momentum now behind the OBOR initiative, the potential for such partnerships to help spearhead the energy transformation is now more exciting than ever.