Positive prospects for the Chinese economy with the One Belt One Road benefitting the world

With the ongoing acceleration of reforms in China exemplifying the structural transition of the economy, one may wonder what will be the global implications of the One Belt One Road strategy.

The strategy was deemed essential to the global economies, and especially to the United States, which was the second largest destination of outbound mergers and acquisitions this year from China. Indeed, China is now focusing on technology, services and innovation. This results in higherinvestments in sectors, such ashealth, science, insurance andfinancial services in order to boost consumption to move towards a domestic orientated economy. The One Belt One Road aims at redirecting the country’s surplus at a regional scale to further enhance trade with the ASEAN and the global powers. This shift in the Chinese strategy not only brings broader worldwide economic opportunities but also allows the Chinese development to be sustainable and strong. In the end, the slowdown of the Chinese economy might be beneficial for the country’s developmentfrom along-term perspective.

The One Belt One Road strategy will bring value to foreign countries in two ways:

 

However, new challenges mayarise, which multinationals and investors must carefully assess. Professional advice might be required for further inquiries .

This will have major impact on the establishment decision for subsidiaries: while on the one side, if talents and technologies are already owned in China, establishing companies abroad is preferable;on the other side, investing in China might be beneficiary if technology and talents are needed for foreign investors and multinationals.

The One Belt One Road strategy is,therefore,further liberalizing trade at a global level and promoting cooperation throughout China’s neighbors and trade partners. It will solidify China’s economic grounds and enhance a more stable and sustainable development for the country while benefiting the rest of the world.

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