European Shipping Industry Should Not Ignore China’s OBOR Project

The European shipping industry cannot afford to ignore China’s One Belt One Road (OBOR) policy, dubbed the biggest event of the 21st Century, which is set to redefine trade patterns between Asia and Europe with enormous impact on the maritime sector, according to international law firm Ince & Co.

The USD 1.2 trillion OBOR project refers to the Silk Road Economic Belt (the Belt), an overland network connecting China to Europe and the Middle East through Central Asia and Russia, and the 21st Century Maritime Silk Road (the Road), a maritime route connecting ports in Asia, Africa and the Mediterranean.

OBOR is expected to have a significant impact on the shipping industry, driven by substantial Chinese investment in maritime infrastructure, as 67 overseas loan commitments “have been put in place and many are along important sea routes, from Asia to Africa and Europe, reinforcing Beijing’s maritime ambitions,” David Beaves, Partner at Ince & Co’s Hong Kong office, said.

He added that the goal of the Maritime Silk Road is to diversify China’s trade routes, increasing market access to Europe and the US through the Suez Canal.

Encompassing 65 countries, 60% of the world’s population and a collective GDP equivalent to 33% of the world’s economy, the level of investment planned by OBOR will also require a sound legal framework that embraces regulatory requirements, cultural considerations and dispute resolution.

For example, Beaves noted that “the development of multilateral co-ordination on freedom of navigation is essential, as is a framework that can cut across all 36 countries on the Maritime Road.”

However, Beaves believes that although there is a reasonable level of awareness of OBOR, it is far from being properly understood.

“In particular, the European shipping industry can’t afford to ignore the biggest event of the 21st Century. Europe should not view OBOR as some giant leap forward, but as one in a series of steps aimed at fostering closer engagement. China’s economy is too big and too deeply integrated with the rest of the world to be ignored or misunderstood in this way,” Beaves said.