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How Will China and Malaysia Both Benefit from the Belt and Road Initiative?

The Belt and Road Initiative has been an oft-discussed topic of contention regarding China and its neighbor, Malaysia.

Construction halted for a year due to an impasse reached by both nations on the future of the project, but China has since announced that it will cut the cost by one-third in order to expedite the completion of the build.

Xi Jinping’s goal of creating transport links towards Africa has been under scrutiny of late, especially concerning costings.

China is set to gain some greater transparency over the destination of government funds, which will help place greater trust of the people in Jinping.

So, the galvanization of the stalled project will signal positive steps forward for both China and Malaysia.

But what is motivating the completion of the project, and what do both sides set to gain?

Growth for China as an economic power

China is set for economic and political gains from the completion of the Belt and Road Initiative.

One of the major incentives for the transportation link improvements is to increase China’s dominance as an export market.

Already strong with exports – with 2.3 trillion USD in goods – the boosting of this market is tied to increasing the renminbi as a major global currency.

This will have ramifications for other countries as well as those in China, as the boosting to the Chinese currency would affect how it stands as a forex trade.

With it becoming easier than ever to use a forex trading platform, many are seeing benefits to the rising value of the Chinese CNY when traded as the stronger component of a forex trading pair, allowing China to appear stronger as an economic power on a global stage.

Malaysia belt-and-road-initiative

Connectivity for Malaysia and beyond

Malaysia also stands to gain from the improved transportation links that it is also paying for.

First and foremost, the trade opportunities brought to the region will provide a huge boost to Malaysia’s economy.

Malaysian businesses will also gain opportunities for expansion and will benefit from greater connectivity.

On a personal level, the project hopes to strengthen personal bonds between people as it will provide greater connectivity and help build stronger communities.

2016 financial statistics from Malaysia found that the trade levels were increased with countries that ran along the Belt and Road, with this trade expecting to grow once the project is finalized.

As Malaysia is an integrated and growing economy, a boost at this time will provide a strong future for the country, especially as China’s agreement to drop some of the cost shows that they feel their neighbors are important and necessary.

While the expensive project is best looked upon in how much return on investment it will provide for the countries who have funded it, there is a less tangible benefit to the show of cohesiveness stemming from China.

While they are set to gain from trading and economic perspectives, they are also aiding connectivity between people for everyone who can use the Belt and Road Initiative when it’s finished.

Last Updated on 2019/04/17

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