How China's Silk Road policy is shaping up in other countries

A lot has been written about China’s One Belt One Road policy, but the policy itself is little more than a mission statement to guide the country’s commercial and political engagement with its near neighbors. It’s what happens on the ground that really matters.

It’s also where the differences become apparent. Over the past 12 months, I have visited cities in Kazakhstan, Pakistan, and the UAE, as well as other countries across Asia, speaking with local industrialists and Chinese business owners about how the policy is impacting commercial activity. The stories are mixed and it is clear that the policy’s effects will differ widely by country.

The situation in Kazakhstan demonstrates the policy’s complexities. As a near neighbor of China, and part of the so-called ‘Belt’, the country should be among the first to feel the policy’s impact. My local Chinese fixer certainly claimed he had received some 30 municipal- and provincial-level Chinese delegations to the country during the past six months.

Yet, after recently spending a week in Kazakhstan, I was left feeling underwhelmed by the policy's impact thus far, even if the long-term changes may yet be significant.

Don’t expect Chinese workers to flood the Silk Road

It’s popular to assume that Chinese traders will flood the Silk Road’s markets as a result of the policy, and I’ve certainly visited some large Chinese communities around the region. Just consider Dubai where the Chinese population is reliably estimated at a huge 120,000.

But this isn’t the case in Kazakhstan. I spent days touring Almaty’s commercial markets and struggled to find more than a handful of Chinese traders--because of their claimed difficulty getting work visas. Many are in fact on student visas but spend more time in the market than the classroom.

That’s important as it underscores that this won’t just be a ‘boots on the ground’ development. If One Belt One Road is to have real commercial implications, Chinese firms will find themselves more often working with local partners rather than bringing their entire supply-chain and workforce with them.

Not everyone is excited about One Belt One Road

For those of us in East Asia, it’s easy to be obsessed by what happens in China. It’s also easy to assume that the rest of the world is, too, especially when looking at a policy change as big as One Belt One Road. The reality is that there are large parts of the world that have never even heard of China's new strategy.

Kazakhstan is again a case in point. Its political leadership care very much about China’s commercial engagement. Still, in my experience, it is hard to find business executives there who are either aware of the policy or understand its potential implications for the country.

That’s not criticism. It’s simply a reflection of the fact that the business sector is more sensitive to decisions taken in Russia and in Europe, in general. Maybe that will change as low oil prices force the country to look for new sources of economic growth. But for now, OBOR is low priority.

But the policy will still be good for Kazakhstan

What could change perceptions around OBOR? China’s potential investment in the country’s infrastructure. The executives I spoke to most often argued that investment in the country’s secondary road network outside the major cities is critical, not to mention investment in railways.

That’s a perfect opportunity for the Chinese-led Asian Infrastructure Investment Bank (AIIB), as it scours the region for projects to fund. It is also an ideal opportunity for those Chinese companies that have excelled in building roads at home and in emerging markets around the world.

There is a caveat, however. Kazakhstan has a population of just 17 million people, making it the same size as a single large Chinese city. There simply aren’t enough opportunities for each of those 30 municipal- and provincial-level delegations. Some will leave the country disappointed.