An economic demography explanation for China's ‘Maritime Silk Road’ interest in Indian Ocean countries

Abstract

ABSTRACTFor four decades, China has gradually re-shaped the distribution of global economic activity, underpinned by a low-wage demographic dividend era. For around a decade, however, both demographic and economic structural change, at home and abroad, have incrementally shifted China's comparative advantage away from low-wage industrialisation. In response, China now seeks to become an international investor in these industries under the umbrella of the country's flagship Belt and Road Initiative. That set of changes, in turn, offers a new context of opportunity for developing countries, and especially so for Indian Ocean (IO) countries that are strategically placed along a continental coastline and in the early phase of a process of demographic transition. This explains the economic demography imperative underlying China's twenty-first-century interest to deepen economic ties with IO countries under the umbrella of the 'Maritime Silk Road of the twenty-first century' initiative.