One Belt One Road Initiative: How to Regulate Chinese Dragon in Central Asia

Abstract

One Belt, One Road Initiative (OBOR) has become one of the most ambitious projects that the 21st century has seen. Being central landscape in realization of ‘One Belt’ part of OBOR, does China pose a new international economic legal-order? If OBOR successfully implemented, what would be the potential implications on economic-legal governance onto Central Asian countries? And to reap the full benefits of OBOR, what kind of legal tools or framework is required? This paper focuses on the Republic of Uzbekistan which once formed the Soviet Union, alongside the other four other ‘STANs’ in the region. The paper argues that China has yet to pose a new international economic order and does not change substantially the status quo. A close look to Chinese international economic relations with Central Asian Stans (e.g. trade agreements, investment treaties and financing infrastructure projects) reveals to us that the former is not shaping or building a new economic order, instead it is trying hard to recalibrate and enrich the current global economic order with Chinese element. The problem is, China still lacks concrete, coherent and transparent multilateral institutional framework regarding OBOR, and it is mostly taking a bilateral or regional approach with each OBOR supporter state or a region, something which resembles president Trump administration’s foreign trade policy. In that sense, this new Chinese Dragon might have both negative and positive implications onto economic-legal governance of Central Asian countries. Without any doubt, a massive transfer of technology, trade facilitation and easy access to financing for ambitious infrastructure projects will improve the welfare of region’s people. On the other hand, the non-transparent activity of Chinese SOEs, the lack of transparent dispute settlement procedures and increasing use of less formal arrangements may prevent host states from fully embracing and enforcing fair international economic rules.