Silk Road Economic Belt is a phrase coined by the author C.omas Young in his famous book The Shifting Landscape of Globalization. It is a concept that was first used in China and after which it got adopted in several Asian countries, namely India, Japan, South Korea, and Pakistan. This concept is a way of comparing different economies and their growth in the present period to that of the past.
It was established as an economic model by the Center for Comparative Economy (CCCE) and was later used in many other economic planning and policy-making tools. It was created after a survey was made of different aspects of the economic policies undertaken by the Asia-Pacific countries. In its current situation, China is the only major economy of the world that has not signed the trade agreement with the European Union and is lagging behind in almost all aspects of economic globalization. The main reason behind this failure is the slowing down of the economy and huge capacity utilization by domestic companies. The overall output is growing very slowly, especially in the agricultural sector. Industrialization has also reached its peak with no signs of lifting up.
The Silk Road Economic Belt is an avenue devised by C.omas Young as a means of promoting harmonious development in that region. The idea was adopted after the economic revolution in China when it was found that bilateral trade was growing at one point only while the area of multi-country trade was growing at a tremendous rate. This led to a vacuum that was being filled by developing nations Silk Road economic belt.
The countries that are involved are; India, Japan, China, Pakistan, and Sri Lanka. These are all relatively new in the international scene and are yet to catch the attention of the global community. There are several reasons behind this. One of them is that these are in terms of size very small countries. On the other hand the fact is that they have similar problems to those faced by the larger countries.
There is a common misconception about these smaller players. They are supposed to be failures, which is not true. They were never a big player in global trade. On the contrary they have managed to attract a number of multinational companies in the past few years largely due to their better business conditions.
The connectivity of the Silk Road Economic Belt makes it possible for freight to cross from China to Europe and from Europe to Asia without any barriers. The connectivity will continue and that is why the European companies are looking forward to invest in this area. One of the reasons is that there is a fear of China taking over the dominant share in these markets. They have doubts regarding their future in such a situation. They feel insecure as China is a rising power that can challenge them at every step. That is the main reason why the European companies are rushing towards the Asian countries.
India is another reason why the investment opportunities are all the more promising in this context. It is an emerging economy that is backed by strong government and a strong business lobby. Hence the government of such a country can easily convince the multinationals to invest in the Indian market. Not only that but the domestic investors too will be drawn to this huge potential market. This is very important because the growth potential in the Indian market is tremendous.
One has to see this region as an enormous potential that can not be ignored. This is because of the present scenario which is very bright and the future looks bright. We cannot afford to ignore the huge potential of this region and hence the Asian countries should be taken seriously. After all they are our biggest partners and we need them for the betterment of the global economy.