These and other factors should see the two nations form closer ties in what is

These and other factors should see the two nations

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to it. These and other factors should see the two nations form closer ties in what is a critical segment of the belt for China. Legal Inherent in the vastness of the OBOR project it will include many countries which have underdeveloped, misunderstood, complex or politically partial legal systems. This means it is inevitable that large numbers of OBOR projects will proceed on the premise of legal uncertainty and with a degree of scope for failure. This issue has already come under the spotlight as OBOR sets foot in Indonesia, where just days after Indonesian President Joko Widodo broke ground on the US$5.5 billion high-speed rail network connecting Jakarta to Bandung, the project was suspended because of inconsistencies with the issuance of the required permits and licences. Although the project is now back on track, it demonstrated some of the challenges China can expect to come up against from a legal perspective as it pursues OBOR going forward. Even in parts of the OBOR map which have well-established legal systems it is being envisaged that the Chinese could find themselves in a minefield of legal and regulatory problems. A perfect example of this challenge concerns those countries who look set to embrace OBOR, but which are members of the EU. Not only will the Chinese need to understand the implications of their own domestic regulations when dealing with EU nations, but they will also need to properly understand the implications of the applicable EU laws and of course the laws of the host nation. Clear and detailed advice in relation to the legal and regulatory environments where OBOR will take Chinese enterprise will be of utmost importance. Competition or cooperation? OBOR and its affiliated institutions (such as the AIIB) are arguably the latest entrants in a somewhat crowded market of multilateral development institutions. There are of course a myriad of other international organizations/alliances which have a similar mandate to that of the OBOR programmed. The World Bank, Asian Development Bank, European Bank for
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16 Reconstruction and Development, and International Finance Corporation are some of the better known such institutions. A key challenge for OBOR will be whether it and China will be perceived as competition or a threat to these well-established institutions The early signs coming out of China are positive and signal China’s intent that it will cooperate and collaborate with its peers. As young as OBOR is, China has already shown material progress in firming up its relationships with some of these multilaterals. In May of this year the AIIB and ADB signed a memorandum of understanding to set out their intention to work together for the purposes of financing projects in Asia. The memorandum provides for the institutions to work together at a strategic level in order to execute what are, in many cases, common objectives and interests. As mentioned above, the M4 highway project in Pakistan is
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  • Fall '19
  • jane smith
  • People's Republic of China, OBOR

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