SINGAPORE (Apr 9): How did the One Belt One Road (OBOR) policy develop? To a significant extent, it grew out of the global financial crisis in 2008. It was a response to the question of what to do with China’s foreign currency reserves. The solution dovetailed neatly with President Xi Jinping’s broader narrative around improving China’s position at the tables where global rules were formulated and administered.

OBOR is the most important bastion and defence against the debilitating effects of US President Donald Trump’s trade war tariffs.

One of the most important consequences of the answer to the above question was the diversion of investment capital. The creation of the Asian Infrastructure Investment Bank was only a small part of the solution. The diversion of capital in itself could not be achieved without a concurrent opening-up of the capital account. This diversion of capital will accelerate as a result of Trump’s tariff walls.

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