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One Belt One Road: Kuala Lumpur is Sitting on a Strategic Spot

China’s One Belt One Road is a network of trade routes that will stretch from Rotterdam and to the most southern part of mainland Asia, namely Johor-Singapore. In one of the major components of this ambitious project - the Pan Asia rail network, the centerpiece is Kuala Lumpur. 
KUALA LUMPUR, 27 OCT 2016 - It is one of the most expensive and certainly the largest infrastructure project the world will ever see. One Belt One Road has the potential to reshape global trade, directly connect major economic blocs and transform the socio-economy of the 4.4 billion people living in the 65 countries in the project. That’s 70% of the world’s population.

They live in countries that generate 55% of global GNP. These countries hold an estimated 75% of known energy reserves. The rail and road links in One Belt One Road project will take 30 to 35 years to be completed. The rewards will start showing real quick. Within 10 years the projected annual trade among the 65 countries will reach US$2.5 trillion.
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In such an elaborate and extensive project, Kuala Lumpur will play an important role and a lot of it has to do with its geographical location – as a land link to Singapore, and land and sea link to the Malacca Strait. Which is why China considers Kuala Lumpur to be the regional centre for its Pan Asian rail network.

Link to Malacca Strait

Greater Kuala Lumpur is inches away from the Malacca Strait, the second busiest waterway in the world. In 2007, more than 62,000 ships passed through the strait and the figure will reach 140,000 in 2020. Almost half of the world’s total annual seaborne trade tonnage passed through the Strait of Malacca, making it a very important waterway.

For centuries this has been a major trade route to Asia and this is unlikely to change with China’s One Belt One Road. China is expected to import 7.3 million barrels of crude oil by 2020, which is half of Saudi Arabia’s planned output, according to Robert Kaplan in Monsoon – The Indian Ocean and the Future of American Power. Currently, more than 85% of China-bound oil cross the Malacca Strait.

With One Belt One Road, China will have more options. There will be oil and communication lines cutting across from Europe and Central Asia to China. There will also be oil and other shipment using the Malacca Strait to reach China. And instead of the South China Sea, there is the Pan Asia rail network, the route that connects Kunming to Singapore through Vientiane, Bangkok and Kuala Lumpur. 

Alternatively, shipments can be sent through a proposed rail line from the Malaysian ports along Malacca Strait, across the peninsula to the Kuantan port which fronts the South China Sea. This will cut travel time and cost. This 600km rail link is part of the port alliance involving 10 Chinese ports – Dalian, Shanghai, Ningbo, Qinzhou, Guangzhou, Fuzhou, Xiamen, Shenzhen, Hainan, and Taicang  - and six Malaysian ports – Port Klang, Malacca, Penang, Johor, Kuantan, and Bintulu.
High-speed rail and Bandar Malaysia

This rail link between Singapore and Kuala Lumpur is a mega rail project in Southeast Asia and is expected to be operational in 2026. There are plans to build a high-speed rail connecting Bandar Malaysia to Bangkok, with talks that the rail line could go even further north.   

The main Malaysian terminus of the 330km high-speed rail will be Bandar Malaysia, a huge mixed development that will change the Kuala Lumpur landscape.

Bandar Malaysia is a 197-hectare (486-acre) transport transit district touted as a major development project for Greater Kuala Lumpur. Work on this project is expected to begin by early 2017 and will span between 20 to 30 years before being fully completed. It will be the main intercity rail link involving all the major rail lines and future access to 12 major highways. 
“Bandar Malaysia will be a glittering gem on China’s rail corridor. China’s rail corridor will link Southeast Asia with East Asia, West Asia and South Asia,” Cai Zemin tells Channel News Asia. He is the general manager for CREC Malaysia, a subsidiary of China-owned China Railway Engineering Corporation.

The consortium that has been awarded this massive Bandar Malaysia project made up of CREC Malaysia and Iskandar Waterfront Holdings, plans to build an underwater canal city which would house a financial centre, cultural villages, lifestyle retails, theme parks and gardens. All this is likely to cost RM160 billion (US$38.5 billion).

Kuala Lumpur’s Bandar Malaysia will indeed sparkle like a gem in this gargantuan One Belt One Road project. It will be a centerpiece in China’s ambitious project where it can parade its prowess in construction and infrastructure building, and as a testimony of what is to come. There is so much that Kuala Lumpur stands to gain from this. The multiplier effect in itself would be hard to fathom. 

Watch the video here : Bandar Malaysia | The Maritime Silk Road

Source: InvestKL