China is also using OBOR as a springboard for domestic development. An area near the north-central city of Xi’an, for example, has been picked as a trade hub linked to China seacoast ports. Plans call for building an all-new city with a population of 900,000 to support an air transportation logistics center at Xi’an Xianyang International Airport. The local government has reportedly allocated US$18 billion for the project’s initial construction phase, which is now under way.
In Jakarta, Xi said China through OBOR planned to build stronger trade ties with the 10 member-nations of the Association of Southeast Asian Nations. ASEAN members work under a limited-scope, free trade agreement with China. Moreover, OBOR and AIIB would co-exist with the development-focused ASEAN Infrastructure Fund (AIF), which is backed by ADB.
Non-China-affiliated institutions such as ADB and AIF have been supporting big Asian infrastructure projects for years. But their combined funding level is considered far less than what’s needed to meet demand for development in Southeast Asia and the rest of the continent.
ADB’s research division in 2012 said more than US$8.2 trillion would be needed to meet all of the region’s infrastructure demands from 2010 to 2020. That huge amount is equal to about 12 percent of the world’s annual gross domestic product.