MANILA - China is aggressively pushing the "One Belt One Road" initiative because its slowing economy is headed for a 'hard landing' in 2018, according to an analyst from the Economist Intelligence Unit (EIU).
Dan Wang of EIU said the initiative is not just an investment plan but a solution to China's problems of overcapacity, especially in the steel and construction industries.
Also known as the 'Silk Road,' China is allotting $40 billion as a special fund for the initiative which will bring together over 60 countries. The fund is on top of the $100 billion earmarked for the Asian Infrastructure Investment Bank (AIIB), which is also led by China.
Dan said that there was some controversy in China over the funds, which some said would be better spent domestically. However, Dan said that doing this would have caused further problems for China.
"It would cause much greater inflation within Chinese market if we had spent this much money within China. There is much more opportunity for Chinese companies to go abroad," Dan said in an interview with ANC's Early Edition.
The Philippines is expected to benefit greatly from the initiative through loans, investments and greater access to the Chinese market.
President Rodrigo Duterte will be going to Beijing this weekend for the 'One Belt, One Road' forum.