GLOBAL VI­SION

Though orig­i­nat­ing in China, the Belt and Road Ini­tia­tive be­longs to the whole world, Pres­i­dent Xi says

China Daily European Weekly - - FRONT PAGE - By AN­DREW MOODY and CHEN YINGQUN an­drew­moody@chi­nadaily.com.cn

Anew form of glob­al­iza­tion based on in­vest­ment in in­fra­struc­ture and greater con­nec­tiv­ity be­tween coun­tries has re­ceived the back­ing of more than 100 coun­tries. China’s Belt and Road Fo­rum for In­ter­na­tional Co­op­er­a­tion, which was at­tended by 29 for­eign heads of state and gov­ern­ment in­clud­ing Rus­sian Pres­i­dent Vladimir Putin and Turk­ish Pres­i­dent Re­cep Tayyip Er­do­gan, con­cluded in Bei­jing on May 15.

The fi­nal com­mu­nique called for a “shared com­mit­ment to build­ing an open econ­omy, en­sur­ing free and in­clu­sive trade (and) op­pos­ing all forms of pro­tec­tion­ism.”

China pledged an ad­di­tional 100 bil­lion yuan ($14.49 bil­lion; 12.57 bil­lion eu­ros; £11.20 bil­lion) to the Silk Road Fund, which was orig­i­nally launched in Novem­ber 2014 with an ini­tial con­tri­bu­tion of $40 bil­lion.

It also di­rected ex­tra funds to China’s two big pol­icy banks, with the China Devel­op­ment Bank re­ceiv­ing 250 bil­lion yuan and the Ex­port-Im­port Bank of China 130 bil­lion yuan to set up spe­cial lend­ing fa­cil­i­ties.

The ini­tia­tive is likely to at­tract ma­jor pri­vate sec­tor funding as well as that from mul­ti­lat­eral devel­op­ment in­sti­tu­tions.

Pres­i­dent Xi Jin­ping made it clear that although Belt and Road was orig­i­nally China-in­spired, it is now firmly a global ini­tia­tive and open to all.

“The Belt and Road devel­op­ment does not shut out, nor is it di­rected against, any party,” he said.

“Though orig­i­nat­ing in China, the Belt and Road Ini­tia­tive be­longs to the whole world. Its devel­op­ment goes beyond re­gions, stages of devel­op­ment and civ­i­liza­tions.”

China is set to host a sec­ond sum­mit in 2019 to mea­sure and mon­i­tor progress of the ini­tia­tive, which was pro­posed by Xi in 2013.

Wang Yi­wei, di­rec­tor of the In­sti­tute of In­ter­na­tional Af­fairs and the Cen­ter for EU Stud­ies at Ren­min Univer­sity of China, says the fo­rum marked the point where Belt and Road be­came a truly in­ter­na­tional ini­tia­tive.

“It can no longer be re­garded as bi­lat­eral but is very much mul­ti­lat­eral, and it came up with a con­sen­sus for real ac­tion. This sum­mit has sent out a sig­nal that it wel­comes all the coun­tries in the world to par­tic­i­pate.”

“The Belt and Road devel­op­ment does not shut out, nor is it di­rected against, any party.” XIJINPING Pres­i­dent

Wang Huiyao, a coun­selor to the State Coun­cil, China’s Cabi­net, and founder and pres­i­dent of the Cen­ter for China and Glob­al­iza­tion, China’s largest in­de­pen­dent think tank, agrees the ini­tia­tive had come of age.

“It has been up­graded from be­ing about 65 coun­tries on a se­ries of routes to a global ini­tia­tive. It is no longer just a Chi­nese project, but one taken up by others across the world who have now come on board.”

Martin Jac­ques, the jour­nal­ist, aca­demic and au­thor of the best-sell­ing When China

Rules The World, who also spoke at the fo­rum, says China’s ini­tia­tive was pre­sent­ing a very dif­fer­ent form of glob­al­iza­tion.

“West­ern ne­olib­eral glob­al­iza­tion as made very clear by (former US pres­i­dent) Bill Clin­ton in the 1990s was about open­ing up mar­kets around the world for West­ern prod­ucts and in­vest­ments and mak­ing the world more West­ern­ized,” he says.

“The Chi­nese ap­proach is about im­prov­ing the lives of those in the de­vel­op­ing world, where 85 per­cent of the world’s pop­u­la­tion live, in­volv­ing mainly State-led in­vest­ment in in­fra­struc­ture to drive eco­nomic growth. It is how China de­vel­oped it­self.”

A num­ber of high-pro­file politi­cians spoke at the fo­rum. UK Chan­cel­lor of the Ex­che­quer Philip Ham­mond was one of the most en­thu­si­as­tic Euro­pean sup­port­ers. He said Bri­tain af­ter Brexit would now be a nat­u­ral part­ner for the ini­tia­tive.

“As we em­bark on a new chap­ter in our his­tory, as we leave the Euro­pean Union, we want to main­tain a close and open trad­ing part­ner­ship with our Euro­pean neigh­bors and at the same time pur­sue our am­bi­tion to se­cure freer trade agree­ments with new part­ners and old al­lies alike,” he said.

“Our am­bi­tion is for more trade, not less trade, and China clearly shares this am­bi­tion.”

Zheng Bi­jian, the pres­i­dent of the In­sti­tute of Na­tional In­no­va­tion and Devel­op­ment Strate­gies, told a the­matic ses­sion on think tank ex­changes at the fo­rum that the ini­tia­tive re­flected the new re­al­i­ties of the world.

He pointed out that de­vel­op­ing coun­tries made up just 36 per­cent of the world econ­omy by pur­chas­ing power par­ity in 1980, but by next year they will make up 59 per­cent of it, with de­vel­oped coun­tries con­tribut­ing only 41 per­cent.

“It will be the de­vel­op­ing coun­tries (in their need for in­fra­struc­ture and other in­vest­ment) that will be con­tin­u­ing to drive global eco­nomic growth in the sec­ond and then the third and fourth decades of this cen­tury. This will lead to a new phase of glob­al­iza­tion.

“It is not a zero-sum game. Peo­ple fail to un­der­stand the core mean­ing of the Belt and Road Ini­tia­tive is co­op­er­a­tion. It is a grand vi­sion.”

Former Aus­tralian prime min­is­ter Kevin Rudd, speak­ing in the same ses­sion, said the ini­tia­tive would strengthen re­gional and global co­he­sion.

“If it is op­er­ated prop­erly, it will be­come a new bridge be­tween the East and West for both co­op­er­a­tion and ex­changes and an end to di­vi­sion.”

One thing clear was that the ini­tia­tive has the po­ten­tial to pro­vide a boost to all parts of the world, in­clud­ing Europe.

One ex­am­ple is China in­vest­ing through its Silk Road Fund in a net­work of five ports in the north­ern Adri­atic, in­clud­ing the Ital­ian ports of Venice, Ravenna and Tri­este and Koper in Slove­nia and Ri­jeka in Croa­tia. This will give it an al­ter­na­tive route into north and cen­tral Europe, rather than just the port of Pi­raeus in Athens.

“China’s 21st Cen­tury Mar­itime Silk Road is very im­por­tant to Italy be­cause it ends up in the Mediter­ranean and Italy is in the cen­ter of the Mediter­ranean,” says Nicola Casarini, head of the Asia pro­gram at IAI, the lead­ing Ital­ian for­eign pol­icy think tank based in Rome.

“Our ports pro­vide an al­ter­na­tive route for goods bound for cen­tral and north­ern Europe.”

Africa also re­mains key to the ini­tia­tive, with a num­ber of the con­ti­nent’s lead­ers at­tend­ing the fo­rum.

One new tie-up with the con­ti­nent was an ex­am­ple of how Belt and Road is not just about phys­i­cal con­nec­tiv­ity but also new tech­nol­ogy.

Huawei, China’s telecom­mu­ni­ca­tions gi­ant, signed a col­lab­o­ra­tion agree­ment with the Kenyan gov­ern­ment at the fo­rum to help it build the in­fra­struc­ture for us­ing cloud tech­nol­ogy for gov­ern­ment ser­vices. This is part of Kenya’s Vi­sion 2030 to de­velop an ICT (in­ter­net cloud tech­nol­ogy) in­dus­try.

Kenyan Pres­i­dent Uhuru Keny­atta said he wel­comed the new part­ner­ship with Huawei, which has had a pres­ence in his coun­try for 19 years.

“The devel­op­ment of ICT and a coun­try’s fu­ture are closely in­ter­twined. I ap­pre­ci­ate the role played by Huawei in Kenya’s devel­op­ment and progress,” he said.

Ab­dal­lah Ab­dil­lahi Miguil, Dji­bouti’s am­bas­sador to China, hopes the ini­tia­tive would as­sist his coun­try in be­ing an in­ter­na­tional mar­itime hub for the trans-ship­ment of goods com­ing from Asia to Europe.

“We want to be a lo­gis­tics base for Chi­nese made prod­ucts for Africa and the Arab world ,” he said.

“Our medium-term aim is to be the Dubai of Africa in or­der to en­able Africans and Arabs to do their shop­ping in Dji­bouti.”

One im­por­tant mes­sage from the fo­rum was that the ini­tia­tive now ex­tended beyond the orig­i­nal 65 coun­tries on the Silk Road Eco­nomic Belt and the 21st Cen­tury Mar­itime Silk Road.

Miguel Jaramillo Baanante, ex­ec­u­tive di­rec­tor of GRADE, a pub­lic pol­icy re­search or­ga­ni­za­tion based in Bar­ranco, Peru, wel­comed the fact that Latin Amer­ica was now firmly part of the ini­tia­tive.

“What we heard at the fo­rum was very promis­ing and en­gag­ing, ” he says.

“My coun­try, in par­tic­u­lar, is a very open econ­omy. We be­lieve in the ad­van­tages of trade. We think it is a very promis­ing ini­tia­tive and we hope to ben­e­fit from it.”

He be­lieveson­eareawhereSouthAmer­i­ca­can ben­e­fit is from China’s ex­per­tise in build­ing in­fra­struc­ture.

“When I first came to Bei­jing 15 years ago, there was one metro line, now there are 19. We need that ex­per­tise in Latin Amer­ica in or­der to de­velop our in­fra­struc­ture.”

Hen­ryPaul­son, for­merUS trea­sury sec­re­tary and chair­man of the Wash­ing­ton-based Paul­son In­sti­tute, told the fo­rum that build­ing in­fra­struc­ture on suchas­cale­was­bound­to­p­re­sent­ma­jor­chal­lenges.

“One thing I learned from my days as an in­vest­ment banker is that in­fra­struc­ture devel­op­ment is not easy any­where. In­fra­struc­ture in­vest­ments tend to yield sub-op­ti­mal re­turns,” he says.

The 71-year-old chair­man of the Wash­ing­ton­based Paul­son In­sti­tute said it was im­por­tant that projects were not as­sessed by nar­row cri­te­ria but by whatth­ey­con­tribute­tothede­vel­op­mento­fa­coun­try.

“A power gen­er­a­tion project in Pak­istan can’t eas­ily be com­pared to a road project in Africa.”

The former chief ex­ec­u­tive of Gold­man Sachs said, how­ever, thatAsia it­selfwasa pos­si­ble in­spi­ra­tion as to how the ini­tia­tive will work glob­ally.

“The Asian economies of the 1960s, 1970s and 1980s grew in large part be­cause they were ex­porters to the United States and Europe, but to­day half ofAsia’s trade is con­ducted with it­self.

“Amid such a dra­matic shift it should not be a sur­prise that­man­yaroundthe­worl­dare­watch­ing close­ly­how­pre­cisely Belt and Road will evolve.”

One of the crit­i­cisms of the Belt and Road Ini­tia­tive has been that it would be mainly Chi­nese con­struc­tion com­pa­nies that­would­ben­e­fit from the projects that it gen­er­ated and that it was the per­fect an­swer for their slow­ing do­mes­tic growth.

But De­nis Depoux, Asia deputy pres­i­dent and se­nior part­ner of Roland Berger, a global con­sul­tancy, says the ini­tia­tive is also likely to be a boon toWestern com­pa­nies.

“Many of the Euro­pean in­fra­struc­ture, in­dus­try equip­ment and ser­vices gi­ants have a chance to lever­age their ex­pe­ri­ence in these re­gions, part­ner with their Chi­nese coun­ter­parts, and de­velop a new, more in­clu­sive, joint devel­op­ment ap­proach,” he says.

He says Belt and Road could re­move many of the ma­jor bar­ri­ers to devel­op­ment in­many parts of the world. “Fi­nanc­ing chal­lenges, first and fore­most in­suf­fi­cient in­fra­struc­ture, have hin­dered devel­op­ment,” he says. “China’s ini­tia­tive brings struc­ture, fi­nanc­ing and po­lit­i­cal im­pe­tus, while the strong fo­cus on in­fra­struc­ture will swiftly en­able eas­ier trade and in­vest­ment.”

Mats Har­born, pres­i­dent of the Euro­pean Union Cham­ber of Com­merce in China, also hoped more Euro­pean com­pa­nies would be­come in­volved.

He says this would partly de­pend, how­ever, on Chi­na­fur­theropenin­git­sown­mar­ket­sup­for­trade.

“TheEuro­peanCham­ber­be­lieves that the suc­cess of the Belt and Road Ini­tia­tive will largely be pred­i­cated on open mar­kets, bal­anced trade and rec­i­proc­ity,” he says.

Marco Lam­ber­tini, di­rec­tor gen­eral of the World Wide Fund In­ter­na­tional, who at­tended the fo­rum, says the ini­tia­tive could play a sig­nif­i­cant role in fight­ing cli­mate change by en­sur­ing that the new in­fra­struc­ture is built sus­tain­ably.

“The Belt and Road Ini­tia­tive can help de­vel­op­ing economies leapfrog a car­bonized econ­omy and em­brace clean re­new­able en­ergy. This could be a very re­mark­able con­tri­bu­tion of the ini­tia­tive not only to Asia, but also to the world.”

Um­berto de Pretto, sec­re­tary-gen­eral of the Geneva-based IRJ, the global in­dus­try as­so­ci­a­tion for road trans­port, says the ini­tia­tive­hadthe po­ten­tial also to re-cre­ate the old silk routes of the past across Cen­tral Asia.

“With mar­itime trans­port to Europe, Cen­tral Asia was some­how left out of the glob­al­iza­tion process,” he says.

“There is now a lot of noise around rail, but it does not have the ca­pac­ity to de­liver goods like roads. The more you build roads, the more likely youare to­have­com­pa­nies­build­ing fac­to­riesand in­vest­ing in these ar­eas.”

Helga Zepp-LaRouche, founder of the Schiller In­sti­tute, the Wash­ing­ton-based in­ter­na­tional po­lit­i­cal and eco­nomic think tank, says the ini­tia­tive had as­sumed a newsig­nif­i­cance.

“The statis­tic­snow­showit has­be­comethe new en­gine of growth for the worlde­con­omy— in­fact, the only one— and it will con­tinue to be like that.”

She says her own in­sti­tute, which was founded in 1984, was an early ad­vo­cate of the un­der­ly­ing ideas of Belt and Road af­ter the col­lapse of the Soviet Union.

“Thiswa­souran­swerthen. When­the IronCur­tain was no longer there, we put for­ward pro­pos­als of how to con­nect Eura­sia with a land bridge aimed at con­nect­ing the in­dus­trial cen­ters of Europe with a then al­ready fast de­vel­op­ingAsia.”

The 68-year-old Ger­man-born cam­paigner says greater­con­nec­tiv­i­ty­woul­daid­de­vel­op­ment in some of the most trou­bled ar­eas of the world, par­tic­u­larly in theMid­dle East.

“The ini­tia­tive has changed the dy­namic around many of the cri­sis spots al­ready. Pres­i­den­tXi has of­fered to ex­tend the ini­tia­tive to Syria and other trou­bled coun­tries. This is in Europe’s big in­ter­est. The only way to re­solve the refugee cri­sis is for ev­ery­one to hold hands and elim­i­nate hunger and star­va­tion. Hope­fully, we can en­ter a new era of mankind so we can stop hav­ing sense­less wars with peo­ple suf­fer­ing.”

Pres­i­dent Xi made clear in his open­ing ad­dress to the fo­rum that this was one of the cen­tral aims of the ini­tia­tive.

“We should build the Belt and Road into a road of pros­per­ity. Devel­op­ment holds the mas­ter key to solv­ing all prob­lems. In pur­su­ing the Belt and Road Ini­tia­tive, we should fo­cus on the fun­da­men­tal is­sue of devel­op­ment, re­lease the growth po­ten­tial of coun­tries and achieve eco­nomic in­te­gra­tion and in­ter­con­nected devel­op­ment and de­liver ben­e­fits to all.”

LI MIN / CHINA DAILY

XU JINGXING / CHINA DAILY

Pres­i­dent Xi Jin­ping ad­dresses the round­table of the Belt and Road Fo­rum for In­ter­na­tional Co­op­er­a­tion at the Bei­jing Huairou In­ter­na­tional Con­fer­ence Cen­ter at Yanqi Lake on May 15.

Bri­tain’s Chan­cel­lor of the Ex­che­quer Philip Ham­mond dur­ing the Belt and Road Fo­rum for In­ter­na­tional Co­op­er­a­tion in Bei­jing on May 14. He was one of the most en­thu­si­as­tic Euro­pean sup­port­ers.

Henry Paul­son, former US trea­sury sec­re­tary and chair­man of Paul­son In­sti­tute

MA ZHANCHENG / XINHUA

Pres­i­dent Xi Jin­ping an­nounces the start of the round­table of the Belt and Road Fo­rum on May 15 in Bei­jing.

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