Belt and Road Initiative for global benefit
... both China and the US should work closely to improve global infrastructure and economic integration ...
The international community hopes the G20 summit inHangzhou, East China’s Zhejiang province, will raise global investments and optimize the use of financial mechanisms. And given its framework, the G20 should viewthe China-proposed Belt and Road Initiative and Asian Infrastructure Investment Bank as a boon for stabilizing the faltering world economy.
The Belt and Road Initiative, the Silk Road Economic Belt and 21st CenturyMaritime Silk Road, is essentially aimed at providing efficient supply for stimulating fresh demand, with a focus on infrastructure investment in both developed and developing economies. That many countries, ranging from theUnited Kingdom to the ASEAN members, have shown interest in endorsing the Belt and Road Initiative highlights their desire to use innovative means to improve their domestic infrastructure.
But the loose economic coalition needs financial institutions such as the AIIB and the BRICS NewDevelopment Bank to coordinate the participation of governments, enterprises and other institutes, as well as to diversify financing channels. Apart from the two international banks led by China, the country’s State-owned and commercial banks, too, have a role to play in implementing the Belt and Road Initiative, which features public-private partnership, or PPP.
Take for example the AIIB, the first multinational financial institution established on Beijing’s proposal. It has the potential to deepen global political and economic cooperation and provide funds for the infrastructure projects for the Belt and Road Initiative.
Sharing the pursuit of boosting infrastructure investment, both the Initiative and the AIIB pledge to make global governance “lean, clean and green”, endorse open regionalism, and are committed to realizing theUnitedNations Sustainable Development Goals by 2030.
But it is not true that they are affiliated to or subject to one another, a popular misreading among some China observers who cannot accept China’s rise and believe its participation in global governance comes with grave security risks. Somehave even playedupBeijing’s so-called challenge to theWashington-led world order, calling the BeltandRoadInitiativeandthe AIIB a threat to the environmentandthe rule of law.
The fact is, China still needs the support of theUnited States, the world’s largesteconomy, to carry forwardits strategic plans, although someUS politicians remain suspicious of the intentionsandfeasibility of the BeltandRoadInitiative. Therefore, moremeasureshave to be taken to convincethemthat stabilizing global growth is inChina’s owninterest.
ButWashington, onits part, also has to learn a lesson or two from its failed attempts to dissuadesomeof its close allies, like theUK, from joining the AIIB. Inother words, bothChinaandtheUS shouldwork closely to improve global infrastructureandeconomic integration, in a bid to upgrade their bilateral ties.
TheUS is a world leader in building soft infrastructure, ranging from capacity buildingandskills developmentto legal systems, while Beijing hasanequally impressive record in infrastructure construction, including transportandtelecommunications, especially in recent years.
The twosides, therefore, should learn from each other to bridge the widening gap betweenthedemand for international public goodsand the insufficient supply, which is exactlywhatthe BeltandRoadInitiative seeks to achieve.
InAsia alone, at least$8trillion are needed for infrastructure projects over the next 5 to 10years to improve connectivity. So the newly established AIIB with a capital of $100 billionandthe$40billion Silk RoadFundshould bewelcomed rather than opposed by relevant countries. The author is a professor of international relations at Renmin University of China.