Pro­posal a new driver of in­vest­ment

China Daily (USA) - - ECONOMY - ByWANG YIQING wangy­iqing@chi­nadaily.com.cn

As the world looks to the G20 for a pre­scrip­tion against the weak global eco­nomic re­cov­ery, the Belt and Road Ini­tia­tive has be­come a new driver of in­ter­na­tional trade and in­vest­ment.

The World Trade Or­ga­ni­za­tion warned in April that the out­look for global trade growth will re­main slug­gish in 2016, fore­cast­ing that global trade would grow by 2.8 per­cent this year, the same as that reg­is­tered last year. This will be the fifth con­sec­u­tive year that world trade vol­ume has grown by less than 3 per­cent, which would be the long­est con­tin­u­ous pe­riod of weak global trade growth in the past three decades.

While the pic­ture for in­vest­ment has been some­what rosier, as global for­eign di­rect in­vest­ment flows grew 38 per­cent in 2015 ac­cord­ing to the World In­vest­ment Re­port is­sued by United Na­tions Con­fer­ence on Trade and Devel­op­ment in June, that is still lower than the fig­ure be­fore the on­set of the global fi­nan­cial cri­sis.

More­over, large-scale FDI flew from emerg­ing mar­kets to de­vel­oped coun­tries. In 2015, the FDI in de­vel­oped economies al­most dou­bled to $962 bil­lion, while the FDI in de­vel­op­ing economies only in­creased by just 9 per­cent.

And the United Na­tions Con­fer­ence on Trade and Devel­op­ment pre­dicts that FDI flows will de­cline by 10-15 per­cent in 2016, con­sid­er­ing the per­sis­tent weak­ness of the global eco­nomic re­cov­ery.

China re­mained the largest coun­try in goods trade and the third largest in­vestor in the world, and its out­ward FDI rose from $123 bil­lion to $128 bil­lion in 2015, ac­cord­ing to the UN body.

The launch of the Belt and Road Ini­tia­tive has been China’s re­sponse to the slug­gish global eco­nomic growth and it is a sig­nif­i­cant move to­ward a more open global eco­nomic sys­tem.

As the Silk Road Eco­nomic Belt and the 21st Cen­tu­ryMar­itime Silk Road have started to progress over the past few years, re­gional trade and in­vest­ment along the routes have been re­mark­ably boosted.

The an­nual growth rates for trade and in­vest­ment along the Belt and Road have been nearly twice as much as the global av­er­age, and in 2015 the bi­lat­eral trade vol­ume be­tween China and coun­tries along the routes ex­ceeded $1 tril­lion, Wang Yi, China’s for­eign min­is­ter, said on Aug 3.

China’s out­bound di­rect in­vest­ment in the coun­tries join­ing the ini­tia­tive has also soared. Ac­cord­ing to the Fi­nan­cial Times’ cross-bor­der in­vest­ment data­base fDI Mar­kets, Chi­nese in­vestors an­nounced 315 green field in­vest­ments with a com­bined value of $75.9 bil­lion in coun­tries along the Belt and Road routes in the 18 months to June 2016.

The re­cently launched Asian In­fra­struc­ture In­vest­ment Bank and the $40 bil­lion Silk Road Fund demon­strate that China is also ex­plor­ing in­no­va­tions in fi­nanc­ing to pro­mote the Belt and Road Ini­tia­tive. And China and coun­tries along the routes are en­deav­or­ing to es­tab­lish free trade zones and re­gional in­te­gra­tion fa­cil­i­tate trade.

Ina speech in­Uzbek­istan on June 22, Pres­i­dent Xi Jin­ping said China has jointly es­tab­lished 46 overseas eco­nomic to fur­ther co­op­er­a­tion zones coun­tries along the Road.

“As the pro­poser of the Belt and Road Ini­tia­tive, China is pro­vid­ing con­sid­er­able fi­nan­cial with 17 Belt and sup­port to the con­struc­tion of the Belt and Road,” said Liu Ying, a re­searcher at the Chongyang In­sti­tute of Fi­nan­cial Stud­ies at Ren­minUniver­sity of China.”

XIN­HUA

A staff in­tro­duces Chi­nese prod­ucts to a vis­i­tor at 2015 China-ASEAN Expo Thai­land Ex­hi­bi­tion in Bangkok, Thai­land, on April 2, 2015.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.