Ini­tia­tive to ex­plore the way to com­mon pros­per­ity

Pro­mot­ing the con­struc­tion of the Belt and Road Ini­tia­tive is con­ducive to China and the other coun­tries along the routes ex­ploit­ing their com­par­a­tive ad­van­tages ...

China Daily (USA) - - VIEW -

The re­al­iza­tion of five trends

Three years ago, Pres­i­dent Xi Jin­ping pro­posed build­ing the Silk Road Eco­nomic Belt and a 21st Cen­tu­ryMar­itime Silk Road, now known jointly as the Belt and Road Ini­tia­tive, which is China’s most am­bi­tious ini­tia­tive of the past fewdecades.

TheWest’s re­ac­tion to the pro­posal has been skep­ti­cal, fo­cus­ing on it as an at­tempt by China to ex­port its ex­ces­sive in­dus­trial ca­pac­ity or be­ing part of China’s geopo­lit­i­cal strat­egy, or both.

There are ob­vi­ously do­mes­tic im­per­a­tives for the ini­tia­tive, but they do not con­vey the whole pic­ture, and there are five as­pects of the ini­tia­tive that are par­tic­u­larly note­wor­thy:

First, in­fra­struc­ture is more con­ducive to poverty erad­i­ca­tion than one per­son one vote (as ad­vo­cated by theWest). China is shar­ing this prag­matic idea with the coun­tries along the Belt and Road, most of which are de­vel­op­ing ones with a huge de­mand for in­fra­struc­ture and large pop­u­la­tions seek­ing bet­ter liveli­hoods.

Sec­ond, in­fra­struc­ture fa­cil­i­tates con­nec­tiv­ity, which in turn fa­cil­i­tates ex­changes of goods, ideas, ser­vices and peo­ple. Hav­ing gained so much from its own con­nec­tiv­ity both within the coun­try and with­out, China is pro­mot­ing “five-way” con­nec­tiv­ity— in poli­cies, trade, trans­porta­tion, cur­rency and peo­ple-to-peo­ple— with the Belt and Road.

Third, the sig­nif­i­cance of con­nec­tiv­ity is mul­ti­plied by co­op­er­a­tive part­ner­ships. True, the Belt and Road Ini­tia­tive are Chi­nese pro­pos­als, but China can­not re­al­ize them alone, rather it is en­deav­or­ing to forge win-win part­ner­ships with all par­tic­i­pants in the ini­tia­tive.

Fourth, es­tab­lish­ing part­ner­ships among so many coun­tries with di­verse cul­tures and tra­di­tions is bound to be chal­leng­ing, so China has called on those will­ing to par­tic­i­pate in the Belt and Road Ini­tia­tive to re­spect the sovereignty of oth­ers and pro­mote di­a­logue and co­op­er­a­tion among civ­i­liza­tions as away to re­duce dif­fer­ences, en­hance mu­tual un­der­stand­ing and jointly ex­plore the best way to re­al­ize com­mon pros­per­ity.

Th­ese five con­cepts put to­gether rep­re­sent a new­type of glob­al­iza­tion, a more in­clu­sive glob­al­iza­tion, one which will con­trib­ute to clos­ing up the gap be­tween the world’s poor and rich, tack­ling the root cause of ex­trem­ism and ter­ror­ism and pave the way for cre­at­ing a com­mu­nity of shared in­ter­ests, des­tiny and re­spon­si­bil­ity. ZhangWei­wei is the di­rec­tor of the China In­sti­tute at Fu­dan Univer­sity.

A driv­ing force for fairer global devel­op­ment

The Belt and Road Ini­tia­tive car­ries on the 1,000-year-old spirit of the an­cient Silk Road, namely “open­ness and in­clu­sive­ness, peace­ful co­ex­is­tence and mu­tual ben­e­fit”.

The orig­i­nal Silk Road was fun­da­men­tally a col­lec­tion of trade routes. Like­wise, trade and eco­nomic co­op­er­a­tion is a fun­da­men­tal part of the Silk Road Eco­nomic Belt and 21st Cen­tu­ryMar­itime Silk Road pro­posed by China.

At present, the world econ­omy is still strug­gling to re­cover and ad­just af­ter the global fi­nan­cial cri­sis. In the decades be­fore the cri­sis, in­ter­na­tional trade boomed, and its growth rate re­mained al­most twice that of the world’s eco­nomic growth rate. How­ever, since 2012, the growth rate for in­ter­na­tional trade has been slower than the world’s eco­nomic growth rate for three con­sec­u­tive years.

Pro­mot­ing the con­struc­tion of the Belt and Road Ini­tia­tive is con­ducive to China and the other coun­tries along the routes ex­ploit­ing their com­par­a­tive ad­van­tages and con­vert­ing eco­nomic com­ple­men­tar­ity into a driv­ing force for their devel­op­ment.

China is not seek­ing uni­lat­eral gains from the ini­tia­tive in­stead it hopes to pro­mote com­mon pros­per­ity.

For a long time, the mul­ti­lat­eral eco­nomic and trade mech­a­nism and re­gional eco­nomic and trade ar­range­ments have been the two wheels driv­ing eco­nomic glob­al­iza­tion for­ward. Af­ter the in­ter­na­tional fi­nan­cial cri­sis, the mul­ti­po­lar­ity of the global econo- my has be­come more prom­i­nent, along with var­i­ous risks, chal­lenges and un­cer­tain­ties.

The Belt and Road Ini­tia­tive em­pha­sizes di­a­logue so as to cre­ate an open, in­clu­sive, bal­anced and widely-ben­e­fi­cial co­op­er­a­tion frame­work to drive the global gov­er­nance struc­ture in the di­rec­tion of fair­ness and rea­son­able­ness. This is the Chi­nese wis­dom which can help pre­vent the world suf­fer­ing the con­se­quences of the Thucy­dides trap.

Since Pres­i­dent Xi Jin­ping pro­posed the Belt and Road Ini­tia­tive in 2013, China has been ac­tively es­tab­lish­ing a free trade net­work with coun­tries and re­gions along the routes. The next step in re­al­iz­ing the Belt and Road Ini­tia­tive should be the ex­ist­ing re­gional and sub-re­gional co­op­er­a­tion mech­a­nisms in­creas­ing their eco­nomic and trade co­op­er­a­tion, and the pro­mo­tion of bi­lat­eral and mul­ti­lat­eral, re­gional and sub-re­gional co­op­er­a­tion in an all-round way. Gu Xuem­ing is head of Chi­nese Academy of In­ter­na­tional Trade and Eco­nomic Co­op­er­a­tion, af­fil­i­ated to the Min­istry of Com­merce.

A mu­tu­ally ben­e­fi­cial way to use China’s sav­ings

China’s na­tional sav­ings rate had been run­ning high, in some senses very high, over the past 10 years, and it re­mains high now at a ra­tio of around 47 per­cent to the coun­try’s GDP.

What should a coun­try do when it has such a high sav­ings rate? It should in­vest more, of course. As China has done, in­vest­ing in do­mes­tic in­dus­tries and pub­lic The au­thor is an as­sis­tant re­searcher at the In­sti­tute of Pop­u­la­tion and La­bor Eco­nom­ics, Chi­nese Academy of So­cial Sciences. in­fra­struc­ture.

How­ever, this in­vest­ment caused the econ­omy to over­heat when con­sump­tion did not in­crease pro­por­tion­ally, and cre­ated a great deal of ex­cess pro­duc­tion ca­pac­ity in cer­tain in­dus­tries.

And the sav­ings rate has not fallen much, so the ques­tion re­mains, what should China do with its na­tional sav­ings?

There are three ways China can uti­lize its sav­ings.

The first is the in­vest­ment by pri­vate com­pa­nies abroad. With fewer at­trac­tive in­vest­ment projects in the do­mes­tic mar­ket, com­pa­nies nat­u­rally look else­where for promis­ing in­vest­ment projects.

The sec­ond way is to lend the money to oth­ers. But this is the least ef­fi­cient way to use its sav­ings as it brings the low­est re­turns.

The third and best way to use the coun­try’s na­tional sav­ings is to in­vest in some pub­lic projects in for­eign coun­tries that will bring ben­e­fits to all.

There is no doubt that many coun­tries along the Belt and Road need funds for in­fra­struc­ture. The ques­tion here is whether those projects in other coun­tries are in China’s in­ter­ests? The an­swer is: prob­a­bly yes. China’s ex­ports have de­clined due to the global eco­nomic stag­na­tion, in­clud­ing the slow­ing growth of emerg­ing mar­kets. If China con­trib­utes to boost­ing the eco­nomic growth of other coun­tries and thereby peo­ple’s in­comes, China’s ex­port mar­ket can be ex­panded. Other coun­tries have done this in the past. Nowit is China’s turn. Fan Gang is pres­i­dent of the China Devel­op­ment In­sti­tute.


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