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 ...
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.