China emphasizes infrastructure for integration
Investment projects will show greater growth in long run: experts
Infrastructure as a means of boosting regional economic growth has become China’s solution in promoting regional integration, experts attending the annual Boao Forum for Asia conference said on Thursday.
However, China, a large exporter of infrastructure, ranked 15th on average in infrastructure development among 37 countries and regions in Asia, according to a report issued by the forum on the same day.
Lin Guijun, vice president at the University of International Business and Economics, said at a press conference Thursday that infrastructure exporting and its result – regional connectivity – can be understood as China’s plan for the economic integration of Asia.
This suggestion is in addition to the US’ solution of boosting free trade and investment, Lin said, adding that promoting infrastructure connectivity can unlock more potential than promoting liberalization in trade and investment.
Wang Jun, a senior economist at the China Center for International Economic Exchanges, said China, as a major regional and global power, needs a global vision and to shoulder responsibility for regional economic integration.
“Contributing its expertise in resources, technology and labor to other countries that want to upgrade their infrastructure is a path China must take, given the country’s current developmental stage,” Wang told the Global Times on Thursday.
“This is also a new- type of globalization propelled by China. China cannot follow in the footsteps of the US and the EU when they chose to back down. When the infrastructure of China’s neighbors improves, people’s welfare will increase in these countries, and growth potential will be unlocked, and China will benefit from this process,” Wang said.
In 2016, Chinese companies made investments of $ 14.53 billion to 53 countries and regions along the One Belt and One Road initiative, data from the Ministry of Commerce ( MOFCOM) showed on January 19.
Major investment destinations included Singapore, Indonesia, India, Thailand and Malaysia.
Additionally, in 2016, Chinese firms inked 8,158 new deals worth $ 126 billion in 61 countries and regions along the initiative, MOFCOM data showed. The value of the total deals was up 36 percent year- on- year.
The Belt and Road initiative was put forward by President Xi Jinping in 2013 to enhance connectivity, trade and investment between Asian, European and African countries.
Infrastructure ranking
According to the Asian Competitiveness Annual Report 2017 released Thursday, China ranked 15th, while Bahrain, Hong Kong, Singapore, Japan, South Korea and the island of Taiwan remained the top six in terms of infrastructure levels, according to the report. Australia, New Zealand and China slightly dropped in their rankings from the previous year.
Indicators used in the ranking cover all aspects of infrastructure in an economy, including transport facilities, telecommunication and Internet facilities, as well as power supply and water supply facilities.
“The countries and regions on the top of the list are much richer than China in GDP per capita. It is not the situation that China has already built too many roads,” Brian Coulton, Fitch’s chief economist, told the Global Times on the sidelines of the forum Thursday.
He noted that “the portion of investment happening in China is going to be supporting growth in the long run, but the problem is that if you look at the return of the investment in China, it has been going down since 2008, and that is related to the credit issues.”
Commenting on China’s relatively weak infrastructure ranking in the report, Wang said the ranking is partly based on per capita figures and China’s infrastructure demand has basically been met and it is natural to see a change in the ranking compared with other countries.
“If you drive around the country to the less developed central and western areas, you will discover highways nowadays have reached even remote villages. Growth on top of such a high level of infrastructure is difficult. It is just like slowing down China’s economy, on top a very large base,” Wang told the Global Times Thursday.