China’s BRI investment rises by 7 percent a year
Overseas economic and trade cooperation zones play important role in initiative
China has become the main investor in many countries involved in the Belt and Road Initiative, and overseas economic and trade cooperation zones are important platforms for it, according to a recent report.
The Report on China’s Trade and Investment Cooperation Under the Belt and Road Initiative (2014-17) was released on Sept 21 in Beijing by the Chinese Academy of International Trade and Economic Cooperation, part of the Ministry of Commerce.
It says that in the past five years, China’s direct investment in countries along the Belt and the Road has grown by about 7 percent annually, reaching $16.71 billion (14.3 billion euros; £13 billion) as of the end of 2017.
Even in 2017, when China’ direct investment overseas dropped generally, its direct investment in countries involved in the BRI increased by 8.9 percent.
In 2013, in Kazakhstan and Indonesia, President Xi Jinping proposed the Silk Road Economic Belt and the 21st Century Maritime Silk Road — components of the BRI. The initiative serves as a solution for China to participate in global opening-up and cooperation, improve global economic governance, promote common development and prosperity and build a community with a shared future for humanity, he said.
To compile the report, the writers visited many BRI countries, including Cambodia, Laos, Vietnam, Thailand and Egypt, and also visited eight Chinese regions and cities that are key participants, including Chongqing and the Xinjiang Uygur autonomous region.
The report says that at the end of last year, 56 percent of China’s overseas direct investment in countries along the Belt and the Road was in Southeast Asia. Singapore, Indone- sia, Laos and Vietnam were the main investment destinations. About 20 percent went to Mongolia, Russia and Central Asia, where Russia and Kazakhstan received the most investment. About 15 percent went to western Asia and North Africa, mainly the United Arab Emirates, Israel, Iran and Saudi Arabia.
About 70 percent of China’s investment has been focused on a few sectors: manufacturing, leasing, commercial business, construction, wholesale and retail and farming.
Gu Xueming, president of the Chinese Academy of International Trade and Economic Cooperation, says that overseas economic and trade cooperation zones have become an important platform for Chinese companies as they have invested in the countries involved in the BRI.
An increasing number of companies are operating in these zones, he says.
According to figures from the ministry, as of the end of 2017 Chinese companies had built 75 economic and trade cooperation zones in 24 BRI countries, accounting for about 75.8 percent of the total number of overseas cooperation zones that Chinese companies had built.
Chinese companies have invested $25.45 billion in these cooperation zones and attracted 3,879 companies.
“Cooperation zones have made a great contribution to countries along the Belt and the Road,” Gu says. “For example, a cooperation zone between China and Egypt has helped Egypt’s fiberglass manufacturing industry develop from nothing to the third-largest in the world.”
In another cooperation zone in Indonesia, facilities that would benefit local people were designed from the start, including educational facilities, shopping malls and hospitals, he added.
Wang Shouwen, vice-minister of the Ministry of Commerce and deputy China International Trade Representative, says that China’s overseas economic and trade cooperation zones have also paid $1.68 billion in tax to destination countries, and provided 219,000 jobs for these countries.
In the future, China will strengthen connectivity with countries involved in the BRI, and strengthen the construction and operation of overseas economic and trade cooperation zones, to push forward the development of both destination countries and China, Wang says.
Gu Xueming, president of the Chinese Academy of International Trade and Economic Cooperation, gives a speech at the China Forum on Opening and Development in Beijing on Sept 21.