The Belt and Road Ini­tia­tive: In­ject­ing Pos­i­tive En­ergy into the World Econ­omy

In­ject­ing Pos­i­tive En­ergy into the World Econ­omy

China Today (English) - - CONTENTS - By REN HONG­BIN

Since a raft of mem­o­randa of co­op­er­a­tion was signed be­tween China and cer­tain na­tions to jointly build the Belt and Road, it has be­come a rea­son­able be­lief that the ini­tia­tive will bring about new means of mu­tu­ally-ben­e­fi­cial co­op­er­a­tion for the world econ­omy.

SINCE the Belt and Road Ini­tia­tive was pro­posed, con­struc­tion across the area has steadily pro­gressed. China has signed mem­o­randa of co­op­er­a­tion with cer­tain na­tions to jointly build the Belt and Road, and has also signed mem­o­randa with some neigh­bor­ing coun­tries to pro­mote re­gional and fron­tier co­op­er­a­tion. A raft of ma­jor co­op­er­a­tive projects has driven de­vel­op­ment in such ar­eas as in­fra­struc­ture con­nec­tiv­ity, in­dus­trial in­vest­ment, re­source de­vel­op­ment, eco­nomic and trade co­op­er­a­tion, fi­nan­cial co­op­er­a­tion, cul­tural ex­changes, eco­log­i­cal con­ser­va­tion, and mar­itime co­op­er­a­tion. That more coun­tries and en­ter­prises will en­gage in the con­struc­tion of the Belt and Road in or­der to craft new means of mu­tu­ally-ben­e­fi­cial co­op­er­a­tion for the world econ­omy is thus now be­com­ing a rea­son­able be­lief.

Co­op­er­a­tion, Mu­tual Ben­e­fit and Win-Win Re­sults

On Septem­ber 7, 2013, in a speech de­liv­ered at Nazarbayev Univer­sity in Kaza­khstan, Chi­nese Pres­i­dent Xi Jin­ping ex­pounded the strate­gic Belt and Road Ini­tia­tive for the first time. He called for pol­icy con­sul­ta­tion, road con­nec­tions, unim­peded trade, mone­tary cir­cu­la­tion, and un­der­stand­ing be­tween peo­ples. In his Oc­to­ber 3, 2013 speech to the Peo­ple’s Rep­re­sen­ta­tive Coun­cil of In­done­sia, Pres­i­dent Xi re­marked that China is com­mit­ted to greater con­nec­tiv­ity with ASEAN coun­tries and is will­ing to de­velop a mar­itime part­ner­ship with them to jointly build the 21st Cen­tury Mar­itime Silk Road. This ini­tia-

tive hon­ors the prin­ci­ples of con­sul­ta­tion, joint ef­forts and ben­e­fits for all. With the goal of pro­mot­ing eco­nomic co­op­er­a­tion and pros­per­ity in coun­tries strad­dling the Belt and Road, the ini­tia­tive is com­mit­ted to pro­mot­ing con­nec­tiv­ity in Eura­sia and its ad­ja­cent sea­ways, and es­tab­lish­ing and en­hanc­ing part­ner­ships among coun­tries in the area, so as to re­al­ize di­ver­si­fied, in­de­pen­dent, bal­anced and sus­tain­able de­vel­op­ment.

Ac­cord­ing to pre­lim­i­nary es­ti­mates, there are over 60 coun­tries abut­ting the Belt and Road, with an ag­gre­gate pop­u­la­tion of 4.4 bil­lion; this ac­counts for 63 per­cent of the world’s to­tal. Ge­o­graph­i­cally, the Belt (short for the Silk Road Eco­nomic Belt) fo­cuses on bring­ing China, Cen­tral Asia, Rus­sia and Europe to­gether, and link­ing China with the Per­sian Gulf and the Mediter­ranean Sea through Cen­tral and Western Asia, and link­ing China with South­east Asia, South Asia and the In­dian Ocean. The 21st Cen­tury Mar­itime Silk Road is pro­jected to go from the Chi­nese coast to Europe via the South China Sea and the In­dian Ocean along one route, and from China’s coast through the South China Sea to the South Pacific on the other. The Belt and Road will be­come the world’s ma­jor eco­nomic cor­ri­dor, and stretch across the long­est dis­tances. Re­vi­tal­iza­tion of the world’s econ­omy will be less dif­fi­cult if na­tions along the Belt and Road strengthen their co­op­er­a­tion and en­hance their con­nec­tiv­ity.

Based on China’s an­cient Silk Road and Mar­itime Silk Road, the Belt and Road has a pro­found his­tor­i­cal and cul­tural back­ground. It en­riches the Silk Road spirit of “open­ness and co­op­er­a­tion, har­mony and in­clu­sive­ness, and mu­tual ben­e­fit.” In the present age, in­ter­na­tional com­pe­ti­tion is be­com­ing ever fiercer, but the co­op­er­a­tive com­pe­ti­tion en­dorsed by China is bound to yield win-win re­sults. The Belt and Road is open to all coun­tries, eco­nomic en­ti­ties, in­ter­na­tional or­ga­ni­za­tions, re­gional co­op­er­a­tion mech­a­nisms, non-gov­ern­men­tal or­ga­ni­za­tions, and mar­ket play­ers in the area with­out any re­stric­tions or in­ter­est al­liances. While fur­ther­ing its open­ing up to the out­side world, China is will­ing to help pro­mote greater open­ness among mar­kets in the area and fa­cil­i­tate trade and in­vest­ment, while low­er­ing the costs of en­gag­ing in trade and in­vest­ment.

Some coun­tries lin­ing the Belt and Road are de­vel­oped, while oth­ers are de­vel­op­ing. Con­sid­er­ing their vary­ing eco­nomic foun­da­tions and de­vel­op­ment phases, the spirit of har­mony, in­clu­sive­ness and mu­tual re­spect must be ob­served in the course of co­op­er­a­tion and ex­changes, so as to al­le­vi­ate each one’s con­cerns and achieve com­mon pros­per­ity. If the essence of economics is com­pe­ti­tion, the core of the com­pe­ti­tion en­dorsed by the Belt and Road is co­op­er­a­tive rather than con­fronta­tional.

In­ject­ing Im­pe­tus into the Re­cov­ery and a New Round of Growth of the World Econ­omy

As the world’s sec­ond largest econ­omy, China has been pro­mot­ing the world eco­nomic re­cov­ery. This aim also pro­vided the prompt for China’s lead­er­ship to pro­pose the Belt and Road Ini­tia­tive. Through en­hanced co­opera- tion with coun­tries along the Belt and Road, China hopes to share the bounty of its open­ing-up and the fruits of its eco­nomic de­vel­op­ment, build new chan­nels lead­ing to mu­tu­ally-ben­e­fi­cial global eco­nomic co­op­er­a­tion, and gal­va­nize the eco­nomic re­cov­ery with a new en­ergy, while trig­ger­ing a new round of global eco­nomic growth.

Es­ti­mates in­di­cate that the de­pen­dence on for­eign trade by coun­tries along the Belt and Road is 36 per­cent – much higher than the world av­er­age of 25 per­cent. From Jan­uary to Au­gust 2015, the vol­ume of tan­gi­ble goods trade be­tween China and the coun­tries along the Belt and Road stood at US $485.37 bil­lion, and this is es­ti­mated to ex­ceed US $2.5 tril­lion by 2025. From Jan­uary to Au­gust 2015, Chi­nese en­ter­prises had in­vested a to­tal of US $10.73 bil­lion in this area, with a year-on-year growth of 48.2 per­cent. The con­struc­tion of the Belt and Road will ex­ert pos­i­tive in­flu­ence on all coun­tries con­cerned. They may then in­te­grate their own de­vel­op­ment plans with the con­struc­tion of the Belt and Road, in­crease trade and in­vest­ment, pro­mote link­ing of in­dus­tries, mar­kets and projects, give greater play to the com­par­a­tive ad­van­tages of each, fos­ter new points for co­op­er­a­tion, and build a new plat­form for col­lab­o­ra­tion.

China’s re­mark­able con­tri­bu­tion to the world econ­omy in the con­struc­tion of the Belt and Road

The Asian In­fra­struc­ture In­vest­ment Bank and the Silk Road Fund ad­vo­cated by China will pro­vide fi­nan­cial sup­port for in­ter­na­tional routes over land and sea. In the mean­time, the Chi­nese govern­ment is also en­cour­ag­ing en­ter­prises to in­vest in in­fra­struc­ture con­struc­tion in coun­tries along the Belt and Road, and to help coun­tries in need build high­speed rail­ways and over­seas post sta­tions. Ac­cord­ing to a re­search report by the World Bank in 2014, the cost of China build­ing high- speed rail­ways is only two- thirds that of de­vel­oped coun­tries. In ad­di­tion, coun­tries along the Belt and Road may en­hance har­mo­niza­tion of their in­fra­struc­ture con­struc­tion plans and tech­ni­cal stan­dards, jointly push for­ward the con­struc­tion of in­ter­na­tional trunk routes, and jointly ad­vance the con­struc­tion of cross-bor­der op­ti­cal ca­bles and other com­mu­ni­ca­tions trunk line net­works, im­prove in­ter­na­tional com­mu­ni­ca­tions con­nec­tiv­ity, and cre­ate an In­for­ma­tion Silk Road.

Co­op­er­a­tion modes for the Belt and Road can be flex­i­ble. Mul­ti­lat­eral and bi­lat­eral, re­gional and cross-bor­der, fi­nan­cial, trade and project co­op­er­a­tion in var­i­ous ar­eas and at dif­fer­ent lev­els must all come un­der con­sid­er­a­tion. Plat­forms pro­vide the medium for co­op­er­a­tion. Var­i­ous co­op­er­a­tive plat­forms have al­ready been es­tab-

China hopes to share the bounty of its open­ing-up and the fruits of its eco­nomic de­vel­op­ment, build new chan­nels lead­ing to mu­tu­ally-ben­e­fi­cial global eco­nomic co­op­er­a­tion, and gal­va­nize the eco­nomic re­cov­ery with a new en­ergy.

lished be­tween China and coun­tries along the Belt and Road. Trans­porta­tion, oil and gas pipe­lines be­tween China and Rus­sia, Cen­tral Asia and Myan­mar hav­ing al­ready been built, more co­op­er­a­tive ap­proaches will be ex­plored on the ba­sis of the ex­ist­ing freight train routes be­tween China and the rest of Eura­sia, high­ways be­tween Western China and Western Europe, and ship­ping lanes be­tween Lan­cang and Mekong. In­ter­na­tional eco­nomic cor­ri­dors such as the New Eurasian Con­ti­nen­tal Bridge will be jointly built by tak­ing ad­van­tage of in­ter­na­tional trans­port routes, re­ly­ing on core cities along the Belt and Road, and us­ing key com­mer­cial and in­dus­trial parks as co­op­er­a­tive plat­forms. In terms of in­ter­na­tional in­dus­trial chain co­op­er­a­tion, over­seas eco­nomic and trade co­op­er­a­tion zones, cross-bor­der eco­nomic zones, and var­i­ous types of in­dus­trial parks will be es­tab­lished. Co­op­er­a­tive plat­forms for fi­nan­cial reg­u­la­tion and su­per­vi­sion, sci­ence and tech­nol­ogy and per­son­nel ex­changes will also be erected for coun­tries along the Belt and Road.

Ex­pand­ing the scale of trade and in­vest­ment of coun­tries along the Belt and Road and re­al­iz­ing fa­cil­i­ta­tion of trade and in­vest­ment are cru­cial to the con­struc­tion of the Belt and Road. In Septem­ber of this year, China sub­mit­ted its ac­cep­tance of the Trade Fa­cil­i­ta­tion Agree­ment to the WTO, be­com­ing the 16th mem­ber to ac­cede to it. China will ac­tively boost fa­cil­i­ta­tion of trade, in­vest­ment and flow of per­son­nel, en­hance ex­changes of in­for­ma­tion, and the func­tions of cus­toms, cer­ti­fi­ca­tion and ac­cred­i­ta­tion. Coun­tries along the Belt and Road should pro­mote cus­toms co­op­er­a­tion such as in­for­ma­tion ex­changes, mu­tual recog­ni­tion of reg­u­la­tions, and mu­tual as­sis­tance in law en­force­ment. They should mean­while im­prove bi­lat­eral and mul­ti­lat­eral co­op­er­a­tion in the fields of in­spec­tion and quar­an­tine, cer­ti­fi­ca­tion and ac­cred­i­ta­tion, stan­dard­iza­tion of mea­sure­ments, and sta­tis­ti­cal in­for­ma­tion, and fur­ther im­prove cus­toms clear­ance fa­cil­i­ties at bor- der ports, es­tab­lish a “sin­gle-win­dow” in bor­der ports, re­duce cus­toms clear­ance costs, and im­prove cus­toms clear­ance ca­pa­bil­ity. In­vest­ment fa­cil­i­ta­tion must also ac­cel­er­ate, in­vest­ment bar­ri­ers be elim­i­nated, and ne­go­ti­a­tions on bi­lat­eral in­vest­ment pro­tec­tion agree­ments and dou­ble-tax­a­tion avoid­ance agree­ments ad­vanced so as to pro­tect the le­git­i­mate rights and in­ter­ests of in­vestors. With en­hanced trade and in­vest­ment fa­cil­i­ta­tion and an im­proved trade and in­vest­ment en­vi­ron­ment, both the scale and level of trade and in­vest­ment be­tween coun­tries along the Belt and Road will greatly in­crease, thus ben­e­fit­ting res­i­dents through­out the en­tire area.

Achieve­ments and Prospects of Co­op­er­a­tion be­tween China and Coun­tries along the Belt and Road

Achieve­ments in project co­op­er­a­tion be­tween China and coun­tries along the Belt and Road have al­ready be­come man­i­fest. Last April, con­struc­tion of a hy­dropower project by a Chi­nese com­pany in Pak­istan, and fi­nanced by the Silk Road Fund fin­ished. Its in­stalled ca­pac­ity is 720 megawatts, with an an­nual gen­er­at­ing ca­pac­ity of 3.213 bil­lion kwh. This project may help re­lieve the power short­ages in Pak­istan that have long re­tarded eco­nomic de­vel­op­ment and im­prove­ment of liv­ing stan­dards. China has signed cur­rency swap agree­ments with na­tions along the Belt and Road, in­clud­ing Kaza­khstan, Uzbek­istan, Pak­istan, Rus­sia and Mon­go­lia in Asia, and Rus­sia, Ukraine, Al­ba­nia and Hun­gary in Europe. China is now work­ing with coun­tries in the area to ac­tively plan con­struc­tion of six ma­jor eco­nomic cor­ri­dors: China-Mon­go­lia-Rus­sia, the New Eurasian Con­ti­nen­tal Bridge, China-Cen­tral Asia-West Asia, China-In­dochina Penin­sula, China-Pak­istan and Bangladesh-China-In­dia-Myan­mar. With fur­ther con­struc­tion of the Belt and Road, co­op­er­a­tion at more lev­els and in more ar­eas be­tween China and coun­tries along the Belt and Road will un­fold very soon, bring­ing more trade and in­vest­ment op­por­tu­ni­ties. Pri­or­ity ar­eas of co­op­er­a­tion should not be lim­ited to in­fra­struc­ture con­struc­tion. In light of eco­nomic com­ple­men­tar­ity, dif­fer­ent strate­gies and plans should be ap­plied to dif­fer­ent coun­tries and re­gions based on their re­source en­dow­ment.

Be­tween China and Rus­sia and be­tween China and Other Asian Coun­tries: The China-Be­larus In­dus­trial Park is now un­der con­struc­tion. Cov­er­ing a to­tal area of 91.5 square kilo­me­ters, the park will be­come an in­dus­trial man­u­fac­tur­ing zone con­tain­ing such in­dus­tries as elec­tronic in­for­ma­tion, bio-phar­macy, fine chem­i­cals, high-end man­u­fac­tur­ing and ware­hous­ing lo­gis­tics. In the China-Pak­istan Cor­ri­dor, a se­ries of projects in hy­dropower, ther­mal power, and so­lar and wind en­ergy are press­ing for­ward to meet Pak­istan’s ur­gent needs, and have al­ready yielded eco­nomic and so­cial ben­e­fits. China

Pri­or­ity ar­eas of co­op­er­a­tion should not be lim­ited to in­fra­struc­ture con­struc­tion.

will strengthen co­op­er­a­tion with Rus­sia and Cen­tral Asian coun­tries in ar­eas such as oil-gas ex­plo­ration and de­vel­op­ment, petro­chem­i­cals, deep pro­cess­ing of agri­cul­tural prod­ucts, lo­gis­tics and trans­porta­tion, and tourism and telecom­mu­ni­ca­tions. It may even con­sider forg­ing a cross-bor­der agri­cul­tural in­dus­trial chain, en­com­pass­ing the en­tire gamut from re­search and de­vel­op­ment, ex­plo­ration, tech­ni­cal ser­vices, to pro­duc­tion, pipe­line con­struc­tion to mar­ket­ing, and oil and gas trans­mis­sion.

Be­tween China and Euro­pean Coun­tries: Last June, China and Hun­gary signed the Mem­o­ran­dum of Un­der­stand­ing be­tween the Govern­ment of the Peo­ple’s Repub­lic of China and the Govern­ment of Hun­gary to Jointly Pro­mote the Con­struc­tion of the Silk Road Eco­nomic Belt and the 21st Cen­tury Mar­itime Silk Road, and these two coun­tries will push for­ward ma­jor projects such as the Hun­gary-Ser­bia Rail­way. China has signed doc­u­ments for peace­ful uti­liza­tion of nu­clear power with Ro­ma­nia and the Czech Repub­lic. Cen­tral Euro­pean trains link­ing China and Poland, Ger­many and Spain will re­duce the trans­porta­tion cy­cle by 15 days as against mar­itime trans­porta­tion, and are very likely to be­come a new ma­jor com­mod­ity trans­port artery from East Asia to Europe. In­dus­tries in China and Europe are highly com­ple­men­tary, and the two sides may also pro­mote co­op­er­a­tion in in­tel­li­gent equip­ment, me­chan­i­cal equip­ment, nu­clear power equip­ment, rail tran­sit equip­ment and the In­ter­net. New en­er­gies, and the iron and steel in­dus­try may also serve as mag­nets for co­op­er­a­tion. En­ter­prises from the two sides may join hands to pro­mote tech­nol­ogy, brand and mar­ket­ing co­op­er­a­tion in or­der to de­velop a third-party mar­ket.

Be­tween China and Arab Coun­tries: The con­cept of mu­tual ben­e­fit, and the open­ness and co­op­er­a­tion of the Belt and Road of­fers a new way of think­ing to re­solve Mid­dle East is­sues. If Mid­dle East­ern coun­tries join the project in con­cert, they will in­crease ne­go­ti­a­tion and co­op­er­a­tion out of com­mon in­ter­est and will thereby achieve com­mon de­vel­op­ment. China and Arab na­tions en­joy a very good foun­da­tion for co­op­er­a­tion. Arab coun­tries rep­re­sent the largest crude oil ex­porters to China, and China is also the big­gest con­sumer mar­ket for their crude oil. The China-Arab States Expo has be­come an im­por­tant plat­form for pro­mot­ing eco­nomic, trade and cul­tural ex­changes. Con­struc­tion of the Belt and Road will draw all these coun­tries more closely to­gether. They may also fur­ther co­op­er­a­tion in fi­nance, tech­nol­ogy, re­sources, en­ergy and mar­kets. Break­throughs must be made in the three high and new in­dus­tries of nu­clear en­ergy, space satel­lites, and new en­er­gies in or­der to ad­vance lev­els of co­op­er­a­tion. Chi­nese en­ter­prises will in­vest more in en­ergy, petro­chem­i­cals, agriculture, man­u­fac­tur­ing and ser­vice in­dus­tries in Arab lands, trans­fer com­pet­i­tive ca­pac­ity to these coun­tries, and help them speed up in­dus­tri­al­iza­tion. Ex­ploit­ing the ad­van­tages of Is­lamic fi­nance, Arab coun­tries can ex­plore more co­op­er­a­tive op­por­tu­ni­ties with China in offshore fi­nance, Is­lamic bonds, and cross-bor­der RMB set­tle­ment. More­over, there is a huge co­op­er­a­tive po­ten­tial for halal food. To be spe­cific, the two sides can en­hance co­op­er­a­tion in stan­dard cer­ti­fi­ca­tion and ac­cred­i­ta­tion, mar­ket­ing in­for­ma­tion, fi­nanc­ing and tech­nol­ogy. Chi­nese en­ter­prises may learn from the halal food stan­dards of Arab coun­tries to im­prove their pro­duc­tion ca­pac­ity and prod­uct qual­ity, while for their part Arab na­tions may avail them­selves of China’s e-com­merce plat­form to ex­pand their halal food trade with China.

African Coun­tries: Africa is a ma­jor con­stituent of the Belt and Road. Co­op­er­a­tive re­la­tions be­tween China and African coun­tries be­gan half a cen­tury ago. As an im­por­tant plat­form for the two sides to con­duct ex­changes and co­op­er­a­tion, the China-Africa Co­op­er­a­tion Fo­rum has held six min­is­te­rial-level ses­sions and at­tained abun­dant re­sults. Dur­ing his visit to Africa in May 2015, Chi­nese Premier Li Ke­qiang pro­posed to help Africa build high- speed rail­way net­work, ex­press­way net­work and re­gional aviation net­work, and to en­hance co­op­er­a­tion in the ar­eas of pro­duc­tion ca­pac­ity, fi­nan­cial co­op­er­a­tion, poverty re­duc­tion, eco­log­i­cal pro­tec­tion, cul­tural ex­changes, and se­cu­rity. China is will­ing to aid Africa in in­fra­struc­ture con­struc­tion to pro­mote its eco­nomic de­vel­op­ment ca­pac­ity. China is now a ma­jor con­sumer of petroleum, nat­u­ral gas, metal ores and other bulk com­modi­ties, while Africa abounds in nat­u­ral re­sources, but is weak in deep pro­cess­ing. This pro­vides huge room for the two sides to boost lev­els of co­op­er­a­tion, and to con­trib­ute to rea­son­able and ef­fi­cient uti­liza­tion of the world’s re­sources, at the same time avoid­ing the “re­source curse” phe­nom­e­non.

Fur­ther­more, mea­sures that have proved ma­ture and prac­ti­cal in pi­lot free trade ar­eas – such as fi­nan­cial in­no­va­tion, neg­a­tive lists, and open­ing-up of ser­vice in­dus­tries – could be repli­cated in the FTAs along the Belt and Road to achieve greater con­nec­tion be­tween coun­tries, en­ter­prises, projects, and stan­dards.

Cer­tain schol­ars be­lieve that the fun­da­men­tal rea­son why it is so hard for the world econ­omy to ex­tri­cate it­self from cri­sis lies in the ab­sence and back­ward­ness of eco­nomic the­ory. The Belt and Road Ini­tia­tive has in­jected new im­pe­tus into the world’s eco­nomic de­vel­op­ment and co­op­er­a­tion. Its phi­los­o­phy will en­rich the tra­di­tional think­ing of eco­nomic co­op­er­a­tion and add more pos­i­tive en­ergy to the world’s econ­omy. Just as Pres­i­dent Xi Jin­ping said, the Belt and Road is by no means a solo act by China, but a cho­rus in which all coun­tries along the Belt and Road join. China hopes more coun­tries will par­tic­i­pate in this cho­rus, and that more en­ter­prises and res­i­dents share the fruits and bounty of co­op­er­a­tion. He be­lieves that the con­struc­tion of the Belt and Road will add more Chi­nese mo­tive force to global eco­nomic growth, and that more coun­tries will gain new growth en­ergy when shar­ing China’s eco­nomic de­vel­op­ment achieve­ments. Thus, great syn­ergy will be formed to pro­mote new growth for the world’s econ­omy.

The clien­tele of the China (Shang­hai) Pi­lot Free Trade Zone ad­min­is­tra­tive ser­vice cen­ter grows daily.

One of the first fleet of cargo trains rolls out from Lianyun­gang, Jiangsu Prov­ince to­wards Alma-Ata, Kaza­khstan on Fe­bru­ary 25, 2015.

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