Restoring economic vitality
China-led BRI plays an important role in shoring up the prospects of many pandemic-hit nations
As of Dec 23 last year, 138 countries and 31 international organizations had signed 203 documents on cooperation with China on jointly building the Belt and Road Initiative.
But sensing a threat to their interests and their positions in the world, some countries have attempted to promote a boycott of the program, block its geographical expansion and create a negative international reputation for it. This seems counterproductive as huge financial opportunities are emerging, with the amount of possible economic interaction estimated at $21 trillion.
The Belt and Road Initiative is a long-term project aimed at facilitating the integration of the international community. It fits in well with China’s foreign policy, and does not aim at creating an alliance against one or a group of countries. In his keynote speech at the World Economic Forum in Davos, Switzerland, in early 2017, President Xi Jinping emphasized Beijing’s commitment to continuing globalization and protecting world trade freedom from encroaching protectionism.
According to an ING bank report in 2019, trade between Asia and Europe (excluding trade among the EU countries) accounted for 28 percent of global trade. Facilitating trade flows between countries along the Belt and Road corridors, especially in Central and Eastern Europe, the Middle East and South East Asia, could increase international trade by 12 percent.
According to international bodies, including the World Bank, Belt and Road cooperation will reduce the cost of global trade by 1.1 percent to 2.2 percent. At the same time, the cost of transactions in the ChinaCentral Asia-West Asia economic corridor will fall by 10.2 percent.
The initiative reflects a new geoeconomic paradigm, the successful implementation of which will directly benefit countries with a combined population of around 4.5 billion.
The Chinese initiative is attracting a growing number of developing countries that have requirements for investments in certain infrastructure projects.
China through the Asian Infrastructure Investment Bank and the Silk Road Fund as well as other channels, has provided a great deal of funding.
At the same time, Chinese State Councilor and Foreign Minister Wang Yi said in March that the initiative is “not a geopolitical tool, but an opportunity for many countries to develop together”. In addition to developing and developed economies, a number of companies and financial institutions from developed countries are looking to work with China under the framework of the Belt and Road Initiative to expand third-party markets.
European Union countries, for example, are on the lookout for investment projects. Amid this, third-party market cooperation under the framework of the Belt and Road Initiative can effectively link China’s preferential manufacturing capacity, the advanced technologies of developed European countries and the needs of developing states.
China’s bilateral investments with countries along the Belt and Road Initiative have been steadily growing in recent years. China has promoted the construction of a whole group of overseas trade and economic cooperation zones in countries along the Belt and Road, with a total investment of over $30 billion, which has helped create more than 300,000 jobs in the respective countries.
Over the past few years, the share of trade between China and countries participating in the Belt and Road Initiative has continuously increased, and at the same time, its quality has also improved. China’s imports and exports with countries along the Belt and Road accounted for 30 percent of the total in 2019.
The Silk Road threads, by penetrating Eurasia from east to west, are reconfiguring the economy, changing its structure and opening up new profitable options for growth. Asia and Europe, two powerful poles of global economic activity, are becoming even more closely linked overland and increasingly integrated into a single economic system of mutual exchange.
Thus, thanks to the Belt and Road Initiative, Central Asia, at the heart of the continent, has regained its geostrategic importance as a major bridge between the world’s major markets. The region has been given the opportunity for an economic renaissance. The Central Asian countries, which are the core of the Shanghai Cooperation Organisation, by participating in the Belt and Road Initiative have become full participants in international economic cooperation, influencing their development.
It should be noted that since the launch of the Belt and Road Initiative, progress has been made in some major projects in the area of interconnectivity especially between SCO member states. Today, the SCO countries are taking important steps to build and share highways, railways and oil and gas networks, further strengthening their mutually beneficial ties. The SCO region is gradually realizing the goal of creating favorable living conditions for people and the free movement of goods.
The COVID-19 pandemic has recently dealt a serious blow to the global production and supply chains, resulting in declining international trade and investment, increased unilateralism and protectionism. As the novel coronavirus continues to spread and the global economy is in deep recession, China’s accelerated stabilization has been the greatest positive factor in the global economic recovery.
China’s Belt and Road Initiative has demonstrated strength and vitality, playing an important role in combating the pandemic and restoring the economy and the normalcy of people’s lives in different countries.