China, the only veto power of Asia and major global power, is seen trying to take a larger role in global affairs by promoting its economic ventures across continents of Asia, Africa and Europe by joint efforts.
China has come out with a fast forward idea of working together for greater benefits for all nations involved. The Silk Road Economic Belt and the 21st-century Maritime Silk Road or One Belt, One Road (OBOR) is a development strategy, proposed by Chinese President Xi Jinping that focuses on connectivity and cooperation among countries primarily between the People’s Republic of China and the rest of Eurasia, which consists of two main components, the land-based “Silk Road Economic Belt” (SREB) and oceangoing “Maritime Silk Road” (MSR).
The China Pakistan Economic Corridor (CPEC) and the Bangladesh-China-India-Myanmar (BCIM) Economic Corridor are officially classified as “closely related to the Belt and Road Initiative”. The strategy underlines China’s push to take a bigger role in global affairs, and its need for priority capacity cooperation in collective economic affairs in areas such as steel manufacturing.
The One Belt One Road initiative is geographically structured along 6 corridors, and the maritime Silk Road; New Eurasian Land Bridge, running from Western China to Western Russia; China – Mongolia – Russia Corridor, running from Northern China to Eastern Russia; China – Central Asia – West Asia Corridor, running from Western China to Turkey; China – Indochina Peninsula Corridor, running from Southern China to Singapore; China – Pakistan Corridor, running from South-Western China to Pakistan; Bangladesh – China – India – Myanmar Corridor, running from Southern China to India; Maritime Silk Road, running from the Chinese Coast over Singapore and India to the Mediterranean.
Essentially, the ‘Belt’ includes countries situated on the original Silk Road through Central Asia, West Asia, the Middle East, and Europe. It goes through Central Asia, Russia to Europe.
The China-proposed Belt and Road Initiative offers enormous opportunities for all the countries involved and Greek business community warmly supports all the efforts to deepen the two countries’ cooperation under this context, President of the Greek-Chinese Economic Council Fotis Provatas said recently.
One Belt, One Road has been contrasted with the two US-centric trading arrangements, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership.
OBOR Summit 2017
Chinese President Xi Jinping welcomed UN Secretary-General Antonio Guterres before the Leaders’ Roundtable Summit at the Belt and Road Forum (BRF) for International Cooperation at Yanqi Lake International Convention Center in Beijing, capital of China, May 14-15, 2017. Around 30 state and government heads as well as delegates from more than 100 countries – including the USA and North Korea – discussed the Belt and Road initiative, one of the world’s biggest economic diplomacy programs led by China.
In a keynote speech delivered at the opening ceremony of the two day Initiative called Belt and Road Forum for International Cooperation held in Beijing on May 14 President Xi Jinping said that China would launch Belt and Road cooperation initiative on trade connectivity together with some 60 countries and international organizations. Xi said that the Belt and Road Initiative embodies the aspiration for inter-civilization exchanges, the yearning for peace and stability, the pursuit of common development and the shared dream for a better life. President Jinping called for renewing the Silk Road spirit. Noting that “we are at a fresh starting point, ready to embark on a new journey together,” Xi said, “so long as we press ahead with a common vision without backpedaling or standing still, we will achieve greater connectivity and benefit from each other’s development.” Before the banquet, Xi and his wife Peng Liyuan greeted the guests at the Great Hall of the People.
Apart from this zone, which is largely analogous to the historical Silk Road, another area that is said to be included in the extension of this ‘belt’ is South Asia and Southeast Asia. Many of the countries that are part of this belt are also members of the China-led Asian Infrastructure Investment Bank (AIIB).
North, central and south belts are proposed. The Central belt goes through Central Asia, West Asia to the Persian Gulf and the Mediterranean. The South belt starts from China to Southeast Asia, South Asia, to the Indian Ocean through Pakistan. The Chinese One Belt strategy will integrate with Central Asia through Kazakhstan’s Nurly Zhol infrastructure program. The coverage area of the initiative, however, is primarily Asia and Europe, encompassing around 60 countries. Oceania and East Africa are also included.
The summit was aimed to map out China’s ambitious new Silk Road project, of which the OBOR is an integral part. The scheme was proposed in 2013 by Xi to promote a vision of expanding links between Asia, Africa and Europe. China has earmarked US$40 billion for a special fund for the scheme, on top of the US$100 billion capitalization for the China-led Asian Infrastructure Investment Bank, many of whose projects will likely be part of the initiative. The OBOR’s wingspan is expected to include 68 nations from China through Southeast and South Asia to Africa and Europe.
The UK’s Chancellor Philip Hammond described the UK as a “natural partner” for the Belt and Road Initiative, while Mexico’s Economy Minister Ildefonso Guajardo touted China as a possible alternative trading partner in the face of US protectionism
Italian PM Paolo Gentiloni has said that Italy and China had a lot to give each another in terms of tourism and cultural cooperation because they are both ancient civilizations “that strike the popular imagination.” The year 2020 marks the 50th anniversary of diplomatic relations between Italy and China, a milestone target that could be a good objective to multiply cultural cooperation as well as tourism. Gentiloni said the culture ministries of both countries were working together on a number of projects, for example “the fact that Italy and China are the two countries in the world with the highest number of UNESCO World Heritage sites.”Ours are two civilizations that strike the popular imagination,” he said, citing ancient Rome, the Renaissance, and the appeal of contemporary Italian culture, food, fashion, and design.
The conspicuous absence of the heads of state from the major Western economic powers and Japan at the belt and road summit this month in Beijing is a big mistake and a missed opportunity for enhancing dynamic and cooperative globalization. India, also seeking wide stage to promote its own interests, chose to ignore the China initiate.
Cost and Benefits
The initiative, unveiled in ¬September 2013 by President Xi Jinping, aims to connect China by a network of overland corridors and sea routes to the rest of Asia, Africa and beyond, linking the dozens of countries through infrastructure and financial and trade ties. The economies along the routes account for about 63 per cent of the world’s population and 29 per cent of global GDP.
Anticipated cumulative investment over an indefinite timescale is variously put at US$4 trillion or US$8 trillion. President Xi said in his speech at the opening of the forum that China will contribute an additional 100 billion yuan (about 14.5 billion US dollars) to the Silk Road Fund. Xi certainly looked keen to begin exercising a leadership role, offering to help tackle the economic and security problems faced by Greece and Turkey, issues the EU has struggled to deal with.
The Belt and Road Initiative is expected to bridge the ‘infrastructure gap’ and thus accelerate economic growth across the Asia Pacific area and Central and Eastern Europe: World Pensions Council (WPC) experts estimate that “Asia alone (excluding China) will need up to $900 billion in infrastructure investments annually in the next 10 years, mostly in debt instruments. This means there’s a 50 percent shortfall in infra spending on the continent.” The gaping need for long term capital explains why many Asian and Eastern European heads of state “gladly expressed their interest to join this new Chinese-led initiative focusing solely on ‘real assets’ and infrastructure-driven economic growth.
Xi told his audience that he had proposed an additional RMB780 billion (approximately US$113 billion) to be disbursed through multiple sources. These include the Silk Road Fund; the China Development Bank; the Export and Import Bank of China and also overseas capital provided by Chinese banks. The Asian Infrastructure Investment Bank (AIIB) is not part – at least not yet – of this proposed package.
Out of this amount, RMB250 billion will be provided in loans from China Development Bank, and RMB130 billion from Export-Import Bank of China. This funding is not direct investment but loans, as in the case of China-Pakistan-Economic Corridor, which the Chinese sources will provide to the participant countries. That would put Beijing in a position to steer the course of each country’s development to a direction it deems fit for its own interests. China, as the primary financer of loans, therefore stands to gain the most and it stands atop the list of potential beneficiaries.
The whopping trade imbalance that China has vis-à-vis almost all the OBOR countries and the way the OBOR initiative is solidifying, through various agreements, worries New Delhi.
Less-developed countries along the new Silk Road stand are among the big winners of investment as China revives ancient land and maritime trade routes, according to estimates by a top bank. The potential benefits of the belt and road, if the dream were even only partly realized, could be enormous. The inclusion of the Middle East and Central Asia could contribute to peace and prosperity in these currently dramatically turbulent regions.
Credit Suisse forecasts that China’s massive inflow of investment over the next five years as part of Beijing’s “Belt and Road Initiative” could amount to as much as US$502 billion, or equivalent to 4 per cent of the total gross domestic product of the 62 countries along the routes in 2015. Credit Suisse estimates that China’s overseas investment in the initiative over the next five years will range between US$313 billion to US$502 billion, depending on how much investment the countries need and how much China is willing to put in.
According to an HSBC estimate, the “Belt and Road Initiative” will generate roughly 300 billion yuan to 500 billion yuan in railway investment, financing more than 15,000km in high-speed rail links along the route. The Credit Suisse report said the initiative could become even more promising as a more “isolationist” administration in the United States created windows of opportunity. “With the new US government pulling out of the Trans-Pacific Partnership, it is unavoidably sending a message to the world that US government policy is turning more ‘isolationist’,” the report said. At the same, China was striving for greater global influence, it said. Chinese investment could also help make up for any capital outflows in the region. If the dollar strengthens, especially as the US moves along the path of rate normalization, emerging market countries also have to face the risks of capital outflow.
The biggest recipients of the investment dollars were expected to be India, Russia, Indonesia, Iran and Egypt, the bank said in a report released earlier this month. India stands to be the biggest gainer overall, according to the report, with China putting in ¬between US$84 billion and US$126 billion. Russia is next with US$53 billion to US$80 billion; ¬Indonesia third on US$35 billion-US$52 billion; Iran fourth attracting US$17 billion-US$26 billion; and Egypt fifth with US$13 billion to US$20 billion. The report also says China could invest between US$52 billion and US$79 billion in 13 African countries. “Africa is rich in resources, and an important destination for Chinese investment over the past decade,” it said.
A successful, inclusive, globally collective effort to make the belt and road a reality could be a harbinger of peace and prosperity. It is a pity that myopia and prejudice prevent Western and Japanese leaders from being present at this potentially seminal event.
Pakistan where the Sino-Pakistani joint projects succeeded is the corner stone of China’s economic project. India is opposed to it.
The project OBOR was first unveiled in September and October when Chinese leader Xi Jinping visited Central Asia and Southeast Asia in September and October 2013 he raised the initiative of jointly building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road and announced two major projects revealing the SREB and MSR, respectively. It was also promoted by Premier Li Keqiang during the State visit in Asia and Europe. The initiative calls for the integration of the region into a cohesive economic area through building infrastructure, increasing cultural exchanges, and broadening trade.
China–Pakistan Economic Corridor (also known by the acronym CPEC) is a collection of infrastructure projects currently under construction throughout CPEC is intended to rapidly modernize Pakistani infrastructure and strengthen its economy by the construction. On 13 November 2016, CPEC became partly operational when Chinese cargo was transported overland to Gwadar Port for onward maritime shipment to Africa and West Asia. The CPEC in particular is often regarded as the link between China’s maritime and overland Silk Road, with the port of Gwadar forming the crux of the CPEC project.
The Belt and Road Initiative proposed by China provides opportunities for the whole world to promote peace and prosperity, experts in Bangladesh said China’s peaceful development is a blessing and opportunity for countries which face extreme difficulties given the rising protectionism in some countries. Bangladeshi experts highly lauded China’s contribution to socioeconomic development of the world and said the initiative of reviving the ancient Silk Road through a network of roads and maritime waterways will surely be a boon for cooperation between China and the rest of the world.
According to the experts, countries on the Belt and Road, especially those with underdeveloped infrastructure, low investment rates and per-capita income, could experience a boost in trade flow and benefit from infrastructure development.
The OBOR project, designed to span 65 countries covering 65 percent of the world population, would enable China to not only champion as the primary engine of one third of global economic output, but also accumulate vast amounts of capital as repayments, and through its own direct trade from Central Asia to Europe.
Plagued by territorial conflicts, poor governance and limping economies, the SA region has drawn inspiration from China’s plan and unleashed an effort to join a shared destiny. South Asia is marred by corruption that is undermining its growth trajectory. The World Economic Forum, in its 2015 Global Competitiveness Index, pointed to corruption as the primary reason for the region’s poor global competitiveness. As China puts conditions on every beneficiary of the trade plan to get rid of corruption, Pakistan and other South Asian countries must gear up to liberate themselves from vicious chains of corruption.
Unemployment is a daunting challenge for South Asia. In order to increase socio-economic viability, it has to create one million jobs every month till 2020. According to the International Labour Organisation, global unemployment will go up by 3.4 million in 2017. With the belt plan a catalyst for transformational change in the economic profile of South Asia, CPEC has started showing its productivity by opening up thousands of jobs for local people. China’s ambassador to Islamabad, Sun Weidong, told reporters that so far the initiative has generated 13,000 local jobs. Experts claim that CPEC projects are likely to create more than one million jobs in various sectors of Pakistan by 2030.
The South Asian Association for Regional Cooperation (SAARC), a critical regional alliance in South Asia accounting for 21 per cent of the world’s population and 7 per cent of its economy, will receive a new lease of life after staying dysfunctional due to a long decade of differences among member countries, especially Pakistan and India. To help SAARC benefit from regional connectivity, China has already stepped up its endeavor to become a full member of the association.
South Asia’s emergence as a leading economic power is in the making, and credit goes to China’s “Belt and Road Initiative”. The grand plan has set into motion game-changing strategies that will lead to free trade agreements, economic integration, physical infrastructure plans, shared growth and structural reforms, all in tune with future demands.
Since this epic plan was announced, South Asia – weighed down by a reputation for regional conflicts, security threats, bad governance, impaired transparency, an energy crisis, poor infrastructure, fragile institutions and limping economies – has unleashed its effort to be part of a shared destiny.
Pakistan foreign affairs expert Muhammad Mehdi says that the trade plan is not solely a Chinese enterprise. “China sees annual trade volume with Silk Road countries from US$1 trillion to US$2.5 trillion within a decade. It reflects 9.6 per cent of annual growth. If South Asia taps this opportunity, it can change the fate of its poor people,” he says. An example of convergence of interests is clearly visible in the Asian Infrastructure Investment Bank, a multilateral development bank which India joined as the second largest shareholder after China. Similarly, the New Development Bank, where Brazil, Russia, India, China and South Africa (the BRICS) are equal partners, is headquartered in Shanghai, and is not envisaged as a Belt and Road initiative by them.
India and China are part of the Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC), a sub-regional economic cooperation initiative involving the four countries which are engaged in talks for developing cooperation through a joint study group. This group had its latest meeting in Kolkata, India in late April. The BCIM-EC is now being projected as a component of the BRI by China.
However, this initiative was conceived well before the Belt and Road Initiative was formulated, and it should not be subsumed within that strategy but instead pursued as a separate grouping for sub-regional cooperation. It involves full and equal ownership of all four countries involved, rather than a subsidiary position as a loop of the Belt and Road.
Like China, India has its own agenda of connectivity and cooperation within Asia and beyond. For instance, India’s “Act East” strategy is aimed at developing close economic synergies with the Association of Southeast Asian Nations and East Asia. Two great nations and civilizations such as India and China need not endorse or sign on to each other’s strategies. A more pragmatic approach will be to explore synergies and look at projects they can work on together, without insisting on artificial labeling.
In the view of MP Lohani, former Nepalese ambassador to Bangladesh, China’s ambitious plan for regional connectivity will revitalize SAARC. So China’s induction into the regional body on the basis of its geographical, historical, cultural and economic features will be a breath of fresh air.
The trade plan’s impacts will make China’s free trade agreements with Pakistan, Sri Lanka, Bangladesh, Nepal and India more lucrative, triggering an economic boost. Though Pakistan and China are yet to finalize the second phase of a free trade deal, trade between the countries was valued at US$4 billion in 2006-07 and reached US$13.77 billion in 2015-16.
The potential benefits of the belt and road, if the dream were even only partly realized, could be enormous. The inclusion of the Middle East and Central Asia could contribute to peace and prosperity in these currently dramatically turbulent regions. The trade plan undoubtedly will have a deep impact in alleviating poverty plaguing South Asia, home to 1.7 billion people. As per the World Bank’s latest poverty calculation, about 570 million people in South Asia still survive on less than US$1.25 a day.
Peace is another dividend that will come to fruition with the new Silk Road initiative. India, with a fast-growing economy, has many disputes with China and Pakistan. It opposes the China Pakistan Economic Corridor (CPEC), a pilot project of the trade initiative, due to its route passing through Gilgit Baltistan, which India considers a disputed area between Pakistan and India. However, Indian lobbyists in collaboration with their Chinese counterparts have been brainstorming to build a peaceful neighborhood for relishing joint economic benefits.
The Belt and Road plan, according to Beijing, is a practical economic strategy for China’s objectives to connect the region, seek new growth engines for its slowing economy, utilize its surplus capacity, and develop and stabilize its western regions. It would also bring benefits to partner countries.
There is room for closer consultations between China and India on the objectives, contours and future directions of the Belt and Road. However, India has considered synergy-based cooperation on a case-by-case basis, where its interests for regional development converge with that of other countries, including China. This pragmatic approach is formulated on India’s stance that as the two major powers in Asia, there is bound to be common understanding on many global and regional issues between India and China. They have cooperated on international platforms with similar positions on climate change and global trade, for instance.
India is keen not to lose out Jammu Kashmir under any new project in South Asia. India opposes and ignores the OBOR. China’s relations with India are not as smooth as its Pakistani ties, although all these nations occupy parts of Jammu Kashmir. India is suspicious of Chinese moves. Plans are being hammered out for a free trade agreement between India and China. That effort comes amid India-China trade volume hitting US$70 billion in 2016 as India sought to increase exports to US$30 billion. Meanwhile, joint feasibility studies for a FTA linking Nepal, Sri Lanka and Bangladesh are on the fast track.
Sandwiched between China and Pakistan and facing a strong freedom movement in occupied Jammu Kashmir, India took an uncharacteristically bold foreign policy stance by turning down China’s invite. India’s objections are rooted on the fundamental issue of its own sovereignty and territorial integrity, which it says have been violated due to the project. India feels the OBOR will basically further interests of Chinese banks and Chinese companies while ignoring Indian sensitivities. It appears to be a rapacious penetration of Pakistan’s economy and territory, including that of Pakistan Occupied Kashmir and Gilgit-Baltistan to which India lays claim, by Chinese enterprises and agencies.
It is difficult to say whether India hated more China or Pakistan. India has repeatedly conveyed its strong objections regarding the CPEC to China. A flagship program and the most advanced component of the initiative, the China-Pakistan Economic Corridor (CPEC), passes through Pakistan-occupied Kashmir, a region that is under the control of Pakistan and India now claims to be its own as a ploy to force Pakistan to stop fighting for India occupied Kashmir. As a country acutely conscious of its own sovereignty-related claims, it wants China to appreciate India’s “sensitivities” in this regard.
The Belt and Road plan is a Chinese initiative rather than a multilateral enterprise undertaken after prior consultation with potential partner countries, and India has not endorsed it. It is one of the most imaginative and ambitious programs ever to be rolled out by a government. It represents a broad strategy for China’s economic cooperation and expanded presence in Asia, Africa and Europe, and has been presented as a win-win initiative for all participating nations. But for India seeking not to lose out Kashmir by any developmental projects in the region, the connotations of China’s Belt and Road Initiative” for New Delhi are somewhat different. By joining, India could benefit from Chinese investment in infrastructure projects, and fast-track its economic development through trade connectivity.
Critics also feel that India’s underwhelming response to China’s grand scheme stems in part from the latter consistently squashing its neighbor’s ambitions to augment its influence at the global high table.
Whenever India, ignoring the freedom struggle being waged by Kashmiris who have been fighting for their lost sovereignty, has lobbied at international forums for entry to the Nuclear Suppliers Group, permanent membership of the UN Security Council and push for UN sanctions against Pakistan, Beijing has always opposed i. Beijing thus offers New Delhi little incentive to be ebullient about bolstering its own causes and crusades especially at the international level.
Linked to this is the compulsion of protecting Chinese maritime commerce, particularly oil, in the IOR. India risks being systematically frozen out of business opportunities in an enlarging area that is integrating with the Chinese economy around the world.
Chinese scholars have been issuing dire warnings on how India would be isolated as most Asian nations as well as the USA and Russia are on board. India’s non-cooperation is also being linked to Sino-Indian ties, which have hit a new low lately. The unresolved decades-old border dispute, Chinese support for India’s arch-rival Pakistan and New Delhi’s backing of the Tibetan Buddhist spiritual leader, the Dalai Lama which rankles China, have affected bilateral relations.
It is wrong today to presume that the he One Belt-One Road in Beijing is fundamentally the elaboration of a Chinese dream wherein participant countries appear only as facilitators and fade away China would make maximum out of it. India opposes China to be on top of the hierarchy of the states participating in it and it does not approve Chinese leadership and seeks USA to contain China. .
Observation: Prospects and Problems
The origin of the belt and road idea is to open up China’s landlocked western provinces towards Central Asia in a sense it is exporting China’s internal needs to find external solutions.
President Xi’s project was intended to present the world with a view of statecraft different from what the West espoused. But so far Beijing had failed to find a rhetoric that would appeal to Westerners. China invites the world to join its “project of the century. The president’s vision, however, is winning supporters from across the globe. Xi told the conference: “Swan geese are able to fly far and safely through winds and storms because they move in flocks and help each other as a team,” The message is: the best way to meet challenges and achieve better development is through cooperation.”
Enthusiasm for Chinese money, however, does not equate to enthusiasm for Chinese leadership. OBOR revealed eye-catching figures including the Chinese government’s pledge to invest $124 billion into the scheme and provide $78 billion of financing for OBOR projects.
Both the Belt and Road are clearly intended to enhance connectivity not just across Eurasia but between China and Europe. However, the EU, which holds reservations over OBOR, can put the brakes on China’s plans, demonstrated by its ongoing investigation into the Belgrade-Budapest high-speed rail funded by Beijing.
China is by no means an angel. Nor, however, as Western and Japanese rhetoric tends to proclaim, is it a devil; or certainly no more so than previous rising great powers. Furthermore, while for much of modern history China was subjugated and marginalized, it’s quite staggering re-emergence will continue to mark the first decades of the 21st century.
Skeptics are, however, questioning the lack of details and multilateral stewardship of the initiative. The strategy spearheaded by President Xi Jinping seemed to be incompatible with China’s preference for “one-way” globalization and assertive policies in Southeast Asia, particularly on maritime routes in the South China Sea, experts said at the Oxford China Forum held in the University of Oxford.
It is a plan that is going to allow a Chinese penetration in the “host” countries on an unprecedented scale which India opposes. Again, at least this is what the CPEC master plan tells us in terms of the presence that China will come to establish through its “flagship” project in Pakistan, putting it yet again on top of the vertical order China is building. The pledges China has so far made have been far from sufficient to complete the projects its leadership claims to have already put in motion, or meet Asia’s growing infrastructural requirements, which will be needing, according to ADB, a whopping US$26 trillion up to 2030.
While Xi could not call a spade a spade, the OBOR is far from a gateway to “win-win co-operation,” it is a project saddled with loans, allowing China to invest and re-invest its surplus capital, money that it will use to further boost its international standing to potentially alter the global order to its own advantage in the coming decades, if not years.
What OBOR is therefore doing is not simply a Chinese push towards development, it is equally raising a multitude of problems for the host countries. A clear absence of enough resources to repay loans perhaps tops the list.
However, China seems to have a strategic and political agenda which remains opaque. Apart from the CPEC that directly connects China and Pakistan, India also has misgivings about the manner in which the Belt and Road Initiative is being pursued in its neighborhood. For instance, the development of ports under Chinese operational control as part of the Maritime Silk Road strategy has raised concerns in India. While investment in the Gwadar port, roads and energy projects is reported to have increased from US$46 billion to US$55 billion, CPEC lacks economic justification.
Apart from general resistance to China’s efforts to make its economy stronger, some have expressed concerns that OBOR projects will be overly tailored to China’s needs, favoring projects designed to export Chinese overcapacity in industries such as steel and make use of surplus savings. If these projects do not generate the expected returns for the host countries, it could leave them burdened with debt.
Besides Indian objections, a document acquired by leading Pakistani daily Dawn lays out Beijing’s plans for the China-Pakistan Economic Corridor, which includes installing 24-hour surveillance in major cities and the dissemination of Chinese culture. Such designs could give fuel to those who frame OBOR as 21st-century Chinese colonialism.
China clearly wants a horizontal, non-vertical integration and it always clarifies that there is no hegemonic plan inherent in the Two Silk Roads. Indeed, the issue lies in putting an end to the US “hegemony”, not in creating others. Some observers argue, there is no reason why OBOR cannot be as mutually beneficial as President Xi claims. Building infrastructure in other countries with Beijing’s financial support “should benefit trade and economic development in those places, while of course bringing new business opportunities to Chinese companies
Of course, at this stage, the belt and road represents a vision, a dream, that will face innumerable obstacles – financial, environmental, technological, logistical, social and geopolitical – to translate into reality. It is also without doubt motivated primarily by Chinese interests. But what country ever undertook a major international initiative that wasn’t primarily motivated by its own interests? The post-war Marshall Plan was not an act of pure American altruism, but rather one of enlightened self-interest.
It is especially important that China be engaged in the institutional framework of global governance, and that initiatives for enhancing trade and investment, such as the belt and road, be welcomed rather than rebuffed. Yet the opposite has been happening, while the EU must engage with the Asian Infrastructure Investment Bank (AIIB), “the decision to launch the AIIB came as a direct result of China’s growing frustration … over only playing a marginal role within the existing international financial system”. This is true of the International Monetary Fund and the World Bank.
A successful, inclusive, globally collective effort to make the Belt and Road a reality could be a harbinger of peace and prosperity. It is a pity that myopia and prejudice prevent Western and Japanese leaders from being present at this potentially seminal event.
China’s push to create new trade and infrastructure links through its “One Belt, One Road” initiative will be hampered by Beijing’s reluctance to open up investment for foreign companies, according to experts.
China plan can boost one aspect. Asia is fast getting old and the harsh reality is that it could do so before it gets rich. Although Asia remains the growth champion of the world, the highly populated continent is ‘shifting from being the biggest contributor to the global working-age population to subtracting hundreds of millions of people from it, according to the International Monetary Fund (IMF) East Asia, in particular, is projected to be the world’s fastest-ageing region in the coming decades, with its old-age dependency ratio roughly tripling by 2050.
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