First Fruits of the 'Belt and Road'

By Hu Biliang

First Fruits of the 'Belt and Road'

By Hu Biliang

Initiative’s high degree of openness contributes to initial success

Since Chinese President Xi Jinping proposed the Belt and Road Initiative in 2013, more than 100 countries and international organizations have responded positively to it. Of them, nearly 50 countries have signed cooperative agreements or memorandums of understanding (MOUs) with China, and more than 20 countries have carried out production capacity cooperation with China, with a slew of major projects being implemented.

The Initiative has received wide support and welcome from the international community over the past few years because it advocates a new type of open cooperation that has no prerequisites and doesn’t reject or discriminate against any party who intends to join. As long as it accepts the principles of extensive consultation, joint contribution and shared benefits, any country or region can use the Initiative as a platform to achieve development featuring mutual benefit and winwin cooperation, benefiting people from around the world according to their respective advantages.

Strengthening Economic Cooperation

Although it was initiated only three years ago, the Belt and Road Initiative has proven important to efforts to enhance regional cooperation and accelerate regional economic development. Satisfactory achievements have been made in areas such as infrastructure connectivity, trade and investment facilitation, financial cooperation and production capacity cooperation.

In terms of infrastructure cooperation, as significant parts of the Initiative, railway projects such as the China-Laos Railway and the Jakarta-Bandung High-speed Railway (jointly constructed by China and Indonesia), highway projects and port projects like Myanmar’s Kyaukpyu Port have been pushed forward rapidly in countries along the Belt and Road.

In terms of trade cooperation, statistics released by the National Bureau of Statistics of China show that in 2016, the country’s import and export worldwide dropped by 0.9 percent over the course of 2015, but at the same time its foreign trade with other countries along the Belt and Road increased 0.5 percent to nearly US$1 trillion, accounting for 25.7 percent of China’s total import and export in goods that year.

In terms of investment cooperation, statistics released by the Chinese Ministry of Commerce show that in 2016, China’s direct investments in other countries along the Belt and Road totaled US$14.5 billion and its net direct investments in those countries reached US$7.4 billion, a yearon-year increase of 17.5 percent compared to the 2015 figure of US$6.3 billion. The figure surpassed the total amount that other countries along the Belt and Road invested in China in 2016. Moreover, Chinese companies have established 56 economic and trade cooperative zones in 20-plus countries along the Belt and Road, with total investments of nearly US$20 billion, creating more than US$1 billion in tax revenue and some 200,000 jobs in those countries.

In terms of financial cooperation, it is estimated thatChinese banks have established nearly 1,000 branches in more than 20 countries along the Belt and Road.

In terms of energy cooperation, China signed energy cooperation agreements with more than 20 countries along the Belt and Road from 2013 to 2016. With the huge amounts of investment they earned from China, such countries have not only expanded their shares in China’s energy market, but also enhanced cooperation with China in refined oil production and trade.

On Aug. 20, 2015, Pakistani Prime Minister Nawaz Sharif attended a ceremony marking the launch of construction work on Karachi Nuclear Power Plants II and III. Located in Karachi, Pakistan's largest city by population, the project is undertaken by China National Nuclear Corporation.

ABOUT THE AUTHOR

Hu Biliang is president of the Emerging Markets Institute and dean of the Institute of Belt and Road Initiative Studies at Beijing Normal University.

Improving Global Economic Governance

The Belt and Road Initiative is a systematic, extensive plan beyond country-to-country cooperation.

First, it is an international initiative that calls for joint efforts of countries or economies along the Silk Road Economic Belt and the 21st Century Maritime Silk Road in pushing forward the construction of the Belt and Road, as well as addressing the common challenges and problems faced by countries in the region through mutual consultation. Therefore, it features a high degree of openness.

Second, it has a practical construction and implementation plan. The Belt and Road Initiative includes policy coordination and people-to-people bonds. Policy coordination focuses on intergovernmental communication and cooperation, and people-topeople bonds stress interactions and friendship among peoples. The Initiative also aims for mutual benefit in enhancing infrastructure connectivity, trade and investment facilitation and financial integration.

Third, it has played an active role in improving global economic governance. Substantial results have been achieved in the following two aspects:

One is that the Asian Infrastructure Investment Bank (AIIB) has provided loans totaling US$2 billion for infrastructure projects in countries such as Pakistan, Bangladesh, Tajikistan, Indonesia, Myanmar, Azerbaijan and Oman. Besides the AIIB, the China-led Silk Road Fund gives particular focus to providing direct support to the construction of the Belt and Road, so as to promote regional common development and prosperity.

The other aspect is that China has utilized its rich experience in infrastructure development over the past three decades (since reform and opening up began in the late 1970’s) to facilitate infrastructure connectivity in countries along the Belt and Road. It has also integrated this idea into the construction of the Belt and Road by making it one of the most important parts of the Initiative. It has provided strong financial support in this regard.

Moreover, China hopes to deepen South-South cooperation and promote common development of developing countries through the Belt and Road Initiative. Poverty reduction is a key part of South-South cooperation. Over the past 30 years, China has lifted nearly 5 million of its people out of poverty, and has thus accumulated rich experience in fighting poverty. With the gradual implementation of the Belt and Road Initiative, countries involved will see an increase in tax revenues and job opportunities. This will directly accelerate their poverty alleviation process and help underprivileged countries escape the poverty trap.

In a nutshell, the Belt and Road Initiative is an absolutely new and vital international public platform that is not only conducive to regional economic cooperation and development, but also meaningful for improving global economic governance and accelerating global economic development.