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China pools strength on Belt and Road strategy

Updated: Mar 13,2015 6:55 AM     Xinhua

Themed tours around Hainan province offer visitors a chance to experience ancient fishing villages and historical ports. The China National Tourism Administration has deemed 2015 as the Year of Silk Road Tourism, and provinces along the ancient business route are promoting themed tours.[Photo by Huang Yiming/China Daily]

BEIJING — The Belt and Road initiatives, China’s ambitious trans-Eurasia and across-ocean trade strategy, are among the most extensively referenced topics during the ongoing annual parliamentary session.

Regardless of difficulties, there are clear signals that China is determined to implement the initiatives, which Chinese officials claimed represents a golden opportunity to forge greater cooperation between countries.

“China’s diplomacy in 2015 will focus on making progress in the Belt and Road initiatives,” Foreign Minister Wang Yi said on March 8 at the session.

China announced on March 12 that the board of directors and the senior management team have been formed in the country’s $40 billion Silk Road Fund, which will start investment soon.

The fund will invest mainly in infrastructure and resources, as well as industrial and financial cooperation, in an effort to achieve common development and prosperity, Jin Qi, chair of the fund, said at a press conference on the sidelines of the session.

Proposed by President Xi Jinping in 2013, the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives aim to improve cooperation with countries in a vast part of Asia, Europe and Africa.

The National People’s Congress (NPC), or the parliament, is a platform for the country to create consensus and pool strength for major tasks. This year, it hopes to do so for the Belt and Road initiatives.

“NOT MARSHALL PLAN”

In a story published at the end of last year, US-based bi-monthly magazine “Foreign Policy” had listed the Belt and Road initiatives as the first of “six trends from 2014 likely to burst into international headlines” for China in 2015.

It’s premise was correct, but the story became flawed after trying to compare the Chinese strategy to the US-sponsored Marshall Plan.

China has denied the accusation, saying that the initiatives are not exclusive and not a tool for geopolitics like the Marshall Plan, which led to the start of the Cold War.

“China’s Belt and Road initiatives are both much older and much younger than the Marshall Plan. Comparing one to the other is like comparing apples to oranges,” said Wang Yi.

The initiatives are older because they embody the spirit of the ancient Silk Road, which had a history of more than 2,000 years.

The Silk Road was used by people of many countries for friendly exchange and commerce, and the country must renew the spirit and bring it up to date, Wang said.

The initiatives are younger because they are born in the age of globalization.

“They are the product of inclusive cooperation, not a tool of geopolitics, and must not be viewed with the outdated cold war mentality,” Wang said.

The Silk Road Fund is not an aid agency, said Jin Qi, who expects market-oriented principles in operation and reasonable returns for shareholders, including China’s foreign exchange reserves, the China Investment Corp., the Export-Import Bank of China and the China Development Bank.

The fund will comply with market rules and the international order of finance, welcoming participation by domestic and overseas investors, such as the China-Africa Development Fund and the Asian Infrastructure Investment Bank, Jin said.

NATIONAL STRATEGY

The Belt and Road initiatives are also an important part in the government work report, delivered by Premier Li Keqiang to the nation’s lawmakers at the opening of the parliamentary session.

Li said China will work with the countries linked by the initiatives to develop them.

“We will move faster to strengthen infrastructure connectivity with our neighbors, simplify customs clearance procedures and build international logistics gateways,” Li said.

The government work report highlights strategies such as the Belt and Road as key in terms of stabilizing growth while the country further opens and improves the economy, said Zhao Yang, chief China economist of Nomura, Japan’s leading financial institution.

As such, the report encourages Chinese firms to actively participate in overseas infrastructure investment and to export machinery equipment.

Li Chunhong, a deputy to the NPC and head of the Guangdong Provincial Development and Reform Commission, said the south Chinese province has completed formulating the implementation plan for the Belt and Road strategy.

Li said Guangdong has selected a number of significant projects to support the implementation of the strategy. Included were a 5-million-tonne oil refining project invested by a private company of Guangdong in Myanmar; a power plant project invested by China Southern Power Grid in Vietnam; and a few banana plantations in the Southeast Asian countries.

Li said Guangdong is playing a vital role and in a good position in the construction of the 21st Century Maritime Silk Road. The transaction between Guangdong and ASEAN has exceeded 100 billion yuan.

A map covering the major countries along the Silk Road Economic Belt has been published this month to push the plan.

According to the Shaanxi Administration of Surveying, Mapping and Geoinformation, the atlas includes geographic, transportation, culture and economic information covering 16 countries and regions including China, Kazakhstan, Iran and Turkey.

The atlas is the first comprehensive profile of the major countries along the silk road.

“People on the silk road are ‘family members’, and the frequent exchanges between them will promote business and trade,” said Chen Zixuan, a NPC deputy from Fujian province, another gateway of the road.

The province has established a free trade zone to boost cooperation between nations.

Zhao Yang expects a detailed road map of the initiatives this month. He says the plan should help mitigate the severe overcapacity problem in upstream industries and boost overseas investment, led by policy financial institutions and large State-owned enterprises (SOEs).

Moreover, it could also promote the internationalization of the Chinese currency Renminbi, Zhao added.

SYMPHONY FOR ALL

“If I may use a musical metaphor, the initiatives are not China’s solo, but a symphony performed by all relevant countries,” Foreign Minister Wang Yi said.

As a major infrastructure equipment exporter, China has been pooling efforts to provide badly-needed funds to infrastructure construction, a hindrance to growth of many developing countries.

BRICS countries alone have about $1 trillion each year in infrastructure needs, according to World Bank’s calculations. Such funding gaps also exist elsewhere. Foreign assistance is a tiny piece of it and they have to rely on their own resources.

The Belt and Road initiatives are a testament to joint efforts by countries involved to overcome funding shortages and improve infrastructure connectivity.

Greater cooperation between nations could sustain economic growth through investing in infrastructure and guaranteeing energy security, said Asanga Abeyagoonasekera, executive director of Sri Lanka’s Lakshman Kadirgamar Institute for International Relations and Strategic Studies.

Amin Babar, Consul General of Pakistan in southern China’s port city Guangzhou, agreed.

The historic initiatives provide an unprecedented opportunity to the global community to share the fruits of China’s economic development, he said.

It is a mark of big thinking by the Chinese leadership to give a share of its hard earned prosperity, particularly to the developing countries of South East Asia, South Asia, Middle East and Africa, in order to achieve a “win-win” prospect.

Abeyagoonasekera said more cooperation under the initiatives will also be a demonstration of the regions’ willingness to jointly find solutions to non-traditional threats such as climate change, terrorism and piracy which are issues of global significance.

Wang Yi said that China and Russia will sign an agreement to work on the Silk Road Economic Belt, adding that the practical cooperation between China and Russia is based on mutual need and has enormous internal impetus and room for expansion.

Zhou Xiaochuan, governor of China’s central bank, said on March 12 that China and Russia are exploring novel financial cooperation along the route of the Silk Road.

CHALLENGES AHEAD

The implementation of the initiatives won’t be an easy task, analysts said, citing terrorism and domestic politics of countries involved in the initiatives.

Violence and terrorism remain in China, with the Xinjiang Uygur autonomous region in the northwest of the country suffering the most, especially from the Eastern Turkistan Islamic Movement (ETIM), a U.N.-listed terror group.

China has set ETIM as a major target when seeking international cooperation against terrorism.

“Violent terror attacks have provoked strong condemnation and opposition in the region,” Chairman of the Xinjiang regional government Shohrat Zakir said on March 10.

Xinjiang, located in the center of Asia and a traditional gateway of the Silk Road, has become a key player for China’s exchanges with Europe. The region has pinned much hope on the Belt and Road initiatives.

Despite terror threat, Xinjiang is gearing up its efforts to become a “core area” of the Silk Road Economic Belt.

The region will strive to become a center of communications, trade, culture, finance and medical care along the belt, said Zhang Chunxian, Communist Party of China chief of Xinjiang.

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