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Belt and Road Initiative can help world economy

Updated: Nov 16,2015 9:44 AM     Xinhua

JERUSALEM — China’s Belt and Road Initiative is expected to give a new impetus to the global economy by increasing investment, improving infrastructure and promoting economic integration and people-to-people exchanges among the countries it covers, Israeli experts told Xinhua in recent interviews.

“I think it’s a very smart move because it will bring investment and infrastructure to countries that need this kind of investment, so that is very positive,” said Alexander Pezvner, founding director of the Chinese Media Center at Israel’s College of Management.

Pezvner said the initiative, put forward by President Xi Jinping in late 2013, poses a win-win situation for the Chinese economy and the global economy, which “is facing headwinds all over in the West.”

VISION FOR FREE TRADE ZONE IN EURASIA

Pezvner believed that besides bringing more investment to and improving infrastructure in relevant countries, the Belt and Road Initiative will help advance the integration of economies along the routes, bring stability to fragile areas and enhance people-to-people exchanges.

Pezvner said that the Belt and Road Initiative holds the promise of achieving more than just bilateral ties. “In the future maybe ... perhaps a free trade zone that will cover all of the Eurasian continent if it works,” he said, citing the planned free trade talks between Israel and China.

Hagai Shagrir, director of the Northeast Asia Department of Israel’s Foreign Ministry, predicted that the Belt and Road Initiative will bring more standardization among the countries which are part of this vision and help lower barriers in trade between them.

Israel hopes to start the actual negotiations on free trade with China at the beginning of 2016, Shagrir said, stressing that a feasibility study showed that an Israel-China free trade deal will be very beneficial for both countries, for their economies and also for their people-to-people exchanges.

He revealed that in the coming weeks, Israel will start negotiating with China a new type of visa, valid for 10 years, for tourists and business people in order to expand the people-to-people exchanges between the two countries.

POTENTIAL CONTRIBUTION TO REGIONAL PEACE

Pezvner observed that the biggest challenge for the Belt and Road Initiative is that the area it covers passes through some unstable spots in the Middle East.

Nevertheless, he predicted that when those conflict-plagued countries are faced “with a choice of joining the development train of China,” they will choose to join and not continue with their war.

Shagrir shared his observation, expressing confidence that the Belt and Road Initiative would be a big contributor to greater stability in the region because all parties will eventually be connected by this vision, which features a lot of common economic interest and a wish for greater regional peace and stability.

They are also very optimistic about the prospect of China’s economy and confident that China will remain an engine of world economic growth in the future.

The Chinese economy is currently undergoing a transition from growth that is dependent on exports and manufacturing to an economic model that emphasizes more sustainable development, clean energy, the growth of the consumer class, and urbanization, Pezvner said, adding that the 6.5-percent growth target set in its 13th five-year development plan is “reachable.”

CHINA’S INDUSTRY CAPACITY TO BENEFIT WORLD

Professor Gadi Ariav of Tel Aviv University Business School cited Israel as an example of a country that is benefiting from the Belt and Road Initiative as Chinese companies dig highways, railways and tunnels in Israel.

“We enjoy the Chinese know-how and capacity,” he said.

“It is very common in international geopolitical policy to offer your excess capacity to friendly benefiters, so in that sense it solves the short-term problem of over-capacity which has been building up in China; in the longer term it provides markets and roads in the surrounding belt around China,” he said.

Describing the Belt and Road Initiative as “an excellent vision” by President Xi, Shagrir said it is “a far-sighted vision to develop infrastructure throughout Asia, Eurasia, the Middle East all the way to Europe” in order to eventually ensure the goods that are coming from China reach Europe.

“It is known that there is a huge infrastructure gap in Asia in general -- some estimate something between a $4-$8 trillion’s infrastructure gap. So definitely there is a need for such a financial tool as the Asian Infrastructure Investment Bank (AIIB) to take care and make sure that the infrastructure will be developed in the coming years,” Shagrir said.

The AIIB, aiming to improve infrastructure in Asian countries, including those covered by the Belt and Road Initiative, is due to be formally launched at the end of this year. The bank, which has 57 prospective founding members, is an important vehicle for the implementation of the Belt and Road Initiative.

Shagrir believed that Israel, a prospective AIIB founding member, will benefit from being part of the bank.

“We believe that it will provide opportunities for Israeli companies to take part in the bids (issued by the bank),” he said, adding that Israel considers itself to be part of the 21st Century Maritime Silk Road which goes all the way from the South China Sea to the Mediterranean Sea.

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