Belt and Road Initiative: A China solution to globalization#China Newsweek#-Sino-US

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Belt and Road Initiative: A China solution to globalization#China Newsweek#

From an idea introduced by Chinese President Xi Jinping in 2013 to a global consensus today, the Belt and Road Initiative not only represents China’s increasing national power and influence in the world, but also accords with the overall trends of global development.

Initially named as the Silk Road Economic Belt and the 21st Century Maritime Silk Road, the Belt and Road (B&R) Initiative covers the continents of Asia, Europe and Africa, connecting the vibrant East Asia economic region at one end and developed European economies at the other.

Facing the challenge of anti-globalization, the Initiative, which embraces the principles of openness, tolerance, cooperation as well as market power, aims to introduce new approaches to globalization in the future.

With the closing of the 2017 Belt and Road Forum for International Cooperation last month in Beijing, China Newsweek ran a cover story in its 18th issue, discussing the ongoing efforts made by China to further promote the Belt and Road Initiative.

Below is an excerpt of the article.

‘Solution 2.0’

Although the Belt and Road Initiative was introduced by China three years ago, the future development is not totally decided by China alone. Instead, it concerns regional economies, not only in Europe, Africa and Asia, but also north and Latin America, according to Zhang Yunling, an expert from the China Academy of Social Sciences (CASS).

She also said that the Belt and Road Initiative amounts to a “Solution 2.0” to globalization, through which China will help provide new ideas and a new growth model for global development.

Meanwhile, she noted that the B&R Initiative is not an overturn of traditional globalization rules.

“The Belt and Road Initiative, which proposes a new type of development and cooperation under the premise of openness, is ‘Solution 2.0’ to global development, instead of an overturn or replacement of the original globalization,” she said.

In March 2015, President Xi said during the Boao Forum for Asia that the B&R Initiative is not a “solo for China but a real chorus” comprising all countries along the routes.

On May 15, an outcome list consisting of more than 270 items were released after the closing ceremony of B&R Forum for International Cooperation, concerning policy communication, infrastructure, trade, financing, as well as people to people exchange.

“It shows that the (future development of) the B&R Initiative is not purely decided by China, but depends on joint discussion, joint establishment and sharing, in order to provide a new model of development and cooperation to world development,” noted Zhang.

While global cooperation used to focus on development cooperation between North-South years ago, the B&R Initiative will help to provide a new cooperation model, Zhang said.

“We should see that countries along the B&R routes are mostly developing countries with huge development potential. And these countries could become main drivers for global development,” she added.

Private enterprises

Official Chinese data shows that around 56 economic and trade cooperation zones have been established in 20 countries along the B&R routes, mostly founded, operated and managed by Chinese private enterprises.

According to Wu Changqi, professor from the Guanghua School of Management of Peking University, such economic and trade cooperation zones could be seen as a new form of overseas direct foreign investment by Chinese companies, which can help avoid trade conflicts.

According to Wang Haifeng, a researcher at the National Development and Reform Commission (NDRC), as private enterprises are more driven by profits, they will be more efficient and welcomed in terms of providing local services and bringing social and economic benefits.

Although many projects, in particular those relating to infrastructure, along the B&R countries are being led by governments, it is necessary that these projects transfer into a market-oriented development model, according to Wang.

A report by the All-China Federation of Industry and Commerce on Chinese enterprises’ overseas investments shows that China’s medium and large private enterprises usually have more advantages in aspects of capital, technology, brand, capacity as well as market expansion.

“The ‘Belt and Road’ is a long-term project which will finally depend on the power of the market instead of the government,” Wang noted.

Financial cooperation

While financing is one of the most important parts in social and economic development, it is also crucial to the long term development of the B&R scheme.

To promote financial cooperation among B&R countries and establish a stable, long-term, sustainable financing system for B&R strategy, China’s Ministry of Finance has put forward a financing guideline which will help guarantee better coordination among countries along the B&R routes, expand currency exchanges, improve financing environment and promote renminbi’s local payment and settlement system.

So far, 26 countries along the B&R routes have reached consensus over the guideline on financing under the B&R framework.

It is beyond doubt that professional private financial organizations are needed in order to improve dialogue and communication in financial sector, and to do so, the Asia Financial Cooperation Association was founded in May 2017, which consists of 26 countries from Asia, Europe, Africa, Oceania as well as America.

A non-governmental and non-profit organization, AFCA is committed to promoting the connectivity in finance sector and financial cooperation, and maintaining regional and global financial stability.

In the meantime, overseas investments by big Chinese financial enterprises, such as Tenpay owned by Tencent and Ant Financial owned by Alibaba, are also playing a significant role in pushing cross-border financial cooperation and providing financial service to local people.

Telecommunication connectivity

Connectivity not only concerns transportation, but also telecommunication system which is an essential part of the B&R plan, according to Zhao Houlin, secretary general of the International Telecommunication Union.

However, although countries along the B&R routes have seen development in telecommunication sector in the past one and two decades, there’s still a long way to go for these countries in this sector due to lagging domestic network infrastructure, Zhao noted.

“As there will be more economic cooperation under the B&R framework in the future, it must be supported by a better telecommunication system,” he said.

As data shows that a country’s GDP can be increased by 1% when the penetration of broadband network is increased by 10%, optimizing the telecommunication system in B&R countries together with China will have great significance in promoting economic and social development of B&R countries, he added.

“According to our statistics, over half of the world population has no access to the Internet today, and to improve the livelihood of this group of people, we have to help them get access to modern communication tools,” Zhao said. “The B&R Initiative introduced by China is a great opportunity for us to promote the development of telecommunication system in those areas.”

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