• World
  • Apr 29

Xi touts $64 bn in Belt and Road deals

China sought to put a gentler face on its plan to recreate the old Silk Road at a summit that ended on April 27, saying it must do more to explain the initiative and boost sustainability.

President Xi Jinping has made the Belt and Road Initiative (BRI) one of the cornerstones of his administration. But it has run into trouble in some nations over fears that opaque financing arrangements lead to unsustainable debt and that it is more about promoting Chinese influence than bringing development.

China has at times reacted angrily to such doubts, tending to characterise critics as harbouring anti-Chinese prejudice and wishing to contain Beijing’s rise, while overlooking what it says are genuine good intentions.

The Belt and Road Initiative seeks to build a modern version of the Silk Road to link China with Asia, Europe and beyond through large-scale infrastructure projects.

On April 26, Xi told foreign leaders - including close allies such as Russian President Vladimir Putin and Pakistani Prime Minister Imran Khan - that the initiative must be green and sustainable, adding that the plan would deliver “high-quality” growth for all.

Meeting Greek Prime Minister Alexis Tsipras, Xi said Belt and Road was about promoting mutually beneficial, win-win international cooperation, not a “you lose, I win” scheme, according to a read-out from foreign ministry.

“We must explain this point to the world, to win even greater understanding and support,” the ministry paraphrased Xi as saying.

China has been keen to show that Belt and Road is even winning acceptance in Western nations, especially after Italy became the first G7 country to sign on last month. Britain’s finance minister, France’s foreign minister and Germany’s economy minister all made the trek to Beijing for the event.

Those countries reminded China of the need for high standards and transparency.

French Foreign Minister Jean-Yves Le Drian told the summit that the success of Belt and Road projects “will depend on our determination to keep our commitments”.

“Commitment to openness, commitment to transparency, commitment to fair competition and, of course, commitment to environmental sustainability as well,” he said.

British Chancellor Philip Hammond said that for Belt and Road to be successful, it had to deliver “the highest international standards of transparency, of governance, but also of environmental integrity”.

Even Aung San Suu Kyi, the leader of another good Chinese friend, Myanmar, said Belt and Road had to take into account realities on the ground. “The projects must not only be economically feasible but also socially and environmentally responsible and, most importantly, they must win the confidence and support of local communities,” she told the summit.

This year’s summit was more low-key than the first one two years ago. Xi did not offer details of any new funding for the initiative, though he did announce deals worth more than $64 billion signed during the meeting.

Beijing has been unable to win over Washington though, with no senior US government officials appearing at the summit.

The US embassy in Beijing reiterated “serious concerns that China’s infrastructure diplomacy activities ignore or weaken international standards and best practices related to development, labour protections, and environmental protection”.

The Global Times, a widely-read tabloid published by the ruling Communist Party’s official People’s Daily, said in an editorial that the US and other critics “have lost their abilities to use logic and common sense, and even rational thinking” when it comes to BRI.

“Lying, being far-fetched, and holding such opinions will not have any real influence,” it said. “BRI is a groundbreaking international endeavour for the 21st century.”

While China has sought to sketch a clearer vision for Belt and Road, it has increasingly taken a defensive tone in saying what it isn’t.

On the eve of the summit, the People’s Daily WeChat account ran a Q&A piece to “verbally fight back with the facts” against critics.

“Is the Belt and Road China creating a debt trap?” reads one of the questions. “The causes of a country’s debt are complex. Some have problems with the fundamentals of their economy, some are old accounts left over from history,” part of the answer reads. “The BRI is only six years old. It’s utterly unjustifiable to simply blame the long-standing debt problems of these countries on China!”

In another softer side to Belt and Road, a list of 283 deliverables reached at the summit listed more than just traditional areas like railways and ports. China will set up a Silk Road museum and library alliances, the lengthy document reveals.

BCIMEC missing from list of projects

The Bangladesh-China-India-Myanmar Economic Corridor (BCIMEC), originally listed in the BRI projects, is conspicuously missing from the new list. A joint statement issued at the end of the meeting carried an annexe mentioning names of “economic corridors and other projects catalysed and supported by connectivity”.

The China-Pakistan Economic Corridor, Nepal-China Trans-Himalayan Multi-Dimensional Connectivity Network and the China-Myanmar Economic Corridor (CMEC) figured in the list from South Asia.

The 2,800-km BCIMEC proposes to link Kunming in China’s Yunnan province with Kolkata, passing through nodes such as Mandalay in Myanmar and Dhaka in Bangladesh before heading to Kolkata.

The 1,700-km CMEC would provide China another node to access the Indian Ocean. The corridor will run from Yunnan province of China to Mandalay in Central Myanmar. From there it will head towards Yangon, before terminating at the Kyaukpyu Special Economic Zone on the Bay of Bengal.

Similarly, the Nepal-China Trans-Himalayan connectivity network starts from Chengdu, from where it is linked to Tibet by the Sichuan-Tibet Highway, or the Sichuan-Tibet Railway. It is proposed that the railway from Tibet will be further extended to Kathmandu, via Ya'an, Qamdo, Lhasa and Shigatse.

China and Pakistan sign a host of deals

China and Pakistan firmed up their cooperation under the $60 billion CPEC by signing a host of agreements, including upgradation of a Karachi-Peshawar railway line, launching of second phase of the Free Trade Agreement and establishment of a dry port.

As per reports, China will provide $8.4 billion to build the Karachi-Peshawar railway line covering a distance of over 1,680 km.

China said about $19 billion have been spent so far under the CPEC projects, mainly relating to energy and power generation.

China and Pakistan also signed an agreement to launch the second phase of the FTA under which China will open up 90 per cent of its market for Pakistani goods in a bid to address the trade deficit, which stood at $9.7 billion last year.

They also signed a deal to establish a dry port at Havelian in Khyber Pakhtunkhwa province.

Notes