Belt and Road Initiative can lift 32m out of poverty: World Bank

WASHINGTON: China’s massive Belt and Road infrastructure drive could speed up economic development and reduce poverty for dozens of developing countries, the World Bank said on Tuesday in a new report that called for deep policy reforms and more transparency for the initiative.

The long-delayed report said that the Belt and Road — a string of ports, railways, roads and bridges and other investments connecting China to Europe via central and southern Asia — could lift 32 million people out of moderate poverty conditions if implemented fully.

Still, there are “significant risks,” the World Bank said.

“Achieving the ambitions of the Belt and Road Initiative will require equally ambitious reforms from participating countries,” World Bank Vice President for Equitable Growth Ceyla Pazarbasioglu said in a statement.

Improvements in data reporting and transparency — especially around debt — open government procurement, and adherence to the highest social and environmental standards will help significantly,” she added.

World Bank President David Malpass skipped China’s second Belt and Road summit in Beijing in April to take his first foreign trip to Africa instead. Malpass was a critic of Belt and Road when he was an official at the US Department of the Treasury, arguing that it was saddling some countries with unsustainable debts.

The report found that for some countries, the costs of new infrastructure could outweigh potential economic gains and the benefits would be unevenly distributed among participating countries.

Real income gains in the Kyrgyz Republic, Pakistan, and Thailand could be above eight per cent, but Azerbaijan, Mongolia and Tajikistan could experience negative welfare gains due to high infrastructure costs, the analysis showed.

The World Bank said real income for Belt and Road corridor economies could be two to four times larger if they ease trade restrictions and institute reforms to reduce border delays.

Increased private-sector participation in Belt and Road, now dominated by China’s state-owned banks and enterprises, can help sustain the initiative in the long run, but participating countries would need to institute reforms to improve their investment climates, including stronger legal protections and regulations, the report said.

“Little is known about the processes for selecting firms” for Belt and Road projects, the report said. “Moving toward international good practices such as open and transparent public procurement would increase the likelihood that BRI projects are allocated to the firms best placed to implement them.”

There was also a need to increase transparency of debt terms and conditions for Belt and Road projects to allow governments to assess the risks to their ability to sustain debt, the report said.

Source: Dawn

Date: 20/6/2019

China stands ready to promote cooperation on high-quality BRI

China said Wednesday that it is willing to work with partners to promote international cooperation on high-quality development of the Belt and Road Initiative (BRI) to constantly score new achievements.

Lu Kang, the spokesperson for the Chinese Ministry of Foreign Affairs, made the remarks at a press conference in response to a World Bank report regarding the BRI.

The World Bank on Tuesday released the report titled “Belt and Road Economics: Opportunities and Risks of Transport Corridors,” saying the “BRI offers opportunities for countries to improve their infrastructure, to increase trade and connectivity among themselves and the wider world, and thus to increase growth and reduce poverty.”

The report also said that the BRI projects could contribute to lifting 32 million people out of moderate poverty.

“China has taken note of the report,” said Lu, adding that since it was first proposed six years ago, the BRI has yielded abundant achievements and has become a broadly participated platform for international cooperation and a widely welcomed international public goods.

Lu said the BRI’s vision and cooperation areas are highly compatible with most developing countries’ development strategies and have made positive contributions to these countries’ economic development and improvement of their people’s livelihood.

The joint construction of the BRI has helped unlock the bottlenecks in infrastructure construction in many regions along the Belt and Road, boosted connectivity and contributed significantly to global trade facilitation and economic growth, said Lu.

“We think the World Bank’s comments on this are objective,” Lu said.

The report also mentioned that policy reforms are needed to increase transparency, improve debt sustainability, and mitigate environmental, social and corruption risks.

Lu said during the Second Belt and Road Forum for International Cooperation, various parties reached consensus on the concept of high-quality BRI development proposed by the Chinese side.

Lu said China stands ready to work with cooperation partners to jointly build the BRI, upholding the principles of extensive consultation, joint contribution and shared benefits as well as openness, inclusiveness and transparency, implementing the open, green and clean approaches, and striving for achieving the goals of high-standard, livelihood-improving and sustainable development.

China is willing to work with cooperation partners to implement the outcomes of the forum, actively build global connectivity partnership and promote international cooperation on high-quality BRI development to constantly score new achievements.

“In this sense, this is consistent with relevant views and suggestions of the World Bank report,” Lu said, adding he believed that relevant departments will conduct serious research on the suggestions given by the World Bank report.

Source: China.org.cn

Date: 20/6/2019


Belt and Road Initiative (BRI) mapping a New World of Opportunities

Belt and Road Initiatives (BRI) attracted world states for 6 years and the big steps were made for the implementation of the project during the last 6 years.

The head of states and governments from 37 countries and head of international organizations attended in the forum. The leaders from Azerbaijan, Russia, Pakistan, Kazakhstan, Austria, Belarus, Czech Republic, Greece, Hungary, Italy, Serbia, Singapore, United Arab Emirates and other countries joined this year’s forum.12-panel discussions and other events were held under the theme of  “Belt and Road Cooperation: Shaping a Brighter Shared Future.”

While speaking in BRF, President of China Xi Jinping announced that 150 states including many prestigious international organizations support Belt and Road Initiatives. “It indicates that our initiatives cover the whole world” – Xi Jinping told that this is the new phase in the world development. Prime Minister of Pakistan Imran Khan emphasized the importance of BRI for Pakistan during his speech at BRF.

Formation of BRI

“One Belt and One Road” initiation by the leadership of China is a restoration of Silk Way having rich historical roots. BRI is called “One Belt and One Road” until 2016.  China thought that the word “one” can make misinterpretation. Chinese strategists worked on to increase the role of China, a huge country in the economic and political scene of the world for a long time. They invented the way of transformation of China as a global power from regional one inspired by Chinese history.

After a long period of time, China decided to utilize its geography which made China an important and prestigious state during history. This is possible by reviving the historical Silk Way. China targets not only to restore Silk Way, but to make this way into international integration and communication centre by modernizing, expanding and attracting the big part of the world to the project.

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The initiation was primarily presented to international community verbally by President of China Xi Jinping during the official visit to Kazakhstan in 2013. Chinese leader could convince the elder to the project that how much it is important. While speaking at Nazarbayev University, Jinping emphasized the necessity and prospective of modernization of Silk Way and formation of Economic Belt along Silk Way. It means the world has met with this global project in Kazakhstan, the first time ever.

China leader paid an official visit to Indonesia in 2013. The content of the visits to Kazakhstan and Indonesia was the same. Chinese leader made a historical speech in Indonesian parliament and emphasized the necessity of the formation of “XXI century Sea Silk Way.”

Two words used in these two historical visits made the cornerstone of the Belt and Road project. The phrase of Economic Belt of Silk Way and XXI Century Sea Silk Way was used in the name of the project “Belt and Road”.

The project announced in 2013 planned to be completed in 2049 (100th anniversary of People Republic of China). The project contained 900 sub-projects and the budget worth $890 billion.

Main goal of BRI

The part of BRI starts from China to Kazakhstan, then Mongolia Russia and over Iran to Europe. China plans to construct energy lines, highways, trains and fiber lines over the planned directions. One of the main aims of China is the integration of its undeveloped regions to the global economy.

The target is the join of 69 countries to the project, this means 42 percent of the material resources, 64% of the population, 40% of highways, 75% of the energy resources of world.

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The position of BRI – unavoidable state for China

BRI is not the regional project but international scale. Pakistan is an essential strategic ally for China in the project. There is no alternative for BRI’s seaway which vital for the realization of the project apart from the geographical position of Pakistan.

China aims to the realization of seaway of BRI with Pakistan. The strategic importance of Pakistan is determined by being a gate to Hormuz, Umman and Africa. At the same time, existence of border with China increases Pakistan’s importance more. Pakistan is the only state has the entrance to Hormuz on the borders of China.

The only alternative to Pakistan could be India. But, India is not considered a proper partner for China. It has several reasons. First of all, India will tend to rivalry with China more than partnership. It is no secret that the US sees India as a balance to China’s leadership in South Asia. Also, several political problems exist between two states. For example, Dalai Lama and Doklam problem between states.

Although India has similar geographical position but is not a country that China cooperate in BRI like Pakistan. For this, India worried the expansion of the project and Pakistan’s increasing importance. India also concerned the potential economic power of Pakistan and regional influence of it.

Geo-strategic importance of China Pakistan Economic Corridor (CPEC)

CPEC reflects Pakistan’s importance for China. CPEC can be considered the Pakistani branch of BRI. It is understood as the main locomotive of the project. It is not only a collaboration of two states but a structure for developing the global economy.

CPEC came to the agenda by Pakistani President Nawaz Sharif and Prime Minister of China Li Kegiang in Islamabad, 2013. Sharif expressed its consent to the project while introducing to him. Primal agreement was signed by parties in 2013, June 5. The project officially started in 2015, 20 April. The complementation and the creation of job opportunities for 1.2 million citizens until 2030 are forecasted.

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2700 km long roads, railroad, fiber optic cables, energy pipeline and the construction of industrial and economic regions are considered within the project. The project covers the Xinjiang of China and Gwadar port of Pakistan and the pipelines and roads go to Basra.

CPEC is 1+4 model of cooperation. The modernization of Gwadar, infrastructure projects, construction of trade and energy lines from China and Chinese investment are based on 1+4 model.

Cornerstone of Gwadar project

Gwadar port holds the strategically important position. This port has the entrance to Hormuz and Babul-Mandap. the port is considered the heart of the project. It has critical significance for China’s Middle East project.

Generally, after the completion of CPEC, Chinese integration towards South Asia, the Middle East and Central Asia will be increased by a huge scale.

It is not coincidental that China makes billions worth investment on the realization of CPEC. 85% of energy import of China is provided via the Strait of Malacca. After the completion of the project, the dependence of China on the Strait of Malacca and new opportunities will be obtained. China will also get new opportunities to integrate Western economic processes. Apart from this, the length of the way of energy import will be diminished to 2414 km from 12070 km.

The total value of CPEC is $47.96 billion. The $34.18 billion is for natural energy and $4.18 billion for transport and $8.21 billion for railroads and $48 million for the modernization of Gwadar port. Currently, the total budget of CPEC reaches to $62-63 billion. Experts forecast the value of the project will reach to $100 billion.

Source: DND

Date: 18th June, 2019


Pakistan, China agree to expedite work on CPEC’s Eastern Corridor

Minister for Planning, Development and Reform Makhdoom Khusro Bakhtyar and Ambassador of China Yao Jing during a meeting here on Monday agreed to expedite the work on Eastern Corridor from Sukkur to Hyderabad on BOT (Build, Operate, and Transfer) basis for its early completion.

The two dignitaries expressed satisfaction over the pace of projects under China-Pakistan Economic Corridor (CPEC) framework.

The minister said the incumbent government is committed to fast-track the progress on this flagship project between Pakistan and China. He appreciated the Chinese leadership and government for expanding the scope of CPEC by including socio-economic and agriculture sector development under the platform. The minister noted that signing of framework agreement on agriculture cooperation is a major milestone, adding that Pakistan will welcome Chinese agriculture companies to explore investment opportunities for initiation of joint ventures.

The minister informed the Chinese ambassador that less-developed areas including the merged districts of KP and Balochistan have been accorded priority in the next year’s development budget. He said that Gwadar Smart Port City Master Plan will be finalised soon which will chalk out the way forward for development of the coastal city.

Various projects under CPEC framework including 300 MW coal-based power plant in Gwadar and Kohala hydro power station also came under discussion during the meeting.


Date: 18th June, 2019

Source: Daily Times

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Army chief reaffirms commitment to ensure CPEC security

ISLAMABAD: The Army on Monday reaffirmed its commitment to ensure security of the China-Pakistan Economic Corridor (CPEC).

The assurance was extend­ed by Army Chief Gen Qamar Bajwa during a meeting with Commander of China’s People’s Liberation Army Gen Han Weiguo at the General Headquarters (GHQ). The two led their respective delegations during the talks.

“COAS reaffirmed Pakistan Army’s unwavering support for CPEC security,” the ISPR said in a statement on the meeting.

Lately there has been a surge in terrorist activity in Balochistan. Security officials believe the sudden intensification of attacks was linked to the launch of second phase of CPEC, the progress on border fencing, and the fluid situation in Afghanistan. Last month’s attack on a hotel in Gwadar accentuated concerns about the security of CPEC.

Prime Minister Imran Khan had after the hotel attack said the attack was “an effort to sabotage our economic projects and prosperity”.

A source said China wanted greater vigilance against security threats and increased intelligence sharing with Pakistan.

Issues pertaining to regional security and military cooperation also came under discussion, the ISPR said in its statement.

Meanwhile, outgoing Austra­lian High Commissioner Mar­garet Anne Adamson also paid a farewell call on Gen Bajwa.

Matters of mutual interest were discussed during the meeting, the ISPR said.


Date: 18th June, 2019

Source: DAWN

Pakistan emerges as leading partner of BRI: survey

BEIJING: Pakistan has emerged as a leading partner of the Belt and Road Initiative (BRI), introduced by President Xi Jinping six years back, according to a survey released at a media and think tank exchange event held in Nanjing, Jiangsu province.

The fast and smooth functioning of the China-Pakistan Economic Corridor (CPEC) makes Pakistan’s role most prominent in the community of the nations. The CPEC is cited as a practical demonstration of BRI’s concept of shared destiny.

According to the survey, BRI has been gaining more recognition globally and will help support economic development across Asia and beyond. The 2019 Belt and Road Media and Think Tank Exchange Event attracted mainstream media representatives and think tank experts from 17 countries, including Pakistan and India.

Mushahid Hussain Sayed, Chairman of the Senate’s Foreign Affairs Committee, represented Pakistan at the meeting. Addressing the meeting, he said that the media and think tanks have an important function in the international community with regard to communicating and avoiding conflicts.

“People are the best bridge to different cultures communicating,” he said. “An initiative is needed for cultures to learn from each other, and we need to promote the development of such an initiative.”

A report released during the event, titled “Leading a New Round of Global Opening up and Cooperation; The Belt and Road in the Eyes of the International Community”, found that the global community’s recognition of the initiative has been increasing each year.

China’s neighbouring countries particularly Pakistan has the best understanding of it, according to the report. In last year’s survey of six ASEAN countries, Indonesia, Thailand, Malaysia, Singapore, the Philippines, and Vietnam, 70pc of respondents said they knew of the BRI.

In another survey conducted in 11 Asian countries, including Israel, Saudi Arabia, and India, 56pc of respondents thought the BRI provides a new solution for global governance and a new mode for equal and win-win cooperation among countries.

The international community recognizes the BRI’s positive impacts on the development of their own countries, the report said.

Last year, in a survey in 21 countries, 53pc of respondents recognized the BRI’s positive impact on regional and global economic development, and 74.7pc of respondents from 11 Asian countries believed the BRI could bring more opportunities for their countries’ development.

Since the Belt and Road Initiative was launched in 2013, it has shown itself to be fruitful and has generated higher expectations from the international community.

In a 2018 survey in 17 countries, 72.5pc of the respondents thought of the BRI as a global public product with bright prospects, and 69.3pc wished their governments would further participate in the initiative.

In another survey this year in 11 Asian countries, 76.7pc of the respondents found that the BRI could bring more development opportunities to Asia.

Gao Anming, deputy director of China International Publishing Group, said that the event provides new opportunities for communication and cooperation between Chinese and foreign media and think tanks.

Hu Hong, the vice-mayor of Nanjing, said that the Belt and Road Initiative can help promote mutual understanding and cooperation between China and other countries and that the media and think tank exchange event will help countries to deepen communication and enhance friendship.

Source: Profit Today

Date: May 20, 2019

Belt and Road Brings Chinese Finance to the Gulf

During his meeting with the King of Bahrain, Sheikh Hamad bin Isa al-Khalifa, in 2013, Xi Jinping stated that China would deepen financial cooperation with Gulf countries. In recent years, this intention has been realized. With the Belt and Road Initiative (BRI), China has been expanding its financial foothold in the Gulf region, which is positioned as one of the most crucial financial hubs in the world.

While Chinese finance has been present in the Gulf since the early days of China-Gulf relations, Xi, with his assertive financial reforms, including greater integration in the global financial economy, aims to reinforce this process through the BRI.

Growing Presence and Bond Market

Corresponding to the BRI’s official “Vision and Action” document, which states that “financial integration is an important underpinning for implementing the Belt and Road Initiative,” Chinese banks and financial institutions have increased their cross-border financial transactions, presences, and activities in the Gulf region.

This is particularly apparent in the UAE, the Gulf’s most important financial center. According to the Dubai International Financial Center’s (DIFC’s) 2015 annual Operating Review report, banks from China had doubled their balance sheet since mid-2014. In 2018, it was further reported that Chinese financial entities make up nearly a quarter of the total assets in the DIFC, with total value reaching $33.4 billion by September 2017, a 30.5 percent increase from the $25.6 billion reported at end of 2016. Additionally, Chinese banks have also elevated their licenses with the DIFC to Category 1, changing their presence from subsidiary to branch status.

Moreover, following the direction in the BRI “Vision and Action” plan to “open and develop a bond market,” these banks have increased their issuance of bonds in the region.

In October 2016, the Hong Kong branch of the China Construction Bank (CCB) listed a $600 million bond on Nasdaq Dubai, the Gulf’s global financial exchange. In the same month, the Agricultural Bank of China (ABC) was approved by Dubai Gold and Commodities Exchange (DGCX) as the first listed market-maker for Shanghai Gold Futures.

The Industrial and Commercial Bank of China (ICBC), after upgrading its branch’s services from strictly commercial to providing investment banking and asset management to its Gulf clientele, also listed a $400 million bond on Nasdaq Dubai in mid-2017. That made for a total of five ICBC bonds listed on DGCX, after the listing of a $500 million bond in May 2015 and a $400 million bond in June 2016.

Not long afterwards, the CCB listed another $1.2 billion bond in Dubai. The CCB’s chairman, Guo Yuo, statedthat the bonds are intended to support the bank’s activities in the region under the BRI. In March 2018, the ICBC also raised $1.4 billion through the issuance of two bonds on Nasdaq Dubai, which brought the total amount of bonds issued by Chinese banks via the exchange to $5.4 billion.

Institutionalizing Financial Relationships

China’s financial expansion in the Gulf has also been institutionalized. For example, the Shanghai Stock Exchange partnered with the Abu Dhabi Global Market (ADGM) in April 2018 to develop a platform in the UAE known as the “Belt and Road Exchange,” aimed to support Chinese investors and businesses in the Gulf.

Although to date there are no specifics regarding the platforms via which the new exchange would trade, or when it might be opened, we do know that the future exchange aims to help Chinese enterprises finance investments undertaken as part of the BRI. A few months later, the ADGM launched its first overseas representative office in Beijing.

Similarly, in 2017 Shanghai Gold Exchange partnered with the DGCX to establish DGCX Shanghai Gold Futures, which saw the first-ever use of the Shanghai Gold Benchmark Price in global markets.

In July 2018, Chinese state-owned Everbright Group, which operates across banking, securities, asset management, insurance, and funds as well as in futures and investment management, also signed an MoU with the DIFC to explore collaboration opportunities related to the implementation of the financial aspects of the BRI.

Currency Expansions

Such moves have also been accompanied by efforts to expand the use of Chinese currency in the Gulf.

The BRI is intended to complement the ongoing strategy to globalize the Chinese renminbi (RMB), a process that began in 2009 and still faces obstacles. The “Vision and Action” plan states that the BRI aims to establish currency swaps and settlement mechanisms, to uplift the status of the RMB as an international reserve currency, and to incorporate the RMB in the IMF’s Special Drawing Rights (SDR) basket of currencies, a goal that was achieved in 2016.

In the Gulf, this intent was echoed by Xi in his speech at the Arab League headquarters in 2016. A number of Chinese banks have responded to Xi’s call by becoming active in promoting the use of RMB in the Gulf, mainly through currency swaps and trade settlement deals.

The People’s Bank of China (PBOC), for example, signed a 35 billion RMB ($5.6 million) currency swap deal with Qatar Central Bank (QCB). The PBOC has also renewed its $5.42 billion currency swap agreement with the UAE, after the latter was included as a RMB Qualified Foreign Institutional Investor (RFQI) with a quota of 55 billion RMB, paving the way for the Central Bank of the UAE to invest in China’s capital market.

Furthermore, the ICBC has also decided to join the Dubai Commodities Clearing Corporation (DCCC), turning itself into a settlement bank for DGCX, and the Chinese bank has been reportedly pursuing negotiations with Gulf governments and entities about issuing RMB bonds in China.

Besides currency swap agreements, RMB clearing centers have also been established in the Gulf. In 2015, the ICBC founded a renminbi clearing center in Doha, which became the first in the Gulf to allow trade priced in RMB to be cleared locally. This helps make the renminbi “trade invoicing currency” in the Gulf. Banks in the Gulf are now able to skirt various custodial relationships with banks in Hong Kong to access currency at the Doha branch. This also effectively enables the creation of a pool of liquidity in renminbi, thereby enabling a push for trade across the wider region.

A year later, the ABC was also appointed by the PBOC to operate another renminbi clearing center in Dubai.

Though still limited, these developments have gradually expanded the popularity and use of Chinese renminbi in the Gulf. HSBC’s RMB Internationalization

Study found that there has been a noticeable increase in the number of UAE businesses using the renminbi – from 34 percent in 2015 to 46 percent in 2016. In January 2016, the RMB had also become the most active currency used in the UAE and Qatar for direct payments to China and Hong Kong and the rate of using the renminbi in direct payments between Kuwait and China exceeded 10 percent. Lately, Saudi Arabia has also declared that the country is currently preparing for renminbi funding.

China’s Belt and Road is usually thought of in terms of literal roads, ports, and bridges. In the Gulf, however, it’s taking a different form as China pursues increased financial cooperation with a globally important financial hub.

Source: The Diplomat

Author: Dr. Muhammad Zulfikar Rakhmat is a lecturer at Universitas Islam Indonesia and a research associate at Jakarta-based Institute for Development of Economics and Finance (INDEF).


BRI a driver of global development

The BRI will help all participants, not just China

There are two kinds of leaders; those who are born to create history and others who are catapulted into the leadership role by history. It is the first category of leaders whose vision and initiatives lift countries from the vicious circle of poverty and shape their future as world leaders. Deng Xiaoping was a leader who was born to create history. His vision to evolve China’s own version of socialism characterized by openness with a clear-cut goal of putting China on the road to sustainable development and improving lives of the people, has worked wonders. China over the last four decades has become the number two economic power of the world, poised to play a major role on the economic and political stage at the global level. Economists and political analysts believe that China would be the number one economic power of the world by 2050 and the indications are that no matter what the USA and its allies do to obstruct that process, it has become unstoppable and will achieve that distinction.

Over the last 40 years, the GDP of China has been growing at an average rate of 9.5 percent, which is phenomenal. The result is that China now accounts for 30 percent of global GDP. The reforms set in train in 1978 were premised on special economic zones in several provinces; introduction of a household responsibility system that allowed households to contract land, machinery and other facilities from collective organizations; the consolidation of state-owned enterprises and accession to the WTO in 2001. These policies boosted foreign investments exponentially besides encouraging entrepreneurship. The willingness of the Chinese leaders to implement pragmatic and impregnable economic policies enabled the country to escape the poverty trap and gave its 800 million people upper-middle-class income status.

However, notwithstanding the US hostility toward BRI and Indian opposition to CPEC, it is an irrefutable reality that China is destined to lead the world within the next two decades as its economic prowess and future potential amply suggest. Connectivity has become the buzzword of the 21st century, which has turned the tide against those who are vying to protect their vested global interest and resist the change

China’s rise to becoming the number two economic power has not only benefitted China and its people, but it has also helped many countries of the world in improving their economic profile through investments made by China. It is reportedly the third biggest source of foreign investment, with outflows touching the $125 billion-mark in 2017. This economic strength enabled China to dilute the impact of the financial crisis in Asia in 1997 as well as at the global level during 2008-9.

The BRI initiative launched by President Xi Jinping in 2013 which aims to connect China with Asia, Europe and Africa via land and sea-based infrastructure development, manifests its economic prowess to propel global development through partnership and connectivity with an explicit aim of shared global prosperity. President Xi, while addressing second Belt and Road Forum for International Cooperation in Beijing on 26 April, vividly espoused the achievements of the initiative so far and gave an encouraging perspective on the future aims of the cooperation. He said “What we have achieved amply demonstrates that Belt and Road cooperation has both generated new opportunities for the development of all participating countries and opened up new horizons for China’s development and opening-up. We need to be guided by the principle of extensive consultation, joint contribution and shared benefits. We need to act in the spirit of multilateralism, pursue cooperation through consultation and keep all participants motivated. We may, by engaging in bilateral, trilateral and multilateral cooperation, fully tap into the strengths of all participants.  We need to take a people-centered approach, give priority to poverty alleviation and job creation to see that the joint pursuit of Belt and Road cooperation will deliver true benefits to the people of participating countries and contribute to their social and economic development. We also need to ensure the commercial and fiscal sustainability of all projects so that they will achieve the intended goals as planned. Connectivity is vital to advancing Belt and Road cooperation. We need to promote a global partnership of connectivity to achieve common development and prosperity. I am confident that as we work closely together, we will transcend geographical distance and embark on a path of win-win cooperation.”

The fact that more than 150 countries and international organizations have signed agreements on Belt and Road cooperation with China amply demonstrate the faith of the participating countries and multilateral organizations in the BRI initiative and its potential to give the world a new global economic order predicated on participation and shared economic prosperity. The much awaited re-awakening of the East has come forth in the shape of BRI.

However the BRI initiative also has its detractors and opponents, like the USA and some of its western allies, who perceive it as a threat to the global economic order which promotes their vested interests. They are taking all possible measures to stop China from gaining the status of number one economic power of the world, with a greater political role on the world stage.  The US trade war with China is one of the manifestations of the malice and grudge that they harbour against China but it will harm them more than the latter. Their economies have reached a point of saturation while China still has a vast potential to increase its economic prowess that will benefit the countries participating in the BRI initiative, because it is not only a global factory for producing goods and services for exports but is also a global market for other countries with ever expanding horizons. China is vying for the removal of trade barriers and is willing to lower tariffs as well as remove non-tariff barriers to meet the ever-growing material and cultural needs of its people by giving them more choices and benefits.

The USA has found a willing partner in India to do her bidding in this region and to check Chinese burgeoning influence in the region and beyond. The USA and India are vying to sabotage the China-Pakistan Economic Corridor, a pivotal project of BRI which aims at regional connectivity and shared regional prosperity. However, in spite of covert and overt Indian actions to sabotage CPEC, both China and Pakistan have urged India to join it, earnestly believing that Indian participation would not only help in exploiting the regional economic potential for shared prosperity but would also benefit India immensely. Unfortunately the Indian leaders remain oblivious to the benefits of CPEC blinded by their designs to establish hegemony in the region.

However, notwithstanding the US hostility toward BRI and Indian opposition to CPEC, it is an irrefutable reality that China is destined to lead the world within the next two decades as its economic prowess and future potential amply suggest. Connectivity has become the buzzword of the 21st century, which has turned the tide against those who are vying to protect their vested global interest and resist the change.

Author: Malik Mohammad Ashraf

Source: Pakistan Today

Date: 24/5/2019

BRI transforming world economic order

This Thursday and Friday, Beijing is hosting a second international forum on the Belt and Road Initiative, and it won’t be a small deal. The four weeks preceding this event have seen a surge of nations and institutions joining the BRI framework, beginning with Italy’s memorandum of understanding in March as the first member of the Group of Seven nations to join, followed soon thereafter by Luxembourg and Switzerland.

Weeks later, China won another victory by consolidating billions of dollars’ worth of infrastructure deals with the 16+1 Central and Eastern European Nations that have signed on to the BRI. This particular forum was especially important as it saw Greece join the alliance, changing the name to the 17+1 group. Greece’s official participation in this bloc extended the group beyond its nominal “central and eastern” geographical limits, and the importance of Greece – whose Port of Piraeus and emerging rail infrastructure funded by China – provide a key bridge in the Maritime New Silk Road to Europe.

If that wasn’t enough, China participated in the April 9-10 International Arctic Forum in Russia where the first treaty was signed between Moscow and Beijing on scientific cooperation in the Arctic, and sweeping agreements were made around Chinese-Russian infrastructure development on a policy that has become known as the “Polar Silk Road” – again extending the limits of the BRI beyond its “east-west framework.” Just as the Arctic conference was ending, an unprecedented Canadian Arctic Policy Report was publicized calling for a transformation of Canada’s Arctic doctrine toward a pro-development orientation in response to the “changing geopolitical rules” initiated by Russia and China

While China and Russia consolidated the BRI-Eurasian Economic Union treaty in June 2018, a major leap was announced toward the finalization of a China-Eurasian Economic Partnership, with the Chinese Commerce Ministry’s deputy director of Eurasian affairs, Wang Kaixuan, stating on April 19:

“Now it has to be endorsed by the specialized agencies. China has already completed its internal procedures. We are now waiting for our Russian counterparts, after that we can immediately start the negotiations. I believe that will happen soon.”

From April 15-16, China initiated a sweeping array of treaties with Arab countries during the second Arab Forum on Reform and Development under the heading Build the Belt and Road, Share Development and Prosperity.” The Arab nations already have more than US$200 billion worth of annual trade with China and 18 Arab countries have signed MOUs with the BRI.

China’s capacity to bring long term infrastructure to nations torn by Western-funded wars and regime change is seen as a vital stabilizing influence not only to alleviate poverty and de-radicalize but also to provide a framework for genuine independence from Western intrigues. Commenting on the forum, the president of Lebanon stated, “The Arab countries have huge markets. We regard China as a good friend and are willing to further consolidate the relationship with China. We would like to draw the experience from China’s reform and development so as to benefit our people and seek our opportunities for development.”

Rather than embrace this new potential, Western “old paradigm” forces representing the entrenched deep state have screamed and hollered against the dangers of China and Russia threatening our democratic way of life.” Exemplifying this outlook was The Washington Post’s April 20 feature article “How Washington can beat China’s global influence campaign,” calling for an “alternative to the BRI” controlled by the Western elite. This plan is entirely absurd, since America has not only permitted its own infrastructure and productive powers to rot for 50 years, but has created no relevant infrastructure that has benefited nations abroad during that same time frame. All that has been created under decades of lending by the International Monetary Fund and World Bank that has meant debt slavery, impoverishment, and a $700 billion derivatives bubble that is ripe to explode.

Although great efforts were made over two years by the Five Eyes/Mueller-led witch hunt to destroy the potential alliance US President Donald Trump was proposing to form with Russia and China, the now published Mueller report turned out to be little more than a goose egg, failing to  prove any of the claims of Russian collusion. Jumping off that victory, Trump called loudly on April 5 for a conversion of vast military expenditures that only risk World War III toward a program of long-term investments among Russia, China and the US:

“Between Russia, China and us, we’re all making hundreds of billions of dollars’ worth of weapons, including nuclear, which is ridiculous.… I think it’s much better if we all got together and didn’t make these weapons … those three countries I think can come together and stop the spending and spend on things that are more productive toward long-term peace.”

Going into this week’s BRI Forum (titled “Belt and Road Cooperation: Shaping a Brighter Shared Future”), 5,000 participants, including 37 heads of state and 100 heads of organizations, will discuss the mega-projects that will give vitality to the coming century with the Chinese leadership and business community. There is no doubt that the collapse of the trans-Atlantic banking system will be on everyone’s mind as opportunities to tie our destiny to long-term projects that benefit all nations will be presented as open offers for all to join. Will the West follow Italy’s and Greece’s lead by joining the BRI, or continue to party like it’s 2008?

Source: Asia Times

Date: April 25, 2019

Pakistan being encouraged to use Yuan as other BRI countries

The Belt and Road Initiative (BRI) has fueled the yuan’s internationalization, particularly in the past two to three years as work on related projects accelerated.
Pakistan is also among those countries that have opened the door to settling all bilateral trade with China in yuan instead of the dollar. According to the State Bank of Pakistan there is no bar to using the yuan to settle payments for trade and investment from China. In Southeast Asia where economic relations with China are closer than in other countries and regions the yuan usage is getting popular, one expert told the Chinese Media House, the Global Times.
However, he said that relatively strict foreign exchange policies in many BRI markets, as well as insufficient branch network of domestic financial institutions in those markets, are restricting the yuan’s internationalization in the short term.
“On the positive side, the growing pace of yuan use in BRI countries has been faster than the yuan’s overall usage in the world in recent years. The trend is particularly evident in some Southeast Asian countries like Singapore,” Zhou Yu, said director of the Research Center of International Finance at the Shanghai Academy of Social Sciences. The change is taking place very “naturally” as local companies gradually accept yuan settlement in their increasingly active business interaction with Chinese companies. This trend is also facilitated by rapid business expansion of Chinese banks in BRI countries, he said.
According to a statement the Bank of China, it has set up 12 offshore yuan-clearing banks, some of which are located in BRI countries like Malaysia. It is also helping local companies use the yuan for business settlement in countries along the routes of the BRI.“As a Chinese company, we of course want to settle balances in yuan, which would help us avoid many exchange rate risks,” Fu said. But Zhou cautioned that the strict foreign exchange policies in BRI countries, which are in general tighter compared with the developed countries, will hinder the yuan’s internationalization.
China’s State Administration of Foreign Exchange on April 22 published a report summarizing the foreign exchange policies of 123 countries and regions that have signed BRI cooperation documents with China. According to this report, those countries have different foreign exchange policies but most of them impose some level of restrictions, like cross-border capital flow controls, quota management programs and currency exchange limits.
In the long term, it is believed the yuan’s internationalization will be an evitable trend. It will also be a trend that not only benefits China but benefits BRI countries as many of those countries are also thirsty for foreign exchange,” the report added.

Date: 7/5/2019

Source: Pakistan Observer