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China, Arab states to promote Belt and Road tourism

China and Arab states are seeking to boost cooperation in tourism along the Belt and Road at an upcoming conference in Yinchuan, capital of northwest China’s Ningxia Hui Autonomous Region.

As part of the fourth China-Arab States Expo, the 2019 China-Arab States Tour Operators Conference will be held on Sept. 4-7.

More than 100 representatives from 13 countries including Egypt, and a dozen Chinese provinces, autonomous regions and municipalities are expected to hold discussions on tourism exchanges.

The conference will focus on the future development of tourism along the Belt and Road through promotional events, project signings and tour routes explorations, according to the regional department of culture and tourism.

“Ningxia is reaching out to the world under the Belt and Road Initiative,” said Zhao Mingxia, deputy head of the department.

As a pivot along the ancient Silk Road, Ningxia astonishes tourists with its picturesque landscape, a combination of both the beauty of Chinese southern canal towns and the magnificent scenery of the north.

Source: China.org.cn

Date: 3/9/2019

China looks to rebrand Belt and Road Initiative …to the exclusion of failed projects

By Kiana Wilburg

China’s Belt Road and Initiative (BRI), which aims to bring infrastructural development to various regions, has developed a reputation among most nations as being a debt trap. Even though the world’s most populated country has formally denied such criticisms, the stain still remains. In light of this, China is now looking to embark on a serious rebranding campaign for the initiative.
This rebranding effort is outlined in a report that was prepared by the Advisory Council of the Belt and Road Forum for International Cooperation.
The first meeting of the Advisory Council was held on 16-17 December 2018 in Beijing, with its discussion focused on the Synergy between the Belt and Road Initiative and the 2030 Agenda for Sustainable Development in promoting world economic growth; Priorities for the Belt and Road cooperation; and the ways forward in strengthening the architecture and capacity building for the Belt and Road cooperation.
It was noted by the Advisory Council that by the end of March 2019, 125 countries (of which Guyana is one) and 29 international organisations had signed instruments of cooperation with China to promote the Belt and Road cooperation. The Council wants these partners to help China rebrand the initiative to the world in order to garner more public support, boost confidence and address concerns of various stakeholders.
The Council said it will be important to ensure that the Belt and Road projects are consistently of high quality, sustainable, viable and inclusive so that project delivery matches the vision for the Belt and Road.
It further suggested that better branding could include efforts to accomplish a series of model projects, including both landmark projects that would fundamentally contribute to the socioeconomic development of the host countries and some quick-wins that allow people to feel the real benefits of the Belt and Road cooperation in the short run. It said that this would help to increase the sense of gaining for local communities, establish a good reputation of the Belt and Road projects in their host countries, and avoid the risk that the misperception may pose obstacles to the goal of maximising cooperation among countries.
Additionally, it was noted that better branding also needs improved publicity for the Belt and Road projects.
The Council said, “It is suggested that all partners, not only the governments, but also the private sector, civil society, non-governmental organisations and academia, should be engaged in improving understanding of the Belt and Road cooperation among the general public by raising the profile of success stories and model projects and sharing lessons learned.”
The Council said, too, that it will be important to elaborate on the full story line of the projects in order to cover the whole life cycle of the projects, so as to clear the “misunderstanding” and present clearly the full impact of outcomes of the Belt and Road cooperation. It said that research-based thematic papers on the Belt and Road cooperation are also encouraged.
But what the Council stayed clear of including in its rebranding campaign is acknowledgement of the fact that there are several countries which are left chained to years upon years of debt because of the Belt and Road Initiative.
For over a year now, Kaieteur News has been at the forefront of exposing how the debt burden from China’s BRI has been breaking the backs of nations which signed up for it.
Sri Lanka, for example, was forced to sign over its strategically important Hambantota port to a Chinese state-owned company on a 99-year lease in 2017. The transfer of the port was to lift some of the enormous billion-dollar debts Sri Lanka owed to Beijing, debts which came from loans that helped fund Hambantota in the first place.
Other countries which have landed in the same situation are Sri Lanka include Pakistan, Djibouti, the Maldives, Fiji and Malaysia. (See link for further details: https://www.kaieteurnewsonline.com/category/chinas-modus-operandi/).
In spite of the revelations made by this newspaper and the international reports warning countries about the BRI being nothing more than a debt trap, Guyana still signed onto it.
Other Caribbean nations, which have done the same include Jamaica, Barbados, Venezuela, Costa Rica, Panama, Trinidad and Tobago, Dominica, and the Dominican Republic.

Source: Kaieteur News

Date: Aug 8, 2019

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BRI Trade Reached $617.5 Billion in First Half of 2019

China’s trade with countries participating in the Belt and Road Initiative (BRI) reached $617.5 billion in the first half of 2019, up 9.7 percent year-on-year.

This increase was greater than the growth rate of the country’s total trade for the period which remained stable at 3.9 percent, according to the General Administration of Customs.

Exports and imports with Russia, Saudi Arabia and Egypt went up by 11.5 percent, 34 percent and 11 percent respectively. China has signed cooperation documents on jointly building the Belt and Road with 18 Arabian countries, the Ministry of Commerce said on July 12. In 2018, bilateral trade volume between China and Arabian countries reached $244.3 billion, jumping 28 percent year-on-year.

The release of the statistics coincides with the news of the 100th approved member of the China-led Asian Infrastructure Investment Bank (AIIB). Although not officially associated, the AIIB and the BRI are complementary. AIIB can finance infrastructure projects that will support increased trade.

The AIIB Board of Governors approved the applications of three African countries, Benin, Djibouti and Rwanda, on Saturday. AIIB members collectively account for 78 percent of the world’s population and 63 percent of global GDP. Germany, Britain, France and Italy defied U.S. requests to refrain from affiliation with the AIIB and became its founding members in 2016.

China’s Finance Minister Liu Kun said on Saturday that he hopes the AIIB will link its strategy with the development blueprints of its members, the BRI and the Connecting Europe and Asia Strategy of the European Union.

Since January 2016, the AIIB has provided $8.5 billion in loans to 45 projects in 18 member countries, many in renewable energy and green infrastructure. The investments have made significant contributions to connectivity and development in Asia.

Source: The Maritime Executive

Date: 15/7/2019

Belt and Road Initiative: Target towards Globalization 5.0

The strategic initiative of the One Belt One Road Initiative has expanded and restructured with new routes being added along the initial project program. Now the plan aims to reach 4.4 Billion people in around 69 countries with a combined effect of US $ 2 trillion on their GDP. Primarily the initiative would bridge the infrastructure gap and redistribute funds amongst the Asian economies. According to the implementation guideline for the Belt and Road initiative published by China’s National Development and Reform Commission (NDRC) in March 2015 “development plans along the Belt and Road routes aims to improve connectivity in five areas: policy, infrastructure, trade, currency, and people”. An area of utmost priority is given to the development of infrastructure to improve the connectivity of the region like the construction of roads, railways and ports. Another priority area is that of the energy sector that is essential for the smooth running of industries along the initiative such as power grids, oil and gas pipelines, liquefied natural gas terminals, high-voltage power lines, nuclear power reactors, renewable energy installations and other energy projects. Additionally for the flow of technology and its acceptance, the communication lines and mega IT, projects are also under the pipeline across Asia, the Middle East, East Africa and Europe.

The region is of the most significance since the global stats shows that East Asia is one of the most dynamic and fastest growing regions of the world. Despite of the rich treasures of natural resources, the Central Asia still lags behind in terms of development. This initiative understands particular issue therefore; the stem of its infrastructure is being developed from Central Asia. Such a move aims to reduce the friction in this region and to ensure a bilateral trade for equitable economic growth, development, and integration. The strategic goals of the Shanghai Cooperation Organization (SCO) further emphasizes on the importance of regional stability and better understanding of each other’s political makeup to combat the forces of terrorists and extremists groups.

By the development and transformation of the infrastructure relating to transport, energy, and communication along the Road and the Belt, not only China but also regional connected economies like Pakistan would be able to solve the problems relating to regional connectivity.

 

On the other hand, the one belt one-road initiative spreads over the ASEAN countries that have a history marred with neglect of regional connectivity and a desperate need for infrastructure to overcome the impending need for stable energy resources (SIEW 2015). For a 21st, Century China moving towards globalization the challenges that come with a sustainable domestic economy are numerous. Some of these challenges include ‘lack of access to the resource markets for final products; reduction or reallocation of industrial overcapacity and diversification of its enormous US$3.51 trillion in foreign reserves.

I am of view the Belt and Road initiative is a window to crack some of these problems in an efficient manner. By the development and transformation of the infrastructure relating to transport, energy, and communication along the Road and the Belt, not only China but also regional connected economies like Pakistan would be able to solve the problems relating to regional connectivity. Over a span of two millennia, China has emerged as world power, which can be seen from the production, trade, finance culture, ecology, security, military and geopolitics. At an international level, China has evolved as a world power with substantial participation in structure, bilateral trade agreements and peace treaties. China dwells upon its span over a large unprecedented geographic region that exercises control without any military power. Therefore, the given ideology of soft power without the use of force imposes an interest-driven discourse of its political, economic, and security reality on others.

The “Reform and Opening Up” policy, has been continually working on to improve its multilateral trade agreements and strategy for economic cooperation that provides mutual benefits for future developments. The Chinese President Xi introduced the new idea that aims at creating a win-win strategy in the concept of “three together”.

Many countries playing a part in China’s One Belt One Road Initiative are working for improving infrastructure, IT and sustainable energy resources that are looking for strengthening their relationships with China. However, there are also some parties that are of the exact opposite view. Therefore the support and trust of the public and business communities, is essential for the acceptance of the initiative. The indigenous communities are very sensitive towards their religion and customs, in the countries along the path of the Belt and Road, hence getting local support for making decisions in the concerned countries relating to this multilevel and multipurpose gigantic project is very important.

China move towards globalization is not new indeed it involves the constant and persistent effort of the government, policy makers and the public at large. Pakistan should also take the same inspiration and make use of this platform at most efficient manner. Last weekend, I have attended Industrial Energy Efficiency international conference organized by Energy Foundation China in Beijing where delegates from more than 20 countries have participated and put forth their proposals to make effective use of China’s Belt and Road initiative in energy conservation, green and healthy economy.

Source: Daily Times

Date: 24/7/2019

Writer: Hassnain Javed

The writer is Master Trainer/ Advisor (PITAC), Lahore

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Pakistan’s CPEC affords good opportunities for M’sian businesses, says high commissioner

Malaysian business communities and key players are urged to seize the opportunities offered within Pakistan’s market, specifically the China-Pakistan Economic Corridor (CPEC) project.

Malaysian High Commissioner to Pakistan, Ikram Mohammad Ibrahim, said the CPEC project — a 15-year master plan under the “One Belt, One Road” (OBOR) initiative — is a chance for local businessmen to look into, and penetrate, the market which includes roads and railways that would stretch from the Western Chinese city of Kashgar in China’s Xinjiang province to Pakistan’s second-largest port of Gwadar.

“Ever since the recent governments’ changes and exchanges of the head of states’ visits, the countries are now moving to a greater level of partnership and cooperation.

“The CPEC megaproject is a huge market opportunity that could not be missed by Malaysian business players. This is where the Malaysia-Pakistan Business Council (MALPAK) should play their big role in facilitating business meetings and help to boost the business linkages on both ends,” said Ikram to Bernama International News Service at the Pakistan-Malaysia Business Opportunities Conference (BOC), here, today.

The BOC gathered more than 300 participants — including about 150 Malaysian companies — representing various sectors including tourism, pharmaceutical, chemical, plastic, textile, surgical goods, furniture and construction.

Organised by the Rawalpindi Chamber of Commerce and Industry (RCCI), a business chamber from Pakistan, the BOC is a prelude to the Chamber’s 32nd Achievement Award ceremony scheduled for tomorrow night, with Prime Minister Tun Dr Mahathir Mohamad as the guest of honour.

Concurring with Ikram, Pakistan’s Charge d’Affaires to Malaysia, Atif Sharif Mian, said CPEP would continue to create more joint investments in the long run.

“In terms of Pakistan’s context, the project is a US$40-50 billion (RM165-RM207 billion) investment and it is going to upgrade all the infrastructures as well as across other (sectors of) Pakistan’s economy. It is a big corridor and definitely will bring in more traffic for investments.

“Malaysia, in this regard, is globally known as good at providing services and expertise on railways, roadways and construction, thus the country can also invest in this project,” said Atif.

Aimed at increasing regional connectivity for the economic development of Pakistan and China, the economic corridor is also reported to benefit Iran, Afghanistan, India and the Central Asian region.

Earlier in his welcoming speech of the event today, Atif said Malaysia and Pakistan could do more to increase and enhance the bilateral ties shared to date.

“The focus of the BOC today is also to promote and engage the private sectors from both sides because at the end of the day, though governments have helped to facilitate the efforts, it is the private sectors that would need to find opportunities for increasing trade and investments’ purposes,” he said.

Total trade between Malaysia and Pakistan stood at RM5.91 billion last year, an increase of 2.5 per cent compared to RM5.76 billion in 2017.

Pakistan is Malaysia’s third-largest trading partner in South Asia.

The diplomatic relations between Malaysia and Pakistan were established in 1957. — Bernama

Source: https://www.malaymail.com/news/money/2019/07/08/pakistans-cpec-affords-good-opportunities-for-msian-businesses-says-high-co/1769433

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How Solar Can Power China’s Belt And Road Trade Ambitions

Investment in solar and cross-border power networks in the nations covered by China’s Belt & Road Initiative (BRI) could help them leapfrog fossil fuels.

Those are the conclusions in a new study from Tsinghua University and Harvard University.

The Belt in the BRI represents the Silk Road Economic Belt loosely based on the ancient Silk Road, from Asia to Europe. The Road refers to the 21st Century Maritime Silk Road that connects China to South East Asia, South Asia and on to North Africa. Its initial focus has been centred on power, transport, education and steel.

Researchers assessed the solar potential of BRI nations discounting agricultural and forestry land. They found that if just 4% of the remaining low-value and unshaded land was given over to PV projects, the entire electricity demand of the BRI region could be met by 2030.

As the economies of BRI nations continue to develop and infrastructure projects and industrial activity ramp up, the demand for electricity will rise sharply.

“If we continue to rely on fossil fuels for energy, it can add significantly more CO2 to the atmosphere, not just this year, but for the next few decades,” said co-author Xi Lu from Tsinghua University. “This is not sustainable. If we want to achieve the emission reduction goal set by the Paris Agreement, we need renewable energy.”

The scope of the study spanned 66 countries with geographical connections. By adding in the expansion of distribution across borders, the researchers hope to address one key imbalance. They found that nations with 70.7% of the solar potential are responsible for 30.1% of the regional power demand.

“It would be challenging because different countries have different priorities when it comes to development,” Lu says. “But the BRI is an opportunity as it sets up a framework for collaborations between countries, associations, and industries to happen. There are also funds and banks committed to promoting green development of the BRI, which provides financial support.”

China’s New Development Bank is one obvious source of that financial support. It has already backed solar and other renewable energy projects in South Africa to the tune of nearly $400 million since it signed its first loans in December 2016.

As the dominant force in solar manufacturing, Chinese firms would also be likely to do well out of any pan-continental solar push. In 2018, eight of the ten largest firms, measured by shipments, were Chinese.

Efforts to establish intercontinental distributions networks from North Africa to Europe have stalled in the past, however. That was largely a private endeavour compared to the far more geopolitically charged efforts of the BRI.

Source: Forbes

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SDPI, Chinese think tanks to promote green BRI policies

Pakistan’s leading think tank ‘Sustainable Development Policy Institute’ (SDPI) and Greenpeace East Asia (GPEA), China and All-China Environment Federation (ACEF) have agreed to promote green Belt and Road Initiative (BRI) policy and practices and improved communication between Chinese overseas projects with local stakeholders in Pakistan. They will facilitate the implementation of higher Environment Social Governance (ESG) standards in Chinese Overseas Projects in Pakistan.

Greenpeace East Asia (GPEA) is an independent, nonprofit, global campaigning organization and All-China Environment Federation ACEF is a nationwide non-profitable civil society organization (CSO) in the field of environment. A delegation from GPEA and ACEF recently visited SDPI to have a face-to-face talk with local stakeholders.

Executive Director SDPI Dr Abid Qaiyum Suleri said the purpose of this collaboration with Chinese research institutes is to bridge the research communication gap between the two countries, especially in the areas of CPEC, energy and climate change. He said language is a major barrier in terms of research and publications, which can be bridged through the translation of work in both countries. SDPI offered solutions on issues around CPEC, debt trap, trade and climate change. These are the areas where collaboration with Chinese think tank and civil society organizations can be fruitful. The way Chinese is leading the environmental conservation and climate negotiation, after backing out of Trump administration from the Paris-Agreement, is commendable, he remarked.

Ms Li Ai Project lead, Greenpeace East Asia (GPEA) said GPEA is working on fighting climate change, stop toxic pollution, ensure food security and defend the oceans. She said GPEA with the help of its partners is helping the Chinese government in promoting sustainable green development in their energy infrastructure projects, especially in the BRI projects. For that in 2018, GPEA and ACEF jointly initiated the ‘Green Belt and Road Environment Leadership’ project to promote the communication of green BRI policies and ESG implementation in Chinese overseas projects.

Dr. Mahmood A. Khwaja, Senior Advisor Chemicals said SDPI explored the possibility of joint research proposals and programs in the areas of climate change, clean energy, environmental assessment of CPEC projects, sustainable development (inclusive growth), Chinese overseas investment, Sustainable Development Goals (SDGs) and environmental challenges including air pollution.

Wang Jiajia, Project coordinator (ACEF) said ACEF with its network of local civil society organization is promoting social environmental protection rights of the public and sustainable development in different Chinese projects in China and BRI countries. He said green BRI projects can help promote sustainable development in the region and the globe.

Dr Vaqar Ahmed, Joint Executive Director, SDPI said Pakistan and China have signed revised Free Trade Agreement (FTA), which not only liberalizes more tariff lines for both countries but also there is provision for environmental goods. This shows that both countries respecting the natural resources and environmental endowments in the region. He said SDPI has established a dedicated unit of China Study Center to help the government on both sides in providing research support to promote green development in CPEC and BRI projects.

Source: DailyTimes

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Can solar diplomacy green the Belt and Road?

Source: ChinaDialogue

Date: 29/1/2019

China has pledged to fill the global infrastructure development gap with more than US$4 trillion in “sustainable” projects through its Belt and Road Initiative (BRI). But China is not delivering on its promises of green and low carbon infrastructure so the initiative is facing a crisis of legitimacy.

According to a recent report from the World Resources Institute, about 75% of the US$145 billion in loans from China’s major financing institutions went to fossil fuel energy projects, including US$10 billion for coal plants. The report also outlined how almost all investments in the construction of fossil-fuel power were state-owned enterprises. In contrast, private Chinese companies, which have much smaller investment footprints, have focused on solar and wind.

Looking at mainland Southeast Asia, from which many of the examples below are drawn, I observe that China’s BRI power sector investments in Thailand, Cambodia, Vietnam, Myanmar, and Laos total at least 83 gigawatts. This includes over 8 gigawatts of coal projects and a whopping 65 gigawatts of hydropower dams across 137 projects in Myanmar, Cambodia, and Laos.

It’s well established that coal power is bad for the climate and local air quality. There is also no shortage of studies that show how hydropower overdevelopment in the Mekong, Salween, and Irrawaddy river basins will irreversibly damage their ecology. This is putting the livelihoods and economic base of more than one-hundred million people in Southeast Asia at risk. Yet China continues to build.
Tyler Harlan, a postdoctoral fellow at Cornell University’s Atkinson Center for a Sustainable Future claims that solar and wind are unattractive investments for many Chinese companies in countries such as Laos and Myanmar. He blames the absence of stable policy frameworks, challenges with integrating renewables into the grid, and risks associated with long-term power purchasing.

“Hydropower continues to dominate power planning because of the influence of Chinese hydro state-owned enterprises and because it is perceived as a reliable baseload electricity source that can be exported to accumulate foreign exchange,” he said.

Continued investment in coal and hydro at current levels could destabilise mainland Southeast Asia, and partially or entirely offset China’s efforts to reduce emissions at home by exporting them abroad.

Solar champion

China has developed a robust domestic solar sector that could easily deliver a sustainable transition in Belt and Road countries. It has moved quickly in the past ten years to lead the world in solar power with at least 165 gigawatts across solar farms and distributed generation.

China still derives 60% of its power from coal but solar is increasingly competitive. In December, a 500 megawatt solar farm in western China started selling power at .316 yuan per kilowatt hour (~5 cents), beating the country’s benchmark price for coal power for the first time.

China has already exceeded its 2020 solar target by more than 50%. This massive expansion was helped over the past decade by creative and flexible policy guidance, government subsidies for investment, successful R&D programmes, and a government consensus to significantly curb carbon emissions.

The experiences of government agencies, research institutions, and investors form a valuable toolbox that should be exported to rapidly developing BRI countries where a transition to renewable energy is pressingly required. The WRI report found that 31 Belt and Road countries needed about US$235 billion in investments to meet their emissions reduction commitments under the Paris Agreement.

Packaging solar diplomacy

Chinese solar diplomacy could help countries with a lot more than project financing. Solar is commercially competitive in Thailand and Vietnam but energy sector officials and utility operators there often complain that intermittent power is difficult to manage on national grids. Like China, these countries have encouraged investment only to find deployment quickly outpace planning targets. For instance, in 2015 Thailand achieved 50% of its intended 2036 solar target of six gigawatts just a few years after setting it. Vietnam has 20 gigawatts of solar investments registered in its pipeline, which is about half its existing capacity. However, only a minor portion can be absorbed into its grid system due to capacity and distribution limitations.

This is an area where Chinese expertise could help. China has a lot of experience managing the unwieldy expansion of renewables whether it’s adjusting targets on a gradual and flexible basis, changing subsidy structures or reducing power wastage. This shows an ability to deal with the necessary growing pains of a renewable energy transition.

Further, in 2016, China’s National Energy Agency announced a poverty alleviation initiative that provided financial incentives and technical guidance for installing rooftop solar in China’s poorest areas. It allows participating households to sell power back to the grid. The programme aims to help two million households in sixteen provinces earn an extra 3000 yuan per year (US$420) through government subsidies. It will also manage problems related to solar intermittency and structurally optimise the country’s power sector.

Electrification rates in BRI countries such as Cambodia and Myanmar are likely to still be around 50% by 2020 without significant intervention. These countries would benefit from foreign assistance to alleviate poverty through solar rooftops and mini-grids in rural areas. Such programmes would also create opportunities abroad for domestic solar champions such as Suzhou Photovoltaic Technology Co. Ltd (协鑫) which has constructed more than one gigawatt of small-scale solar power plants through China’s poverty alleviation initiative.

China should take responsibility to mitigate carbon intense outcomes outside of its borders

Jennifer Turner, director of the Wilson Center’s China Environment Forum argues that the Chinese government should be more vocal about its rural solar schemes. “These projects not only electrify small communities but also create jobs in installation and maintenance of these small-scale energy projects. These kinds of successes should be interwoven into China’s BRI investments, especially in communities that are displaced by large dams, ports, or roads,” she said.

Chinese developers often build schools, marketplaces, and medical clinics in communities that are resettled due to infrastructure development, but with mixed results. China’s investment in community-level solar could provide a better option if it came with proper technical capacity training for operations and maintenance.

In Laos and Cambodia, resettlement related to infrastructure projects and displacement from economic land concessions are the top driver of internal migration. Providing resettled people with ample access to power will increase access to educational resources for community youth and underpin conditions for rural economic development. It could also help close gaps between rural and urban livelihoods in Belt and Road countries.

Responsibility versus interference

For many developing countries, building a competitive market environment where renewable energy generation reaches price parity with coal requires creative political leadership, physical infrastructure, effective management, and investments in national level transmission and distribution systems.

To date, BRI projects are mostly investments in physical assets such as power generation, highways, railways, and ports. This is what host countries ask for and what China finds easiest to finance given excess domestic capacity. Given China’s aversion to interference in the affairs of other countries, state-owned enterprises or government agencies might be reluctant to get too involved in transformative planning processes for another country’s power sector or the sharing of best practices related to policy incentives for a transition to solar and wind.

But according to the recent Intergovernmental Panel on Climate Change report, a technological transition, the scale and speed of which is comparable to the US domestic mobilisation for World War II, is required to prevent a 1.5C rise in global temperature. Countries in mainland Southeast Asia are among the most vulnerable to climate risk. Locking these countries into a carbon intensive future will exacerbate future vulnerability. Given such urgency, China should take responsibility to mitigate carbon intense outcomes outside of its borders and build resiliency within the most vulnerable regions of the world.

A win-win solution

A programme of Chinese solar diplomacy in the context of the BRI would demonstrate to the world China’s intentions to become an ecological civilisation. So far, China has prioritised BRI countries with plans for significant coal expansion and those where free-flowing rivers provide critical natural resources. Chinese solar diplomacy could accelerate the expansion of solar capacity and create conditions for forward looking power systems which could integrate wind, biomass, and other forms of intermittent energy.

An effective solar diplomacy, if implemented, would greatly improve China’s position as a climate leader at a time when global carbon emissions are ticking upwards again, and potentially spur other actors to create a virtuous race toward a 1.5C future. Big lenders such as the Asian Development Bank and the World Bank would likely be keen to partner with China on such efforts, building on previous pledges to find ways to co-finance projects with China’s Asian Infrastructure Investment Bank and other development agencies. Such a move would raise global confidence in the BRI as a force for sustainable development and help make good on China’s pledge to be a responsible global power.

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One Belt, One Road, One Big Mistake

Source: Foreign Policy
Author: 
Date: 

The headlines coming out of this year’s APEC conference in Papua New Guinea focused on the conflict between America and China that kept the forum from issuing a joint communiqué. Less noticed were two short memorandums released on the sidelines of the conference by the island nations of Vanuatu and Tonga. In return for renegotiating existing debt, both agreed to become the newest participants—following other Pacific nations like Papua New Guinea and Fiji—in Chinese President Xi Jinping’s signature foreign-policy venture, the Belt and Road Initiative (BRI).

As Xi’s trillion-dollar development strategy has snaked away from the Eurasian heartland and into the South Pacific, western Africa, and Latin America, concern has grown. Many Americans fear that the Belt and Road Initiative is an extension of efforts by the Chinese Communist Party (CCP) to undermine the security and economic architecture of the international order. China’s growing largesse, they worry, comes largely at the expense of international institutions and American influence.

This angst lies behind another announcement made at last month’s APEC gathering: Australia, Japan, and the United States declared that they had formed their own trilateral investment initiative to help meet infrastructure needs in the Indo-Pacific. For some this is not enough: In its most recent report to the United States Congress, the bipartisan U.S.-China Economic and Security Review Commission recommended that Congress create an additional fund “to provide additional bilateral assistance for countries that are a target of or vulnerable to Chinese economic or diplomatic pressure.”

This is the wrong response to the Belt and Road Initiative. Ignore the hype: For the Chinese, this initiative has been a strategic blunder. By buying into the flawed idea that barrels of money are all that is needed to solve complex geopolitical problems, China has committed a colossal error. Xi’s dictatorship makes it almost impossible for the country to admit this mistake or abandon his pet project. The United States and its allies gain nothing from making China’s blunders their own.

In Xi’s speeches, the phrase most closely associated with the Belt and Road Initiative is “community of common destiny.” Xi’s use of this term is meant to link the BRI to the deeper purpose party leaders have articulated for the CCP over the last three decades. China’s leaders believe that not only is it their “historic mission” to bring about China’s “national rejuvenation” as the world’s most prestigious power, but that China has a unique role to play in the development of “political civilization” writ large.

It is the Chinese, Xi maintains (as Hu and Jiang did before him), who have adapted socialism to modern conditions, and in so doing have created a unique Chinese answer to “the problems facing mankind.” Though this answer began in China, Xi is clear that the time has come for “Chinese wisdom and a Chinese approach” to benefit those outside of China. The Belt and Road Initiative is intended to do just that. By using the Chinese model of socialism to develop the world’s poorer regions, the initiative justifies Xi’s grandiose claims about the party’s historic mission on the international stage.

To match these lofty aims, Chinese academics and policy analysts at prestigious party think tanks have articulated more down-to-earth goals for the initiative. According to them, the BRI promises to integrate China’s internal markets with those of its neighbours. Doing so will bring its neighbours closer to China geopolitically and bring stability to the region. By increasing economic activity in China’s border regions, such as Xinjiang and Tibet, the Belt and Road Initiative will lessen the appeal that separatist ideology might have to the residents. Another projected benefit is the energy security that will come through the construction of BRI-funded transport routes. Finally, by articulating and then following through on an initiative that puts common development over power politics, China will gain an advantage over other major countries (read: Japan and the United States) who present the world as a black-and-white competition for hegemony. The community of common destiny, these analysts have claimed, is a community that will immensely benefit China.

As the Belt and Road Initiative is only five years old (and many of its main members have been involved for a far shorter time) its full results cannot yet be judged. However, a preliminary assessment can be offered for BRI projects in South and Southeast Asia, the region described by Chinese leaders as the “main axis” of the Belt and Road Initiative. It is here that BRI investment is strongest and has been around longest. The picture is not promising. The hundreds of billions spent in these countries has not produced returns for investors, nor political returns for the party. Whether Chinese leaders actually seek a financial return from the Belt and Road Initiative has always been questionable—the sovereign debt of 27 BRI countries is regarded as “junk” by the three main ratings agencies, while another 14 have no rating at all.

Investment decisions often seem to be driven by geopolitical needs instead of sound financial sense. In South and Southeast Asia expensive port development is an excellent case study. A 2016 CSIS report judged that none of the Indian Ocean port projects funded through the BRI have much hope of financial success. They were likely prioritized for their geopolitical utility. Projects less clearly connected to China’s security needs have more difficulty getting off the ground: the research firm RWR Advisory Group notes that 270 BRI infrastructure projects in the region (or 32 per cent of the total value of the whole) have been put on hold because of problems with practicality or financial viability. There is a vast gap between what the Chinese have declared they will spend and what they have actually spent.

There is also a gap between how BRI projects are supposed to be chosen and how they actually have been selected. Xi and other party leaders have characterized BRI investment in Eurasia as following along defined “economic corridors” that would directly connect China to markets and peoples in other parts of the continent. By these means the party hopes to channel capital into areas where it will have the largest long-term benefit and will make cumulative infrastructure improvements possible.

UK’s Hammond embraces Belt and Road on China visit, says Hong Kong will have a key role in BRI

HONG KONG – Beijing has made it very clear that Hong Kong will have a major role to play in the Belt and Road Initiative (BRI), the special administration region’s top official said on Wednesday (June 27).

Hong Kong chief executive Carrie Lam was speaking at a global forum set up to exchange ideas on the BRI, which she noted was picking up of momentum five years after Chinese President Xi Jinping announced his signature plan to rekindle historic trade routes linking China to Europe and the rest of Asia over land and sea.

“This is a very important forum for us, to have firsthand information about the Belt and Road, including things which are of great interest to many of you – the projects, the policies, the financing and so on,” Mrs Lam said in her short address to participants of the forum on Wednesday evening.

The forum is an alliance of 110 organisations from 29 countries comprising international chambers of commerce, business associations, research institutes and think tanks to explore ways to collaborate in moving the BRI forward. More than 80 forum members across 24 countries gathered here yesterday (Wed)

Although many Asian and European countries have shown a willingness to participate in the ambitious BRI, there has also been concern in some quarters over whether the infrastructure projects are sustainable, especially those requiring long-term investments.

In April, the International Monetary Fund (IMF) cautiously climbed aboard in a bid to prevent the BRI from turning into a wasteful splurge on white-elephant projects by providing public financial management and training on debt risks.

One of the concerns the IMF had was that the BRI would drive up debt in countries where it was already high.

But many in Hong Kong’s financial sector see opportunities in these projects.

Mr Vincent Lo, chairman of the Hong Kong Trade Development Council (HKTDC), said: “We all share a common goal of creating opportunities and benefits from the Belt and Road Initiative. Using Hong Kong as a commercial hub, the forum helps you make international connections and find partners to turn concept into business.”

The roundtable, which took place earlier in the day, consisted of two sessions, said Mr Andrew Weir, Belt and Road Committee member as well as global chairman of real estate and construction at KPMG.

Asked what the key takeways were from the discussion, Mr Weir said it was how the BRI was not just about infrastructure projects but represented “broader economic connectivity which gives rise to sectors beyond infrastructure and new geographies and new sectors”.

“The other big takeaway was how to identify the right projects, assess the risks and then package projects in a way which ensures they’re bankable and how that requires very early discussion at consortium level and with public bodies and investment agencies,” he added.

Besides risk management, participants also talked about ways to ensure international standards on safety, contracting and governance, Mr Weir shared.

On Thursday (June 28), speakers from Hong Kong, mainland China and countries along the BRI will share insights on intergovernmental cooperation and business opportunities for different sectors at the third Belt and Road Summit.

Organised by the Hong Kong government and HKTDC, the summit’s theme this year is “Collaborate for Success”.

It is expected to link some 5,000 participants with projects, services, businesses and investment opportunities.