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BRI, aimed at economic uplift of partners, is not a geopolitical tool

Source: Global Times

Date: 27th December 2018

Is the Belt and Road initiative (BRI) a geopolitical strategy and tool China has created to scramble for hegemony as what the US and some Western countries claim? This is the most contentious argument as the international community sifts through China’s intention of reaching out to the wider world in a momentous spree of infrastructure building and poverty alleviation.

The fact is that the BRI is a geo-economic rather than geopolitical construct and has nothing to do with geopolitics in form or content. China neither has the intention of forming alliances through the BRI nor plans to seek a sphere of influence. China seeks partners, not allies, in implementing the initiative. The US is grossly mistaken in regarding the initiative as a geopolitical concept.

Some in the West call the BRI China’s Marshal Plan. They are two different things that are not comparable. The Marshall Plan was an American initiative providing aid to West European countries with the political motivation of containing the spread of Communism at the start of the Cold War. The recipients were countries with the same political system as the US and the other goal of the plan was to facilitate the formation of a military alliance with European countries.

In sharp contrast, the BRI is more about investment. Countries of different political systems are welcomed to participate and it doesn’t aim at a military alliance. The significance of the BRI as a geo-economic concept lies in that it can help solve development problems some backward regions are grappling with and provide them enabling conditions for the same.

I recently visited some countries and regions along the Belt and Road routes. Take Peshawar in Pakistan, a city plagued by terrorism in northern Pakistan. The security there has certainly improved in recent years with the progress in the China-Pakistan Economic Corridor. Local people know that terrorism would stand in the way of Belt and Road projects, so they consciously resist the designs of fissiparous elements, leading to reduction in incidents of terrorism.

In northern Myanmar, the construction of the China-Myanmar Economic Corridor under the BRI has seen a marked improvement in security as the importance of peace and stability in facilitating the project dawns on the people.

The BRI can influence major-power relations. The US is planning a $60 billion fund that will bankroll infrastructure projects in Africa, Asia and the Americas and the European Union has also put forward its foreign policy plan to improve transport, energy and digital infrastructure links with Asia. These moves will help meet the huge demands for infrastructure in developing regions. Why can’t major powers cooperate to carry out these infrastructure development initiatives?

Japan and China have agreed to step up cooperation in infrastructure projects in third countries. Some Western countries such as Britain are eyeing closer cooperation with China under the BRI. The initiative is open and inclusive; the more participants it draws in, the more secure and healthier its development. It will serve as a platform to step up cooperation among major powers.

In short, the BRI is a promising mechanism for economic cooperation, a new tool for managing security and a platform that can be used to explore more major-power cooperation.

The article was compiled by Global Times reporter Yu Jincui based on a speech by Huang Renwei, executive vice dean of Fudan Institute of Belt and Road & Global Governance, at the Third Understanding China Conference recently held in Beijing.

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Greek businesses give their backing to China’s Belt and Road Initiative

Source: SMN

Writer: 

Date: 17th December 2018

Greek businesses and Chinese scholars voiced confidence in the prospects of Sino-Greek cooperation in the context of the Belt and Road Initiative (BRI) during a forum in Piraeus, Greece’s largest port which in recent years has become a strong symbol of the win-win bilateral cooperation between the two countries.

The BRI was the main theme of the forum organised by the Chamber of Commerce and Industry of Piraeus (PCCI) and the Chinese Embassy in Greece, with its co-organiser Renmin University of China.

Reflecting on the achievements to date in this corner of the globe and along the 21st century’s Silk Road, five years after the launch of Beijing’s initiative, Greek and Chinese delegates explored the challenges lying ahead as the opportunities to further boost bilateral cooperation to benefit both sides, are seized.

Pointing to Sino-Greek cooperation at Piraeus port, Vassilis Korkidis, president of PCCI, said: “Greece can and should make further use of the opportunities opened up both from its key geopolitical position and from the primacy of Greek shipping to the global economic phenomenon.”

Piraeus Port Authority SA is managed by China’s Cosco Shipping Corp has managed the Piraeus Port Authority SA since 2016, and Piraeus Container Terminal SA since 2010, posting remarkable results as Piraeus advances to become top port in the Mediterranean and among the five largest container hubs in Europe.

Chinese Ambassador to Greece Zhang Qiyue stressed the BRI is proposed by China, but it is actually owned by the world, saying “it is also a call on the part of China to other countries to cooperate in any way we can”.

It is a good initiative for globalisation and the world to work together, not in isolation, the Chinese ambassador said, saying China is trying to align her development with the development strategies of other countries.

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The BRI blessing

Source: The Nation

Writer: Dr Ahmad Rashid Malik

Date: 15th December 2018

The Belt and Road Initiative (BRI) is the great project of this century and the project has entered into its fifth anniversary. Many things have been happening and the project has the capacity to further include a large number of people. The idea floated by the Chinese President Xi Jinping in Kazakhstan and Indonesia in 2013 has gained strength and will continue. The project aims at helping out the poor economies and in the long run, enable them to pay back their debits, if any.

The BRI gives space and technology to poor countries and builds their finances. Habantota Port in Sri Lanka provided Sri Lankans with great help.  Tajikistan has been given loans to build its projects. In its own style, Malaysia has cancelled its projects worth US$ 23 billion signed by country’s previous regime. Malaysia has come up its own way of solution. However, the Malaysian example has not repeated by any other country.

This does not mean that all countries under the BRI have been reconsidering to review its loans plan. There might be minor relocation depending on the situation. The  Kyauk Pyu Port in Myanmar has been bestowed with US$ 1.3 billion. The port is a strategic one diverting the import of oil from the Middle East to Myanmar to reach Yunnan Province in China, by passing the Strait of Malacca. The project will be financed by the private sector and the room for investment has been increasing.

There are a number of major projects being taken up by regional governments and the momentum is scaling. The BRI is yet a master plan and it is going quite well. The plan has been based upon case-by-case basis depending on individual countries’ needs and requirements. An Action Plan 2015-17 issued by the Chinese Government’s Leading Group for Advancing the Development of One Belt One Road contains instructions such as “share responsibilities and progress together”.

China has a mechanism to run a BRI project. Various institutions get to work and to coordinate with each other including international components. The early implementation of any BRI project depends on this mechanism. State owned enterprises took on projects quickly and gave out loans. The China Banking and Insurance Regulatory Commission recently estimated that Chinese banks had lent US$ 200 billion for 2,600 projects. Even then, not all Chinese overseas investments are State-funded. Private investors and ethnic Chinese from outside China are also involved, thus making the Chinese loans for BRI as multinationals, going beyond the border of China.

When Chinese companies within China and outside of China conduct a combined business this will enhance its chances of oneness and transparent liquidity, giving it name of multinationals. In Cambodia, construction there is mostly done by Chinese workers; Chinese tourists arrive in groups managed by Chinese tourist agencies, stay at Chinese-owned hotels, shop at Chinese-owned malls and eat at Chinese restaurants. All these activities are collectively on China and the BRI pattern.

The BRI is largely fuelled by China’s large trade surpluses and foreign-exchange reserves and many other outcomes as a great state. The country needed somewhere to invest its money and to export its industrial surpluses in befitting manner.  Therefore, the BRI critics just cannot blame China on these accounts.

The Chinese capital has a lasting value to be invested all over the world. There is nothing wrong about it as the US dollar also does its global business. The work by Chinese Yuan is also admirable. China has not been keeping its Yuan at home; rather China is allowing its Yuan to create prosperity abroad.

China has not been creating a debt-trap strategy, rather Chinese Yuan is badly needed to overcome poverty, create more jobs, and to create prosperity. China has also been following a policy of write-off of loans. This will not only create prosperity, it will also create a situation for a better competition. No country in the global community would be allowed to sit idle and not to contribute.

Where the US dollar has not created life and prosperity for decades for many countries, the Chinese Yuan has the capacity to create such a miracle and to share with the a large community. Historically, Chinese Yuan has not created its sphere of influence, exploitation, and discrimination among the community of nations in the past.

The vast and dedicating act of Yuan will create a better world. The Western financial institutions are creating a difficult situation for developing debt-oriented economies. In the systematic debt situation, countries became further indebted and they cannot come out of that situation. In that situation, Chinese model of debt and loans creature a better situation for the developing countries.

China is also one of the biggest investors in the African continent. Beijing pledged US$ 60 billion in 2015 and another US$ 60 billion recently for further development. This is great picture of creating a better world in Africa and contributing in its prosperity. Therefore, in a nut shell, we can assume that Chinese strategy of debt and loans disbursement is a blessing and greatly contributing to the world.

5 years of Belt and Road initiative: Chinese vision for shared destiny

Source: Daily Times

Date: 14 th December 2018

ISLAMABAD: Pakistani youth needs to get the required knowledge and skills to be able to part of the emerging new vision of economic and political transformation of the growing world.

China and its phenomenon growth and peaceful rise provide ample example that with consistent efforts and hard work, achieving prosperity is not a distant dream but can be a reality. These were the consensus amongst the scholars speaking during the seminar on “Five years of Belt and Road Initiative: Chinese Vision of Shared Destiny” organized by Centre for Belt and Road and CPEC Studies-Institute of Peace and Diplomatic Studies.

Farhat Asif, Founder President, Institute of Peace and Diplomatic Studies, speaking on the occasion the occasion said that Chinese model of shared destiny is rare and has all the essence to bring peace and prosperity in the region.

Dr. Muhammad Munir, Assistant Professor in National defense University said that BRI is open for states to join its project. Pakistan is main stakeholder in BRI which is dependent on the success of CPEC. Chinese concept is that investing on individual will prosper whole region. BRI will also benefit the common people. CPEC has made the trade most cost effective with its characteristic of trickledown effect.

While talking about Belt and Road Initiative Dr. Muhammad Khan, Head of Department in International Relations in International Islamic University said that Belt and Road has provided China access to market, Global economy and reach over Africa, Europe (the investment hub). BRI is Win-Win situation and states are finding benefit from this project. He was of the view that west instead of opposing and propagating should also get the benefit.

Ambassador ® Javed Hassan, Director, Chinese Studies Centre, National University of Science and Technology, while speaking on the Occasion highlighted at length about the wisdom and vision behind the BRI and how the Chinese nation has transformed them through hard worked. He has also discussed both Pakistan’s and Chinese perspective. He said that one may like it or not China has come a long way and this is a great moment of celebration that BRI has come so long way in just 5 years under all pressures and propaganda. China has achieved what took Europe 400 years. He has advised the Pakistani youth that they must learn the new emerging knowledge to foster forward the interest of Pakistan in the global world.

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CPEC to help addressing Pakistan’s long term economic constraints: Moody’s

Source: Business Recorder

Author: Shoaib Ur Rehman

Date: 14 December 2018.

ISLAMABAD: In its annual credit report released on Thursday, Moody’s has said that infrastructure and power projects under China Pakistan Economic Corridor (CPEC) will address Pakistan’s long-term economic constraints an strengthen its growth potential.

“Pakistan’s longer-term economic prospects remain robust, in part because of improvements in power supply, infrastructure and national security that have raised the country’s growth prospects and hence business confidence,” said the report Moody’s-a credit rating agency.

It said institutional reforms planned by the new government, if effectively implemented, would also bolster institutional strength, which has increased in recent years with greater central bank autonomy and monetary policy effectiveness.

“However, the reforms will be challenging for any government to navigate because of the country’s large bureaucracy and complex federal-provincial politics and administrative arrangements,” it added.

Neverthless, Moody’s said in short time, it expects the country’s real GDP growth to slow down to 4.3-4.7 percent in fiscal 2019 and 2020, from 5.8 percent in fiscal 2018, in part due to policy measures taken to address the external imbalance.

It said that the credit profile of Pakistan (B3 negative) reflects the country’s high external vulnerability, weak debt affordability, and very low global competitiveness.

“Significant external pressures driven by wider current-account deficits have reduced foreign-currency reserves, which are unlikely to be replenished in the near term unless capital inflows increase substantially,” the report stated.

“While Pakistan’s public external debt repayments are modest, low reserve adequacy threatens the ability of the government to finance the balance of payments deficit and roll over external debt at affordable costs.”

Moody’s said its assessment of Pakistan’s susceptibility to event risk is driven by external vulnerability risk. Current-account deficits will remain wider relative to 2013-16 levels, with near-term prospects for a marked and sustained reversal unlikely unless goods imports contract sharply, it pointed out.

“Absent significant capital inflows, the coverage of foreign-exchange reserves for goods and services imports will remain below two months, below the minimum adequacy level of three months recommended by the International Monetary Fund,” the report stated.

The government’s narrow revenue base restricts fiscal flexibility and weighs on debt affordability, while its debt burden has increased in recent years, it observed.

“At around 72 percent of GDP as of the end of fiscal 2018, the government’s debt stock is higher than the 58% median for B-rated sovereigns, and Moody’s expects the burden to rise further and peak at around 76pc of GDP in fiscal 2020 — in part because of currency depreciation — before gradually declining as the twin deficits gradually narrow.

The moderate but rising level of external government debt also exposes the country’s finances to sharp currency depreciation.

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What you need to know to understand Belt and Road

Source: World Economic Forum

Writer: Bruno Maçães

There are two things everyone needs to know about the Belt and Road. First, as officials in Beijing will tell you, this grand project is measured in decades, with its conclusion planned for 2049, the centenary of the founding of the People’s Republic of China. Second, the initiative is both global and revolutionary. Its aim is to create a new order in world politics and the world economy.

Past equivalents to the Belt and Road would have to be just as shapeless and ambitious. Perhaps concepts such as “the West” come the closest — even in the manner that a metaphor came to acquire epochal significance. If the initiative succeeds, it is very likely that we shall use the name to refer to the new arrangements, much as we use “West” as a shorthand for the existing order.

What will the world look like after the Belt and Road? In the first Belt and Road summit in 2017 Xi Jinping hailed it as the “project of the century.” If all goes according to plan, the Belt and Road will change the shape of the world economy and world politics, returning us to a time when China occupied the center of global networks.

There will be new infrastructure, of course, and that will be an obvious and easy metric of success. In twenty or thirty years some of the new Belt and Road projects will likely stand as the highest example of what human ingenuity can achieve in its drive to master natural forces. A bridge crossing the Caspian Sea may make road transport between Europe and China fast and easy, changing old mental maps separating continents. The Kra Isthmus Canal in Thailand will do the same for the Indian and Pacific Oceans.

But infrastructure is ultimately a means. The geographic space being transformed must be connected before it can start to grow areas of economic activity; industrial parks along infrastructure routes are slowly integrated to establish regional value chains and eventually support China’s rise to a technological superpower, leading the transformations of the future.

Artificial intelligence, robotics, genetic engineering and space exploration. As it expands, the Belt and Road is bound to become increasingly futuristic. Self-driving vehicles on land, sea and air and trillions of connected devices worldwide will be empowered by a Belt, Road and Space fleet of China-centered satellites. Chinese companies are already planning to engage in deep-space economic activity, like building orbit solar power plants, and mining asteroids and the moon. One or more Sputnik moments – when Chinese technology leaps far ahead of what the West can do – will offer the final and most meaningful metric of success for the Belt and Road.

The Belt and Road will never become universal—just as the West never became universal—but in some areas of the world it will rule unimpeded and different shades of influence will be felt everywhere.

The problem is to determine the core of the new Chinese world picture and identify the main traits which it will come to impress upon the whole. Many of those traits are already visible in what is but the construction stage of the Belt and Road.

Virtues are regularly invoked. Countries have relations of dependence, generosity, gratitude, respect and retribution. Relations between countries are much more diverse and complex than in the more formal Western-led order. Ritual is important, and so is history. Nations are better seen as intersecting stories and power the ability to determine where the story goes next.

Even in its formative stage the Belt and Road is an exercise in the opacity of power. There is an exoteric doctrine of the initiative and then an esoteric practice where deals are agreed upon, often with no written evidence, and where hierarchy resembles that of security-clearance levels of access. The Belt and Road is like holy writ—never revealed completely and all at once, but only bit by bit and over many decades.

Rapid change, old-fashioned morality, and secret communication. This will be a world of soothsayers, saints, and spooks.

The Belt and Road may well never realize its goals. It may be abandoned as it runs into problems and the goals it sets out to achieve recede further into the distance. But success and failure are to be measured in terms of these goals, so we must start from them.

The new world the initiative will try to create is not one where one piece on the chessboard will be replaced, not even one where the pieces will have been reorganized. It will be a world built anew by very different people and according to very different ideas.

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Belt and Road Initiative: The String of Economic Pearls

Source: Pakistan Observer

Writer: Athar Rashid

According to the estimates of some economists, by 2050, the contribution of Asia in the global GDP will be more than 50%. So, this is an opportunity for Pakistan being in Asia (South East Asia) to benefit from it in the next two decades. Pakistan is a significant partner in the Chinese grand Belt & Road initiative (BRI) also known as One Belt, One Road (OBOR) with CPEC as the flagship project of this massive initiative. CPEC is a framework of regional connectivity which consists of a series of bilateral agreements on multiple projects.
CPEC is an umbrella term used for various projects that have the potential to feed into the larger BRI structure. CPEC is a great economic opportunity for Pakistan to capitalize. As a flagship project of BRI, CPEC churns out experience, opportunities, and expertise for not only Chinese and Pakistani people but also for the other BRI partner countries. CPEC experience can benefit all stakeholders who want to avail the fruits of BRI. Chinese Belt & Road Initiative (BRI) spans around sixty-eight countries over multiple continents and covers about seventy percent of the world’s population in its grand design.
CPEC is a significant part within that large network of BRI. So, in the larger scheme of BRI, Pakistan is one of Sixty eight countries, China is working with to create the potential for sustaining what President Xi Jinping refers to as the “Chinese Dream.” BRI is a framework under which all participating countries enter the fold to help create a community that shares its destiny with China’s. The “Chinese Dream,” referred by President Xi entails sustained growth for China through trade. Therefore, the BRI framework is to achieve “Chinese Dream” through creating a community of countries linking their economic destiny to that of China. Chinese progress and development would mean mutual growth of all stakeholders.
Through Chinese ambitious BRI, Beijing is struggling to build up partners who are willing to align their future with its own. The people’s Republic of China is hoping to create a community where everyone wins through market access, trade relationships and adopting Chinese cultural as well as business norms.As BRI enters its fifth year of implementation it is believed to have some of the largest infrastructure and investment projects in history.Opponents of the BRI claim that the vast global network of new road, rail and pipeline projects will benefit primarily China. Securing sea lanes, ports and refueling stations will help China’s exporters reach overseas markets and give China uninterrupted access to energy imports.
Establishing overland connections to the Indian Ocean will open new trade routes and make Chinese military and commercial vessels less vulnerable to strategic choke points such as the straits of Malacca and Hormuz. On the other hand Chinese President Xi in his keynote address at the 2017 Belt and Road Forum for International Cooperation, specified that the central objective of BRI is to build “land, maritime, air and cyberspace connectivity” and create “networks of highways, railways,and sea ports.”
Numerous studies on the BRI provide evidence that many Chinese development projects accelerate economic growth in partner countries. Nonetheless, it is uncertain who benefits the most from such projects. China committed $50 billion to be invested in Pakistan under the umbrella of CPEC, of which $35 billion will be invested in energy projects and $15 billion in infrastructure, Gwadar development, industrial zones, and mass transit schemes. In the next five years, it is expected that it will be more than $55 billion. This project primarily creates a huge amount of foreign direct investment for Pakistan, at the same time, it will also create greater trade opportunities to China by giving access to a new market for its trading goods.
By building connectivity infrastructure that helps local residents and businesses reach more distant markets, these investments could spread economic activity to rural, remote and disadvantaged areas of the countries along the BRI route. The Belt and Road Initiative (BRI) is based on the win-win philosophy of Confucius. With the successful execution of many CPEC energy and infrastructural projects, both Pakistan and China are going to benefit. China will have all that it needs at the moment to make its presence felt in every corner of the world; more seaports and direct routes to connect with different parts of the world, cutting down the shipping costs etc. Pakistan will see phenomenal growth in its infrastructure, energy and telecommunication sectors.
Pakistan is also doing concentrated efforts to integrate CPEC to its greater network of society. The Planning Commission of Pakistan is trying to improve the academic circle in the country by aligning the vision of Higher Education Commission of Pakistan (HEC) to produce faculty members abreast with the knowledge and expertise of the BRI/CPEC Initiative. This capacity building will certainly help in the human development in shape of skilled students and professionals to serve the long term project of CPEC in a befitting manner.
Chinese investment in BRI countries is around $50 billion and is growing with the passage of time. There are around fifty six economic zones planned in twenty countries, out of which nine are in Pakistan. In the next five years, China will add twenty five hundred, short term research visits for foreign scientists, and train five thousand and four hundred engineers. Most significantly there will be the relocation of twenty five million jobs worth of industry for the people of countries along the BRI. BRI is a great chance and opportunity for countries like Pakistan.
There are many other competitors alongside Pakistan to benefit from the enormous opportunities offered by the grand BRI initiative like Laos, Cambodia, Vietnam, Indonesia, and Malaysia who are looking forward to receiving their share of industrial relocation, jobs, and other economic opportunities. Pakistan needs to work hard in a planned manner to obtain maximum benefit out of this tough competitive opportunity. The Policy makers and shakers in Islamabad should use BRI as an opportunity for global connectivity and trade. Through CPEC and BRI at large, Pakistan can get market access to all the BRI partnering countries which will be a great opportunity for the investors and exporters. The land and maritime routes can effectively be used by Pakistani entrepreneurs and companies to export their products and services to the countries along the BRI route. In order to facilitate that Pakistan needs to renegotiate the visa facility for Pakistani tourists and businessmen with Chinese authorities.
Chinese tourists and businessmen get on arrival visa in Pakistan, the same facility should be extended to the Pakistanis to make the mutual partnership even stronger. Moreover, exporters from Pakistan face a tough time in China because their competitors enjoy zero-rated tax thus leaving Pakistani goods uncompetitive. Pakistan and China should work together for a better free trade agreement (FTA) in order to further strengthen their bonds.

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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.

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CPEC win-win project for Pakistan & China – Sartaj Aziz.

Source: The Nation.

ISLAMABAD – Former finance minister and PML-N leader Sartaj Aziz has said that China-Pakistan Economic Corridor is a win-win arrangement for both Pakistan and China and all projects under the CPEC must be materialised without any delay as it would lead to industrialisation in Pakistan

He was speaking at the opening plenary of 21st Sustainable Development Conference (SDC) organised by Sustainable Development Policy Institute (SDPI) here on Wednesday.

Aziz said that CPEC is not only a package of road and energy projects, but also a tool of connectivity among think tanks, public and private sector, common people, and ideas. For successful transformation from trade to knowledge corridor, he said, it is very important to take confidence-building measures among all the stakeholders.

“The real challenge of 21st century is artificial intelligence and technological upheaval, which took over physical existence of labour force, he said, adding that however, at the same time it brings prosperity in the society as a whole. He maintained that technology is going to transform the job market and the real challenge was how we were preparing ourselves to take up this challenge. He stressed the need to build knowledge corridor under CPEC that, what he said, would help Pakistan bridge the gap between artificial intelligence and technology.

About the issue of climate change South Asia is facing today, he said that the real issue was of capacity to tackle the dire implication of climate change. He further said that water was an important part of the climate change and we need to go beyond building dams, which is water security, water course lining, drip irrigation, and water management. He said that existing irrigation practices were not compatible which is consuming 60 per cent of our freshwater resources. He said that planning for affordable energy resources was another challenge to tackle and we need to concentrate on agriculture sector which will increase our exports growth and agricultural trade. For that we need to focus on agriculture for the next three to four years, he added.

In his introductory speech, SDPI Executive Director Dr Abid Qaiyum Suleri said that one of the objectives of this 21st edition of SDC was to highlight importance of knowledge connectivity among three culturally and academically rich regions, i.e. South Asia, Central Asia, and China. He said that one of the pre-requisites for knowledge corridors was intellectual and academic interaction, where the CPEC had the potential to link South Asia to China and Central Asia. However, in order to get maximum benefit out of this economic corridor, Dr Suleri said, Pakistan needed to build a knowledge corridor with China and Central Asia. In order to harness full potential of emerging economic corridors, governments in South Asia must take specific initiatives within a new policy paradigm for pursuing peace, overcoming poverty and protecting the life support systems of the planet, he added.

Haroon Sharif, chairman of Board of Investment, said that it was important to reflect upon why South Asia is lagging behind in capitalising on its true potential of trade, connectivity, and investments. “The opportune time will not come by itself, and we have to create and strive for the right time to move.” The lens with which the developed world used to look at South Asian countries is changing from security to huge market for trade and investments, he said, adding that this transition from geo-political and security lens to economic lens is putting Pakistan back on track of growth and development. He said that economies in West Asia, East Asia and beyond were now looking towards us in terms of improved and enhanced economic relations. He also stressed the need to look at Pakistan’s capability to handle the demands of the emerging markets.

He said that new financial architecture was emerging in the region, such as opening of Asian Infrastructure Bank, Silk Road Fund, China Development Bank, and BRIC bank, therefore, there was a need to learn as to how this region could smartly use these resources for growth and prosperity. At public policy level, Sharif said that there was a very clear realisation at political leadership level that the partnerships with key Asian states could be successful only if we ensured transparency and zero-tolerance for corruption.

Prof Amitabh Kundu, fellow of Research and Information System for Developing Countries (RIS), India said that climate change and environmental degradation was the major issue and it was the shared responsibility of all countries of Asia to tackle this challenge through cooperation. Identifying the issue of growing inequality, he said that it was a big hurdle in achieving SDGs in the region. In order to achieve the shared objectives of growth and prosperity, he said, we must address the three major dimensions of human development, i.e. inequality in economic, health and education sectors.

He said that South-South Cooperation and regional integration would go a long way in handing these challenges and that must be built on mutual trust. The essence of this cooperation is solidarity among countries of the South that could contribute to national well-being. “We should all work for a collective agenda for development of South Asia that might lead the region towards new heights of hope, progress, and prosperity.

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World Bank official lauds BRI, CPEC role in promoting intra-regional trade

Source: The News
Date: 5th December, 2018.

ISLAMABAD: The World Bank (WB) on Tuesday disclosed that around 71 countries under Belt and Road Initiative (BRI) obtained around 5 percent debt from China including Pakistan but stressed upon the need for ensuring more access to the data and transparency.

While addressing at SDPI conference here on Tuesday, Caroline Freund, WB’s Director Macroeconomics, Trade & Investment said that BRI and China Pakistan Economic Corridor (CPEC) were playing important role for promoting intra- regional trade by building infrastructure but the trade facilitation was required to enhance trade among different regions of the world including this part of the world. The infrastructure alone cannot promote trade but other requisites such as facilitation can help a lot to ensure trade among different parts of the world.

“We are conducting a detailed study about BRI but our initial assessment shows that debt has not become major problem for loan recipient countries under this mega initiative. It stands at around 5 percent of total loans portfolio of 71 countries of BRI,” she added. The trade, she said, had gone up in recent years among different countries and regions of the world.

She said the debt provided by China to BRI countries was highlighted as major problem but their study showed that it was not as big as mentioned in recent news reports. However, she stressed upon the need for sharing more data and placing transparency to ascertain facts based on reality.

On the occasion, Deputy Mission Chief of China’s Embassy in Pakistan Lijian Zhao said that the misconception of debt trap levelled against BRI proved a lie through the work done by the WB. He said that the BRI helped generating 200000 jobs out of which 75000 jobs were created in Pakistan through CPEC. He said that Pakistan became the largest recipient of FDI from China and largest trading partner with help of CPEC. He said the industrialisation was pre-requisite for economic development and in next five years the setting up of factories into Special Economic Zones (SEZs) would be the priority areas between China and Pakistan.

The first SEZs, he said, would become operational in Rashakai and concession agreement between Chinese company and KP government would be signed soon. He said that all SEZs being established in Pakistan would be open for all other countries. All those who complained about missing train in earlier energy projects now they can catch up for the establishment of entities into upcoming SEZs, he maintained.

He said the CPEC would be expanded to Afghanistan and Iran and the upcoming trilateral meeting scheduled to be held on December 15 at Kabul could become the starting point to move ahead.

He said that people to people contact must be the priority areas. He mentioned that there were more than 67000 students belonging to Korea who are studying in China and Pakistani students were in the range of 22000 at the moment. With population of 50 million, there are more than 1000 flights between China and Korea so Pakistan with population of over 206 million must realise its real potential.