Pakistan signs two MoUs with China for gas pipeline, oil refinery

SANYA: Prime Minister of Pakistan Shahid Khaqan Abbasi and PowerChina Limited’s Vice President Li Yanming, on Monday witnessed the signing of a Memorandum of Understanding (MoU) between Inter-State Gas Systems (ISGS) of Pakistan and Power China for laying of North-South Gas Pipeline.

The pipeline would serve as a secure and continuous supply of affordable gas in areas currently showing increased demand for power generation and industrial use.

The prime minister also witnessed the signing of another MoU between Pakistan State Oil (PSO) and Power China for construction of up-country deep conversion oil refinery and laying of a crude oil pipeline. This project will help in reducing costs of petroleum products currently being transported via road from refineries in southern parts and also ensure uninterrupted supply.

Foreign Minister Khawaja Muhammad Asif, Pakistan’s Ambassador to China Masood Khalid, Chinese Ambassador to Pakistan Yao Jing and senior officials were also present on the occasion.

Earlier on Sunday, the PM stressed the urgent need for global openness as he expressed solidarity with China’s vision of “building a community of shared future for mankind.”

The prime minister said that he will lead a delegation comprising cabinet ministers and senior level officials, which underscores the importance Pakistan attaches to the forum.

The forum, scheduled for April 8 to 11 in Boao, a town in the southern island province of Hainan, will have the theme “An Open and Innovative Asia for a World of Greater Prosperity,” which Abbasi praised as “not only pertinent but also timely.”

With Asia becoming more integrated and countries in the region forging partnerships in diverse fields including economy, trade, technology, energy, ecology and social sectors, “Openness and inclusivity are indeed the need of the hour,” he stressed.

He spoke highly of the Belt and Road initiative (BRI) as well as the China-Pakistan Economic Corridor (CPEC), calling it “a transformative project representing economic cooperation between Pakistan and China.”

He said the BRI is “a truly global public good” as it is designed to impact positively a vast number of people living in geographically distinct areas but bound together by the dream of improved lives, and better access to roads, infrastructure, sustainable energy and better resources.

As the flagship project of the BRI, CPEC epitomises the vision of the two countries for comprehensive and broad-based economic cooperation, said Abbasi.

“The energy projects conceived under CPEC have alleviated the energy crisis in Pakistan and we have been successful in adding thousands of megawatts of electricity to the national grid,” he said.

CPEC energy projects have diversified Pakistan’s energy mix with investments in the country’s hydro, wind, solar and hydrocarbon energy sectors, which is also “a matter of satisfaction” for the prime minister.

The initial phase of the CPEC has done extremely well. A network of roads is under construction, and Gwadar port infrastructure is being developed, he noted.

PM Abbasi said that Pakistan is now looking forward to the next stage of CPEC development, setting up Special Economic Zones, which he believes will not only strengthen the economic and industrial base of the country but also generate thousands of jobs.

Early completion of the road and rail network and modernisation and development of Gwadar Port are also expected to “transform Pakistan from an agrarian economy to a logistics’ hub transporting goods from China to the region and the world.”

CPEC will enhance Pakistan’s connectivity not only with China but with Central and South Asia and beyond, said Abbasi, noting that it will expand bilateral and regional trade, promote economic integration, and foster economic development.

The prime minister also said that President Xi’s concept of “Building a Community of Shared Future for Mankind” is “not only revolutionary but also ties in beautifully with CPEC.”

“Together with China, we look forward to making Pakistan a major contributor to ‘building a community of shared future for mankind’ through CPEC,” he said.



IMF director discusses CPEC’s impact on Pakistan’s economy

BEIJING: The International Monetary Fund’s (IMF) Director, Jihad Azour called on the Minister for Interior and Planning, Development and Reform, Ahsan Iqbal, on Thursday and discussed the China-Pakistan Economic Corridor (CPEC) project and its impact on the development of Pakistan and the region.

During a meeting held on the sidelines of a high-level conference on the Belt and Road Initiative (BRI) here, Iqbal highlighted that through CPEC the government of Pakistan has been able to address the critical bottlenecks of energy and infrastructure in our growth and last year Pakistan had a GDP growth of 5.3 per cent and in 2018 the projections are for 5.8 per cent.

The government has made heavy investments in the energy sector to jump start the growth in the economy. CPEC projects have created thousands of jobs and revived construction and power sector industries.

Pakistan wants strong partnerships with multilateral institutions to build regional connectivity projects as regional connectivity holds the key to regional peace and prosperity.

Pakistan has a youth bulge, therefore the government is equally investing in the areas human resource development and technology.

Jihad acknowledged the efforts of the government for promoting education, infrastructure improvement and poverty alleviation. He highlighted the need to jointly work on the areas for capacity enhancement of local human resource under the BRI initiative.

Ahsan Iqbal highlighted the need to promote business to business cooperation under BRI and overcoming knowledge gaps about the Chinese industry, trade and financial systems by all stakeholders.



Pakistan’s strengthening financial market attracts Chinese fintech companies

ISLAMABAD: As Pakistani market is attracting the attention of the Chinese entrepreneurs, from one of the popular Chinese fintech companies, Webull, is all set to jump in to capitalise on the huge financial bonanza – making a new edition to the China-Pakistan Economic Corridor (CPEC).

Having witnessed an unprecedented boom in the recent years, China’s internet finance industry currently leads the world when it comes to the total number of users and the market size, with the country making some of the world’s largest investments in the sector by adopting financial technology (fintech) faster than anywhere else.

Besides Alibaba’s Ant Financial stepping into Pakistan recently, Webull is one of the biggest Chinese fintech companies jumping into Pakistan’s market. The company, however, has already been providing advanced global financial information service to the Pakistan Stock Exchange (PSX) since September 2017, and that too free-of-cost.

With four of top five companies in the world ranked in terms of market cap, China’s fintech industry is number one internationally and represents the global advanced productivity. A number of fintech companies such as Alibaba’s Ant Financial Service, Lufax, Zhong An Insurance and JD Internet Finance are covering most aspects of domestic consumption through mobile and internet spending. As capital markets are aggressively pursuing the internet finance industry, Alibaba’s Ant Finance has closed the world’s largest private funding round for an internet company at $4.5 billion.

Webull official claims that the company is also registered at US Securities and Exchange Commission and is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).

“The aim of Webull is to be the best financial data and trading service provider for individual investors around the world. By integrating advanced information technology, data technology and financial technology, the users can enjoy a stable, reliable and an efficient financial data and trading service,” according to the official.

“People can not only manage the stock portfolios in Webull but can also complete stock transaction through this app. Free and comprehensive real-time quotes, with millisecond updates, cover the data from more than 90 countries and 106 stocks exchanges in stocks, bonds, funds, foreign currency, commodities, cryptos, derivatives and other trading products.”

Until now, as many as 153 thousand Pakistanis have registered themselves with this app to get real-time information about their trading data. Graphical financial data, business analysis, industry contrast and rich tool makes the app user-friendly in real meanings.

According to the statistics gathered from the Google Analytics, the 153 thousand Pakistani users of Webull app fall in the age bracket of 25 to 44 years and hail from several cities from across countries including Karachi, Lahore, Islamabad, Rawalpindi, Hyderabad, Peshawar and Multan. The highest number of users come from Karachi, followed by Lahore and Islamabad.

According to the available statistics, people spent average seven minutes on the Webull app, and 96.1 per cent of the total visitors were returning customers. Of the total number of visitors, 92.4 per cent were male while 7.6 per cent female.

“Best App for Global Stock with outstanding features,” posted Afzaal Hussain Channar from Karachi on his Facebook page.

“This is the best search for me for Pakistan Stock Exchange scripts,” wrote another app user on the social media website.

With the launch of multi-billion dollar China-Pakistan Economic Corridor (CPEC), the flagship project of China’s Belt and Road Initiative (BRI), Chinese companies are fast moving to Pakistan to capitalize on the huge business opportunities offered by unprecedented development projects being executed in the country in a highly progressive and investment-friendly environment.

Pakistan and China are all-weather strategic cooperative partners. With the China-Pakistan Economic Corridor (CPEC) well underway, growth in digital sectors of both countries is set to strengthen efforts for bilateral economic cooperation and there are broad prospects of collaboration in the field of fintech between Pakistan and China.


Peshawar-Karachi Motorway Expected to Bring New Investment Opportunities in Karachi

China Pakistan Economic Corridor, a multi-billion dollar project, is set to bring investment in Karachi, which can be assessed from what is being invested on road infrastructure of the motorway project.

 According to a World Group’s Study “Transforming Karachi into Livable and Competitive City” published recently, the China-Pakistan Economic Corridor (CPEC) may influence the future development of the city.

It can be gauged that the investment on road infrastructure between Karachi to Lahore – that will be a 1,100-kilometer freeway or motorway and a major section of Peshawar-Karachi Motorway (PKM) – is worth approximately US$11 billion.

According to the reports, other motorway projects (Karachi to Sukkur) are now considered a major component of the China Pakistan Economic Corridor and will cost approximately $6.6 billion, with the bulk of financing to be distributed by various Chinese state-owned banks. The Sukkur to Multan and Multan to Lahore is likely to be completed this year with local and foreign financing.

This presents an opportunity for local and international companies to invest in the megacity with a population of over 20 million. It is because the motorway will provide an avenue of investments and businesses for local and foreign investors and businessmen.

The study highlighted the expected impact of CPEC on three key areas.

Trade & Services

There will be an increase in economic volume, which will have an impact on the trade and service sectors, the stock exchange, the price of commodities, land development, and other activities.

Real Estate, Construction, & Housing

The CPEC could drive real estate and housing as well as communication, transport, and construction industries.

Land Use & Connectivity

While it is envisaged that economic activity would spread along with CPEC, the southern bypass could see additional freight transport activities, and the northern bypass and other major arteries may expect increased traffic to serve housing and commercial uses.

Recommendations by World Group to Attract FDI in Karachi

The consolidation of accurate city data will be the first step toward effective long-term integrated planning. Mega cities can shape more livable urban environments by planning and anticipating for the long term. Land-use and spatial planning can safeguard space for the longer term and protect the environment while responding to market demand and space needs for businesses, housing, and amenities. To reap dividends, the following are needed: better land administration; transparent development and real estate indicators, transactions, and processes; and links to the tax system.

Regional planning is required to reap benefits from an economic corridor. Large-scale growth is expected from the CPEC. A regional plan is needed to reap the benefits associated with such growth—and for equitable, inclusive, and efficient growth—while safeguarding environmental and cultural assets.

The planned implementation of a bus rapid transit (BRT) system could make areas in Karachi more accessible. This plans must translate to implementable, transparent policies that can respond to city needs and private sector development in the shorter term.

Various land-owning agencies at different levels will need to work closely to meet the needs of the city in a coordinated and efficient way. Second, given that the public sector controls more than 90 percent of the land in Karachi Division, it is even more critical that it takes the lead in ensuring quality development for economic, social, and environmental needs.

Less than 5 percent of the city’s land is controlled by private entities. There are opportunities to explore appropriate, transparent mechanisms for land disposal and allocation so that land resources can better respond to demand and private-sector needs.

Plans to improve resilience to external shocks and climate change should be incorporated into urban planning. The recent heat wave in 2015 and the city’s susceptibility to floods need to be addressed. Initiatives such as “greening” the city’s public spaces could not only help reduce heat islands and reduce energy consumption but also provide breathing spaces for an increasingly dense city.


Rupee value to increase due to CPEC: Ahsan Iqbal

LAHORE: Federal Interior Minister Ahsan Iqbal said a new middle class market will emerge in Pakistan as the country achieves the gross domestic product (GDP) growth target of 6%.

He added that the value of the Pakistani rupee, which recently plunged over 9% against the US dollar due to a bulging current account deficit, is likely to increase due to investments in the China-Pakistan Economic Corridor (CPEC).

While addressing the ‘Think and Grow’ summit, he said investors from Europe, Middle East and other parts of the world would start businesses in Pakistan, which will create a positive impact of CPEC on their economy. The summit was hosted by the University of Management and Technology, Lahore in collaboration with the Pakistan Industrial Technical Assistance Centre and the Centre of Excellence CPEC.

Govt uses ‘best tool in hand’, allows rupee fall

 Iqbal said that CPEC would be completed by 2030 in three phases. In the first phase of CPEC, energy and physical infrastructure would be developed by 2020, he said, adding that the roadmap for the formation of a National Internal Security Policy (NISP) is centred on goals defined in Vision 2025, which envisage sharing peace, stability and development.

Speakers at the summit called for actively engaging the Pakistani workforce in CPEC in order to provide them first-hand knowledge, experience and engineering being applied by Chinese experts.

They said once the project is fully functional in 2030, foreign direct investments in key areas are likely to pour into Pakistan, resulting in greater opportunities for both countries.

Addressing the summit, UMT Chairman Dr Hasan Sohaib Murad said CPEC is a beacon of hope.

He said current business models need to be replaced with new and innovative ones in order to oversimplify the business culture and attract more locals to take the risk of investment.


China Needs to Avoid ‘Belt and Road’ Debt Problems

WASHINGTON DC, Mar 14, 2018 (IPS) – Chinese officials have been adept at ascribing a vision for the “Belt and Road” initiative (BRI) that garners support from a wide array of countries, as well as international institutions like the World Bank and International Monetary Fund (IMF).

The appeal is simple. China is offering to mobilize trillions of dollars in capital for something that all countries, rich and poor, crave: infrastructure. But as the vision moves to implementation, the Chinese government and its BRI partners would do well to address its key vulnerabilities.

High on the list is China’s go-it-alone approach to managing debt problems, evident in high-profile cases like Venezuela and in lesser-known situations like Sri Lanka and Tajikistan. The World Bank and other international institutions, which seek to lend their names to the BRI, have an obligation on behalf of their member countries to press the Chinese on a legacy of opaque and ad hoc debt workout arrangements.

These arrangements often prove to be a bad deal for distressed borrowers and are misaligned with global development objectives, which are pinned on principles of transparency and sustainability. For the Chinese themselves, unilateralism on debt is increasingly problematic.

Not only does it contribute to a political backlash in debtor countries, it makes Chinese financial interests increasingly vulnerable in the absence of the kinds of protections afforded to Paris Club creditors. In fact, this club of rich-country lenders was formed not to look out for the interests of debtors but to use collective action to ensure repayment from recalcitrant borrowers.

In practice, the disciplines, transparency, and predictability of the Paris Club’s approach, working in concert with the IMF and multilateral development banks, has proved to be beneficial for creditors and borrowers alike.

In new research, we identify eight BRI countries that could be pushed into debt distress due to lending under the initiative. That’s a relatively small share of the 68 countries associated with the BRI. But for these eight, which include Pakistan, Djibouti and Laos, China’s past behavior as a creditor ought to be a source of concern.

Unlike the world’s other leading government creditors, China has not signed on to a binding set of rules of the road when it comes to avoiding unsustainable lending and addressing debt problems when they arise. China’s rapid emergence from poor country to the world’s creditor has meant that sound policy frameworks around debt management, such as the approach of the Paris Club, have not caught up to China’s role as lender today.

Given China’s dominant role as an official creditor, it may be asking too much of Chinese officials to simply sign on to the set of rules and disciplines of a G-7-dominated forum like the Paris Club. Whether it is the club itself, or some new arrangement that holds closely to key principles of transparency and collective action, China would do well to step up on the debt front as the BRI gets underway.

Firmer commitments on responsible lending go beyond lending transparency and include clearer disciplines around lending terms and loan volumes, as well as project standards that help to ensure positive economic returns such as open and competitive procurement.

China can claim success when it comes to a vision for the BRI that has gained widespread support. The way forward demands a clear policy framework aligned with global standards, something that has been absent from China’s lending practices to date.

Whether Chinese officials have the will to pursue this approach will be critical in determining the ultimate success or failure of the BRI.

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Extending CPEC to Afghanistan

Many believe that Afghanistan’s involvement in CPEC, even if only modest, can be a big confidence-building measure for an Afghanistan-Pakistan relationship which has been tense for quite some time now. In the long run, through Afghanistan, China is planning to gradually connect the CPEC with the China-Central and Western Asia Economic Corridor.  China is confident   about Afghanistan’s joining CPEC. According to Chinese Foreign Minister, as an   important neighbor of China and Pakistan, Afghanistan has an urgent desire to develop its economy and improve people’s livelihood and it is willing to integrate itself into the process of regional interconnection.

On February 28, 2018, Afghan President Ashraf Ghani while speaking at a peace conference in Kabul offered peace talks “without preconditions” to the Taliban after 16 years of war. He also declared that his government wants to make a fresh start as far as relations with Pakistan are concerned. The offer called for a ceasefire, an exchange of prisoners and included a promise to extend official recognition of the Taliban as a legitimate political group as well as including the group in the political process and review of the country’s Constitution. What Afghan President has offered can form a basis of significant and substantive peace process that could lead to restoration of durable peace and stability to war-torn Afghanistan. It is, perhaps, for the first time that no pre-conditions have been attached to talks with the Taliban.  From Pakistan’s perspective peace in Afghanistan is very important for smooth regional connectivity of CPEC.

China has played a critical role in bringing a change in Afghanistan’s attitude towards Pakistan and the Taliban. On December 26, 2017, the first China-Afghanistan-Pakistan Foreign Ministers’ Dialogue was held in Beijing. The two most important takeaways from this trilateral dialogue were Beijing’s readiness to play a constructive role in improving Afghanistan-Pakistan relations and decision on extending the China-Pakistan Economic Corridor (CPEC) to Afghanistan.

One of the main objectives of China to extend CPEC connectivity to Afghanistan is to create   conducive environment for regional connectivity in the broader perspective of its Belt and Road Initiative. The CPEC could help Afghanistan reduce its dependence on foreign aid as well as provide both Kabul and Islamabad with an opportunity to improve ties. Trilateral cooperation between Pakistan, Afghanistan and China on Belt and Road would benefit all three countries. Pakistan considers China’s enhanced involvement in Afghanistan as a stabilising factor to counter the negative fallout of Indian influence in Afghanistan. On the contrary, India might be alarmed by the extension of CPEC to Afghanistan.

For a landlocked country like Afghanistan, CPEC is of vital importance in geo-strategic sense. With the extension of CPEC to Afghanistan, the country can become a major beneficiary of this project as in future the corridor will contribute to the economic development of this brittle country by enhancing economic activities in the area which can put the fragile economy of Afghanistan on a sound footing.

There are several connectivity projects that Pakistan, China and Afghanistan can undertake.  The important road projects that may be included in the CPEC connectivity to Afghanistan are: 265 km Peshawar to Kabul motorway and the road   link connecting western alignment of CPEC to Afghanistan by linking Chaman to Kandahar, Mazar-i-Sharif  to Termez near the border of Central Asian countries. This route will provide an easy and short access to Afghanistan to reach the sea port of Gwadar which is almost 600 kilometres shorter than the existing transit route being used by the traders and people of Afghanistan This connection will integrate Afghanistan with other regions and also allow her to start commercial activities through the Indian Ocean.

CPEC is bringing industrialization and investment to Pakistan, the carry-over effects of which will benefit Afghanistan as well. Pakistan has already undertaken the building of several roads to improve connectivity between the two countries. The 75 km Torkham-Jalalabad road is one of them while the Peshawar-Torkham road is another. These developments have faced considerable completion challenges; they are a step toward increasing connectivity with Pakistan and, in turn, gaining Afghan access to CPEC.  A railway track may be built between Torkham and Jalalabad in Afghanistan to facilitate China to use the Pakistan Railways network to transport goods and equipment for the development of copper mines and various other projects in Afghanistan. Separately, Pakistan Railways has completed a feasibility study for a rail section between Chaman and Kandahar, a part of a proposed link across Afghanistan to Turkmenistan.

China can expect a lot of economic benefits by investing in Afghanistan. Such investments will strengthen Chinese projects in Pakistan, and also help China to access natural resources in Afghanistan. Afghanistan also has the abundant potential of hydroelectricity which Chinese companies can tap and sell in Pakistan. For instance Pakistan and Afghanistan are moving towards the joint management of common rivers starting with construction of a 1,500MW hydropower project on Kunar River — a major tributary of Kabul River contributing almost 13 million acres feet (MAF) annually to Pakistan. China may help them in completing this project. Further the extension of CPEC to Afghanistan may help in identifying projects relating to communications, railways, transit trade and the power sector.

Central Asian Region being physically attached to Wakhan Corridor, Pakistan can utilise its value by linking the corridor with its northern highlands most suitably along the Chitral River and improvement of existing route from Chitral to Afghanistan. This 250 km long route should start from Broghal Pass linking Mastuj, Booni, and Chitral and should link Afghanistan.  The proposed route will serve as subsidiary to Karakorum Highway for China and Pakistan as an instrument re-driving influence of India in Afghanistan.

The northeastern Badakhshan province of Afghanistan is bordering China, Pakistan and Tajikistan through Wakhan Corridor. The province has large scale natural resources such as Azure, Gold, Ruby and Diamond mines in addition to Copper and Iron.  Pakistan and China can help Afghanistan in exploring these natural resources. Construction of the Lowari tunnel will turn the Wakhan corridor into an all-weather route for connecting Pakistan with Afghanistan and Turkmenistan.

China is keen on accessing Afghanistan’s large reserves through its state-owned enterprises (SOE), and has the monetary resources to invest in developing the infrastructure for procurement. As such, Afghanistan should be open to such investments and operating deals, which will benefit the country in the long run. In addition, such a move will bring forth much needed foreign direct investment (FDI) to the cash-strapped country.

There are already some investments from Pakistan to build connecting roads, as mentioned above. Afghanistan should focus its attention on finishing the stalled projects and building confidence in the country’s ability to complete existing infrastructure undertakings. To develop the small-scale energy and transportation industries that could easily fit into the CPEC structure once Afghanistan joins. In this respect the government of Afghanistan has taken a right step of offering peace talks to the Taliban.  Any positive development in Afghanistan’s relations with Pakistan and initiation of peace talks with the Taliban may create a favorable environment for investment in CPEC connectivity projects in Afghanistan.


CPEC to facilitate other South Asian nations: Chinese newspaper

According to the Chinese newspaper “Global Times”, China-Pakistan Economic Corridor (CPEC), the flagship project of the Belt and Road Initiative (BRI), will create new business opportunities not only for Pakistan but other countries in the region too as it will shorten trade routes. The BRI is making headlines across South Asia and leaders must work towards economic integration to maximize benefits. Active exchanges in various areas are brightening the picture for South Asian economies.

Beijing: The China Pakistan Economic Corridor (CPEC), a flagship project of Belt and Road Initiative (BRI), will create new business opportunities for not only Pakistan but also other countries in South Asia and adjacent areas as it reshapes the regional economic landscape by shortening trade routes.

The B&R initiative has made headlines across South Asia, where leaders must ponder the future of regional economic integration in a bid to pursue the maximization of their local interests. Some countries in the region have thus witnessed frequent high-level bilateral exchanges, according to an article published by Chinese newspaper “Global Times”.

The image of Pakistan has improved as the country gives full support to the Belt and Road (B&R) initiative, announced by Chinese President, Xi Jinping for the shared prosperity of the mankind.

As an example, Pakistan’s Prime Minister Shahid Khaqan Abbasi was the first high-level foreign dignitary received by KP Sharma Oli after Oli was sworn in as the prime minister of Nepal this month.

Nepal’s prime minister usually makes his first visit to India after being inaugurated, so the invitation to Pakistan is seen as a sign that the two countries may further strengthen economic cooperation.

Although the CPEC faces challenges, the economic corridor has become a reality with the first shipment of Chinese goods through the Gwadar Port in southwest Pakistan in 2016.

The CPEC, a flagship project of the B&R initiative, helps Pakistan occupy an important position in the trade route linking China and the West.

While Nepal extends an olive branch to Pakistan to enhance cooperation, Afghanistan has also shown an interest in being involved in the CPEC projects.

The B&R initiative is not designed as a political instrument to enhance China’s economic ties with the participants, but as an open platform for all of them to strengthen communication among themselves.

Active exchanges in various areas are brightening the picture for South Asian economies. It seems the B&R initiative has played an increasing role in promoting economic integration. Countries that have given a cool response to the B&R initiative may be bystanders to South Asia’s rejuvenation. This should be recognized by India.

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The Belt and Road initiative meets excitement and concerns in Europe

The conference, held together by the ACCA (the association of Chartered Certified Accountants), the EU-Asia Centre, the European Movement International (EMI) and UEAPME on Wednesday, was attended by a group of the EU officials, decision makers, and representatives from European trade union and business groups. Among the speakers were MEP Jo Leinen, Head of the European Parliament EU-China Delegation, and Alain Baron, team leader of the EU-China Connectivity platform, the main negotiation channel for EU-China cooperation on the BRI.
Leinen praised that the scale and scope of the Belt and Road initiative is “nothing can be compared to in the 21st century”, but the unilateral idea proposed by Beijing needs to become multilateral in order to achieve success.

“If we’re not able to make sure that the level playing field, the reciprocity and transparency is applying to the BRI, I am afraid there will be no future for the BRI,” said Baron.

The Belt and Road initiative, first addressed by Xi in 2013 as “One Belt, One Road” shortly after he assumed office, aims to create a trade and infrastructure network connecting China by land and sea with Europe and Africa along ancient trade routes.

Closely linked to Xi’s leadership and legacy, the initiative is expected to mark a global economic paradigm shift with a promise of more than $1 trillion investment in over 60 countries. China clearly showed its endeavor when the initiative was enshrined in the Communist Party Charter during the 19th Party congress in October 2017.


Compared to many countries in Africa, Southeast and Central Asia, the EU has been wary of endorsing the BRI. French President Emmanuel Macron mentioned about the imbalances of the initiative during his visit in China earlier this month. UK prime minister Theresa May, who is visiting China later this week, is expected to raise concerns about the initiative in front of the Chinese officials

Projects under the Belt and Road initiative have been criticized for their lack of transparency and monopoly of Chinese contractors. According to a study published a few days ago by the Center for Strategic and International Studies, among all the contractors participating in Chinese-funded projects under the BRI in Asia and Europe, 89% are Chinese companies.

China’s different understandings of market rules, huge dominance of the government in business and lack of freedom in the associations were also stressed during the conference. The Budapest-Belgrade high-speed railway project, one of the hallmark schemes under the BRI in Europe, is still under the European Commission’s investigation for breaking EU tendering rules.

“We do see a lot of opportunities, but also challenges,” said Ada Leung, Head of the ACCA China, to EU Reporter. She pointed out that a lot of coordination needs to be done since different jurisdiction and cultures are involved along the planned routes of the BRI.

The EU is also facing an internal challenge. So far, the member states have not yet had a common standpoint towards the BRI. While France and Germany hesitate to endorse the BRI, six European countries, including Spain, Italy, Greece, Hungary, Czech Republic and Poland, have already signed a joint communiqué with China and other 23 countries on the Belt and Road Forum for International Cooperation held in May 2017. There is as well concern that the 16+1 initiative between China and East European countries could undermine the EU’s overall approach to China.