China offers billions for new Silk Road initiative

Tuesday, 16 May, 2017

The memorandums of understanding add to $57 billion already pledged for the China-Pakistan Economic Corridor (CPEC), a network of rail, road and energy infrastructure that is part of the wider Chinese project also known as the Belt and Road initiative, or One Belt, One Road.

PRESIDENT Xi Jinping expressed ambitious hopes for Asian and European governments working closely on finance, law enforcement and a broad range of other issues under a China-led trade initiative as leaders of 30 countries yesterday ended a meeting to promote the effort.

Beijing on Monday taunted New Delhi for turning down its One Belt and Road (OBOR) invite by saying that India will have a very "small role" to play if it decides to join the initiative in the future.

The Chinese initiative calls for building ports, railways and other facilities to expand trade across Asia, Africa and Europe.

Also, China will encourage financial institutions to conduct overseas RMB fund business with an estimated amount of United States dollars 44 billion, Xi said.

"We need to improve policy coordination and reject beggar-thy-neighbour practices", Mr Xi told the 29 national leaders attending the forum.

This edition of the forum was attended by Pakistan Prime Minister Sharif, his Sri Lankan counterpart Ranil Wickramasinghe.

The web of trade would span over countries representing more than 40 percent of the world's GDP, that are home to 4.4 billion people - more than half of the world's population - giving it a potential to affect global trade patterns.

India has been the most openly critical voice against the $1 trillion scheme, largely because one of the key projects passes through Pakistan and the disputed Kashmir region.

China says that between 2014 and 2016, its businesses signed projects worth $304.9 billion in Belt and Road countries.

Participants in a joint communique declared: "We reaffirm our shared commitment to build open economy, ensure free and inclusive trade, [and] oppose all forms of protectionism, including in the framework of the Belt and Road Initiative", according to the official Xinhua news agency.

Without referring to India's objections to the China- Pakistan-Economic Corridor (CPEC), Xi said, "all countries should respect each other's sovereignty, dignity and territorial integrity, each other's development paths and social systems, and each other's core interests and major concerns".

Many developing countries along the trade routes have welcomed the initiative even as some are wary of China asserting its influence.

China announced a day earlier that it would provide an additional US$113 billion in funding to facilitate the trade and investment plan, with the stress on infrastructure construction in the region as well as policy coordination among members. But he also called for economic integration and cooperation on financial regulation, anti-terrorism and security — all fields in which China's economic heft would give it a prominent voice. "We'll see what happens tomorrow", she said in a briefing with the press on the sidelines of the summit.