People take pictures of the "Golden Bridge on Silk Road" installation by Chinese artist Shu Yong, set up ahead of May's Belt and Road Forum in Beijing. Photo: Reuters, Thomas Peter

President Xi Jinping is set to host one of the biggest summits of the year, with leaders of 28 nations gathering in the capital on Sunday for talkfest to map out China’s ambitious new Silk Road project.

It has been hailed as an ambitious project that will redefine the global economy of the 21st century, but some wonder what exactly is the Belt and Road Initiative? And others say it is an opportunity for Xi to show off his initiative to the world.

Leaders, including Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan, will attend the two-day meeting at Yanqi Lake, located in a Beijing suburb near the Great Wall.

And a delegation from North Korea will also be attending, NK News reports.

The initiative, formerly known as One Belt, One Road (Obor) was proposed in 2013 by Xi to promote a vision of expanding links between Asia, Africa and Europe. Although the links will be underpinned by billions of dollars in infrastructure investment, the project is broad on ambition, but still short on specifics.

Obor spans some 65 countries representing 60% of the global population and around a third of global GDP. The China Development Bank alone has earmarked US$890 billion for some 900 projects.

China has earmarked US$40 billion for a special fund for the scheme, on top of the US$100 billion capitalization for the China-led Asian Infrastructure Investment Bank, many of whose projects will likely be part of the initiative.

Analysts are skeptical that the Asian giant can take the lead in global commerce, while also cautioning that an integrated world trade system where China’s ruling Communist Party sets the rules could come with serious risks and hidden costs.

Three silk roads stretching from China to Southeast Asia Europe and Africa, Jan 2017.

The European Union’s ambassador to Beijing, Hans Dietmar Schweisgut, recalled that EU companies have repeatedly complained about unequal market access in China.

“We hope China will implement domestically what it is preaching internationally,” Schweisgut said on Tuesday. “The Chinese market, when it comes to investment, is not as open as the European market to Chinese companies.”

It is significant to note that Italian Prime Minister Paolo Gentiloni is the only leader coming from the Group of Seven industrialized nations.

Read: Nepal set to hop on China’s Silk Road whatever India thinks

But with a confusing name, that officially refers to the Silk Road Economic Belt and the 21st century Maritime Silk Road, added to myriad economic and security risks, clouds hang over the plan.

US President Donald Trump’s decision to withdraw from the now-defunct Trans-Pacific Partnership free-trade agreement gave countries “added incentive” to join Obor, June Teufel Dreyer of the University of Miami said.

But she added: “What may look like benefits may turn out to entrap [participating countries] in a China-centered spider web.”

One diplomatic source familiar with discussions on the forum’s communiqué said: “The forum is downright glorification of Xi Jinping and One Belt, One Road,” using the straight Chinese translation of the project’s title.

Confucius and win-win thinking

China has taken umbrage at suggestions that the new Silk Road is about it trying to dominate the world and mould it to Beijing’s liking, saying it is good for all and anyone can join.

“Western sceptics have failed to see the fact that the Chinese don’t harbour a zero-sum mentality, but encourage win-win thinking,” Xinhua news agency said in an English-language commentary.

“As Confucius once said: ‘He who wants success should enable others to succeed’.”

There are risks involved, however.

In Sri Lanka, there have been public protests against projects linked to the Belt and Road, and in Pakistan, where Islamist militants pose a security threat, the government has set up a new army division to protect the US$57 billion China-Pakistan Economic Corridor, a key part of the new Silk Road.

Read: Hopes and fears on people’s Silk road in Kyrgyzstan

The corridor also runs through disputed Kashmir, meaning India has rebuffed China’s attempts to get it onto the Belt and Road.

“We have some serious reservations about it because of sovereignty issues,” Indian Finance Minister Arun Jaitley said in Japan last week.

New York-based Fitch Ratings expressed concern that “genuine infrastructure needs and commercial logic might be secondary to political motivations,” leading to “a heightened risk of projects proving unprofitable.”

Struggling countries could be saddled with Chinese loans requiring payment regardless of project performance, Fitch Ratings said.

Meanwhile, reports of trains loaded with Chinese goods trundling towards Europe laden but returning empty have led to the quip “One Belt, One Way,” Dreyer said.

Politics before economics?

During the meeting, more than 50 memorandums of understanding, plans, cooperation letters and cooperation projects in transportation, energy and communications will be signed, Chinese government officials say.

“This … will be a jointly consultative document by all parties to reflect their shared consensus on advancing the Belt and Road,” foreign ministry spokesman Geng Shuang said Wednesday, referring to the summit communiqué.

Reuters, Agence France-Presse

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