More than US$64 billion worth of deals were signed during China’s Belt and Road Initiative forum, Chinese President Xi Jinping said on Saturday in a closing speech. In the same remarks, Xi assured that market principles would guide all BRI cooperation projects.
The multi-billion dollar announcement followed on his opening speech on Friday, where Xi ensured the sustainability of BRI projects commercially and financially to improve the livelihoods of people in participating countries worldwide.
Xi claimed China would introduce well-recognized rules and standards in its Belt and Road projects to ensure they are of high-standard, beneficial to people and sustainable.
“We will make sure that corporates follow international rules and standards during construction, operation, merchandise and tender and respect laws and regulations in different countries,” Xi said.
Belt and Road projects should commit to a people-centered approach and target at eliminating poverty, creating jobs and improving people’s livelihood, he said in the forum, which was attended by 37 world leaders and 5,000 other representatives from 150 countries.
“We welcome financial institutions from different countries to jointly invest and finance for Belt and Road projects, encourage cooperation in third-party markets and achieve mutual benefits through the participation of multi-parties,” he said.
Xi’s speech was seen as a response to criticism from the United States, which participated in the first Belt and Road Forum two years ago but declined to send any high-level officials to this summit.
In early April, a US State Department spokesman raised “concerns about opaque financing practices, poor governance and disregard for internationally accepted norms and standards” in Belt and Road projects.
Unveiled by Xi in 2013, the Belt and Road Initiative, or China’s New Silk Road plan, was criticized by western countries for having created “debt traps” to less developed Asian countries, which borrowed money from China for their infrastructure projects but then failed to manage them commercially.
The plan was also criticized for creating unfavorable conditions for local workers as well as environmental problems.
At present, most of the financial resources for the Belt and Road projects are provided by China, but how this financing model will be sustainable in a growing scale is an important matter to study, Chen Kang, a professor and director of Chinese Executive Education Programmes at the Lee Kuan Yew School of Public Policy, the National University of Singapore, said in media briefing about the Belt and Road Initiative in Singapore on Thursday.
Chen also pointed out that there was an urgent need to set up a governing body to settle disputes as Belt and Road projects usually involved different parties.
Cooperation in third-party markets would be a new trend for Belt and Road projects as China and another country can jointly develop a project in a third country, said Zhou Zixun, a senior columnist at the China Economic Times.
China can make good use of its advantages in mid-and-high-end industries and integrate them with ideas and technologies from developed countries, Zhou added.
The Belt and Road Initiative has made great progress over the past six years, but there are still many challenges in the future, Long Guoqiang, the Vice-President of the Development Research Center of the State Council, was quoted as saying in an interview.
In the next phase, China has to improve commercial returns, realize economic benefits and ensure sustainability in cooperation, Long said. Also, Chinese corporates must respect local law and culture, fulfill the requirements of environment protection and social responsibility, he said.
Debt sustainability framework
On Thursday, China’s Ministry of Finance launched a Debt Sustainability Framework for Low-Income Belt and Road Countries and encouraged international financial institutions to voluntarily use it.
The framework can help developing countries analyze the financial sustainability of their Belt and Road projects. It showed that China had remained active and open to help Belt and Road countries resolve their debt problems, said Liu Kun, China’s Minister of Finance.
Yi Gang, the governor of the People’s Bank of China, said in sub-session of the Belt and Road Forum on Thursday that Chinese financial institutions have so far provided US$440 billion for infrastructure projects along the Belt and Road countries.
He said 11 Chinese banks had set up 76 country-level institutions in 28 B&R countries, while 50 banks from 22 B&R countries have set up their branches in China as of the end of last year. He said China would jointly set up financing systems with other countries’ banks and finance ministries.
More innovative financial tools should be launched to provide new financing sources to developing countries, which don’t have open financial markets, Wang Wen, Executive Dean of the Chongyang Institute for Financial Studies, which was founded in 2013 at the Renmin University of China, said in a media interview.
US-China trade war
On Wednesday and Thursday, Xi individually met country leaders in the Great Hall of the People, including those from key Asian economies such as Japan, the Philippines and Malaysia. India and the United States did not send officials to attend the Belt and Road Forum.
Xi also talked about trade in his opening speech in the Belt and Road Forum.
“China is the world’s factory and also the world’s market. China has the largest and fastest-growing middle-class with a huge potential in consumption. To meet the materialistic and cultural needs of Chinese people and provide more choices and benefits to consumers, we will further lower our tariffs and remove different kinds of non-tariff barriers,” said Xi.
“We don’t chase a trade surplus and are willing to import more competitive and high-quality agricultural products, goods and services, promoting a balanced trade,” he said, adding that the world’s second-largest economy would increase its efforts to protect the intellectual property rights of foreign companies in China and promote technological exchanges under legal principles.
Since last year, the United States has been engaged in a trade war with China by increasing tariffs on Chinese goods. In the past few months, senior officials from both countries have been negotiating terms to settle the dispute. It has been reported that the world’s two largest economies will sign a trade agreement next month.