HomeNewsRenewing BRI potential for growth - Newspaper

Renewing BRI potential for growth – Newspaper

China says the multi-trillion-dollar transnational Belt and Road Initiative (BRI) global cooperation platform will become “more open” as it marks 10 years of the project by holding the third Belt and Road Forum for International Cooperation (BRF) in Beijing from tomorrow.

“Continuing from this new starting point, BRI will demonstrate greater creativity and vitality, become more open and inclusive, and generate new opportunities for both China and the rest of the world,” says the white paper China’s State Council Information Office released last week.

The document titled ‘The Belt and Road Initiative: A Key Pillar of the Global Community of Shared Future’ maintained that BRI, which has seen Beijing pour a trillion dollars into projects around the world since its launch in 2013, sought to provide a new platform for international economic cooperation, as well as generate new momentum to support growth.

Representatives from 130 nations and 30 international organisations are expected to attend the high-profile event, which includes three high-level forums on connectivity, green development and digital economy. The forum is being held after a gap of four years at a time when the West, led by the US, is trying to counter Beijing’s growing political and economic clout across the globe, accusing China of “laying a debt trap” for the participating countries, and claiming that the infrastructure development deals signed under the initiative lack transparency.

The government must focus on fast-tracking the completion of the industrial estates to attract Chinese companies

Recently, the US and India unveiled a plan to build the India-Middle East-Europe Economic Corridor (IMEC), which seeks to connect India with several countries in the Middle East and Europe through a trade corridor consisting of ports, a railway and better roads. Announced on the sidelines of the G20 meeting in India, the IMEC is widely being seen as an alternative to Beijing’s modern-day Silk Road.

The IMEC remains way too small in scale compared with BRI and also doesn’t include African, Central Asian, Southeast Asian or other South Asian countries — at least not so far.

President Xi Jinping unveiled BRI in March 2013, when he proposed a “vision of a global community of shared future.” Later that year, President Xi raised the initiative, joining with others to build BRI, a Silk Road Economic Belt and a 21st Century Maritime Silk Road. With the resource mobilisation needs in the world economy growing, China has made one of the largest contributions to closing that gap for the Global South under a new BRI model of South-South cooperation.

“Since its launch, cooperation under the BRI framework has brought profound changes to the world,” reads the white paper. BRI has set in motion more than 3,000 cooperation projects and nearly a trillion in investment towards bilateral developments and livelihood initiatives as Chinese finance is more associated with ‘economic growth by addressing infrastructure bottlenecks and increasing energy access’ than World Bank lending.

The ambitious BRI plan prioritises connectivity and calls for a network of ports, railways, airports and other transportation links spanning across Asia, the Middle East, Africa and Europe, becoming the largest platform for global cooperation. Based on a framework comprising six corridors, six routes, and multiple countries and ports, a multitier infrastructure network is taking shape under this initiative.

Since its launch, China has signed agreements for co-building BRI with over 150 countries and 30 international organisations. More than 3,000 cooperation projects under the initiative have delivered $1tr of investment and generated growth across partner countries. The value of signed construction contracts with the participating countries now totals $2tr and the turnover of Chinese contractors has reached $1.3tr.

The balance of loans for BRI projects from Eximbank — the key BRI creditor — now totals $307.4 billion, covering over 130 partner countries and driving $380bn of two-way investment, the white paper said.

In 2022, the value of imports and exports between China and partner countries reached nearly $2.9tr, accounting for 45.4 per cent of China’s foreign trade and representing an increase of 6.2 percentage points compared with 2013. The World Bank has estimated that by 2030, BRI-related investments could lift 7.6 million out of extreme poverty and 32m out of moderate poverty.

Chinese policymakers argue that “economic globalisation is dominated by a few countries and has not contributed to the common development that delivers benefits to all… it has widened the wealth gap between rich and poor, between developed and developing countries, and within developed countries.”

They insist that certain countries have practised unilateralism, protectionism and hegemony. “It is no longer acceptable that only a few countries dominate world economic development, control economic rules and enjoy development fruits.”

The BRI document clarifies that the initiative isn’t aimed at designing a new international system but rather supplementing and improving the existing mechanisms by promoting an open global economy and constructing an equitable and transparent system of international trade and investment to build inclusive economic globalisation.

The BRI initiative has faced some difficulties and challenges over the past few years because of the pandemic, as well as the tensions between Beijing and Washington that saw the latter impose trade and investment restrictions on China, besides creating several regional economic and security pacts to counter its growing economic and political clout across the continents.

There is every reason to believe that China will use the forum to renew its plans to push ahead with the BRI initiative agreements and investments in the partner economies.

That’s good news for Pakistan, which is facing multiple economic challenges, ranging from the ongoing liquidity crisis to declining foreign investment to falling industrial productivity. The forum affords Islamabad yet another opportunity to take up with the Chinese authorities the projects of significance to its economy on the sidelines of the event, as well as remove their concerns.

At the same time, the government must focus on the fast-track completion of the industrial estates identified under the China Pakistan Economic Corridor to attract Chinese companies looking to relocate their manufacturing facilities abroad.

The two sides have confronted various challenges impeding economic cooperation in the past. But the future is promising as long as both nations can address these challenges and advance cooperation by considering their long-term interests for even deeper economic relations.

Published in Dawn, The Business and Finance Weekly, October 16th, 2023



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