2018-08-31

Belt and Road is in progress -- Marking the fifth anniversary of proposing the Belt and Road Initiative

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The image shows a jetty built by China-Malaysia cooperation at the new sea terminal in Port Kuantan, Malaysia. Xinhua News Agency

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The train runs on the Asian Railway near Addisababa, Capital of Ethiopia. Xinhua News Agency


Five years ago, in the autumn season, President Xi Jinping, based on the basic situation of world development at that time, combined with the objective needs of China's development stage, put forward the Belt and Road Initiative with great foresight. Over the past five years, the basic ideas of this initiative have been translated into action, and its vision is becoming a reality. The Institution of "Belt and Road" has been preliminarily established, the key points of cooperation have been firmly advanced, and the project construction has made brilliant achievements. Although it still faces some challenges, it has won positive responses around the world. On the occasion of the fifth anniversary of Belt and Road's initiative, we should applaud warmly and think calmly so as to make the road for the future more stable,smoother, and better. 

Respondents are Actively participated

Since the Belt And Road initiative was launched, the international community has responded positively and enthusiastically. At the national level, so far more than 70 countries have signed joint MOUs with China on "Belt and Road" intergovernmental cooperation. On this basis, China and countries along the Belt and Road have jointly formulated  very detailed action plans, such as  Long Term Plan for China-Pakistan Economic Corridor; the Planning Outline of the Construction of the China-Mongolia-Russia Economic Corridor; and The Cooperation Outline on Docking the Silk Road Economic Belt Construction and the New Economic Policy of the "Bright Road" (China-Kazakhstan) etc., the development strategy of China and relevant countries through plans to fulfill the actual connection. At the 2017 Belt and Road Forum for International Cooperation in Beijing, high-level delegations from more than 140 countries participated, indicating that the vast majority of countries in the world are willing to carry out " Belt And Road" cooperation. The presence of 29 heads of foreign states and governments on the summit shows that the joint construction of "Belt And Road" is a cause with significant international influence. The Form resulted in an outcome list of 279 items, including 76 items in five main categories, and more than 90% of the specific items on the list have been translated into ordinal work, indicating that the cooperation is feasible, practical and has great potential.

From the perspective of international organizations, the vast majority of international organizations have actively carried out in-depth research on the Belt and Road Initiative, and a large number of international conferences have been organized. They have expressed their views and even issued resolutions and initiatives, signed cooperation agreements with the Chinese government and conducted project cooperation in many areas. For example, some regional professional institutions, such as the Asian Development Bank, the European Investment Bank and the European Bank for Reconstruction and Development, etc., have all taken a positive attitude towards "Belt and Road" cooperation, and have signed more specific cooperation agreements with relevant Chinese counterparts. ASEAN, the European Union, the African Union and other regional organizations also highly appraise the " belt and road" in general.

Among them, the United Nations is particularly positive and proactive on "Belt And Road". Judging from the basic position of the United Nations, the United Nations, the construction of "Belt and Road" is directly conducive to promoting the implementation of the United Nations’ 2030 Agenda for Sustainable Development, building a new model of international cooperation and improving global governance. To promote global infrastructure and trade development, and promote mutually beneficial and win-win cooperation among participating countries. As a result, in March 2016, the UN Security Council included Belt and Road's initiative in resolution S/2274. United Nations specialized agencies such as the United Nations Development Program (UNDP) and the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and other specialized UN agencies have also signed memorandums of understanding, agreements, action plans and implementation plans with China for strengthening cooperation under the framework of "Belt and Road."

From the perspective of multinational companies, because of their sensitivity to new investment opportunities, most of them hold a positive attitude towards Belt and Road Initiative, especially those engaged in infrastructure construction and financial services. According to a research report issued by HSBC   in March, 2018, More than 6000 major international companies from 26 global economies were asked to sorted the positive influence in the future  brought by the policy environment and economic and trade propositions in the European Union, the Association of South-East Asian Nations (ASEAN), Middle East, Latin America and the United States, Britain, China and other major economies; Belt and Road's initiative topped the list, with a high acceptance rate of 40% of the companies. In fact, many of the Fortune 500 companies have actively involved in the construction of "Belt and Road" in different ways, such as General Electric, Siemens, Bosch, Honeywell, Caterpillar, ABB, DHL, Linde Group, BASF, Maersk, Ssangyong (South Korea), etc., Some companies have involved for several years and have achieved good returns.

Preliminary establishment of institutional system

Based on the five-year practice, "Belt And Road" as an innovative institutional arrangement, has initially formed a basic framework, which is roughly composed of five aspects.

First is the ultimate goal. The ultimate goal of "Belt And Road" is to build a community of common destiny for mankind. Belt And Road should build itself into a path of peace, prosperity, openness, innovation and civilization, and contribute to building a world of lasting peace, universal security, common prosperity, openness, inclusiveness, and Cleanness and beauty. At the CPC in Dialogue with World Political Parties High-level Meeting held in December 2017, General Secretary Xi Jinping made it clear in his keynote speech that the Belt and Road Initiative is to practice the concept of a community of common destiny for mankind.

Second, core features. As a new international platform, "Belt And Road" has many new features, the core of which is openness and inclusiveness. The openness,refers to areas that cover not only trade, investment, finance, information, technology and other aspects directly related to economic development; but also the opening up of culture, education, medical and health. Ultimately, different civilizations and nations will develop in openness and coexist in integration. By inclusiveness, it means mutual benefit and win-win results. The achievements made on the basis of broad participation should be shared by all groups, including poor people and nations that can gain real benefits.

Third, the principle of joint construction. In May 2017, <Building the "Belt And Road" : concepts, practices and China's contribution>, released by the Office of the Leading Group for the Belt and Road Initiative, clearly points out that the basic principle of building "Belt and Road" is to "adheres to the principle of achieving shared growth through discussion and collaboration, ". The reason why "Belt And Road" is a chorus of the international community rather than a monologue of China is that it adheres to the principle of Joint building and sharing. This has created a new pattern of win-win cooperation, and is an important reason for the " Belt and Road" construction has been widely echoed by the international community.

Fourth, the basic spirit. To build Belt and Road, China advocates and upholds the Silk Road spirit featuring peace and cooperation, openness and inclusiveness, mutual learning and mutual benefit. History and reality have proved that as long as we adhere to the basic approach of win-win cooperation, we can properly handle the relations between different countries, ethnic groups and people and achieve common development.

Fifth, construction content. In <Vision and Actions On Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road> issued by the National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce of the People's Republic of China, with State Council authorization, in March 2015; the "five Connectivities", namely policy coordination, facility connectivity, unimpeded trade, financial integration and people-to-people connectivity, were identified as the key contents of the "Belt and Road" cooperation. The solid progress of "five Connectivities" indicates that the construction of "Belt and Road" is gradually transforming from idea to action and from vision to reality.

Major cooperation has yielded fruitful results

As the top priority of "five Connectivities", policy coordination is the premise and guarantee of "Belt and Road" cooperation, aims at promoting intergovernmental cooperation and building a multi-level intergovernmental macro political exchange and communication mechanism, to provide policy support for "Belt and Road" construction. At present, many Belt and Roadrelated countries have issued policies and plans, which are linked with the synergy of theBelt and Roadimplementation.

The facility connectivity has yielded fruitful results, especially the steady progress of major infrastructure projects in the six major economic corridors and“multiple countries and ports projects. For example, the Moscow - Kazan high-speed railway project and the China-Mongolia "two mountains" railway have completed the preparatory work; In the first half of this year, the number of cities in China that have opened a China-Europe Railways reached 48, involving 27 countries and about 40 overseas cities. The second expansion of the Karakoram highway and the upgrading of the Pakistan railway line 1 are under construction. The China-Myanmar gas and oil pipeline projects were completed in 2013 and 2017, respectively. Indonesia's Yawan high-speed railway, Thailand high-speed railway, China-Laos railway and other railway projects are in progress, and so on. In addition, at present, China's total railway mileage in Africa is over 6000 kilometers, the number of roads under construction is over 5000 kilometers, and a number of ports and airports are also under construction. The completed key projects include the opening of Kenya's Monet Railway in May 2017, the opening of Nigeria's "Aka Railway" in July 2017, and the opening of the railway from Ethiopia to Djibouti in October 2017, etc..

In terms ofmultiple countries and ports”, Chinese companies are involved in the construction of more than 20 ports in more than 10 countries. For example, the construction of Gwadar port in Pakistan is progressing smoothly, and the first phase of the economic development zone of Gwadar port is basically completed. Construction of the Kyaukpyu port in Myanmar has begun. Construction of Hambantota port and Colombo port town in Sri Lanka is back on track; The Djibouti port project in Africa went smoothly.

Trade and cooperation focus is to promote trade and investment facilitation, including on the avoidance of double taxation (China has signed agreements with more than 50 countries), trademark standardization (China has "mutual recognition" with more than 10 countries), and Customs coordination and liaison mechanism, cross-border regulatory procedures, and so on, to make more reasonable policy arrangements.

To promote smooth trade, China has accelerated the construction of overseas economic and trade cooperation zones. According to statistics from the Ministry of Commerce, by the first half of 2018, China had built 113 initial economic and trade cooperation zones in 46 countries, with a cumulative investment of US $34.87 Billion, 4,542 enterprises in the regions, paid US $2.86 billion in taxes and fees to host countries, and created 287,000 local jobs. In addition, China has signed Free Trade Agreements (FTA) with 24 economies, among which ASEAN, Pakistan, Georgia and Maldives are all "Belt and Road" related economies. China has also established international production capacity cooperation mechanisms with nearly 20 countries. All these have boosted trade and investment in "Belt and Road" countries.

Breakthroughs have been made in financing. First, the creation of three new international financial institutions, namely the AIIB, the BRICS New Development Bank and the Silk Road International Bank, in 2015 and 2016 by a coalition of Chinese or Chinese companies. The first two Banks have a considerable proportion of funds to serve Belt and Road construction, while the Silk Road International Bank mainly provides financial services for enterprises to participate inBelt and Road construction in Africa. Second, a series of funds have been set up specific for the development of Belt and Road, including the silk road fund, RMB overseas fund, China-Africa development fund, China-Kazakhstan capacity cooperation fund, China-ASEAN investment cooperation fund, China-Eurasian economic cooperation fund and China-Russia regional cooperation development investment fund. Third, Chinese Banks have accelerated their development in relevant countries. Currently, 11 Chinese Banks have 71 branches in 27 relevant countries, mainly in southeast Asia, west Asia and Russia. Fourth, raise funds through bond issuance to support the "Belt and Road" construction financing. Banks such as Bank of China, China Development Bank and China Merchants Port Holdings Ltd. have issued special "Belt and Road" bonds (including some Panda bonds) of considerable size.

In terms of people-to-people connectivity, culture, education, science and technology, health, sports, tourism, political parties and people-to-people exchanges have witnessed rapid development in the past five years. Take education for example, the total number of students studying in China in about 200 countries and regions was about 350,000 in 2013, and the number of students from Belt and Road countries alone reached about 300,000 in 2017. In terms of tourism, about 26 million tourists came to China in 2013, of which about 60% came from Asia. About 43 million tourists came to China in 2017, of which about 75% were from Asia.

The outlook is promising

We are positive and optimistic about the prospect of "Belt and Road" construction, which has both theoretical basis and practical support. Theoretically, it is an objective necessity to put forward the Belt and Road Initiative and conduct international cooperation with relevant countries. On one hand, most of Belt and Road countries are developing countries, and promoting economic growth is the key. It is urgent to solve the problem of infrastructure shortage. Many countries have abundant natural resources. The vast majority of countries have sufficient labor force, and many countries even have labor surplus. At present, the main problem in the development of these countries is a serious shortage of capital stock that leads to the lack of necessary rail roads and other infrastructure, making  products unable to dock with the market, which creates difficulties in connecting to  regional marketsor demands high transportation cost. Power shortages is another challenge to economy development in many countries, which makes it difficult to sustain even basic living, let alone produce. On the other hand, after 40 years of reform and opening-up, China has accumulated certain capital, capacity and development experience, and reached the stage of moderately increasing outbound investment and more rationally allocating capital, technology and other elements.

From a practical perspective, after the Belt and Road Initiative was put forward, it soon received warm response and active participation from many countries, international organizations, and multinational corporations in the world, indicating that the timely introduction of this initiative can better meet the needs of global common development. Especially after the completion of relevant projects, it soon brings various positive effects to host countries, and increasing number of population believe that "Belt and Road" construction is a great cause that can promote the development of the country and the happiness of the people. For example, after the completion of the railway of Mombasa–Nairobi Standard Gauge Railway, the positive effect immediately appeared: the cost of goods transportation fell by nearly 80% soon, which led to business activities along the line, increased urban and rural employment opportunities along the line, and even promoted the revival and prosperity of small towns along the line, and increased national tax revenue. Kenyan officials estimate that the railway adds 1.5 percentage points a year to the country's economic growth. For another example, the Sahiwal coal-fired power station project in Pakistan, completed in 2017, solved the electricity problem of 10 million local people and directly improved the quality of life of local people.

Because Belt and Road can bring real benefits to the countries and people involved, we believe it is valuable to promote such a cause. Looking ahead, the outlook of "Belt and Road" is positive and promising in general, but it is also facing new pressure and challenges in the new situation. We must, on the basis of lessons learned, deal with it calmly, do a good job in this great cause, and make due contribution to the building of a community of common destiny for mankind.

(Author: Hu Biliang, Dean of Belt and Road Research Institute of Beijing Normal University)