Source: Global Times Published: 2017-10-18
A China-Europe freight train heads to Germany`s Duisburg from Weihai, East China`s Shandong Province. Photo: VCG
The China-proposed Belt and Road (B&R) initiative has reshaped the landscape of globalization and given more importance to emerging markets, and it will play an even more significant role in boosting global economic growth, experts said.
The initiative focuses on promoting policy coordination, connectivity of infrastructure and facilities, unimpeded trade, financial integration, and closer people-to-people ties through extensive consultation, joint contribution and shared benefits, with the goal of bringing benefits to all, according to the Xinhua News Agency.
Over the past four years, the Chinese government, under the B&R initiative, has signed economic and trade cooperation agreements with the governments of 30 countries and regions ranging from Southeast Asia to Central Asia and the Middle East.
The B&R initiative has become a new engine of the global economic recovery, which used to be led mainly by developed countries, Jia Jinjing, an expert from Chongyang Institute for Financial Studies at the Renmin University of China, told the Global Times on Tuesday.
"The population of developed countries accounts for less than 15 percent of the world population, and some have been seeing sluggish economic recovery for years, meaning they make only a small contribution to the global recovery," Jia said.
The B&R initiative, on the contrary, offered a new platform for the other 85 percent of the people, particularly in reshaping global value chains, he said.
As of the end of 2016, more than 100 countries, regions and organizations had expressed their interest in participating in the B&R initiative, according to Xinhua.
"The B&R initiative gives more opportunities to developing countries, which were marginalized in the old world order in the past few decades," Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Wednesday.
"By tapping into new multilateral financial institutions such as the Asian Infrastructure Investment Bank (AIIB) and the BRICS New Development Bank, countries and regions along the B&R route have benefited from more investment opportunities and financing channels," he said.
From January to August, bilateral trade between China and the leading Eurasian countries, which are major participants in B&R initiative, rose 40.1 percent to $84 billion, with a faster pace than China`s overall trade growth, according to the Chinese Ministry of Commerce.
Total outbound investment to 57 economies along the route amounted to $9.6 billion in the first three quarters, and countries like Cambodia, Laos, Malaysia and Russia saw accelerated growth, according to the official B&R site yidaiyilu.gov.cn.
The presence of Chinese companies has become increasingly distinct on the global stage, which also contributes to regional peace and the well-being of local people, Huang Rihan, executive director of the B&R Institute at the Center for China and Globalization, told the Global Times on Wednesday.
"When companies keep going out, they bring innovative technologies to the world. One example is mobile payments, like Alipay, which can now be used in 28 countries," he said.
Enhancing connectivity in five dimensions - policy, trade, finance, transport and people-to-people exchanges - is a key part of the B&R initiative, the expert noted.
"In that area, the AIIB and Silk Road fund, for instance, have allocated capital to improve regional infrastructure, and more China-Europe freight trains are boosting trade growth," Huang noted.
The China-Europe freight rail services have run more than 5,000 trips so far, covering more than 50 countries and regions and becoming a major logistics channel for markets along the B&R route, according to yidaiyilu.gov.cn.
These services have cut transport times and costs for clients.
Still, when talking about the B&R initiative, some people may interpret it as a way of redeploying excess capacity in China, which is due to a lack of comprehensive understanding about the global economy, experts noted.
The initiative has been reshaping the global value chain, and some of China`s outbound investment aims at helping local economic growth, which is also in line with local demand, Jia noted.
"The China-supported Nairobi-Mombasa rail line project, for example, also improves skills and technical training in the local community, and that will have a far-reaching social and economic impact," the expert said.
Jia Jinjing is the Director of the Macro Research Department at Chongyang Institute for Financial Studies, Renmin University of China.