China's Belt and Road Initiative fleshed out

By Zhang Lulu
0 Comment(s)Print E-mail, March 29, 2015
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Chinese President Xi Jinping delivers a keynote speech at the opening plenary of the 2015 annual conference of the Boao Forum for Asia in Boao, south China's Hainan Province, on March 28, 2015. [Photo/Xinhua]

Chinese President Xi Jinping delivers a keynote speech at the opening plenary of the 2015 annual conference of the Boao Forum for Asia in Boao, south China's Hainan Province, on March 28, 2015. [Photo/Xinhua]

China's much-anticipated Belt and Road Initiative is finally being fleshed out.

Since Chinese President Xi Jinping proposed the creation of the Silk Road Economic Belt and the 21st Century Maritime Silk Road in 2013, the Belt and Road Initiative has gained traction but has also given rise to speculation as to its mission and intentions. Now with an action plan issued by the government on Saturday and a newly proposed bank to help facilitate the process, the substance of the initiative is taking shape.

"Not China's solo"

The initiative is by nature a "regional economic cooperation structure," according to the plan entitled "Vision and Actions on Jointly Building the Silk Road Economic Belt and 21st Century Maritime Silk Road." The plan was issued by China's National Development and Reform Commission, the Ministry of Foreign Affairs and the Ministry of Commerce on March 28.

Named after a centuries-old trade route, the land and sea Silk Road stretches from China to Asia, the Middle East, Europe and Africa, affecting an estimated 4.4 billion people and encompassing regions with a combined GDP of US$21 trillion.

Five goals have been laid out as the priorities of the initiative, namely, "policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bonds."

The specific goals range from transportation infrastructure improvement and oil and gas pipeline construction to breaking down barriers to trade, investment and regional financial cooperation, among others.

The plan revealed that the initiative will be carried out through bilateral and multilateral cooperation mechanisms including regional and international forums.

Since the announcement of the Belt and Road Initiative in 2013, it has been interpreted by some as China's effort to ratchet up its global influence, but the action plan set forth "cooperation, harmony and inclusiveness, market operation and mutual benefit" as the initiative's operating principles.

"It is not China's solo, but a chorus sung by countries along the route," Chinese President Xi Jinping spoke of the initiative on Saturday while addressing the opening ceremony of the 2015 annual conference of the Boao Forum for Asia in the forum's namesake seaside town in south China's Hainan Province.

So far, more than 60 international organizations and countries along both routes have shown interest in taking part in the initiative, Xi said in his speech.

AIIB helps boost Asian infrastructure market

One of the priorities of the initiative is infrastructure construction, which has crippled the development of some countries in Asia. A study by the Asian Development Bank in 2009 estimated that there will be a gigantic US$8 trillion need in the Asian infrastructure market between 2010 and 2020, while existing multinational and regional financial institutions are lagging far behind in meeting these needs.

In October 2014, China and 20 other countries signed a Memorandum of Understanding in Beijing to set up the Asian Infrastructure Investment Bank (AIIB) to address the problem of infrastructure construction.

The move has recently been endorsed by a slew of major Western countries that have filed applications to join the bank, bringing the number of prospective founding members to around 40.

According to the Memorandum of Understanding signed last October, the bank's authorized capital is US$100 billion and its initial subscribed capital is around US$50 billion.

Despite concerns raised by the United States about the bank's governance, the new institution has been welcomed as a move to boost Asian infrastructural and economic development.

"The Asian Infrastructure Investment Bank is open. We welcome the participation of Asian countries and the countries along the route," Xi said during his speech on Saturday.

The bank is expected to be fully established by the end of this year.

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