China's 'Belt and Road' initiative and the EU's 'Juncker Plan'
- By John Ross
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E-mail China.org.cn, January 16, 2016
In parallel with China's practical advantages, Chinese economists began to develop international policies based on infrastructure development. Justin Yifu Lin, former chief economist and senior vice president of the World Bank, in his 2013 book Against the Consensus, entitled a section "Infrastructure investments - beyond Keynesianism" - a self-explanatory proposal intended for multilateral action. Lin's proposals, however, were not taken up by Western countries for similar reasons to those as why Summer's and Wolf's were rejected.
But such an initiative was taken up by the Chinese government and aided in policy formation by China's new think tanks. On the Belt and Road initiative, a leading role was played by my Chinese colleagues at the Chongyang Institute for Financial Studies of Renmin University, under the personal direction of its Executive Dean Wang Wen, who not merely provided studies but also took numerous practical initiatives.
Finally, to add a theoretical point, China's economic framework makes it much easier to see and understand the close link between investment and trade. In the framework of Western economics, trade and investment are separate categories. In China's Marxist economics, the concepts trade and investment are not separate but examples of growing "socialization of labour" - the link between the two is therefore easily seen.
For these interrelated reasons China was able to show both practical and thought leadership in first linking investment and trade in the Belt and Road, the AIIB and parallel initiatives. The EU going in the same direction with the Juncker Plan now creates favourable opportunities for both Europe and China.
The writer is a columnist with China.org.cn. For more information please visit:
http://www.china.org.cn/opinion/johnross.htm
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