China pledges $124B for new Silk Road as champion of globalisation

China touts its new One Belt, One Road initiative as "a project of the century" at a summit highlighting its growing leadership on globalisation.

Photo by: AFP
Photo by: AFP

Chinese President Xi Jinping speaking at the summit.

Chinese President Xi Jinping pledged $124 billion on Sunday for his new "Silk Road plan", known officially as One Belt, One Road, to forge a path of peace, inclusiveness and free trade, and called for the abandonment of old models based on rivalry and diplomatic power games.

Xi used a summit on the initiative to bolster China's global leadership ambitions, and push for globalisation as US President Donald Trump promotes "America First" and questions existing global free trade deals.

"We should build an open platform of cooperation and uphold and grow an open world economy," Xi told the opening of the two-day gathering in Beijing.

Leaders from 29 countries attended the forum, as well as the heads of the United Nations, International Monetary Fund and World Bank.

In total, more than 1500 representatives from 130 countries and 70 international organisations are attending the summit.

TRT World's Alican Ayanlar has more on the summit from Beijing:

China has touted the One Belt, One Road initiative as a new way to boost global development since Xi unveiled the plan in 2013, aiming to expand links between Asia, Africa, Europe and beyond underpinned by billions of dollars in infrastructure investment.

Xi said the world must create conditions that promote open development and encourage the building of systems of "fair, reasonable and transparent global trade and investment rules".

He also emphasised social and cultural interactions, by saying that the Silk Road dates back 2,000 years and it connected many civilizations with each other and hence allowed financial and cultural communication between societies.

Massive funding boost

Xi pledged a major funding boost to the new Silk Road, including an extra 100 billion yuan ($14.50 billion) into the existing Silk Road Fund, 380 billion yuan in loans from two policy banks and 60 billion yuan in aid to developing countries and international bodies in countries along the new trade routes.

In addition, Xi said China would encourage financial institutions to expand their overseas yuan fund businesses to the tune of 300 billion yuan.

Xi did not give a time frame for the new loans, aid and funding pledged on Sunday.

Turkey to support initiative

Turkish President Recep Tayyip Erdogan described the Belt and Road initiative would help defeat terrorism.

"This initiative will eradicate terrorism at a time when it is on the rise. We, as Turkey, are ready to give all kinds of support for it," Erdogan said.

“I believe that this initiative, also called the New Silk Road, will mark the future in an effort to link Asia, Europe, Africa and even South America,” he added.

Britain's finance minister told the summit his country was a "natural partner" in the new Silk Road, while the prime minister of Pakistan, Nawaz Sharif, a close Chinese ally, praised China's "vision and ingenuity".

"Such a broad sweep and scale of interlocking economic partnerships and investments is unprecedented in history," Sharif said.

White House adviser Matt Pottinger said the United States welcomed efforts by China to promote infrastructure connectivity as part of its Belt and Road initiative, and US companies could offer top value services.

Some countries are sceptical

Other countries were more sceptical of the initiative.

India refused to send an official delegation to Beijing, reflecting displeasure with China for developing a $57 billion trade corridor through Pakistan that also crosses the disputed territory of Kashmir.

"No country can accept a project that ignores its core concerns on sovereignty and territorial integrity," said Indian foreign ministry spokesman Gopal Baglay, adding that there were concerns about host countries taking on "unsustainable debt."

Some Western diplomats have also expressed unease about both the summit and the plan as a whole, seeing it as an attempt to promote Chinese influence globally.

They are also concerned about transparency and access for foreign firms to the scheme.

Germany warned that it would not sign a joint statement at China's Belt and Road forum if a pact does not include guarantees on free trade and fair competition, the German minister of economic affairs and energy said.

Australian Trade Minister Steven Ciobo said Canberra was receptive to exploring commercial opportunities China's new Silk Road presented, but any decisions would remain incumbent on national interest.

Hours before the summit opened, North Korea launched another ballistic missile, further testing the patience of China, its chief ally. The United States had complained to China on Friday over the inclusion of a North Korean delegation at the event.

The North Korean delegation largely kept a low profile at the summit, and there was no evidence that its presence had affected participation despite US misgivings.

Financial inclusiveness

Xi said the new Silk Road would be open to all, including Africa and the Americas, which are not situated on the traditional Silk Road.

The idea of cooperation and inclusiveness extends to funding projects and investments along the new trade routes, which are being developed both on land and at sea.

"We need joint effort among Belt and Road countries to boost financing cooperation," Zhou Xiaochuan, governor of China's central bank, said.

To sustain the projects, Belt and Road nations should allow companies to play a key role, as government resources are limited, Zhou said.

The active use of local currencies will also help to mobilise local savings, lower remittance and exchange costs, and safeguard financial stability, he said.

At the forum, finance ministries from 27 countries, including China, approved a set of principles that will guide project financing along the new Silk Road.

Some of China's close allies and partners were at the forum, including Russian President Vladimir Putin, Cambodian Prime Minister Hun Sen and Kazakh President Nursultan Nazarbayev.

There were also several European leaders attending, including the prime ministers of Spain, Italy, Greece and Hungary, and the president of Turkey.

Chinese state-run media has covered the summit widely, including broadcasting an English-language music video "The Belt and Road is How" sung by children from countries on the new Silk Road.

Source: 
TRTWorld and agencies