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ECONOMY

China Seeks Common Prosperity With Its 'Belt and Road' Initiative, Not Political Clout, Xi Says

By Fran Wang

(Beijing) – Chinese President Xi Jinping on Sunday promised new financial backing for the “One Belt, One Road” initiative that he said will promote trade and mutual prosperity to participating countries stretching from Asia to Africa and Europe, primarily through infrastructure investment and construction.

Xi spoke at the opening of a two-day Belt and Road Forum for International Cooperation in Beijing, which drew state and government leaders from 29 nations. Mr. Xi's ambitious trade and investment program, unveiled in 2013, comes at a time of protectionist moves afoot in the U.S. and elsewhere.

The initiative includes an overland Silk Road Economic Belt that connects China with Europe through Central Asia, and an ocean-based 21st Century Maritime Silk Road that links countries to the south of China and leads all the way to Africa and southern Europe.

Some observers have said Xi's initiative will strengthen the geopolitical standing of the world's second-largest economy and allow it to export its excess domestic industrial capacity. But Xi stressed the economic opportunities and benefits for participating nations.

"We should build the 'Belt and Road' into a road of prosperity,” said Xi, who pledged to “achieve economic integration and interconnected development, and deliver benefits to all.”

"Belt and Road" supporters hail it as a significant alternative to the rising anti-globalization sentiment symbolized by the election of Donald Trump in the U.S. presidential election.

“Opening up brings progress, while isolation results in backwardness,” Xi said in his keynote address. “We should build a platform of cooperation and uphold and grow an open world economy…and establish a fair, equitable and transparent system of international trade and investment rules” so as to develop a “broad community of shared interests."

Xi said China will scale up financing for the Belt and Road initiatives. That includes a combined 380 billion yuan ($55 billion) in specialized loans to be extended by policy lenders China Development Bank and Export-Import Bank of China, and an injection of 100 billion yuan into the state-owned Silk Road Fund, which is tasked to invest in infrastructure, resources, industrial-capacity cooperation and financial projects in Belt and Road countries.

China will grant more than $10 billion in aid to nations and international organizations participating in the program to alleviate poverty and improve people’s well-being, Xi said.

The new funds follow more than $50 billion China invested in the initiative from 2014 through 2016. The Beijing-backed Asian Infrastructure Investment Bank, which began operation in January 2016, has provided $1.7 billion in loans for nine projects in the initiative’s partner nations, while the state-owned Silk Road Fund has made investments of $4 billion, China’s official data showed.

Chinese companies have built 56 economic and trade cooperation zones in more than 20 countries, creating 180,000 jobs locally and contributing nearly $1.1 billion in tax revenues to foreign governments, Xi said.

As of the end of 2016, three of the country’s big four state-owned banks had provided credit lines worth a combined $225.4 billion to countries covered by the Belt and Road initiative, according to data released by those lenders.

While 29 national leaders from four continents, including Russian President Vladimir Putin and Argentine President Mauricio Macri, attended the forum, heads of most Group of Seven countries and members of the Organization for Economic Co-operation and Development, which represents many of the world’s developed economies, did not come.

Indian Prime Minister Narendra Modi was among those absent. New Delhi has expressed alarm about the $55 billion China-Pakistan Economic Corridor, one of the largest Belt and Road projects and one that runs through territory that India and Pakistan both claim sovereignty over.

Xi directly addressed concerns about China's motives, saying the nation isn't seeking to interject itself in politics and disputes elsewhere.

“We are ready to share practices of development with other countries, but we have no intention to interfere in other countries’ internal affairs, export our own social system and development model, or impose our will on others,” he said.

“In pursuing the Belt and Road Initiative, we will not resort to outdated geopolitical maneuvering. What we hope to achieve is a new model of win-win cooperation."

Xi also called on world leaders to keep their minds open to globalization.

“We should embrace the outside world with an open mind, uphold the multilateral trading regime, advance the building of free trade areas and promote liberalization, trade and investment,” he said.

Contact reporter Fran Wang (fangwang@caixin.com)


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