China’s New Silk Road project and South Asia!

China’s New Silk Road project and South Asia!
-Dr. Abdul Ruff
____________

China, the only veto power of Asia and major global power, is seen to take a larger role in global affairs by promoting its economic ventures across continents of Asia, Africa and Europe.
In a keynote speech delivered at the opening ceremony of the two day Initiative called Belt and Road Forum for International Cooperation held in Beijing on May 14-15 Chinese President Xi Jinping said that China would launch Belt and Road cooperation initiative on trade connectivity together with some 60 countries and international organizations.
Around 30 state and government heads as well as delegates from more than 100 countries – including the United States and North Korea – met in Beijing for two days to discuss the Belt and Road initiative, one of the world’s biggest economic diplomacy programmes led by China. However, skeptics are questioning the lack of details and multilateral stewardship of the initiative.
The conspicuous absence of the heads of state from the major Western economic powers and Japan at the belt and road summit this month in Beijing is a big mistake and a missed opportunity for enhancing dynamic and cooperative globalization. India, also seeking wide stage to promote its own interests, chose to ignore the China initiate.
OBOR
The Silk Road Economic Belt and the 21st-century Maritime Silk Road or One Belt, One Road (OBOR) is a development strategy, proposed by Chinese President Xi Jinping that focuses on connectivity and cooperation among countries primarily between the People's Republic of China and the rest of Eurasia, which consists of two main components, the land-based "Silk Road Economic Belt" (SREB) and oceangoing "Maritime Silk Road" (MSR).
The strategy underlines China's push to take a bigger role in global affairs, and its need for priority capacity cooperation in areas such as steel manufacturing. The project was first unveiled in September and October 2013 in announcements revealing the SREB and MSR, respectively. It was also promoted by Premier Li Keqiang during the State visit in Asia and Europe.
Essentially, the 'Belt' includes countries situated on the original Silk Road through Central Asia, West Asia, the Middle East, and Europe. It goes through Central Asia, Russia to Europe. The initiative calls for the integration of the region into a cohesive economic area through building infrastructure, increasing cultural exchanges, and broadening trade. When Chinese leader Xi Jinping visited Central Asia and Southeast Asia in September and October 2013, he raised the initiative of jointly building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road.
Apart from this zone, which is largely analogous to the historical Silk Road, another area that is said to be included in the extension of this 'belt' is South Asia and Southeast Asia. Many of the countries that are part of this belt are also members of the China-led Asian Infrastructure Investment Bank (AIIB). North, central and south belts are proposed. The Central belt goes through Central Asia, West Asia to the Persian Gulf and the Mediterranean. The South belt starts from China to Southeast Asia, South Asia, to the Indian Ocean through Pakistan. The Chinese One Belt strategy will integrate with Central Asia through Kazakhstan's Nurly Zhol infrastructure program. The coverage area of the initiative, however, is primarily Asia and Europe, encompassing around 60 countries. Oceania and East Africa are also included.
Cost
Anticipated cumulative investment over an indefinite timescale is variously put at US$4 trillion or US$8 trillion. One Belt, One Road has been contrasted with the two US-centric trading arrangements, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership.
President Xi said in his speech at the opening of the forum that China will contribute an additional 100 billion yuan (about 14.5 billion US dollars) to the Silk Road Fund.
The Belt and Road Initiative is expected to bridge the 'infrastructure gap' and thus accelerate economic growth across the Asia Pacific area and Central and Eastern Europe: World Pensions Council (WPC) experts estimate that "Asia alone (excluding China) will need up to $900 billion in infrastructure investments annually in the next 10 years, mostly in debt instruments. This means there’s a 50 percent shortfall in infra spending on the continent." The gaping need for long term capital explains why many Asian and Eastern European heads of state "gladly expressed their interest to join this new Chinese-led initiative focusing solely on ‘real assets’ and infrastructure-driven economic growth.

Chinese President Xi Jinping welcomed UN Secretary-General Antonio Guterres before the Leaders' Roundtable Summit at the Belt and Road Forum (BRF) for International Cooperation at Yanqi Lake International Convention Center in Beijing, capital of China, May 14-15, 2017. Chinese President Xi Jinping called for renewing the Silk Road spirit when addressing a banquet held Sunday evening in honor of foreign guests attending the Belt and Road Forum for International Cooperation. Before the banquet, Xi and his wife Peng Liyuan greeted the guests at the Great Hall of the People. Chinese President Xi Jinping called for renewing the Silk Road spirit when addressing a banquet held Sunday evening in honor of foreign guests attending the Belt and Road Forum for International Cooperation. Xi and his wife Peng Liyuan greeted the guests at the Great Hall of the People. Xi said that the Belt and Road Initiative embodies the aspiration for inter-civilization exchanges, the yearning for peace and stability, the pursuit of common development and the shared dream for a better life. Noting that "we are at a fresh starting point, ready to embark on a new journey together," Xi said, "so long as we press ahead with a common vision without backpedaling or standing still, we will achieve greater connectivity and benefit from each other's development."

Opportunities
The One Belt One Road initiative is geographically structured along 6 corridors, and the maritime Silk Road.
 New Eurasian Land Bridge, running from Western China to Western Russia
 China - Mongolia - Russia Corridor, running from Northern China to Eastern Russia
 China - Central Asia - West Asia Corridor, running from Western China to Turkey
 China - Indochina Peninsula Corridor, running from Southern China to Singapore
 China - Pakistan Corridor, running from South-Western China to Pakistan
 Bangladesh - China - India - Myanmar Corridor, running from Southern China to India
 Maritime Silk Road, running from the Chinese Coast over Singapore and India to the Mediterranean.
The China-proposed Belt and Road Initiative offers enormous opportunities for all the countries involved and Greek business community warmly supports all the efforts to deepen the two countries' cooperation under this context, President of the Greek-Chinese Economic Council Fotis Provatas said recently.
According to the experts, countries on the Belt and Road, especially those with underdeveloped infrastructure, low investment rates and per-capita income, could experience a boost in trade flow and benefit from infrastructure development. Bangladeshi experts highly lauded China's contribution to socioeconomic development of the world and said the initiative of reviving the ancient Silk Road through a network of roads and maritime waterways will surely be a boon for cooperation between China and the rest of the world. The Belt and Road Initiative proposed by China provides opportunities for the whole world to promote peace and prosperity, experts in Bangladesh said China's peaceful development is a blessing and opportunity for countries which face extreme difficulties given the rising protectionism in some countries.
The China Pakistan Economic Corridor (CPEC) and the Bangladesh-China-India-Myanmar (BCIM) Economic Corridor are officially classified as "closely related to the Belt and Road Initiative" On 13 November 2016, CPEC became partly operational when Chinese cargo was transported overland to Gwadar Port for onward maritime shipment to Africa and West Asia. The CPEC in particular is often regarded as the link between China's maritime and overland Silk Road, with the port of Gwadar forming the crux of the CPEC project. China–Pakistan Economic Corridor (also known by the acronym CPEC) is a collection of infrastructure projects currently under construction throughout CPEC is intended to rapidly modernize Pakistani infrastructure and strengthen its economy by the construction.
Italian Prime Minister Paolo Gentiloni has said that Italy and China had a lot to give each another in terms of tourism and cultural cooperation because they are both ancient civilizations "that strike the popular imagination." He said the culture ministries of both countries were working together on a number of projects, for example "the fact that Italy and China are the two countries in the world with the highest number of UNESCO World Heritage sites. "Ours are two civilizations that strike the popular imagination," he said, citing ancient Rome, the Renaissance, and the appeal of contemporary Italian culture, food, fashion, and design. The year 2020 marks the 50th anniversary of diplomatic relations between Italy and China, a milestone target that could be a good objective to multiply cultural cooperation as well as tourism.
South Asia

The South Asian Association for Regional Cooperation (SAARC), a critical regional alliance in South Asia accounting for 21 per cent of the world’s population and 7 per cent of its economy, will receive a new lease of life after staying dysfunctional due to a long decade of differences among member countries, especially Pakistan and India. To help SAARC benefit from regional connectivity, China has already stepped up its endeavor to become a full member of the association.
In the view of MP Lohani, former Nepalese ambassador to Bangladesh, China’s ambitious plan for regional connectivity will revitalize SAARC. So China’s induction into the regional body on the basis of its geographical, historical, cultural and economic features will be a breath of fresh air.
The trade plan’s impacts will make China’s free trade agreements with Pakistan, Sri Lanka, Bangladesh, Nepal and India more lucrative, triggering an economic boost. Though Pakistan and China are yet to finalize the second phase of a free trade deal, trade between the countries was valued at US$4 billion in 2006-07 and reached US$13.77 billion in 2015-16.
South Asia’s emergence as a leading economic power is in the making, and credit goes to China’s “Belt and Road Initiative”. The grand plan has set into motion game-changing strategies that will lead to free trade agreements, economic integration, physical infrastructure plans, shared growth and structural reforms, all in tune with future demands. Since this epic plan was announced, South Asia – weighed down by a reputation for regional conflicts, security threats, bad governance, impaired transparency, an energy crisis, poor infrastructure, fragile institutions and limping economies - has unleashed its effort to be part of a shared destiny.
Plagued by territorial conflicts, poor governance and limping economies, the region has drawn inspiration from China’s plan and unleashed an effort to join a shared destiny. South Asia is marred by corruption that is undermining its growth trajectory. The World Economic Forum, in its 2015 Global Competitiveness Index, pointed to corruption as the primary reason for the region’s poor global competitiveness. As China puts conditions on every beneficiary of the trade plan to get rid of corruption, Pakistan and other South Asian countries must gear up to liberate themselves from vicious chains of corruption.
Unemployment is a daunting challenge for South Asia. In order to increase socio-economic viability, it has to create one million jobs every month till 2020. According to the International Labour Organisation, global unemployment will go up by 3.4 million in 2017. With the belt plan a catalyst for transformational change in the economic profile of South Asia, CPEC has started showing its productivity by opening up thousands of jobs for local people. China’s ambassador to Islamabad, Sun Weidong, told reporters that so far the initiative has generated 13,000 local jobs. Experts claim that CPEC projects are likely to create more than one million jobs in various sectors of Pakistan by 2030.

Plans are being hammered out for a free trade agreement between India and China. That effort comes amid India-China trade volume hitting US$70 billion in 2016 as India sought to increase exports to US$30 billion. Meanwhile, joint feasibility studies for a FTA linking Nepal, Sri Lanka and Bangladesh are on the fast track.
Peace is another dividend that will come to fruition with the new Silk Road initiative. India, with a fast-growing economy, has many disputes with China and Pakistan. It opposes the China Pakistan Economic Corridor (CPEC), a pilot project of the trade initiative, due to its route passing through Gilgit Baltistan, which India considers a disputed area between Pakistan and India. However, Indian lobbyists in collaboration with their Chinese counterparts have been brainstorming to build a peaceful neighborhood for relishing joint economic benefits.

The trade plan undoubtedly will have a deep impact in alleviating poverty plaguing South Asia, home to 1.7 billion people. As per the World Bank’s latest poverty calculation, about 570 million people in South Asia still survive on less than US$1.25 a day.

Pakistan foreign affairs expert Muhammad Mehdi says that the trade plan is not solely a Chinese enterprise. “China sees annual trade volume with Silk Road countries from US$1 trillion to US$2.5 trillion within a decade. It reflects 9.6 per cent of annual growth. If South Asia taps this opportunity, it can change the fate of its poor people,” he says.

Indian worry

The Belt and Road plan is a practical economic strategy for China’s objectives to connect the region, seek new growth engines for its slowing economy, utilise its surplus capacity, and develop and stabilise its western regions. It may also bring benefits to partner countries. However, it also has a strategic and political agenda which remains opaque. Apart from the CPEC, India also has misgivings about the manner in which the Belt and Road Initiative is being pursued in its neighbourhood. For instance, the development of ports under Chinese operational control as part of the Maritime Silk Road strategy has raised concerns in India which need to be addressed.
It is one of the most imaginative and ambitious programmes ever to be rolled out by a government. It represents a broad strategy for China’s economic cooperation and expanded presence in Asia, Africa and Europe, and has been presented as a win-win initiative for all participating nations.
But for India, the connotations of China’s Belt and Road Initiative” are somewhat different. A flagship programme and the most advanced component of the initiative, the China-Pakistan Economic Corridor (CPEC), passes through Pakistan-occupied Kashmir, a region that belongs to India and is under the control of Pakistan. As a country acutely conscious of its own sovereignty-related claims, China should have no difficulty in appreciating India’s sensitivities in this regard.

While investment in the Gwadar port, roads and energy projects is reported to have increased from US$46 billion to US$55 billion, CPEC lacks economic justification for
India has repeatedly conveyed its strong objections regarding the CPEC to China. The Belt and Road plan is a Chinese initiative rather than a multilateral enterprise undertaken after prior consultation with potential partner countries, and India has not endorsed it. There is an expectation in India that China will take India’s sensitivities into account while formulating its plans. Clearly, there is room for closer consultations between China and India on the objectives, contours and future directions of the Belt and Road. However, India has considered synergy-based cooperation on a case-by-case basis, where its interests for regional development converge with that of other countries, including China.
This pragmatic approach is formulated on India’s stance that as the two largest emerging economies of the world and major powers in Asia, there is bound to be common understanding on many global and regional issues between India and China. They have cooperated on international platforms with similar positions on climate change and global trade, for instance.

An example of convergence of interests is clearly visible in the Asian Infrastructure Investment Bank, a multilateral development bank which India joined as the second largest shareholder after China. Similarly, the New Development Bank, where Brazil, Russia, India, China and South Africa (the BRICS) are equal partners, is headquartered in Shanghai, and is not envisaged as a Belt and Road initiative by them.

India and China are part of the Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC), a sub-regional economic cooperation initiative involving the four countries which are engaged in talks for developing cooperation through a joint study group. This group had its latest meeting in Kolkata, India in late April. The BCIM-EC is now being projected as a component of the BRI by China. However, this initiative was conceived well before the Belt and Road Initiative was formulated, and it should not be subsumed within that strategy but instead pursued as a separate grouping for sub-regional cooperation. It involves full and equal ownership of all four countries involved, rather than a subsidiary position as a loop of the Belt and Road.
Like China, India has its own agenda of connectivity and cooperation within Asia and beyond. For instance, India’s “Act East” strategy is aimed at developing close economic synergies with the Association of Southeast Asian Nations and East Asia. Two great nations and civilizations such as India and China need not endorse or sign on to each other’s strategies. A more pragmatic approach will be to explore synergies and look at projects they can work on together, without insisting on artificial labeling.

By 2030, the United States, China and India will be the three largest economies in the world. How India and China utilize each other’s growth stories will be of great significance for both them and the global economy. China’s participation in the Indian economy is growing as India’s markets expand and new opportunities arise. The two countries must continue to jointly explore points of convergence in their respective connectivity and developmental agendas and utilize openings for collaboration.
The simultaneous re-emergence of China and India generates new challenges and opportunities which can be addressed through better strategic communication and mutual accommodation in respect of specific theatres, situations and issues to the maximum extent feasible. This will involve understanding each other’s vital interests while avoiding any expansive definition of those interests.

The potential benefits of the belt and road, if the dream were even only partly realized, could be enormous. The inclusion of the Middle East and Central Asia could contribute to peace and prosperity in these currently dramatically turbulent regions.

As I have tried to stress, China is by no means an angel. Nor, however, as Western and Japanese rhetoric tends to proclaim, is it a devil; or certainly no more so than previous rising great powers. Furthermore, while for much of modern history China was subjugated and marginalized, its quite staggering re-emergence will continue to mark the first decades of the 21st century.
A successful, inclusive, globally collective effort to make the belt and road a reality could be a harbinger of peace and prosperity. It is a pity that myopia and prejudice prevent Western and Japanese leaders from being present at this potentially seminal event.
Life of common men better
Many illustrations of China’s most awesome achievement over recent decades are visible all over China and most importantly the state lifting of hundreds of millions out of poverty and the creation of a vast new urban middle class. In 1981, 88 per cent of Chinese (and 96 per cent of rural Chinese) lived below the poverty line; in 2013, only 2 per cent of Chinese were extremely poor.” That is worthy of respect and Indian politicians and officals loot the resources for personal use rather than let the resources shared by all citizens.
China’s achievement is all the more impressive in that it was not only unprecedented, but also unexpected. The often proclaimed “era of humiliation” – from the first opium war in 1839 to Liberation in 1949 – was no myth, but very much a reality. Though China was not colonized by any single power, as, say, India was by Britain, it was what Sun Yat-sen termed a “poly-colony” – ie, gang-raped.
While the rising dragon is clearly no sweet pussycat, in comparison to other industrial powers – notably Britain, France, the US, the Soviet Union and Japan – it has been pacific. Thousands and thousands of Chinese come to visit the Louvre in Paris these days, to gape at the Mona Lisa and other masterpieces of art, not to pillage and burn it down as French troops (in cahoots with the British) did to the Summer Palace in Beijing. In 1950, the newly liberated People’s Republic of China invaded Tibet, which was reprehensible, but Britain also invaded Tibet (in 1903/04), not to mention the roughly half of the planet that was conquered and subjected by the empire. In its wars against China, Japan is estimated to have caused some 30 million deaths, along with multiple mutilations, tortures and rapes. I am not aware of single Japanese killed by Chinese troops in the course of China’s recent rise.
While the USA presents itself as the great global moralizer, it seems to forget that its rise to great power status included the genocide of Native Americans, the enslavement of millions of Africans, wars against its Latin American neighbours and the conquest of the Philippines. While China went to war against Vietnam in 1979 (and lost), in terms of crimes against humanity, it was nothing compared to the war against Vietnam (and Laos) waged (and lost) by the US. Seemingly addicted to belligerence, this century has seen America’s illegal war against Iraq, with all the carnage that ensued.
All this, needless to say, is not to suggest that it is now China’s turn to invade, conquer and pillage. Though China’s 2005 pledge of a “peaceful rise” seems more illusory with each passing year, it would be in the world’s best interests if it could be achieved. Indeed, the implications of the alternatives are cataclysmic. However, in the process, the West and Japan should be conscious of the inevitable scars China bears from past exploitation and humiliation and thus refrain from taking the hypocritical high ground, which seems to be common China policy currency.
It is especially important that China be engaged in the institutional framework of global governance, and that initiatives for enhancing trade and investment, such as the belt and road, be welcomed rather than rebuffed. Yet the opposite has been happening. As Silvia Menegazzi has stated in arguing why the EU must engage with the Asian Infrastructure Investment Bank (AIIB), “the decision to launch the AIIB came as a direct result of China’s growing frustration ... over only playing a marginal role within the existing international financial system”. This is true of the International Monetary Fund and the World Bank.

As to the World Trade Organisation, the death of the Doha Round is in great part due to the inability of the erstwhile established leaders of the global trading system – the so-called “Quad”, consisting of Canada, the EU, Japan and the US – to integrate China. Instead, the US and Japan proceeded to create their own initiative, the Trans-Pacific Partnership, from which China was visibly excluded; this way, as they claimed, “we will write the rules, rather than let the Chinese do so”. Surely, the appropriate, constructive and dynamic approach would have been to write the new rules ¬together.

Not only did the Japanese-American alliance seek to exclude China by setting up the Trans-Pacific Partnership, but when the Chinese launched the AIIB, aimed at financing much needed infrastructure investments across the Eurasian continent, they refused to join and sought to browbeat other nations to follow suit. Fortunately, on this occasion, good sense prevailed in Europe and Asia, as most countries from both joined. However, it does not make it less disappointing that the major Western powers and Japan should be no-shows at the forthcoming summit.

Of course, at this stage, the belt and road represents a vision, a dream, that will face innumerable obstacles – financial, environmental, technological, logistical, social and geopolitical – to translate into reality. It is also without doubt motivated primarily by Chinese interests. But what country ever undertook a major international initiative that wasn’t primarily motivated by its own interests?

The post-war Marshall Plan was not an act of pure American altruism, but rather one of enlightened self-interest.

The potential benefits of the belt and road, if the dream were even only partly realized, could be enormous. The inclusion of the Middle East and Central Asia could contribute to peace and prosperity in these currently dramatically turbulent regions.

China is by no means an angel. Nor, however, as Western and Japanese rhetoric tends to proclaim, is it a devil; or certainly no more so than previous rising great powers. Furthermore, while for much of modern history China was subjugated and marginalized, its quite staggering re-emergence will continue to mark the first decades of the 21st century.

A successful, inclusive, globally collective effort to make the belt and road a reality could be a harbinger of peace and prosperity. It is a pity that myopia and prejudice prevent Western and Japanese leaders from being present at this potentially seminal event.
Less-developed countries along the new Silk Road stand are among the big winners of investment as China revives ancient land and maritime trade routes, according to estimates by a top bank.

Credit Suisse forecasts that China’s massive inflow of investment over the next five years as part of Beijing’s “Belt and Road Initiative” could amount to as much as US$502 billion, or equivalent to 4 per cent of the total gross domestic product of the 62 countries along the routes in 2015.

The biggest recipients of the investment dollars were expected to be India, Russia, Indonesia, Iran and Egypt, the bank said in a report released earlier this month.

The initiative, unveiled in ¬September 2013 by President Xi Jinping, aims to connect China by a network of overland corridors and sea routes to the rest of Asia, Africa and beyond, linking the dozens of countries through infrastructure and financial and trade ties.

The economies along the routes account for about 63 per cent of the world’s population and 29 per cent of global GDP.

Credit Suisse estimates that China’s overseas investment in the initiative over the next five years will range between US$313 billion to US$502 billion, depending on how much investment the countries need and how much China is willing to put in.
India stands to be the biggest gainer overall, according to the report, with China putting in ¬between US$84 billion and US$126 billion. Russia is next with US$53 billion to US$80 billion; ¬Indonesia third on US$35 billion-US$52 billion; Iran fourth attracting US$17 billion-US$26 billion; and Egypt fifth with US$13 billion to US$20 billion. The report also says China could invest between US$52 billion and US$79 billion in 13 African countries. “Africa is rich in resources, and an important destination for Chinese investment over the past decade,” it said.

According to an HSBC estimate, the “Belt and Road Initiative” will generate roughly 300 billion yuan to 500 billion yuan in railway investment, financing more than 15,000km in high-speed rail links along the route. The Credit Suisse report said the initiative could become even more promising as a more “isolationist” administration in the United States created windows of opportunity. “With the new US administration pulling out of the Trans-Pacific Partnership, it is unavoidably sending a message to the world that US government policy is turning more ‘isolationist’,” the report said. At the same, China was striving for greater global influence, it said.
Chinese investment could also help make up for any capital outflows in the region, the report said.“If the dollar strengthens, especially as the US moves along the path of rate normalization, emerging market countries also have to face the risks of capital outflow,” it said.

Regional economic growth was gaining traction, as opposed to global growth under the new US new administration. For instance, exports to China from countries in the Association of Southeast Asian Nations recovered faster and better in recent months than those of other trading partners. In March 2017, the growth of Asean’s exports to China was higher than those to the European Union, the US, Japan and South Korea. But Credit Suisse also said China’s actual investment in the belt and road countries might fall short of expectations, given the drop in its foreign exchange ¬reserves over the last few years.

China’s forex reserves stood at US$3.030 trillion in April, well ¬below the peak of US$4 trillion -recorded in June 2014.
Asia is fast getting old and the harsh reality is that it could do so before it gets rich. Although Asia remains the growth champion of the world, the highly populated continent is ‘shifting from being the biggest contributor to the global working-age population to subtracting hundreds of millions of people from it’, the International Monetary Fund (IMF) said last week.

Institutional support is not yet in place to respond to the rapid rise in ageing. Pension systems remain unsustainable despite recent policy reforms.” East Asia, in particular, is projected to be the world’s fastest-ageing region in the coming decades, with its old-age dependency ratio roughly tripling by 2050,” the IMF wrote.

As both China and Hong Kong are adjudged by the IMF to be economies that are “post-dividend” in a demographic sense, both will face challenges. Japan is the world’s most aged country with an old-age dependency ratio of 43.3 per cent at the end of 2015, forecast to rise to 70.9 per cent by 2050. That ratio is defined as a measure of the size of the population 65 years of age and older as a share of the working-age population, itself defined as comprising those aged 15 to 64. For Hong Kong the figure for the end of 2015 was 20.6 per cent but is forecast by the IMF to rise to 64.6 per cent in 2050, while for China the equivalent figures are 13.1 per cent and 46.7 per cent respectively. Both economies are going grey. In its favour, Hong Kong does benefit from material working-age immigration.

For China, where the IMF calculates net migration is relatively small, and where it expects a decline in absolute terms of 170 million in China’s working-age population over the next 35 years, the estimate for the impact of the demographic trend on real GDP growth in the period 2020-50 is minus 0.6 per cent.
That means both that “countries in Asia will have less time to adapt policies to a more aged society than many advanced economies had”, according to the IMF and that “some countries in Asia are getting old before becoming rich or, to put it differently, they are likely to face the challenges of high fiscal costs of ageing and demographic headwinds to growth at relatively low per capita income levels”. Asia’s policymakers will have to address these issues. The IMF points out the need for Asia to strengthen its pension systems to accommodate the consequences of rapid ageing and the attendant fiscal costs.
China’s demand for energy has led the country to scour the region for suppliers. Turkmenistan has been a major beneficiary of this initiative due to its vast energy reserves. China plans to increase its gas imports from Turkmenistan over the next decade to 65 billion cubic metres per year.
Observation
China’s push to create new trade and infrastructure links through its “One Belt, One Road” initiative will be hampered by Beijing’s reluctance to open up investment for foreign companies, according to experts.

The strategy spearheaded by President Xi Jinping seemed to be incompatible with China’s preference for “one-way” globalization and assertive policies in Southeast Asia, particularly on maritime routes in the South China Sea, experts said at the Oxford China Forum held in the University of Oxford over the weekend.

Launched in 2013, Xi’s programme calls for billions of dollars to be ploughed into new railways, ports, and energy projects in 65 countries. China has invited leaders from more than 20 countries to a summit on the plan it is hosting in May and hopes will be larger than the G20 meeting held in Hangzhou last year.
John Farnell, a former director at the European Commission, said China would need to clearly spell out the investment opportunities for companies if it wanted other nations to participate. Fair, open bidding on contracts is a must. “If China’s vision of ‘One Belt, One Road’ is an extension of what happened in its domestic market, then there probably will not be a lot of space for European participation,” said Farnell, who managed the EU’s policy dialogue with China before retiring in 2012.He said Beijing’s reluctance to open up its government procurement of goods and services to outsiders had worsened trade imbalances with Europe.

There is a fear the same trend will occur with investment. Over the past decade, China basically shut out European capital to protect state-owned companies, particularly in telecoms and finance, stalling investment growth from the European bloc.

“Clearly we want big construction projects, legal and financial services in ‘One Belt, One Road’ to be opened up to international competition, and the most effective way is to have as much competition as possible,” Farnell said.
the decision by US President Donald Trump to abandon the Trans-Pacific Partnership would create opportunities for China’s belt initiative, but its success would depend on a stable security environment in east and Central Asia.
It remained to be seen how Beijing would reconcile its increasingly assertive policies in Southeast Asia with the need for such stability

Xi’s project was intended to present the world with a view of statecraft different from what the West espoused. But so far Beijing had failed to find a rhetoric that would appeal to Westerners.

While China had signed up for rule-based global systems such as the World Trade Organisation, the country remained fundamentally sceptical of such liberal international orders, he said. There was little all 65 countries had in common – whether it be rule of law, culture or language. “The origin of the belt and road idea is to open up China’s landlocked western provinces towards Central Asia … in a sense it is exporting China’s internal needs to find external solutions,” he said. “Will other countries feel that is in their interests?” Farnell said Chinese companies might be less aware of the legal and financial risks in dealing with countries along the routes, especially those with complex political situations. He also warned of uncertainties brought by China’s rapid drop in foreign-exchange reserves and volatile energy prices in the international market.
Putin calls for Eurasia integration!
-Dr. Abdul Ruff
_____
Inspired by the Chinese initiative of OBOR and its vast potentials for the region covering three continents, Russian President Vladimir Putin said in Beijing on May 14 that he salutes China's "large-scale" Belt and Road Initiative and called for greater Eurasian partnership. Putin made the remarks at the opening ceremony of the Belt and Road Initiative Forum for International Cooperation taking place in Beijing on May 14-15.
The Belt and Road Initiative proposed by China in 2013 consists of the Silk Road Economic Belt and the 21st-Century Maritime Silk Road. It aims to build a trade and infrastructure network connecting Asia with Europe and Africa along and beyond the ancient Silk Road trade routes.
During a visit to Moscow in May 2015, Chinese President Xi Jinping signed an agreement with Putin on aligning the Belt and Road Initiative with the EEU, which currently groups Russia, Kazakhstan, Belarus, Kyrgyzstan and Armenia.
Calling the Belt and Road Initiative an example of cooperation in such fields as infrastructure, transport and industry, the Russian president said his country has supported the initiative from the very beginning. He said the historical experience of cooperation between countries linked by the ancient Silk Road through Asia, Europe and Africa is important in the 21st century when the world is facing "very serious challenges."
Putin called for more cooperation to meet worldwide challenges like unbalanced development in globalization, poverty and regional conflicts, saying that Russia is working with its partners to advance the Eurasian Economic Union (EEU), among others.
The integration of the Belt and Road Initiative, the EEU, the Shanghai Cooperation Organization and the Association of Southeast Asian Nations (ASEAN) has laid the groundwork for building a great Eurasian partnership, he said.
Meanwhile, Putin urged concrete actions to materialize these existing initiatives by facilitating flow of goods, cooperation between enterprises of different countries, infrastructure construction and establishment of joint and large-scale research institutions. He said the Belt and Road Initiative proposed by China is "very timely and promising."

Tags: