Since the formal launching of China's Belt and Road Forum in May this year in China at a glittering pageantry, its progress has been quite impressive. As many as 29 heads of state and government and representatives from 130 countries and 70 international organisations attended the meeting. Sixty-five countries are now actively participating in its multi-trillion-dollar infrastructure projects. Together they represent 60 per cent of the world population and a third of global output.
Although India refused to participate in the Forum for its strong reservation about the fast progressing $55-billion China-Pakistan Economic Corridor (CPEC) ostensibly because it runs through Pakistani part of the disputed Kashmir territory, the United States and Japan decided at the last moment to attend it. CPEC has become an important part of the Belt and Road Initiative, linking Pakistan's Chinese-built Gwador port to Kashgar in China.
GROWTH PROJECTION: The successful conclusion of China's ruling Communist Party's 19th Congress earlier in October, President Xi Jinping's smooth entry into his second term of office and China's rising global stature has obviously made the Chinese leader more confident.
In his concluding speech in the congress, Xi has set two goals - completing the task of building a moderately prosperous society by 2035 and then establishing its position as a great power by 2050. The West has construed the speech as a challenge to them on three fronts - ideological, economic and geopolitical.
Apparently, these estimates have been based on structured documentation. For example, a study made by the McKinsey Global Institute in 2015 said: "The world's economic centre remained in the East like in the year 1000. The US replaced Europe as the centre of the world's economy after WWII. But the wheels of history turning into the 21st century, China has reinstated itself as the global economic centre."
Vast changes have taken place in the global economic structure. Between 1980 and 2007, share of the developed economies stood at 59 per cent of World's Gross Domestic Product (GDP) in terms of purchasing power parity while that of developing world was 41 per cent. The ratio is changing. According to IMF forecasts, by 2018, the share of developed and emerging economies of world's GDP will be reversed. It should be mentioned that in the 1820, China's share of world's GDP was 32.9 per cent. It went down to 2.3 per cent in 1980 and is now estimated to rise to 18.9 by 2020.
TRUMP'S PROTECTIONISM AND XI'S OPEN DOOR POLICY: President Donald
Trump's latest and longest trip to Asia by an American president in a quarter of a century in November 2017 did not leave a positive impact in the minds of the Asian leaders. His repeated assertions during his five Asian-nation tour that he would not tolerate the 'chronic trade abuses' by Asian nations and would 'always….. put America first'" has not obviously gone well with his multiple Asian hosts and participants in the regional meetings that he addressed.
The US is leading a campaign for protectionism, globally spearheaded by Trump's "America First" policy which has caused widespread resentment among its close allies in the West. An Asia expert at the Lowy Institute in Sydney, Euan Graham observed, "the US President was sending his country down a lonely road."
Xi's Belt and Road Initiative, on the other hand, has been steadfastly pushing an inclusive agenda for streamlining the global multilateral system and further consolidating "win-win" situation for all. It is offering physical infrastructure development and building the world's largest economic corridor to facilitate and also ensure faster flow of goods across borders transcending continental barriers.
Xi Jinping said: "China will not shut the doors to the outside world but will open it further." Indeed, he has a valid point. As China has emerged as the world's leading manufacturer of goods and has also been dubbed as the world's factory, it needs to expand trade. While the Chinese government has been successful in raising internal consumption, it also has to look for market for its goods abroad. But unlike the new US administration, it wants to open its own markets to others, knowing well that trade is not a one-way traffic, it would naturally promote two-way trade.
INCREASING TRADE VOLUME: The Belt and Road Initiative was envisioned against this changing background. Ding Gang, a senior fellow at the Chongyang Institute for Financial Studies at Renmin University of China, in an article said: "In the next decade, it is expected that the annual trade volume between China and the countries along the Belt and Road route will exceed $2.5 trillion, providing support for about one billion people in the emerging middle class across Asia, almost equivalent to the total population of all Western countries."
This is not considered to be an ambitious target. Trade between China and BRI-linked countries had already exceeded $916 billion in 2016 accounting for over a fourth of China's total foreign trade volume. Besides, earlier this year, the Chinese ministry of commerce announced that by the end of 2016, Chinese firms had established 77 industrial cooperation zones with 36 countries, the vast majority of whom are in developing countries and a few of which are in the least developed countries (LDCs).
BRI has been working for three types of projects in its linked countries. They are strategic, policy and commercial projects. The first two categories, strategic and policy projects are not necessarily profit-oriented but they are required to serve the bigger picture of the state policy. For example, China-Pakistan Economic Corridor (CPEC) is a strategic project and the Jakarta-Bandung railway project is a policy project. Through the railway project the Chinese companies will gain access to the Indonesian market. These projects are considered worthwhile.
The third type, the commercial projects are taken up based on market principles. While these companies are basically profit-driven, they also face risks such as security, legal, political, economic and even moral ones.
However, BRI's top priority is to implement infrastructure projects in which the Western private capital companies are reluctant to invest.
ESTABLISHING CONNECTIVITY: BRI's goal is to connect China with Europe and Africa and to become a catalyst for infrastructure development in some of the least developed countries. This is also intended to create jobs in China and the other countries and pave the way for improving trade volume by creating an enabling environment. This is what the Chinese repeatedly call a 'win-win' situation.
The infrastructure construction projects include a vast network of oil and gas pipelines, airports, deep water ports, energy terminals, power plants and transnational high-voltage power lines, logistical hubs and free trade zones. Experts have suggested that new maritime trade corridors will provide China with new shipping alternatives allowing its newly developed regions to new markets.
It is to be noted here, Xi's 'open door' policy means the opening up of two-way trade benefiting both the concerned sides.
