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article imageChina pledges $124 billion for new 'Silk Road' trade initiative

By Ken Hanly     May 15, 2017 in Business
Beijing - 30 different countries have just ended a two-day summit in Beijing on China's new Silk Road plan. China plus 29 other countries reaffirmed commitment to build open economies and to develop free and inclusive trade under China's Belt and Road initiative.
The group also agreed that they would foster a rules-based, non-discriminatory trading system with the World Trade Organization (WTO) at its core. The group oppose protectionism according to a news communique signed by the leaders. The communique emphasized the importance of expanding investment and trade on a level playing field. President Xi-Jinping said at the closing of the event: "It is our hope through the Belt and Road development, we will unleash new economic forces for global growth, build new platforms for global development, and rebalance economic globalization so mankind will move closer to a community of common destiny."
The Silk Road or Belt and Road project as it is also known is described by Wikipedia as follows: The coverage area of the initiative is primarily Asia and Europe, encompassing around 60 countries. Oceania and East Africa are also included. Anticipated cumulative investment over an indefinite timescale is variously put at US$4 trillion or US$8 trillion.[5][6] One Belt, One Road has been contrasted with the two U.S.-centric trading arrangements, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership.[6 The project is also described in a recent Digital Journal article. Not many western leaders attended with the U.S. sending a senior White House adviser but several European PMs attended. Human Rights Watch raised concerns over the treatment of people within the new Silk Road route through Central Asia as it involves nations with poor human rights records. It also expressed the same concerns for parts of the route within the Xinjiang region in China where the Chinese were said to have implemented repression and heightened surveillance to prevent unrest.
The Silk Road project will build infrastructure and trade links between Asia, Africa and Europe. Xi on Sunday pledged $124 billion towards the new plan. Some western diplomats see the initiative as trying to promote Chinese influence globally and also worry about transparency and the access of foreign companies. Germany said its firm would support the initiating but more transparency was required. European Commission Vice President Jyrki Katainen told Reuters on Monday that EU member states would not be signing ministerial statements connected to the summit, though he downplayed the significance of this: "The European Commission, who has a mandate, who has the capacity to negotiate on behalf of member states on trade-related issues, we were not given a chance to negotiate on the text. But it's not an issue. The event, what Chinese authorities have organized here, and the joint understanding of what should be done and what must be done, is very positive." The Australian Trade Minister Steven Cioba said that the Australian government was interested in expanding commercial opportunities when they were presented but decisions would depend on national interest.
One powerful Asian country that did not attend was India. India is angry that China is developing a $57 billion trade corridor through to Pakistan that crosses through the disputed territory of Kashmir. The U.S. investment firm Exotix Partners noted that investors in host countries would need to consider whether the infrastructure being developed was useful for the local economy and what costs would be. It would also be relevant whether the development created opportunities for local material suppliers, labor and finance: "And ultimately how much political sovereignty is sacrificed, and what is the risk to completion of projects in the event of a disorderly slowdown in the domestic Chinese economy." Xi spoke against protectionism and stressed that development should help all parties: saying that policy coordination needed to be improved and that "beggar-thy-neighbor policies" should be rejected. Seated next to Russian president Vladamir Putin at the summit, Xi said: "We need to seek win-win results through greater openness and cooperation, avoid fragmentation, refrain from setting inhibitive thresholds for cooperation or pursuing exclusive arrangements and reject protectionism. In a world of growing interdependency and challenges, no country can tackle the challenges, also the world's problems, on its own."
Philippine president Rodrigo Duterte attended the meeting as well at Italian PM Paolo Gentiloni. The heads of the UN, International Monetary Fund and World Bank were also in attendance. Xi said that China would host a second Belt and Road forum in two years in 2019. Xi said that the project was a long term undertaking.
The U.S. had complained about the presence of North Korea at the meeting but China responded that all countries were welcome. However, North Korea kept a low profile at the event.
More about Silk road initiative, chinese trade policy, North korea
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