Next Silk Road summit set for 2019 as Beijing ramps up global drive

Chinese president says belt and road construction in full swing, denies project has political agenda

PUBLISHED : Monday, 15 May, 2017, 11:28pm
UPDATED : Tuesday, 16 May, 2017, 3:51pm

China capped its ­diplomatic event of the year with a commitment on Monday to host another international summit in 2019 to promote its grand globalisation strategy.

The two-day Belt and Road Forum for International Cooperation closed in Beijing, with President Xi Jinping declaring the event a success and China signing deals with 68 countries to jointly develop infrastructure along the new Silk Road trade routes.

“The initiative has entered into a new phase ... with construction in full swing,” Xi said, wrapping up the forum. “It is not based on ­ideology, and there is no political agenda.”

The forum explored Xi’s “Belt and Road Initiative” to revive ­ancient trade links between China, Asia, Africa and Europe. The countries along the routes account for about 40 per cent of the world’s gross domestic product.

The forum, the first since Xi unveiled the concept four years ago, was overshadowed by North Korea’s latest missile test.

The event was also eclipsed by the absence of state leaders from developed countries including the United States, Japan and ­Australia.

Another setback was the decision by several European countries, including France, Germany and Britain, not to sign a trade statement at the summit, saying the initiative was not clear on public procurement and social and environmental standards.

But 30 countries directly ­involved in the initiative, including Malaysia and Myanmar, ­endorsed a joint communique, agreeing to work together to build key infrastructure under the belt and road umbrella.

The communique said the countries would promote “practical cooperation on roads, railways, ports, maritime and inland water transport, aviation, energy pipelines, electricity and telecommunications” to boost growth, and work on a long-term stable and sustainable financial system.

While admitting the programme faced a “crucial bottleneck” in capital, Xi underscored China’s commitment to inject at least US$113 billion in extra funding for the initiative, a promise he made at the start of the forum on Sunday.

Check out our visual explainer of the five main projects of China’s Belt and Road Initiative

Zhao Kejin, from Tsinghua University’s Institute of Global Development, said China was grasping the chance to advance its version of globalisation as the US focused on its “America First” strategy. “The presence of delegates from more than 100 countries is an initial victory for China. But we’ll have to wait and see how ­actively governments and companies dole out money and take part in the projects before we can call it a success,” Zhao said.

In the communique, China said it would promote partnerships with Europe, Asia, Africa and South America. There was no reference to the US, but the statement said its welcome extended to “other ­regions”.

Matthew Pottinger, senior director for Asian Affairs at the US National Security Council, replaced a lower level official as head of the US delegation to the forum after China announced measures to increase imports from the US last week.

Addressing the gathering, Pottinger urged China to insist from the start on transparent government procurement. “Transparency will ensure that privately owned companies can bid in a fair process, and that the cost of participating in tenders will be worth the investment,” he said.

Steve Tsang, director of the SOAS China Institute in London, said: “Money talks, so this grandiose and apparently well-funded project will attract attention and warm reception in most parts of the world. However, it does not mean others are willing to see China change rules.”

Hasnain Malik, an analyst with investment bank Exotix Partners in Dubai, said the initiative undoubtedly improved access to capital for countries with “historically retarded political and economic governance”.

“However, the questions for investors in host belt and road countries are: whether the infrastructure built is useful for the indigenous economy; what recurring costs are incurred in order to provide sufficient returns to Chinese capital; whether the construction phase creates opportunities for local suppliers of materials, labour and finance; and ultimately how much political sovereignty is sacrificed,” Malik said.

Additional reporting by Shi Jiangtao and Wendy Wu