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May 15, 2017

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A Silk Road open to the world

PRESIDENT Xi Jinping yesterday pledged US$124 billion for a Silk Road project to forge a path of peace, inclusiveness and free trade as he called for the abandonment of old models based on rivalry and diplomatic power games.

“We should build an open platform of cooperation and uphold and grow an open world economy,” Xi told the opening of a two-day gathering in Beijing attended by leaders and senior officials from around the world.

China has been promoting its Belt and Road initiative as a new way to boost global development since Xi unveiled the plan in 2013, aiming to expand links between Asia, Africa, Europe and beyond, underpinned by billions of dollars in infrastructure investment.

Xi said the world must create conditions that promote open development and encourage the building of systems of “fair, reasonable and transparent global trade and investment rules.”

“Trade is the important engine of economic development,” Xi told the Belt and Road Forum for International Cooperation.

He said the world must promote a multilateral trade system, the establishment of free-trade regions, and the facilitation of free trade.

Xi pledged a major funding boost for the new Silk Road, including an extra 100 billion yuan (US$14.5 billion) into the existing Silk Road Fund, 380 billion yuan in loans from two policy banks and 60 billion yuan in aid to developing countries and international bodies in nations along the trade routes.

In addition, Xi said China would encourage financial institutions to expand their overseas yuan fund businesses to the tune of 300 billion yuan.

Xi did not give a timeframe for the new loans, aid and funding pledged yesterday.

Leaders from 29 countries are attending the forum, as are the heads of the United Nations, International Monetary Fund and World Bank.

Britain’s finance minister told the summit his country was a “natural partner” in the new Silk Road, while the prime minister of Pakistan, Nawaz Sharif, praised China’s “vision and ingenuity.”

“Such a broad sweep and scale of interlocking economic partnerships and investments is unprecedented in history. We stand at the cusp of a geo-economic revolution,” Sharif said.

China plans to import US$2 trillion of products from countries participating in the Belt and Road initiative over the next five years, Commerce Minister Zhong Shan said.

Xi said: “China is willing to share its development experience with all countries. We will not interfere in other countries’ internal affairs. We will not export our system of society and development model, and even more will not impose our views on others.

“In advancing the Belt and Road, we will not re-tread the old path of games between foes. Instead we will create a new model of cooperation and mutual benefit.”

Xi said the new Silk Road would be open to all, including Africa and the Americas, which are not on the traditional trading route.

“No matter if they are from Asia and Europe, or Africa or the Americas, they are all cooperative partners in building the Belt and Road,” China’s president said.

The idea of cooperation and inclusiveness extends to funding projects and investments along the new trade routes, which are being developed both on land and at sea.

“We need joint effort among Belt and Road countries to boost financing cooperation,” said Zhou Xiaochuan, governor of China’s central bank. “We cannot rely on one country to fight alone.”

To sustain the projects, Belt and Road nations should allow companies to play a key role, as government resources are limited, Zhou said.

The active use of local currencies will also help mobilize local savings, lower remittance and exchange costs, and safeguard financial stability, he said.

Finance ministries from 27 countries at the forum, including China, approved a set of principles that will guide project financing along the new Silk Road.


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