China’s president Xi Jinping has pledged funding of US$124bn (£96bn) for the country’s ‘belt and road’ initiative to improve infrastructure and strengthen the country’s links with its trading partners.
“Trade is the important engine of economic development,” Mr Xi said at a two-day summit of world leaders in Beijing, unveiling the latest instalment of the initiative launched four years ago.
His speech also aimed to reassure Western diplomats that the plan, which aims to revive the historic ‘Silk Road’ of trading routes, was not simply a bid to bolster China’s influence globally.
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”.
“In advancing the belt and road, we will not re-tread the old path of games between foes,” he added. “Instead we will create a new model of co-operation and mutual benefit. We should build an open platform of co-operation and uphold and grow an open world economy.”
The speech was applauded by leaders including Russia’s Vladimir Putin and Turkey’s president Recep Tayyip Erdoğan. However, notable absentees at the summit include representatives from Japan and India, with both countries suspicious that the belt and road initiative has more to do with building China’s strategic assets and geopolitical ambitions.
In addition, economists have expressed reservations over the viability of projects in areas of political instability and poor governance.
The additional US$124bn funding promised for the US$900bn initiative includes an extra 100bn yuan (CNY) -around US$14.50bn – into the existing Silk Road Fund, CNY380bn in loans from two policy banks and CNY60bn in aid to developing countries and international bodies in countries along the new trade routes.
In addition, Xi said China would encourage financial institutions to expand their overseas yuan fund businesses to the tune of CNY300bn. “China is willing to share its development experience with all countries,” he added. “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.”
However, a statement issued in response by India expressed scepticism about the initiative and its aims. It cautioned China against pursuing projects that would create an “unsustainable debt burden for communities”, damage the environment or infringe upon other countries’ sovereignty. These initiatives “must be based on universally recognised international norms, good governance, rule of law, openness, transparency and equality”, it said.