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BRI Construction Achievements

BRI Construction Achievements

The 5th Anniversary of the “Belt and Road Initiative”: Construction Achievements, Risk Challenges and Countermeasures

Author: Zhang Weiyu Tsinghua Belt and Road Institute of Strategic Studies Today

President Xi Jinping first proposed the “Silk Road Economic Belt” when he visited Kazakhstan on September 7, 2013. On October 3, 2013, President Xi Jinping gave a speech in Indonesia, and proposed for the first time to jointly build “21st Century”. The Maritime Silk Road initiative, collectively known as the “Belt and Road Initiative” initiative. The “One Belt and One Road” is based on the principle of sharing, sharing and co-construction. It is based on policy communication, facility connectivity, trade smoothness, capital finance and people's heart, and builds a community of interests, fate, economic integration and cultural tolerance. The Community and the Community of Responsibility aim to build a “Belt and Road” initiative to promote the orderly and free flow of economic factors. The efficient allocation of resources and resources and the deep integration of the market will promote the coordination of economic policies among countries along the route, carry out regional cooperation at a higher level, higher level and deeper level, and jointly create an open, inclusive, balanced and inclusive regional economic cooperation framework. China's breakthrough in development-oriented international-level grand strategy and large-scale layout can be called an upgraded version of the open grand strategy in a certain sense, with epoch-making historical significance and global significance that affects the world. From 2013 to 2018, the “One Belt, One Road” initiative has been proposed for nearly five years, systematically sorting out the achievements of the “Belt and Road” initiative in the initial stage, and timely analyzing and summarizing the experiences and lessons learned for the upcoming “New Five Years”. It is of great significance.

I. The “Belt and Road Initiative”: Building Achievements

(1) Policy communication is more smooth

On August 27, 2018, the State Council Information Office held a press conference to introduce the progress of the “Belt and Road” construction in the past five years. According to statistics, 103 countries and international organizations have signed 118 “One Belt, One Road” agreements with China. Cooperation Agreement, of the 279 results of the first “One Belt, One Road” International Cooperation Summit in 2017, 265 have been completed or converted to normal work, and the remaining 14 are being supervised and promoted, with a implementation rate of 95%. The “One Belt, One Road” initiative and its core concepts have been incorporated into the outcome documents of major international mechanisms such as the United Nations, the G20, APEC, and the SCO. The “Belt and Road Initiative” continues to build consensus on international cooperation and has formed a common the good atmosphere of building the “Belt and Road” has entered the international discourse system. For example, in March 2016, the UN Security Council adopted Resolution S/2274, which included the promotion of the “Belt and Road Initiative” initiative. In November 2016, UN General Assembly Resolution A/71/9 was first written into the “Belt and Road Initiative” and welcomed the Economic Cooperation Initiatives such as the “Belt and Road Initiative” and called on the international community to provide a safe and secure environment for the “Belt and Road” construction. Kazakhstan, Indonesia, the European Union and other countries or organizations have introduced their own development plans for direct docking of the “Belt and Road Initiative”. China and Africa have agreed that the “Belt and Road Initiative” will be linked to Africa’s “2063 Agenda”. Currently, documents with third-party market cooperation have been officially signed with France, Canada, Japan, Singapore and other countries and international organizations.


(2) Facilities Unicom made a breakthrough

 

Facilities Unicom is the core content and priority area of the “Belt and Road” construction. In the past five years, the efficient and smooth international channel is accelerating construction. According to data released by the Ministry of Transport of China, the “One Belt, One Road” initiative has proposed a number of achievements in terms of transportation connectivity in the past five years. The number of CEIBS trains has exceeded 10,000, reaching 43 cities in 15 countries in Europe, and has reached “three times two”, with a heavy box rate of 85%. International road passenger and cargo transportation lines opened 356. The national transportation logistics public information platform realizes the interconnection and sharing of logistics information with 31 ports around the world.

 

In terms of air transportation, 403 international routes were added, and direct flights were carried out with 43 countries along the route, with approximately 4,500 direct flights per week. On the railway side, the Inner Mongolia Railway was completed and opened to traffic, the Yaji Railway was opened for operation, and the Sino-Thai Railway and Hungarian Railway Construction of the railway and other construction, some sections of the Yawan high-speed railway have started construction, and the transportation infrastructure construction under the China-Laos railway and the China-Pakistan Economic Corridor is also steadily moving forward. On the highway side, the two major highways of the China-Pakistan Economic Corridor are being promoted. Major infrastructure projects such as the Sino-Russian Heihe Highway Bridge started construction. In terms of shipping, the second phase of the Hambantota Port was completed, the Gwadar Port of Pakistan resumed operations, and 34 countries including the Port of Piraeus and the Port of Colombo in Greece were also involved. With the construction and operation of 42 ports, China has signed bilateral maritime transport agreements (river transport agreements) with 36 countries along the route, the European Union and ASEAN. In terms of energy pipelines, China-Myanmar crude oil pipelines have been used to realize the passage of crude oil from the Indian Ocean to China through pipelines. The Sino-Russian crude oil pipeline double line was officially put into use, and the construction of the Sino-Russian east line natural gas pipeline was progressing as planned. The mainstream media in many countries highly affirmed the contribution of China's “One Belt, One Road” initiative to the economic development of countries along the route, especially infrastructure construction, and evaluated it as “one of the most transformative projects”.

 

(3) Capital finance is gradually strengthened


As of June 2018, China has established RMB clearing arrangements in seven countries along the route. Eleven Chinese banks have established 71 first-level institutions in 27 countries along the route.
The total number of AIIB members has increased to 84, of which 42 are countries along the route, and more than 20 investment projects have been approved, totaling more than $3.7 billion. Silk Road Fund has signed 17 projects, committed to invest 7 billion US dollars, and supports a total investment of 80 billion US dollars in project design. China Export Credit Insurance Corporation provides various types of insurance services for cooperation projects in 20 countries along the route, and Belarus, Georgia and other countries. A cooperation agreement was signed. The China Banking Regulatory Commission has signed a bilateral memorandum of understanding on financial supervision cooperation or a letter of exchange for cooperation with the financial regulatory authorities of 32 countries along the Belt and Road. This is the consensus between the financial regulatory authorities of various countries on establishing formal information sharing and regulatory cooperation mechanisms. file. China has also approved the “One Belt and One Road” Financing Guiding Principles with relevant countries, and carried out co-financing cooperation with multilateral development banks such as the African Development Bank, the Inter-American Development Bank, and the European Bank for Reconstruction and Development, and initiated the establishment of the “One Belt, One Road” international commercial dispute settlement mechanism. And institutions, with the relevant countries to promote the establishment of a third-party market cooperation fund.

 

(4) Outstanding results in smooth trade


In the five years from 2013 to 2018, the trade in goods with countries along the route totaled more than 5 trillion US dollars, with an average annual growth rate of 1.1%. China has become the largest trading partner of 25 countries along the route, with foreign direct investment exceeding US$70 billion and an average annual growth rate of 7.2. %, the contract value of newly signed foreign contracted projects in the countries along the route exceeds 500 billion US dollars, with an average annual growth rate of 19.2%. Chinese enterprises have built 82 overseas economic and trade cooperation zones in the countries along the route, with a total investment of 28.9 billion US dollars and 3,995 enterprises entering the zone. 4,000, the host country paid taxes and taxes totaled 2.01 billion US dollars, creating 244,000 jobs for the local job. China has accelerated the construction of free trade zones with countries along the route, and has signed or upgraded five free trade agreements with 13 countries along the route. China-Belarus Industrial Park has become a model for bilateral cooperation. A large number of cooperative parks such as China-Laos Cross-border Economic Cooperation Zone and China-Kazakh Horgus International Border Cooperation Center are also accelerating construction. He has made outstanding contributions to the prosperity and development of the world economy.

 

(5) The people's hearts are gradually convinced


China has also formulated and issued special cooperation plans in various fields such as education, science and technology, finance, energy, agriculture, inspection and quarantine, and standard China Unicom, implemented the “Silk Road” scholarship program, set up a school-running institution overseas, and initiated the establishment of “One Belt and One Road”. The Green Development International Alliance initiative officially opened the “One Belt, One Road” official website to achieve the simultaneous operation of the six official language versions of the United Nations. Multi-level and multi-field humanities exchanges and cooperation are friendly exchanges and trade, culture, education and tourism among people along the line. Such activities have brought convenience and opportunities, and constantly promoted mutual learning and mutual learning and cultural integration and innovation. At present, 734 pairs of sister cities have been established with 53 countries along the route. Exchanges, tourism festivals, film festivals, forums, joint archaeology and other exchange activities have been frequent, and citizens have been granted visa-free or landing visas with 24 countries along the route. In 2017, there were more than 300,000 international students from the countries along the route, and more than 60,000 people studying in the countries along the route. It is estimated that by 2020, the number of two-way tourists with the countries along the route will exceed 85 million, and tourism consumption will be about 110 billion US dollars. In the past five years, cultural tourism cooperation has been deepening and the public opinion base has been gradually consolidated. The positive attitude of foreign media and netizens towards “One Belt, One Road” has increased from 16.5% in 2013, 18.32% in 2014 and 20.17% in 2015 to 2016. 23.43%, 23.61% in 2017

 

II. The "Belt and Road" construction: risk challenges


(
1) From a global perspective,

 

Political competition among major powers is increasing, and the United States is stepping up efforts to contain China. The United States has blocked the economy and undermined the "One Belt, One Road" construction environment. On November 13, 2017, the US Department of Commerce finally ruled that Chinese companies pledged 183.36% of plywood in the United States, and the Chinese government subsidized enterprises from 22.98% to 194.90%. Anti-dumping duties will be imposed accordingly. In the anti-dumping investigation, the US Department of Commerce continues to apply discriminatory “alternative country” practices in disregard of WTO obligations and commitments. On November 28th, the US Department of Commerce was not based on domestic industrial applications for the first time in 25 years, and the government independently initiated anti-dumping and anti-subsidy investigations on general-purpose aluminum alloy plates imported from China. This practice is rare in the history of international trade. On November 30th, the Trump administration announced the formal rejection of China’s request for market economy status under Article 15 of the Protocol on China’s Accession to the World Trade Organization. In 2018, Trump raised tariffs several times and triggered a trade war between the two sides.

 

The United States has blocked the security and threatened the smooth progress of the “Belt and Road”. On December 18, 2017, during his tenure, Trump released the US National Security Strategy Report for the first time, announced its security strategy and politically, and positioned China as a “strategic competitor”. The "Indo-Pacific" (US, Japan, Australia, India) headed by the United States has blocked the "Belt and Road" in the Pacific Ocean and the Indian Ocean, and has developed an infrastructure initiative. The gradual solidization of the Indo-Pacific strategy will become a major strategy for the United States to reshape regional order and consolidate its hegemonic status. Its priority is to increase the building of maritime forces, strengthen military cooperation with allies and partners.

 

(2) From the regional level, the risks of security conflicts along the countries or regions along the line are outstanding


Due to historical and practical reasons, many countries or regions along the line are at the intersection or fracture of many civilizations in the East and West. Christian, Islamic and other religious contradictions, conflicts between different ethnic groups and races are prone to sudden, diverse, complicated, long-term Characteristics. At the same time, the “Belt and Road” has gone through a number of geopolitical fractures, economic development is inadequate, historical issues are complex, armed conflicts are frequent, and it is a region with frequent terrorism. The construction of the “Belt and Road” also faces the threat of regional conflicts and local wars. The outbreak of armed conflicts in the region threatens the safety of investment projects and the safety of people's lives and property. For example, on April 14, 2018, in the absence of a thorough investigation of the “suspected chemical weapons attack” in the Tungututa, Syria, the United States joined forces with Britain and France to launch a force against Syria and launch more than 100 missiles at relevant facilities in Syria. The situation in Syria and the Middle East has become more complicated, and these incidents have caused greater damage to the peaceful environment required for the “Belt and Road” construction.

 

(3) From the perspective of the internal level of the country, the political risks within the countries or regions along the line have increased.


In 2018, about 26 countries around the world hold elections. Major events such as presidential elections and parliamentary elections may lead to political changes and related policy adjustments. The intensification of political contradictions and the escalation of electoral disputes may also lead to turmoil in some countries. Unstable, its policy continuity and stability will also be affected to varying degrees, posing a potential threat to the “Belt and Road” economic activities. Many countries along the “Belt and Road” region are still called “transition countries”. Some countries have outstanding problems such as the “democratic” system, the transplanting of Western democracy, and the inertia of the old system. The regime has changed frequently and political turbulence has become normal. The “One Belt, One Road” strategy will constitute a systemic risk. At the same time, the geopolitical relationship along the “Belt and Road” is complex and is the main area of strategic comparison of big countries. The geopolitical risks are high. Some major conflicts have worsened political conflicts under the domination of big country games and multiple political and economic interests.

 

(4) From the perspective of enterprise operation,

 

The operating environment of countries or regions along the line is complicated and intensified
Economic projects are the support and foundation for the “Belt and Road”. Funds and laws are important factors to measure the safety of investment. Safeguarding project investment safety is the most direct and realistic issue. Some countries or regions along the “Belt and Road” lack a mature and stable business environment. On the one hand, the level of economic development is uneven, the structural contradictions of economic development are prominent, the risk of nationalization is high, the inflation is serious, and the ability to withstand external risks is weak; on the other hand, the infrastructure is not perfect, and the administrative efficiency of the government is not High, corruption issues are prominent; the legal system is not perfect, the law enforcement is poor, judicial independence and judicial supervision are difficult to guarantee, and legal risks are prominent. The 2017 China Overseas Investment National Risk Rating released by the Institute of World Economics and Politics of the Chinese Academy of Social Sciences reports on the economic base, solvency, political risk, social resilience and relations with China in 35 countries along the Belt and Road Initiative. Various aspects were evaluated. From the overall rating results, most countries have higher risk levels. Among them, only Singapore is a low-risk level (AAA-AA); the middle-risk level (A-BBB) has 26 countries, accounting for 74.3% of the total number of countries assessed; the high-risk level (BB-B) countries are Eight, accounting for 22.9% of the total number of countries assessed.

 

 

 

III, the "Belt and Road" vision: response measures


With the deepening of the construction of the “Belt and Road”, various political risks, security risks and economic risks are superimposed, the international situation is changing, the global economic instability is increasing, and the promotion of the “Belt and Road” construction poses different degrees of threat. Looking forward to the new five-year period, the construction of “One Belt, One Road” needs to adapt to international and regional environmental changes, sum up experience, adjust ideas and optimize strategies in a timely manner, and strive to build “One Belt, One Road” initiative into a larger, higher and deeper area. Cooperation to jointly create an open, inclusive, balanced and inclusive regional economic cooperation framework.

 

(1) In the choice of partners,

 

It is recommended to upgrade from the initial “full-scale” to “key optimization” to improve the quality of cooperation. In the past five years, the “Belt and Road” has been in the promotion stage, and it is necessary to build a circle of friends. This is in line with the actual needs and actual needs in the “Belt and Road” initiative. In the new five-year period, the “One Belt, One Road” partner countries need to highlight key points and build models. They should give priority to selecting high-quality bilateral political relations, safe and stable security, and reliable and reliable quality partners, and identify priority cooperation areas and key partner countries. At the same time, the “One Belt, One Road” project will be screened and selected, and the project will be transformed from an extensive quantitative growth route to a high-quality boutique flagship project growth route.

 

(2) In the investment field layout,

 

It is recommended to upgrade from “heavy assets” economic cooperation to “light assets” economic cooperation to reduce cooperation risks.
For a long time, infrastructure construction has been the priority direction of “One Belt, One Road” construction, and infrastructure interconnection has achieved great results. However, the infrastructure investment construction period is long, capital investment is large, income and returns are slow, and infrastructure construction projects are mostly involved in other countries. Sovereignty is easily affected by regime changes within other countries, and policy continuity and stability are not strong. Therefore, the risks faced are large and variable. In the new five-year period, we must accelerate the expansion of cooperation in innovation fields such as information technology and digital economy. New technologies such as e-commerce, big data, cloud computing, and artificial intelligence have joined the “Belt and Road” to make high-tech and innovative technologies. Enterprises have become the main force and pioneer of “going out”, creating digital corridors and information corridors to share the dividend of technological innovation.

 

 

 

 

(3) In the external operation of enterprises,

It is recommended to establish a conflict management and control mechanism between enterprises and local communities to prevent economic investment behavior from being “politicized”.


In the process of “going out”, Chinese-funded enterprises should pay attention to handling good relations with local people, establish timely and effective conflict control mechanism for corporate and community relations, and control conflicts at the local level to reduce the resistance of Chinese-funded enterprises to invest abroad. Important measures. In participating in international competition, Chinese-funded enterprises are often relatively weak in corporate and community conflict management and institutionalization of corporate and community relations. This makes Chinese-funded enterprises unable to get timely at the local level when they encounter conflicts with local communities. Effective disintegration, local level dissatisfaction and protests tend to evolve into national opposition, which in turn “politicizes” economic issues, thus causing greater resistance for Chinese-funded enterprises to invest abroad.


IV, the conclusion

 

Cooperation with countries or regions along the “Belt and Road” cannot be separated from the government’s “settling up” to create a good environment for cooperation. From the national level, we must constantly seek a convergence point with the development vision and overall planning of the countries or regions along the “Belt and Road”, and strengthen the effective integration and integration of the national or regional strategies along the “Belt and Road” to the “One Belt and One Road”. "Promoting the creation of a good external environment and reducing political risks in international cooperation."
Cooperation with countries or regions along the “Belt and Road” cannot be separated from the “singing” of enterprises, and the project will take root. From the enterprise level, establish a community of interests with the local people, avoid “politicization” of economic investment behavior, establish a risk mitigation mechanism with local communities, and be good at handling relations with local people and communities.
Cooperation with countries or regions along the “Belt and Road” is also inseparable from the “staff” of academics and think tanks, providing decision-making advice to governments and enterprises. From the perspective of think tanks and academic circles, it is necessary to vigorously strengthen regional country studies, strengthen in-depth understanding of the political situation, economic trends, culture and religion, and other countries and regions along the “Belt and Road” countries and conduct field research, and build countries along the “Belt and Road” or The regional country database provides accurate and timely academic public products for the country and enterprises, provides accurate judgment and prediction of the local situation, reduces misjudgment of information, and provides decision-making consultation and reference for the state and enterprises.

 

About the author: Zhang Weiyu is an assistant researcher at the Institute of Strategic Studies at Tsinghua University and a postdoctoral fellow at the Postdoctoral Research Station of Theoretical Economics at Tsinghua University.


Source: Overseas Investment and Export Credits, No. 5, 2018, pp. 3-7.

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