China Pledges $124b for New Silk Road Plan

Chinese President Xi Jinping pledged $124 billion on Sunday for his ambitious new Silk Road plan to forge a path of peace, inclusiveness and free trade, and called for the abandonment of old models based on rivalry and diplomatic power games.

Xi used a summit on the initiative, attended by leaders and top officials from around the world, to bolster China's global leadership ambitions as US President Donald Trump promotes "America First" and questions existing global free trade deals, Reuters reported.

"We should build an open platform of cooperation and uphold and grow an open world economy," Xi told the opening of the two-day gathering in Beijing.   

China has touted what it formally calls the 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 said. The world must promote the multilateral trade system, the establishment of free trade regions, and the facilitation of free trade, he added.

  Massive Funding Boost

Xi pledged a major funding boost to the new Silk Road, including an extra 100 billion yuan ($14.50 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 new 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 on Sunday.

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

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

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

  Leaders’ Quotes:

IMF’s Managing Director Christine Lagarde—”It is about connecting culture. It is about connecting communities it is about enriching economies and improving the standard of living of people.

Russian President Vladimir Putin—”Poverty, social chaos ... the development level of countries and regions—all this creates a breeding ground for international terrorism, extremism as well as irregular migration. We shall not be able to live up to these challenges should we fail to overcome the stagnation of the global economic development.”

UN Secretary General Antonio Guterres—”It is in our shared interest to show that the global economy can serve all the world’s people.”

Czech President Milos Zeman—”In all of history, except for the Marshall Plan, there was practically no long-term project which needs enormous courage. Let me express my gratitude for People’s Republic of China for this courage, and especially let me appreciate China’s president for the courage which is so rare.”

Turkish President Recep Tayyip Erdogan—”This is going to be the kind of initiative that will put an end to terrorism.”

Pakistan Prime Minister Nawaz Sharif—”Peace and development go hand in hand. ‘One Belt, One Road’ signifies that geo-economics must take precedence over geopolitics and that the center of gravity should shift from conflict to cooperation.”

Greek Prime Minister Alexis Tsipras—”As a country with a rich cultural heritage and the world leader in the tourist industry, we highly value the importance of this initiative for people-to-people contacts, cultural exchanges and tourism.”

India refused to send an official delegation to Beijing, reflecting displeasure with China for developing a $57 billion trade corridor through Pakistan that also crosses the disputed territory of Kashmir.

But some western diplomats have expressed unease about both the summit and the plan as a whole, seeing it as an attempt to promote Chinese influence globally. They are also concerned about transparency and access for foreign firms to the scheme.

Germany, which was not among the countries that approved the financing guidelines, said its firms are willing to support the Belt and Road initiative, but more transparency is needed. There should also be improvement in non-discriminatory practices and adherence to international standards, said Germany’s Minister of Economic Affairs and Energy Brigitte Zypries.