Geopolitics cannot be divorced from China’s ambitious Belt and Road Initiative, but the mega project will create plenty of economic opportunities and growth for countries, said panellists at a World Economic Forum discussion in Davos on Tuesday (Jan 22).
And while current tensions between the world’s two biggest economies, China and the US, have rattled the rest of the globe, long-term infrastructure projects that are vital to connecting nations and driving free trade will continue at a rapid clip, they predicted.
Launched five years ago, Chinese President Xi Jinping’s signature development strategy to revive ancient sea and land trade routes linking Africa, Europe and Asia, has won the support of an increasing number of countries eager for China’s help.
It involves an estimated US$1.5 trillion (S$2.04 trillion) of Chinese investment across Asia alone in the next decade for infrastructure projects such as ports, industrial hubs, railways and roads
While experts have also expressed worry over these developing countries’ ability to repay the large debts they owe to China, not to mention fears over the East Asian giant’s expanding geopolitical influence, the four panellists were upbeat about the benefits of the BRI.
“Any kind of transportation project which connects countries will have a geopolitical background and positively influence geopolitical situations, stability and credibility because it creates interdependence,” said Azerbaijan President Ilham Aliyev.
Singapore’s Finance Minister Heng Swee Keat said the momentum of the initiative will not slow if countries support the vision of economic integration through building connectivity.
“Geopolitics will have an impact on the pace and the international trading system, so it is important for us to push on and look for projects that are economically viable, bankable and have proper rules and regulations, so you can show to the world that these are projects that have long-term benefits,” he said.
“And we shouldn’t let the current trade skirmishes end up affecting the longer term objective of better integration for a better world.”
The Belt and Road Initiative is a focal point in China’s relationship with Singapore, which has been an early supporter of the mega project.
The two countries have identified four major areas of cooperation: infrastructure connectivity, financial connectivity, joint collaboration to help other countries, and services to help resolve cross-border commercial disputes.
Mr. Heng said while it is easy to say that free trade will benefit all, in practice there will be winners and losers, and countries will have to restructure to keep up.
“The underlying concept is we can all have a better life if we cooperate, but reaching there is not a given,” he said, noting of the BRI: “It’s a serious vision which needs to be pursued vigorously.”
Mr. Xu Niansha, Chairman of State Owned Poly Group, which is primarily in the business of defence manufacturing sales, said China has come a long way in the past 40 years, and developing countries linked by BRI share similarities with China’s developmental path.
“Therefore, it will be much easier to collaborate because of the similarities,” he said.
Mr. Xiao Yaqing, Chairman of the China’s State Owned Assets Supervision & Administration Commission, offered an assurance to companies eager to come on board, but facing pressures of trying to strike a balance between a long-term development vision and short-term rewards.
“If you don’t think you can strike that balance just yet, you can wait before participating in Belt and Road,” he said from among the audience, when asked for his view on the subject by the panel’s moderator.