China’s Xi Calls For ‘New Regional Order’ In Asia, Unveils Framework For New Silk Road

Chinese President Xi Jinping delivers a keynote speech at the opening plenary of the 2015 annual conference of the Boao Forum for Asia (BFA) in Boao, south China’s Hainan Province, March 28, 2015. Photo courtesy of Xinhua.

Chinese President Xi Jinping called on the world’s nations on Saturday to support Beijing’s ideas for the new Asian Infrastructure Investment Bank (AIIB) and its new “Silk Road” strategy to create a ‘new regional order’ in Asia.

In his keynote address at the annual Boao Forum titled “Asia’s New Future: Towards a Community of Common Destiny”on Hainan island in southern China, Xi stressed the need for Asian nations to join forces to increase regional and world prosperity.

The focal points of the forum outlined the new AIIB and plans to improve overland and maritime trade and transport routes in the development of China’s new Silk Road vision.

“Facing the fast-changing regional and international landscapes, we must see the whole picture, follow the trends of our times and build a new regional order that is more favorable to Asia and the world,” Xi said.

Xi said that China will “vigorously” promote a system of regional financial cooperation, explore a platform for exchanges and cooperation among Asian financial institutions and advance complementary and coordinated development between the AIIB and such multilateral financial institutions as the Asian Development Bank and the World Bank.

Xi emphasized that the Chinese economy was running as planned, despite annual economic growth having eased to about 7 percent, the lowest in 24 years.

“When looking at China’s economy, one should not focus on growth rate only,” Xi said. “We will focus on improving quality and efficiency, and give even greater priority to shifting the growth model and adjusting the structure of development.”

“As the (Chinese) economy continues to grow in size, around 7 percent growth would be quite impressive and the momentum it generates would be larger than the growth at double digits of previous years,” Xi said.

“(China’s) economy is highly resilient and has much potential, which gives us enough room to leverage a host of policy tools,” Xi said.

The government will make more solid efforts to boost economic development and deepen reform and opening up, as well as unleash creativity and ingenuity of the people, Xi said.

“This new normal of the Chinese economy will continue to bring more opportunities for trade growth and development for the countries of Asia and beyond,” Xi said, adding that China was now aiming for increased quality and efficiency as opposed to rapid growth in its economy.

Xi announced that Chinese investment abroad will exceed $500 billion and that China will import $10 trillion worth of goods over the next five years.

Xi said a roadmap for China’s proposed strategy had been developed with the aim of improving trade and transport links in Asia.

The Belt and Road Initiative aims to promote the connectivity of Asian, European, and African continents and their adjacent seas, establish and strengthen partnerships among the countries along the Belt and Road, set up all-dimensional, multi-tiered and composite connectivity networks, and realize diversified, independent, balanced and sustainable development in these countries.

By speeding up connectivity-building “we can turn the seas of Asia into seas of peace and cooperation between Asian countries”, Xi said.

The “Belt and Road” initiatives, aimed at meeting the development needs of China, countries along the routes and the region at large, will serve the common interests of relevant parties and answer the call of the times for regional and global cooperation, Xi said.

The initiatives will be carried out following principles of wide consultation, joint contribution, and shared benefits, Xi said.

Xi stressed the need for a community of “common destiny” and a new future for world prosperity.

The old mindset of a zero-sum game should give way to a new win-win approach, Xi said.

In a bid to enhance regional connectivity, China unveiled on Saturday afternoon the principles, framework, and cooperation priorities and mechanisms in its Belt and Road Initiative.

Map: China’s new Silk Road. Courtesy of Xinhua.

The vision for the Silk Road Economic Belt and 21st-Century Maritime Silk Road was issued by China’s top economic planner, the National Development and Reform Commission (NDRC) and ministries of foreign affairs and commerce.

According to the plan, China will give full play to the role of the Silk Road fund and that of sovereign wealth funds of countries along the Belt and Road, and encourage commercial equity investment funds and private funds to participate in key projects.

The “New Silk Road Economic Belt” plan aims to improve the infrastructure linking China to Europe through Central Asia and the “21st Century Maritime Silk Road” plan aims to strengthen maritime cooperation.

The Belt and Road run through the continents of Asia, Europe and Africa, connecting the vibrant East Asia economic circle at one end and developed European economic circle at the other, and encompassing countries with huge potential for economic development. The Silk Road Economic Belt focuses on bringing together China, Central Asia, Russia and Europe (the Baltic); linking China with the Persian Gulf and the Mediterranean Sea through Central Asia and West Asia; and connecting China with Southeast Asia, South Asia and the Indian Ocean. The 21st-Century Maritime Silk Road is designed to go from China’s coast to Europe through the South China Sea and the Indian Ocean in one route, and from China’s coast through the South China Sea to the South Pacific in the other.

On land, the Initiative will focus on jointly building a new Eurasian Land Bridge and developing China-Mongolia-Russia, China-Central Asia-West Asia and China-Indochina Peninsula economic corridors by taking advantage of international transport routes, relying on core cities along the Belt and Road and using key economic industrial parks as cooperation platforms. At sea, the Initiative will focus on jointly building smooth, secure and efficient transport routes connecting major sea ports along the Belt and Road. The China-Pakistan Economic Corridor and the Bangladesh-China-India-Myanmar Economic Corridor are closely related to the Belt and Road Initiative, and therefore require closer cooperation and greater progress.

The plan highlights the priority the connectivity of facilities by improving the infrastructure of countries along the Belt and Road in order to form an infrastructure network that connects all sub-regions in Asia, and between Asia, Europe and Africa.

In regards to transportation infrastructure, the plan focuses on the construction of key passageways and junctions while giving priority to linking up unconnected road sections, removing transport bottlenecks, advancing road safety facilities and traffic management facilities and equipment, and improving road network connectivity.

The plan calls for building a unified coordination mechanism for transportation by increasing connectivity of customs clearance, reloading and multimodal transport between countries, and gradually formulating compatible and standardized transportation rules, so as to realize international transport facilitation.

The plan urges improving investment and trade facilitation, removing investment and trade barriers, opening up free trade areas for countries and regions along the Belt and Road, expanding trading areas, improving trade structure, exploring new growth areas of trade, and promoting trade balance and trade through investment.

China has already built joint economic zones and ports in partnership with Vietnam, Laos, Kazakhstan, Myanmar, Cambodia, Greece, and Sri Lanka, while other pilot projects are still being discussed.

The plan calls to push forward port infrastructure construction, to build more land-water transportation channels, increase sea routes and the number of voyages, advance port cooperation, and enhance information technology cooperation in maritime logistics.

In regards to aviation, platforms and mechanisms for comprehensive civil aviation cooperation will be built and the pace of improving aviation infrastructure will be quickened.

In regards to energy, the plan focuses on the connectivity of energy infrastructure, security of oil and gas pipelines and other transport routes, the construction of cross-border power supply networks and power-transmission routes, and the upgrading of regional power grids.

In regards to communications, the plan calls for the construction of cross-border optical cables and other communications networks, improving international communications connectivity, and the creation of an “Information Silk Road”. The plan also calls for construction of bilateral cross-border optical cable networks to be built at a faster pace, transcontinental submarine optical cable projects, and improvement of satellite information passageways to expand information exchanges and cooperation.

In regards to financial integration, the plan calls to deepen financial cooperation, advance efforts to build a currency stability system, investment and financing system and credit information system in Asia. The plan calls to expand the scope and scale of bilateral currency swaps and settlements with other countries along the Belt and Road, open and develop the bond market in Asia, make joint efforts to establish the Asian Infrastructure Investment Bank (AIIB) and BRICS New Development Bank, establishment of the Shanghai Cooperation Organization (SCO) financing institution, setting up and to put into operation the Silk Road Fund as early as possible, strengthen cooperation of the China-ASEAN Interbank Association and SCO Interbank Association, carrying out multilateral financial cooperation in the form of syndicated loans and bank credit, supporting the efforts of governments of the countries along the Belt and Road and their companies and financial institutions to issue Renminbi bonds in China, encourage qualified Chinese financial institutions and companies to issue bonds in Renminbi and foreign currencies outside China, strengthening financial regulation cooperation, encouraging the signing of MOUs on cooperation in bilateral financial regulation, improving the system of risk response and crisis management, building a regional financial risk early-warning system, and creating an exchange and cooperation mechanism of addressing cross-border risks and crisis.

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Friday night Brazilian President Dilma Rousseff announced that Brazil had accepted China’s invitation to join the AIIB.

On Saturday Russian Deputy Prime Minister Igor Shuvalov announced that Russia was seeking to join the bank, followed by announcements from Australia, the Netherlands, Denmark, and Georgia to join the bank.

China’s Finance Ministry said on Saturday that the U.K. and Switzerland had been formally accepted as founding members of the bank.  Also this week Turkey, South Korea, Austria, Hong Kong, and Taiwan have announced plans to join.

As the March 31 deadline for membership application with the AIIB approaches, there are 45 nations (at the time of writing on March 28) that are set to join the bank as founding members, according to Wikipedia.

The bank — a potential rival to the Western-led IMF and World Bank — is due to be established later this year and has been seen as a significant setback to U.S. efforts to extend its influence in the Asia Pacific region to balance China’s growing financial clout and assertiveness.