The Belt and Road Forum at Beijing well projected China as the country leading the new world order with the emerging markets rallying behind it and Russia deciding to throw its weight in favour of the new order. The US and the G20 are observing the development with caution and India is opting to stay out of it. The good news is that all of them opted to give China's vision of globalization a chance to deliver. China's leaders pitched it as a new world order at a majestic international conference held in Beijing last Sunday, joined in by Russia at the same pitch. Significant was the closeness between Xi and Putin sending signals to the world that the seat of power is now balanced between Atlantic and Pacific if not moved to Pacific.
The Belt and Road Forum is China's answer to Davos or the G20, centred around One Belt One Road (OBOR) trade initiative, which takes its inspiration from the ancient Silk Road trading route when goods and technology moved from east to west. History has taken a full round.
Speaking at the opening ceremony, Chinese president Xi Jinping emphasised OBOR's international credentials in the face of criticism that the project will be dominated by Beijing. "What we hope to create is a big family of harmonious co-existence," Xi said, adding that all countries were welcome to take part in the project.
China announced an additional $124 billion in funding for the OBOR initiative, including loans, grants, and $8.7 billion in assistance to developing countries. According to Chinese state media, around $1 trillion has already been invested in OBOR, with another several trillion due to be invested over the next decade.
Addressing the forum after Xi, Russian president Vladimir Putin appeared to take aim at the US, which is not involved in the OBOR initiative. "Protectionism is becoming the new normal," Putin warned, adding that "the ideas of openness and free trade are increasingly often being rejected by those who until very recently expounded them." Spanning more than 68 countries and encompassing 4.4 billion people and up to 40 percent of the global GDP, China's One Belt, One Road project is not short on ambition.
Its boosters tout its massive economic promise and claim it could benefit the entire world and lift millions out of poverty. But no one can say for sure what exactly the plan encompasses, and detractors warn it could be an expensive boondoggle at best or a massive expansion of Chinese imperial power at worst. The intellectuals argue: "So what is One Belt, One Road?" No one is totally sure. At the most basic level, One Belt, One Road is a collection of interlinking trade deals and infrastructure projects throughout Eurasia and the Pacific, but the definition of what exactly qualifies as an OBOR project, or which countries are even involved in the initiative, is incredibly fuzzy. "It means everything and it means nothing at the same time," said Christopher Balding, a professor of economics at Beijing University.
China at this stage is concentrating on building up a global network of infrastructure which facilitates "Ease and Cost of Doing Business," tempting all nations to derive benefits out of it. In these times of competition and compulsions of cost rationalization and ease of accessibility, OBOR will be irresistible for many countries. It also aims to develop the infrastructure and economies of nations which falls along OBOR.
The major deliverables achieved under OBOR at the forum are:
1. China signed MoUs with 11 countries and co-operation documents with nine international organisations.
2. China signed economic and trade co-operation agreements with 30 countries.
3. China will scale up financing support for OBOR by contributing an additional $14.5 billion to the Silk Road fund
4. The China Development Bank and the Export-Import Bank of China (Eximp Bank of China) will set up special lending schemes worth $36.3 billion and around $18.8 billion for the development of infrastructure projects.
5. The National Development and Reform Commission of China will set up a China-Russia regional co-operation development investment fund with a total scale of $14.5 billion and an initial scale of $1.45 billion to promote co-operation between China's north-east and Russia's Far East.
6. In the coming five years, China will offer 2,500 short-term research visits to the country for young foreign scientists, train 5000 foreign scientists, engineers and managers and set up 50 joint laboratories.
7. In the coming three years, China will provide assistance worth $8.7 billion to developing countries and international organisations participating in OBOR.
8. In the coming three years China will provide emergency food aid worth $290 million.
9. In the coming three years China will make an additional contribution of $1 billion in assistance for the South-South Co-operation.
10. In the coming three years China will launch 100 "Happy Home" projects, 100 poverty alleviation projects and 100 health care and rehabilitation projects along OBOR.
The China Pakistan Economic Corridor (CPEC) is one important link in OBOR. Having achieved growth in central China, the vision is now to extend it to the outskirt provinces of China. OBOR is one initiative which will make it happen. The next five years of the roll out of OBOR are crucial in steering it against many challenges and odds. (The writer is former President, Oversees Investors Chamber of Commerce and Industry)