Promotion of OBOR Initiative Requires Timely Domestic Connectivity

Date:2016-08-18 09:56  Author:admin   Click:
“The Belt and Road”is China’s important cross-regional economic cooperation initiatives. “One Belt”refers to the route from China to the hinterland of Eurasia and the western extension, while “One Road” covers the area from China to the Pacific and the Indian Ocean. The coordinative development of One Belt and One Road is like the spread swings of a roc, which is a vivid generalization and concise integration of “Silk Road Economic Belt”and“the 21st Century Maritime Silk Road.

It is a main task for China to push forward and implement the initiative of “The Belt and Road” in the new stage. On August 17, President Xi Jinping delivered an important speech again at the symposium on promoting the construction of “The Belt and Road”, proposing to establish a mutually beneficial cooperation network and a new cooperative mode by focusing on policy communication, road connectivity, unimpeded trade, financial integration, and people-to-people bond and to build a green, healthy, intelligent and peaceful Silk Road.

The ancients said: A journey of a thousand miles begins with a single step. It requires the joint effort of people in various fields to push the development of “The Belt and Road”and benefit people along the route. Today, we have invited several experts and scholars engaged in the study of “The Belt and Road” to discuss how to implement this initiative.

Facilities connectivity is the most important task in the construction of “The Belt and Road”.

China Economic Times: As a scholar invited to attend the symposium of “OBOR”construction, what do you think is the most important basic condition and core content of international cooperation in the building of the “The Belt and Road”?

Hu Biliang: In the symposium, it is stressed that the building of “The Belt and Road” is a great opportunity to rebalance the world economy, and it is also pointed out that the construction of “The Belt and Road” should be coordinated with the national strategies of domestic development, such as “Coordinated Development of Beijing, Tianjin and Hebei Strategy” and “Yangtze River Economic Zone Strategy” and other national strategies, and with development of the western region, the revitalization of the northeast, the rise of the central, the development of eastern part, to ensure all-round opening up and interactive development of east and west.

Talking about “The Belt and Road”, Xi Jinping proposed five major areas for cooperation: policy communication, road connectivity, unimpeded trade, financial integration, and people-to-people bond (hereafter referred to as Cooperation in Five Areas). The road connection falls in the field of facility connectivity, while the other four are of institutional level. 

I think the international communication and development in the building of “The Belt and Road” should be based on connectivity. The most important thing in the building of “The Belt and Road” is to establish two new patterns: a new pattern of all-round opening up domestically and a new pattern of regional integration in all directions internationally. Its essence lies in the construction of an open system which ultimately leads to win-win cooperation. Therefore, “opening up” is actually a key factor for a win-win situation. The opening up is based on wide contacts to realize connectivity between different elements and different parts. The connectivity of infrastructure or “hardware”, for example, the construction of roads, railways and the opening of the air line, can make different countries or regions join together; the connectivity between “software”, such as agreement on the tariff, exchange rate and so on agreed by both and more parties through consultation will effectively promote the cooperative development of trade and finance of the relevant countries or regions.

Seen from the practice of China’s reform and opening up in the past 40 years, China has been effectively cooperating with other countries. In 2001 China joined the WTO as a starting point, and then through the construction of rules in trade and investment, China has gradually integrated into the international trade and investment system. After proposing “The Belt and Road” initiative, China quickly put forward policies and plans to promote the connectivity construction between countries along the route and began to implement a number of key projects with the transportation infrastructure construction as the key point. Its purpose is to connect China and countries along the route, which makes it possible to carry out a series of economic cooperation. At the same time, the connectivity network system with the focus on the joint construction of transportation infrastructure can directly promote the economic growth, increase employment opportunities, improve the income level of people in the countries along the route.

China Economic Times: based on what you have said, connectivity is not only the foundation but also the focus. It is proposed that “The Belt and Road” construction basically features “international connectivity” with Chinese characteristics. Would you like to talk about what is specifically included in the connectivity?

Luo Yuze: The construction of connectivity involves the intellectual endeavor of all the related countries and international organizations, and the “The Belt and Road” features “joint construction through consultation to meet the interests of all”. I am not quite sure what connectivity means exactly, while with China as the initiator, the connectivity construction along the route is doomed to contain Chinese experience, Chinese model, Chinese scheme.

Connectivity falls into various classification, such as classification of cooperations in five major areas in term of the basic framework of cooperation; classification of connectivity in railway, highway, telecommunications and other infrastructure according to fields in which the cooperation is conducted, domestic and cross-border infrastructure connectivity according to the countries involved, and cross-border infrastructure connectivity can be further classified into bilateral and regional connectivity, etc.

Zhai Kun: The connectivity of infrastructure is the most crucial point of the construction of “the Belt and Road” Initiatives of China, playing the role of a vanguard. Not only does the connectivity of infrastructure contributes a lot to the business of relevant countries, but also provides powerful fundamental support to “policy communication, road connectivity, unimpeded trade, financial integration, and people-to-people bond”. It makes China fully connect with relevant countries and integrate into the world.

I think “the Belt and Road Initiatives” is China’s strategy for global connectivity. The Silk Road is the great artery connecting China and the west, and the history of the Silk Road can also be considered as the history of global connectivity. An era of globalization features global connectivity. The opening up and development of every country can be seen as organic component of global connectivity. The innovative cooperation mode of “communication in five areas” for the development of the Silk Road economic belt probably represents China’s idea about global connectivity, linking materials and spirits, official and folk, moreover, conception and practice. “The Belt and Road” Initiatives is the continued history of global connectivity in 21st century, which will become a strong power to promote the evolution of global connectivity. With the building of “The Belt and Road”, China will be the power source and crucial network node of global connectivity.

Xie Shiqiang: I think the basic feature of “the Belt and Road Initiatives” is connectivity while the main feature is international connectivity which not only consists of connectivity in the five major areas: culture, infrastructure, trade investment, money and finance, rules and policies, but also covers the connectivity of crisis control. Domestically, the connectivity can be divided into that within the region, between regions and between rural and urban areas, such as the synergetic development of Beijing-Tianjin-Hebei, etc. Globally, it includes the connectivity between China and surrounding countries, Asian countries, and even countries in other continents.

China Economic Times:  What important roles will the Land Bridge Economic Belt and the New Eurasian Continental Bridge Economic Corridor play in the construction of “the Belt and Road”?

Luo Yuze: The New Eurasian Continental Bridge is the great artery of railroad transportation from Lian Yungang, China to port of Rotterdam, linking up the Europe and Asia and striding across the “Silk Road Economic Zone” and “21st Century Maritime Silk Road” by way of seven provinces across east, middle, west of China and more than 30 countries and regions. The areas involved are continuing to expand with the development of domestic and international railway network. Transporting goods from China to Europe via the New Eurasian Continental Bridge, people use only about 1/3 of the time when they do it by ocean shipping. It will contribute a lot to the building of “the Belt and Road” if coordinated development of different regions and cooperation in customs clearance are ensured. 

Xie Shiqiang: The unique geographical location of Land Bridge Economic Belt makes it a vital juncture of “the Belt and Road”. The construction of this area is not simply restricted to the infrastructure construction of the New Eurasian Continental Bridge, but involves comprehensive economic belts which are developing diversely and influence a wide variety of flows of personnel, materials, capital and information. If the construction of the New Eurasian Continental Bridge Economic Corridor is considered as the crucial measure to accelerate the international connectivity of “the Belt and Road”, it is necessary to build Land Bridge Economic Belt in order to continue to push the domestic connectivity forward. The two are supposed to make joint efforts to promote steady and coordinated development of international and domestic connectivity and neither should be omitted.

The connectivity of rules and policies is the institutional guarantee to the healthy development of “the Belt and Road”.

China Economic Times: What’s the difference between domestic and international connectivity? For China, how to achieve the connectivity both domestically and internationally?

Luo Yuze: the international and domestic “connectivity” are indeed integrated. I think the difference between the two is that international connectivity should be negotiated and constructed collaboratively by relevant countries, and China cannot plan and have jurisdiction over it independently. To achieve connectivity, it is advisable that China should make top-level design and overall planning and negotiate them with relevant countries.

Xie Shiqiang: In general, the construction of both international and domestic connectivity should meet the basic requirements of connectivity, assuming the basic responsibilities, such as the rational allocation of internal resources, the satisfaction of the basic material needs of people, the improvement of environment necessary for survival and development, and so on. However, due to the different background, international and domestic connectivity differ from each other. For example, international connectivity mainly involves two or more countries or regions. It is necessary to follow not only the relevant laws and regulations in each country and region but also the international practice and common regulations. However, in the construction of domestic connectivity, people should only look to the Chinese laws and regulations.

At present, to realize both the domestic and international connectivity effectively, it is necessary to connect the construction of “The Belt and Road” with that of “Yangzi River Economic Zone” and “Coordinated Development of Beijing, Tianjin and Hebei”. Besides, the development of the six Economic Corridors should also be coordinated. For example, the connectivity between the construction of Yangtze River Economic Zone and the coordinated development of Beijing, Tianjin and Hebei; the coordinated development of Beijing, Tianjin and Hebei and the revitalization in Northeast China; the development of Coastal Economic Belt and that of the Yangtze River Economic Zone; the development of Chengdu-Chongqing Economic Zone and that of the Yangtze River Economic Zone, the development of Land Bridge Economic Belt, the Yellow River Ecological Region and Western development, the development of Land Bridge Economic Belt and that of China–Pakistan Economic Corridor, the development of the Pearl River Delta Economic Zone and that of Yangtze River Delta, etc.

Chinese economic times: Then, in the construction of “The Belt and Road”, what are the specific measures we can take to promote connectivity?

Hu Biliang: Since the reform and opening up, China has accumulated rich experience both in infrastructure connectivity and in system connectivity, which may be viewed as reference for the countries along “The Belt and Road” to promote the development of the connectivity construction. Today, many projects focused on transportation infrastructure construction have started successfully in the countries along the route. Transport network from the Pacific Ocean to the Baltic Sea, connecting East, West and Asia is being gradually implemented, and actual effects have been achieved in some regions.

At present, more attention should be paid to the connectivity at the level of system. I think, first of all, policy communications should be strengthened, for example, how to take advantage of the opportunities in the construction of “The Belt and Road” and promote the internationalization of RMB, and how to improve trade policy, investment policy and industrial policy.

As for financing system, I find that in the research of central Asian countries, most of the countries along “The Belt and Road” are facing the shortage of funds. Loan interest rates and costs of capital in these countries are very high. I am thinking if we can allow these countries to issue bonds in China under appropriate financing institutions, for example, to set up international version of “The Belt and Road”in China for the good enterprises in these countries to get funds through direct financing from China.

Besides, when we speed up the construction of the free trade zones in China and the countries along the “The Belt and Road”, we should strengthen the construction of domestic industrial parks and business parks and promote the complementary development of economy of different parties through implementing some institutions. At present, China and Georgia are negotiating on the construction of the FTA which has a positive demonstration effect.

In addition, communication between people in all aspects is of great potential. We should actively explore and promote the connectivity in this area, including education, health, culture, science and technology, think tanks and etc.

China Economic Times :It is well known that there may be tremendous environmental risks in building OBOR. How can we avoid environmental risks, and reach the basic requirements of “Communications in Five Areas”?

Zhaikun: The ecological environmental problems have posed a threat to the construction of “The Belt and Road”. The countries along the route covers only less than 40% of world’s total area,but takes up more than 70% of the world population with the population density 1.5 times higher than the world average. Water resources per year in this area average at about 36% of global water resources, while water exploited here each year is up to about 67% of the global water resources. The pressures on environment and water resources are higher than the world average levels.

In south-eastern region, the air pollution caused by rapid industrialization and urbanization has been gradually obvious, which affects the sustainable development of the region seriously. Central Asia is one of the regions which suffer from most severe global ecology problems. Due to water shortages, frequent earthquakes, external environmental pollutions, overgrowth of populations, increasingly serious ecological crisis of Aral Sea, the pressure on resources and environment in this area is increasing. Besides, chemical fertilizers and pesticides are constantly used in this countries to protect the lawn from insects,pathogens and weeds, seriously polluting urban air, surface water and groundwater and soil, which to some extent hampers the regional economic and social development. Some countries along the route are not clear about the basic information about environmental management and the risk. Environmental monitoring and surveillance, early-warning and emergency response system and management abilities fall far behind. The abilities of environmental risk prevention and early warning and control are low and the ecological carrying capacity continues to decline, which further aggravates the ecological risk.

China faces environmental problems in the process of building up “The Belt and Road” as well. Among the relevant policy documents concerning “The Belt and Road” released by related institutions, little attention has been paid to ecology, environmental protection and greenization or policy designs. When enterprises in China begin to participate in the construction of “The Belt and Road”, they have not realized that they stand for Chinese enterprises and should take up the corporate responsibilities. They continue ignoring environmental protection and bring extensive mode of operation to the countries along the route, and are punished by local government and judicial departments. With an increasing amount of direct investment of China, there are more risks on environmental problems, which seriously damage the image of China and even jeopardize the relations between China and those countries.

Therefore, “greenization” helps to build up a good image of a responsible country when China deepens economic cooperation with countries along the route. Through a careful research, we reckon that we can make the development of “The Belt and Road” green by promoting an “three-point support” -- ecological agriculture, water resources management and renewable energy development. First, we carry out ecological agriculture and water resources management at the same time, make it possible for renewable energy resources interact well and promote the green development of countries along the route. Because agriculture is the pillar industry of most countries along the route, it is crucial to transform land suitable for cultivation into farmland in South-eastern Asia and Central Asia for development of eco-agriculture.

Second, to change the imbalance of water resources in Southeast Asian countries, the key is to change the agricultural irrigation mode. Water resources management will lead to the development and utilization of renewable energy. According to preliminary calculations, to dig wells in half of the land in Central Asia requires 3120 wind power plants of 10,000 kw. If the corresponding production bases are built in Central Asia, it will be a great opportunity for huge capacity cooperation projects. In addition, importing agricultural products will promote a series of capacity introduction of national transportation, railway construction materials, iron, steel and cement and machinery processing, making China - Central Asia capacity cooperation leap forward.

In general, it fits with the reality and meets the basic needs of the countries along the route to base the construction on agriculture. The development of eco-agriculture will help the modernization of agriculture in these countries, and will help China obtain a more stable and sustainable supply of agricultural products. And water resources management not only helps to improve the local environment, but also helps to ease the water disputes and promote the stability of China’s southwest and northwest frontier. The development of renewable energy is conducive to reduce the excess capacity in China and drive energy industries “going out of China”.

It calls for a propulsion mode in which people work together, seeking advantages and avoiding disadvantages.

China Economic Times: the construction of “The Belt and Road”initiated in the end of 2013 is a complex task of the century which calls for joint efforts. What kind of support do we need to realize joint working?

Zhai Kun: In the future, the construction of “The Belt and Road”can continue to improve the propulsion mode of “Work together, seeking advantages and avoiding disadvantages” which is adopted by the stockholders. Overall, the leadership groups are needed to upgrade the general plans of “The Belt and Road”, co-ordinate domestic and foreign development, mobilize a variety of domestic resources, give full consideration local specific conditions, make the overall planning, take effective and comprehensive measures. In principle, the overall strategic plan should be consistent with the reform of the domestic governance system, following the overall national security concept and the “National Security Law”. In content, not only should the overall plans include the visions and actions of “The Belt and Road” which focus on taking advantages, but also include the plans on avoiding disadvantages such as risk prevention systems. The overall strategic plan emphasizes the use of the “multi-stakeholder” model to coordinate stakeholders in all fields such as authority, commerce, industry, academic, media, military, civil, religion, law, finance, insurance and so on in order to make the multi-stakeholders from home and abroad, including governments, enterprises, media, think tanks, and civil organizations cooperate together and strive for a win-win situation.

China Economic Times:In the process of joint construction, how does the political crisis affect the development of “The Belt and Road”differently? And what measures can be taken to keep a balance?

LuoYuze: As for crisis, “The Belt”is exposed mainly to risks of extremism and terrorism, while “The Road” is facing political risks. At present, the overall situation is relatively stable, not yet to implement crisis control. Now, the key is to establish a response mechanism for crisis prevention and control. On the one hand, necessary measures should be taken to improve the ability to resist risks. On the other hand, resources and information in all aspects should be collected and it is wise to make risk assessments and early warnings.

ZhaiKun: the construction of “The Belt and Road” provides public goods for regional and global connectivity, and in the meantime, it will face a complex set of risks, especially in political security. “The Belt and Road” construction overlaps the profound adjustment and transition of “post-financial crisis era”, when the regional situations are complex and changeable. Most countries along the route are in a political transition stage. The linking of traditional security and non-traditional security risks always run through the “The Belt and Road” construction. The domestic and foreign stakeholders are deeply involved. They should not only take up responsibilities at their own risk, but also manage risks jointly. In fact, they form a community of interests, responsibilities and fates.

Besides, “The Belt and Road”construction encourages or even pushes the Chinese enterprises to take the risk-response measures positively and transform the risks into benefits creatively based on a dynamic and phased risk assessment and prediction. From getting local people’s recognitions to facing terrorism,and from resolving the challenges of government regulation to struggling from political changes, Chinese companies not only need the support of systematic political risk assessment to the top-level strategy designs, but also need the  concrete micro safeguards measures. Before deciding to invest or operate a project, the enterprise should analyze the political situation, policy supervision, security situation of the investment regions or countries, and the demands of various stakeholders and make more hierarchical risk assessment with full consideration of the project itself. It helps to carry out a more effective long-term planning and design detailed risk management plans to ensure investment income.

XieShiqiang: Since Xi Jinping, general secretary of China,put forward the initiative of“Silk Road Economic Zone” and “the 21st century Maritime Silk Road” in 2003, great progress has been made in the construction of both the “The belt” and “The road”. However, there is big difference between the developments of these two areas.

In addition to the differences in political mutual trust, economic mutual trust and security mutual trust, it also matters how to deal with the relations with relevant countries, even the attitudes, methods and mechanisms of how to manage territorial sea crisis, regional leadership crisis and resource and energy crisis, etc. If these problems are not addressed properly, they may seriously affect the effective implementation of major infrastructures.

Due to the fact that China and Russia, Kazakhstan as well as other Central Asian countries have high mutual trust in politics, economies and cultures and they deal with various disagreements in time through multilateral coordination mechanism, such as Shanghai Cooperation Organization, “The Belt” has been developing relatively fast.

On the contrary, China has disputes with Vietnam, Philippines, the United States, Japan and some other countries and an appropriate solution has not been found so far. If these countries work together against China, the development of “One road” will definitely be affected.

s I see it, to reduce the gap between the development of the “the belt” and “the road”, the key lies in how to properly deal with the basic demands of these countries, and taking effective coordination mechanism. For example, between China and some ASEAN countries, we can adopt the basic principles to give priority to economical development, to support with diplomatic policy and to shelve the sovereignty dispute. We should establish the Nanhai Regional Economic Cooperation Committee based on the experience of building Asian Infrastructure Investment Banks. On the one hand, this meets the multilateral political demands of Vietnam, Philippines and other countries, and on the other hand, this helps put aside the disputes on sovereignty of territorial sea with Vietnam, Philippines and other countries temporarily and exclude the United States, Japan and other countries which jeopardize the stability of South China Sea and the development of “One Road”.