Beijing: China will invest nearly USD 900 billion in economic corridors along the mega Silk Road and Maritime Silk Road initiatives with funds including from the newly-floated AIIB bank. Vice-Premier Zhang Gaoli said the country is mulling six economic corridors with countries along the Belt and Road trade route to better connect Asia and Europe with funding from the Asian Infrastructure Investment Bank, (AIIB) and the Silk Road Fund, state-run China Daily reported.
China has announced USD 40 billion for Silk Road fund last year. Corridors are set to run through China-Mongolia-Russia, New Eurasian Land Bridge, China-Central and West Asia, Indo-China Peninsula and China-Brazil, Bangladesh-China-India-Myanmar, Zhang said at the opening ceremony of the Asia-Europe Meeting (ASEM) Industry Dialogue on Connectivity in Chongqing municipality yesterday.
Meanwhile, China Development Bank, one of the country’s policy banks, said it will invest more than USD 890 billion into more than 900 projects involving 60 countries, as part of its efforts to bolster the initiative, the 21st Century Business Herald reported today.
The newspaper cited the bank’s vice-president Li Jiping that over USD 10 billion has been poured into projects covering coal and gas, mining, electricity, telecommunications, infrastructure, agriculture, and so on Zhi Luxun, deputy director-general of the Department of Foreign Trade of the Commerce Ministry said China is seeking to boost its trade ties with economies along the new “silk roads” as trade with these countries and regions have become a new engine of China’s overall lackluster trade growth.
Trade volume in goods with the 64 economies along the routes, many of which are developing countries has been growing by an average of 22.2 per cent each year since 2001, 4.4 percentage points higher than China’s average trade growth during the period, Zhi said. Total trade volume with economies along the routes in 2014 accounted for 26 per cent of China’s total trade, up from 16.2 per cent in 2001, he said.
The “One Belt, One Road” initiative, consisting maze of routes on the land and the 21st Century Maritime Silk Road, (MSR) was first proposed by President Xi Jinping in 2013, who last year announced USD 40 billion fund to finance the projects. “After China raised the concept of the ‘One Belt and One Road’, many countries along the routes responded very positively, some of them have already been linking the initiative with projects of their own countries,” Zhi said. India is backing the Bangladesh, China, India, Myanmar road (BCIM) one of the Silk Roads but silent on the MSR due its security implications in the Indian Ocean.
China also launched the USD 46 billion China-Pakistan Economic Corridor under the one belt one road through the Pakistan occupied Kashmir, (PoK) over which India has conveyed concerns to Beijing as it goes though the disputed territory. Zhi said China will encourage industries such as power, transport, automobile and heavy machinery to invest in the countries along the routes, so as to upgrade local industries and create jobs. In the first four months of the year, China’s foreign trade reached 7.5 trillion yuan (USD 1.2 trillion), down 7.3 per cent from the same period last year.
Exports grew slightly at 1.8 per cent while imports dropped as much as 17 percent, according to customs data. In April alone, total trade volume declined 10.9 per cent over the previous year to 1.96 trillion yuan, with exports declining 6.2 per cent and imports dropping 16.1 per cent, customs data showed.
China’s economic growth continued to slow down as it slipped to 7 per cent in the first quarter of this year, the worst since global economic crisis six years ago raising concerns over the continued deceleration of the world’s second largest economy. Its GDP registered 7.4 per cent last year, a 24 per cent year low. An IMF forecast said China’s growth rate would further decline to 6.8 per cent this year and 6.3 per cent next year.