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China pledges $124b for new Silk Road plan

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Chinese President Xi Jinping: promises $120b for new Silk Road

Chinese President Xi Jinping pledged $124 billion on Sunday for his ambitious new Silk Road plan to forge a path of peace, inclusiveness and free trade, and called for the abandonment of old models based on rivalry and diplomatic power games.

Xi used a summit on the initiative, attended by leaders and top officials from around the world, to bolster China’s global leadership ambitions as U.S. President Donald Trump promotes “America First” and questions existing global free trade deals.

“We should build an open platform of cooperation and uphold and grow an open world economy,” Xi told the opening of the two-day gathering in Beijing.

China has touted what it formally calls the Belt and Road initiative as a new way to boost global development since Xi unveiled the plan in 2013, aiming to expand links between Asia, Africa, Europe and beyond underpinned by billions of dollars in infrastructure investment.

Xi said the world must create conditions that promote open development and encourage the building of systems of “fair, reasonable and transparent global trade and investment rules”.

“Trade is the important engine of economic development,” Xi said.

He said the world must promote the multilateral trade system, the establishment of free trade regions, and the facilitation of free trade.

MASSIVE FUNDING BOOST

Xi pledged a major funding boost to the new Silk Road, including an extra 100 billion yuan ($14.50 billion) into the existing Silk Road Fund, 380 billion yuan in loans from two policy banks and 60 billion yuan in aid to developing countries and international bodies in nations along the new trade routes.

In addition, Xi said China would encourage financial institutions to expand their overseas yuan fund businesses to the tune of 300 billion yuan.

Xi did not give a timeframe for the new loans, aid and funding pledged on Sunday.

Leaders from 29 countries are attending the forum, as well as the heads of the United Nations, International Monetary Fund and World Bank.

Britain’s finance minister told the summit his country was a “natural partner” in the new Silk Road, while the prime minister of Pakistan, Nawaz Sharif, a close Chinese ally, praised China’s “vision and ingenuity”.

“Such a broad sweep and scale of interlocking economic partnerships and investments is unprecedented in history. We stand at the cusp of a geo-economic revolution,” Sharif said.

Pakistan’s traditional foe India refused to send an official delegation to Beijing, reflecting displeasure with China for developing a $57 billion trade corridor through Pakistan that also crosses the disputed territory of Kashmir.

“No country can accept a project that ignores its core concerns on sovereignty and territorial integrity,” said Indian foreign ministry spokesman Gopal Baglay, adding that there were concerns about host countries taking on “unsustainable debt.”

China plans to import $2 trillion of products from countries participating in its Belt and Road initiative over the next five years, Commerce Minister Zhong Shan said.

But some Western diplomats have expressed unease about both the summit and the plan as a whole, seeing it as an attempt to promote Chinese influence globally. They are also concerned about transparency and access for foreign firms to the scheme.

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