Development Down the Line

By+hou+Weili

Jin Haijun， a trader specializing in importing Spanish wines， is a happy man. The reason for his raised spirits lies in a railway line that now links the Spanish capital of Madrid to his hometown of Yiwu City in east Chinas Zhejiang Province. The cargo line makes it possible to increase his annual imports to 1.5 million bottles.

“With the freight train running， my business is more competitive as the cost of importing wines decreased by 20 percent and the delivery can be done in a shorter time，” said Jin. He explained the wines were previously imported by sea as air freight is too expensive. Due to prolonged movement of bottles at sea， wines had to be kept still for two to six months before selling so that the flavor would not be compromised.

“Shortening the delivery period greatly relieves the stress on my companys cash flow，” he added.

The cargo line helping Jins business is one of the ambitious projects fostered by Chinas Belt and Road Initiative. It runs from Yiwu westward to Xinjiang Uygur Autonomous Region and winds its way to Madrid. Crossing China， Kazakhstan， Russia， Belarus， Poland， Germany and France， the marathon journey totaling 13，052 km connects the worlds largest market of small commodities to its European counterpart and shortens the traveling time to 21 days from 40 days along the sea route.

Besides Yiwu， Chongqing， Zhengzhou， Chengdu， Hefei， Wuhan and Changsha， all of which are landlocked cities， now are also connected with European nations by rail. Thanks to these cargo lines， the strategic plan of promoting connectivity among nations involved in the Belt and Road Initiative is becoming a reality and Chinas western hinterland is embracing an opportunity of emerging as a new frontier of economic growth. With this as the foundation， people-topeople interactions are becoming increasingly more dynamic.

Facilitating connections

By means of cargo rail lines， more and more agricultural products from rural areas in west China are able to reach European consumers. In rural areas of Lanzhou， capital city of Gansu Province， farmers established a base to grow lily bulbs， a traditional Chinese medicinal herb helping nourish the lungs， with technological support from a local agriculture firm， and sold these quality bulbs to Russia and Italy. In 2016， the export of lily bulbs in this area totaled $332，800. The provinces trade with nations involved in the Belt and Road Initiative hit 10 billion yuan （$1.45 billion）， a year-on-year increase of 10 percent.

This is just one example of how western provinces upgrade their economies and promote foreign trade with opportunities by traffic connectivity. Statistics by the Ministry of Commerce show that Chinas trade with countries involved in the Belt and Road Initiative last year amounted to 6.3 trillion yuan （$913 billion）， 0.6 percent up from the previous year， and still outpacing the overall foreign trade which declined by 0.9 percent from 2015.

The traffic connectivity is also bringing in commodities from the countries involved in the Belt and Road Initiative. Jin Haijun is expanding cooperation with more European businesses and adding baby formula， French bags， machineries， yachts and art works to his future importing lists.

Experts believe the Belt and Road Initiative is more than infrastructure； it will boost inclusive cooperation spanning all sectors like manufacturing， services， tourism and cultural industries.

“Transportation infrastructure is something like a strategic investment. Its connectivity will not only facilitate trade but also spur local businesses and radiate expansive surrounding regions，” said Zhao Lei， researcher with the Institute for International Strategic Studies of the Central Party School of China.

The traffic connectivity also brings people in countries linked to the Belt and Road Initiative closer， enabling more frequent communication. Lu Jianfu， Director of the Religious Studies Center at Shaanxi Normal University， noted the Belt and Road Initiative is not only about trade， but also about people-to-people contacts.

“Cooperation will not be sustainable solely driven by trade， but should be supported through continuously enhancing mutual understanding among peoples，” he said. “History has proven this， as through the ancient Silk Road China introduced its tea and porcelain wares to countries along the road and also brought back cultures of other nations，” he added.

Zhang Guozuo， Director of the China Center for Cultural Soft Power Research， echoed Lu， pointing out that the core of the initiative is inclusive and win-win cooperation. “People-to-people exchanges are the foundation of partnerships. Cultural interaction makes people know each other better and become friends. With friendship， everything is possible，” he noted.

Benefiting all

The countries involved in the Belt and Road Initiative are mostly emerging economies with a population making up 63 percent of the world total， whereas their GDPs total only 29 percent of the global economy. Experts observe that by initially promoting traffic connectivity， the Belt and Road Initiative is building an open platform for cooperation that resonates with demands of participating nations for industrialization and modernization.

“As many participating nations per-capita GDP is no more than 50 percent that of China， they have to continue efforts on upgrading economic structure and increase efficiency of labor productivity while improving infrastructure to reduce business costs so that they can raise peoples income and the economy as a whole，”said Justin Yifu Lin， Dean of Peking Universitys Institute of South-South Cooperation and Development. “Chinas Belt and Road Initiative fulfills such demands，” he added. According to the Ministry of Commerce of China， more than 100 countries and international organizations have taken part in the initiative and more than 40 cooperation deals have been signed by the end of February.

China has jointly set up 56 overseas economic cooperation zones in 20 participating countries， with accumulated Chinese investment amounting to $18.5 billion， bringing $1.1 billion in taxes and 180，000 jobs to participating countries.

Chinese enterprises direct investment in countries along the economic corridors has exceeded $50 billion over the past three years after China put forward the Belt and Road Initiative in 2013. As a two-way cooperation， participating nations investments in China are also on the rise. The latest statistics show that the figure exceeded $8.2 billion in 2015， up by 25 percent year on year， a substantially promising trend comparing with the 6-percent increase of foreign direct investment in China that year.

Behind these figures is the successful integration of the initiative with local development ambitions through concrete projects. Currently， the 40-billion-yuan（$5.8-billion） railway connecting Chinas landlocked Yunnan Province with Vientiane， capital of Laos， is under construction. Production capacity deals with Kazakhstan regarding sectors of steel， cement and building materials are also being carried out. Besides， the construction of industrial parks and economic zones are also on the list of construction projects.

By integrating with regional and national development plans in Belt and Road regions and countries， the initiative will foster sustainable economic progress by sharing advantages and profits and realize win-win results， according to observers. Zheng Yongnian， Director of the East Asia Institute at the National University of Singapore， noted that no matter in terms of capital， technologies or production capacity， they are two-way demands. Both China and countries involving in the Belt and Road Initiative are eager to use foreign advanced technology and capital as well as tap the market potentials of each other， according to him.

Changing Africa

Experts believe that in regard to improving both the telecommunication and transportation infrastructure， the Belt and Road Initiative provides a strategic chance to dock Chinas development strategy with African Unions Agenda 2063， the continents economic integration plan to accelerate the modernization and industrialization progress.

The under-construction information expressway project built by Chinese enterprises with African counterparts will in future make high-speed Internet available to Africans across the continent. In addition， infrastructure projects like construction of railways and industrial parks facilitate transportation across borders on the continent while bringing in investment and creating jobs.

An example of this is Africas first modern international electrified railway connecting the capitals of Ethiopia and Djibouti. The project shortened travel time from seven days to 10 hours and brought jobs and technologies to local people. “During the construction， nearly 40，000 locals were employed. And 2，000 more got maintenance and operation jobs after the railway was put into operation in October 2016，” said Fu Xun， Project Manager from China Railway Group Ltd. who worked on the project. Besides， more than 300 Ethiopians got financial support from Chinese businesses and government come to China for learning skills and expertise on railway engineering， driving and maintenance， he added.

“Railway construction is only a start. With traffic connectivity， cities， ports and industrial parks will be linked， promoting regional integration and bringing in considerable investments and opportunities for economic development，” said Liu Xianfa， Chinese Ambassador to Kenya.

Funding streams

Financial support is vital to sustainably promote infrastructure construction under the Belt and Road Initiative. A report by the Asian Development Bank（ADB） released in late February predicted that it required an investment of $26 trillion on infrastructure from 2016 to 2030 to maintain the current economic growth rate among Asian emerging economies. Breaking it down to annual investment， the figure stands at$1.7 trillion. However， the current actual annual investment in this area in the region is only around $800 billion.

Though there are many platforms providing financial support including ADB， Asian Infrastructure Investment Bank， the Silk Road Fund and BRICS Development Bank， the funding gap is still large. Filling this gap calls for active participation of private funding.

Yang Guangpu， researcher with the Development Research Center of the State Council， suggests public-private partnerships （PPP） should play an active role in mobilizing resources to enhance connectivity under the Belt and Road Initiative. “As an innovative approach of supplying public goods and services， PPP helps alleviate governments financial pressure and enhance investment efficiency，” said Yang.

The involvement of Chinese private funding was first seen on the African continent. In January 2017， the Silkroad International Bank launched its services in Djibouti. Funded by Chinese enterprises such as IZP Group， the bank is the first Chinese-funded enterprise obtaining a banking license in Africa. It offers various financial services in Djibouti including issuing bank cards， providing cross-border payments and international bank cards collection as well as supporting Chinese enterprisesprojects in Africa.

“The opening of the bank was the latest example of Chinas long-term support for infrastructure development in the nation，” said Ilyas Moussa Dawaleh， Djiboutis Minister of Economy and Finance.