Qudsia Bano

The Belt and Road Initiative (BRI) continues to make significant strides in reshaping the global economic landscape by expanding its focus on financial integration, reports WealthPK. China is paving the ground for global mutually beneficial collaborations by focusing on developing robust investment and financing institutions. Launched in 2013 by President Xi Jinping, the BRI has subsequently grown to become one of the world's most ambitious and broad infrastructure development projects. It aspires to promote economic growth, trade, and cultural exchanges by fostering connectivity and collaboration among countries in Asia, Europe, Africa, and beyond. The BRI has expanded beyond physical infrastructure development over the years, now encompassing financial integration. In the recent development, President Xi highlighted the significant achievements of the BRI over the past decade and outlined major steps to support high-quality Belt and Road cooperation in his keynote speech at the Third Belt and Road Forum for International Cooperation held recently in Beijing.

According to President Xi, China is going to promote both signature projects and "small yet smart" livelihood programs. The China Development Bank and the Export-Import Bank of China will each set up a RMB 350 billion loan window. An additional RMB 80 billion wil be injected into the Silk Road Fund. Together, they will support BRI projects based on market and business operation. During this Forum's CEO Conference, cooperation agreements worth USD 97.2 billion were signed. Through Luban Workshops and other initiatives, China will carry out 1,000 small-scale livelihood assistance projects and strengthen vocational education cooperation. Talking to WealthPK, Dr. Liaqat Ali Shah, Executive Director and Head of the Policy Division – Trade and Industrial Cooperation at the Centre of Excellence for China-Pakistan Economic Corridor (CoE-CPEC), said the BRI had already seen numerous projects and investments in various fields, including transportation, energy, and technology.

Now, with a focus on financial integration, China is aiming to create a more stable and supportive financial environment for these endeavors. This includes a renewed commitment to improving access to financing for the participating nations and companies, as well as enhancing the risk management mechanisms for investors. He said, “Financial integration stands as a pivotal pillar of BRI cooperation, as the participating countries and relevant institutions have forged various forms of financial cooperation, creating new models, expanding channels, diversifying stakeholders, and improving investment and financing mechanisms. Their concerted efforts aim to construct a long-term, stable, and sustainable investment and financing system while effectively managing risks.” He shared that in a white paper released by China's State Council Information Office, it was revealed that the participating countries were committed to enhancing trade, investment, and financial integration through the BRI. Trade and investment under the BRI are expanding steadily.

From 2013 to 2022, the cumulative value of imports and exports between China and other BRI countries reached a staggering USD19.1 trillion, boasting an impressive annual growth rate of 6.4 percent. Furthermore, the cumulative two-way investment between China and other BRI countries has reached USD380 billion, of which USD240 billion came from China, said Dr Liaquat. It is worth noting that China has funded the establishment of Silk Road Fund (SRF), which serves BRI cooperation exclusively. By June 2023, the SRF had signed agreements for 75 projects with a committed investment of approximately USD22 billion. Additionally, the Asian Infrastructure Investment Bank (AIIB), established by China in collaboration with other participating countries, has made substantial progress. The AIIB now boasts 106 members and has approved 227 projects with a total investment of USD43.6 billion. The BRI continues to grow and evolve, making substantial contributions to global economic cooperation, trade, and investment. The expansion of financial integration and development of stable investment and financing systems highlight the initiative's enduring commitment to fostering a community of shared prosperity.

Credit: INP-WealthPk