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China’s Xi says Silk Road plan boosts finance, security ties

/ 04:22 PM May 14, 2017
Russian President Vladimir Putin, left, and Chinese President Xi Jinping chat during a breakfast prior to the opening ceremony of the Belt and Road Forum in Beijing, Sunday, May 14, 2017. (Alexei Nikolsky, Sputnik, Kremlin Pool Photo via AP)

Russian President Vladimir Putin, left, and Chinese President Xi Jinping chat during a breakfast prior to the opening ceremony of the Belt and Road Forum in Beijing, Sunday, May 14, 2017. (Alexei Nikolsky, Sputnik, Kremlin Pool Photo via AP)

BEIJING — President Xi Jinping called Sunday for closer cooperation across Asia and Europe in areas from anti-terrorism to finance, as leaders from 29 countries gathered to promote a Chinese trade initiative that could increase Beijing’s global influence.

The Belt and Road Initiative calls for building ports, railways and other facilities in a vast arc of 65 countries. Other countries welcome the investment but governments including the United States, Russia and India have expressed unease Beijing also might be using the effort to increase its political stature.

Speaking before an audience that included Russian President Vladimir Putin, Xi said his government has “no desire to impose our will on others.” But he called for “economic integration” and cooperation on financial regulation, anti-terrorism and security — fields in which China’s heft as the world’s No. 2 economy would make it a dominant player.


“We should foster a vision of common, comprehensive, cooperative and sustainable security,” said Xi. He called for stepped-up action against terrorism and what he called its root causes of poverty and social injustice.

In a reminder of potential security threats, North Korea test-fired Sunday what could be a new type of missile in a direct challenge to the new South Korean president.

The “Belt and Road” is Xi’s signature foreign policy initiative. The two-day meeting gives him a platform to promote his image as a global leader and free trade advocate in contrast to President Donald Trump, who has called for import restrictions.

China is hardly the first government to promote regional trade links. Japan has given billions of dollars in grants and low-cost loans to Southeast Asian nations, and governments including South Korea have launched trade initiatives. But Beijing’s effort is the most ambitious and is backed by China’s financial muscle and status as the biggest global trader.

Chinese officials have said previously “Belt and Road” is purely commercial, though Xi’s comments indicated Beijing sees that as including a broad array of regulatory and other coordination with potentially far-reaching consequences.

Some diplomats and political analysts say Beijing is trying to create a political and economic network centered on China, push the United States out of the region and rewrite rules on trade and security. The United States and Japan, which Beijing sees as rivals for influence in Asia, are not part of “Belt and Road.”

China and Russia already are partners, along with Central Asian governments, in the Shanghai Cooperation Organization, a security group widely seen as an effort to counter U.S. influence in the region.

Putin, Turkish President Recep Tayyip Erdogan and Prime Minister Nawaz Sharif of Pakistan echoed Xi’s theme that economic development would help to nurture political stability and neutralize support for radical groups.


The Russian leader complained about “illegal sanctions” — a possible reference to U.S. trade penalties imposed on Moscow over Ukraine — and warned trade protectionism is creating a “breeding ground” for terrorism.

Closer economic integration “should change the very political and economic landscape of the continent, bringing Eurasia stability, prosperity,” said Putin.

Referring to Bejing’s plan, Erdogan said, “This is going to be the kind of initiative that puts an end to terrorism.”

Xi called for regional cooperation in finance — a field where China’s huge state-owned banking industry and $3 trillion of foreign currency reserves would make it the dominant player.

“We should establish a sustainable financial system that keeps risk under control,” said Xi.

The president also announced additional Chinese financing for “Belt and Road” totaling 780 billion yuan ($113 billion).

That includes lending totaling 380 billion yuan ($55 billion) by two noncommercial state banks, up to 300 billion yuan ($43 billion) from state-owned commercial lenders and a 100 billion yuan ($14.5 billion) contribution to the Silk Road Fund set up in 2014 to finance infrastructure projects.

Xi said his government also will provide aid worth 60 billion yuan ($8.7 billion) to developing countries and international organizations. He said Beijing plans to announce dozens of new investment and other agreements during the two-day event.

On Sunday, Pakistan announced agreements with China on possible projects worth a total of 500 million yuan ($72 million). That is on top of railway, power and other projects announced previously in an “economic corridor” linking China’s far west with the Indian Ocean that Pakistani officials have said are worth up to $55 billion.

Other leaders included Premier Paolo Gentiloni of Italy and President Michelle Bachelet of Chile. No major Western leaders attended, though Britain, France and Germany were represented by top finance officials.

A U.S. delegation was led by Matt Pottinger, special assistant to President Donald Trump and senior director for East Asia at the National Security Council.

The U.S. and other governments have said “Belt and Road” is a natural outgrowth of China’s status as the biggest global trader and they want to work with Beijing on infrastructure. But they also have expressed concern Beijing might undermine human rights and international standards for lending or leave poor countries with too much debt.

Chinese state-owned lenders have put up most of the money for “Belt and Road,” but Beijing says it wants projects to attract private investment.

Speaking at Sunday’s event, former U.S. Treasury Secretary Henry Paulson said Beijing needs to make its initiative more transparent to attract partners.

“I know the United States has been among those countries apparently most skeptical,” said Paulson, who was in office in 2006-09. “The more China can demonstrate the Belt and Road Initiative is open to outside participation in this way, the more it will be embraced by global and even American firms and suppliers.”

India delivered an implicit criticism in a statement that said such an initiative should meet international norms and not create unsustainable debt.

India has objected to Chinese state-owned companies working in the Pakistani-held part of Kashmir, the Himalayan region claimed by both sides. New Delhi sees that as an endorsement of Pakistan’s control.


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TAGS: Beijing, China, Finance, Security, silk road, Silk Road plan, Terrorism, The Belt and Road Initiative, Trade, Xi, Xi Jinping
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