Summary: Chinese President Xi Jinping vows to open up China’s market to international firms and provide over $100 billion in financing for developing economies as part of the Belt and Road initiative.
Chinese President Xi Jinping has announced plans to increase access to China’s market for international companies and provide more than $100 billion in financing for developing economies as he inaugurated a forum focused on the Belt and Road infrastructure policy. The Belt and Road initiative, which has led to the construction of power plants, roads, railroads, and ports globally, has deepened China’s relationships with Africa, Asia, Latin America, and the Middle East. However, the substantial loans that financed these projects have placed a heavy burden on poorer countries, resulting in China gaining control of some of these assets.
During the forum’s opening ceremony, Xi assured that the China Development Bank and the Export-Import Bank of China would establish financing windows of 350 billion yuan ($47.9 billion) each, while an additional 80 billion yuan ($11 billion) would be injected into the Silk Road Fund to support Belt and Road projects. Xi also pledged to remove restrictions on foreign investment access in China’s manufacturing sector, open up cross-border trade and investment in services, expand market access for digital products, and undertake reforms in state-owned enterprises and sectors such as the digital economy, intellectual property rights, and government procurement.
Representatives from more than 130 countries, with at least 20 heads of state and government in attendance, are participating in the forum. Russian President Vladimir Putin, who is attending the event, expressed his support for the Belt and Road initiative, describing it as leading to a fairer and multipolar world. Putin’s meeting with Hungarian Prime Minister Viktor Orbán, the sole European Union leader present, signifies China’s economic and diplomatic support for Russia amidst its isolation due to the Ukrainian conflict. Other attendees include the presidents of Indonesia, Argentina, Kazakhstan, Sri Lanka, Kenya, as well as U.N. Secretary-General António Guterres, who has praised the Chinese policy for driving development in underserved areas. Notably, most Western European countries and U.S. allies sent lower-level or former officials to the forum.
The Belt and Road initiative has made China a significant financier of development projects, on par with the World Bank. The Chinese government claims that the initiative has launched over 3,000 projects and attracted nearly $1 trillion in investment. However, it has faced criticism from the U.S., India, and others, accusing China of engaging in ‘debt trap’ diplomacy, where loans are given with the knowledge that governments would default, leading to Chinese interests taking control of assets. For instance, the leasing of a Sri Lankan port to a Chinese company for 99 years has been frequently referenced. As the initiative enters its second decade, concerns about the sustainability of the debt burden and environmental impact are at the forefront of discussions at the forum, according to Steve Tsang, the director of the SOAS China Institute in London.
Tags: China, Xi Jinping, Belt and Road, market openness, investments, infrastructure policy, financing, development, debt trap diplomacy, sustainability