Xi calls for stronger cooperation, less protectionism at opening of B&Road Forum

Xi also lauded his grand plan launched 10 years ago of building global infrastructure and energy networks connecting Asia with Africa and Europe through overland and maritime routes, saying that "blueprints turned into real projects."

Representatives of more than 130 countries, largely from the Global South, attended the forum including several heads of state, of whom the most prominent was Xi's "dear friend" Russian President Vladimir Putin.

"We stand against unilateral sanctions, economic coercion, decoupling and supply chain disruption," Xi told more than 1,000 delegates gathered in an ornate conference room in the Great Hall of the People west of Tiananmen Square.

Xi pushed against Western efforts to reduce dependence on the Chinese economy, saying that, "our lives will not be better and our development will not be faster if we view the development of others as a threat and economic interdependence as a risk."

Chinese President promised foreign companies greater access to China’s huge market and more than $100 billion in new financing for other developing economies.

Xi’s initiative has built power plants, roads, railroads and ports around the world and deepened China’s ties with Africa, Asia, Latin America and the Mideast. However, the massive loans backing the projects have burdened poorer countries with heavy debts, in some cases leading to China taking control of those assets.

At the forum’s opening ceremony at the ornate and cavernous Great Hall of the People, Xi promised that two Chinese-backed development banks – the China Development Bank and the Export–Import Bank of China – will each set up 350 billion yuan ($47.9 billion) financing windows. An additional 80 billion yuan ($11 billion) will be invested in Beijing’s Silk Road Fund to support BRI projects.

“We will comprehensively remove restrictions on foreign investment access in the manufacturing sector,” Xi said. He said China would further open up “cross-border trade and investment in services and expand market access for digital products” and carry out reforms of state-owned enterprises and in sectors such as the digital economy, intellectual property rights and government procurement.

The pledges of hefty support from Beijing come at a time when China’s economy has slowed and foreign investment has plunged.

Xi alluded to efforts by the United States and its allies to reduce their reliance on Chinese manufacturing and supply chains amid heightened competition and diplomatic frictions and reiterated promises that Beijing would create a fairer environment for foreign firms.

“We do not engage in ideological confrontation, geopolitical games nor clique political confrontation,” Xi said. “We oppose unilateral sanctions, economic coercion and the decoupling and severance of chains,” a reference to moves elsewhere to diversify industrial supply chains.

Reiterating Chinese complaints that such moves are meant to limit China’s growth, Xi said that “viewing others’ development as a threat or taking economic interdependence as a risk will not make one’s own life better or speed up one’s development.”

“China can only do well when the world is doing well,” he said. “When China does well, the world will get even better.”

Addressing the forum right after Xi, Putin praised BRI as being “truly important, global, future-oriented, aimed at creating more equitable, multipolar world relations.”

“This is truly a global plan,” he said, adding that it aligns with Russia’s plan “to form a large Eurasian space, as a space of cooperation and interaction of like-minded people, where a variety of integration processes will be linked.” He referred to other regional organizations, such as the security-oriented Shanghai Cooperation Organization, the Association of Southeast Asian Nations (Asean), and the Eurasian Economic Union of former Soviet states.

With the BRI, China has become a major financer of development projects on a par with the World Bank. The Chinese government says the initiative has launched more than 3,000 projects and “galvanized” nearly $1 trillion in investment.

It has also attracted criticism from the US, India and others that China is engaging in “debt trap” diplomacy: Making loans Beijing knew governments would likely default on, enabling Chinese interests to take control of the assets. An oft-cited example is a port that the Sri Lankan government ended up leasing to a Chinese company for 99 years. Many economists say China did not make the bad loans intentionally.

A key concern is whether the BRI can become more sustainable in terms of debt burdens, said Steve Tsang, director of the SOAS China Institute in London.

The initiative now aims to become smaller and greener after a decade of big projects that boosted trade but left big debts and raised environmental concerns.

China will also “monitor the debt sustainability of BRI countries more closely,” Christoph Nedopil, director of the Asia Institute at Griffith University in Australia, wrote in a report.

“Chinese financial institutions will likely limit their exposure to projects that do not have stable cash flows from within the project,” he added. “That being said, ‘beautiful’ strategic projects, such as strategic railways or ports, will still find Chinese financial creditors.”

AP and Reuters