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Session 1 (Main Session): Future Prospects of Opening-up and Globalization

Chen Deming, CCG Honorary Chair; Former Minister of Commerce; President of MOFCOM China Association of Enterprises with Foreign Investment (CAEFI)

Chen Deming: WTO Reform Matters In the New Era of Globalization
With the rapid development of globalization, current economic stagnation has posed a great challenge to the multilateral system. The core of this challenge is how great powers get along with each other. Closely related to the development of globalization, obstacles to WTO reform emerged at the G20 Summit in 2018. Member countries have divergent perspectives on the direction of reform as well as their own interests.

A key disadvantage of WTO rules is that many agreements call for unanimous approval by all 164 members, while its advantage is that it can implement sanctions as a permanent independent institution. However, after years of changes in international politics, economy and geopolitics, as well as the development of advanced technology such as IT, the liberalization and facilitation of trade and investment pursued by WTO is far from being achieved. Many rules need to be revised.

Many countries suggest that China and the United States should lead WTO reform. This is no easy task. China insists on differential treatment for developing countries, which is opposed by the United States.

This year, discussions on WTO reform will be on the agenda of the G20 meeting in Japan. Nonetheless, its realization still needs the consent from the WTO Ministerial Conference. This shows the difficulties in achieving progress in the formulation of global governance rules, especially setting multilateral rules in the short term.

Chen Jian, CCG Advisor; Former Vice Minister of Commerce

Chen Jian: China should grasp the trend of international rules
China's development is a destined result of 40 years of reform and opening up, and the process of continuous integration with international rules. Over the next 40 years, China should not only set clear goals, but also forecast and seize the trends in international rules.

The international power structure, division of labor, economic structure and governance system are all experiencing changes. We should accurately grasp the next step of development. Globalization not only promotes the growth of the global economy, but also brings problems such as exclusiveness, unfairness, inequality and non-reciprocity in the international trade system.

The trend of globalization 4.0 should be a progressive and upward process, starting from the weakest and the most needed place, and improving governance with a commitment to existing rules. In the process of improving the governance structure, we must uphold the core values of the multilateral trading system. This is the basic principle of WTO.

We must correctly understand the meaning of "no break" and "no stand", adhere to the spirit of the "Belt and Road” Initiative and properly handle contradictions between existing rules and new practices. We should move forward in the right direction with determination, treat differences with tolerance, solve complex problems with wisdom, and tackle lasting issues with patience.

Cui Mingmo, President of China Association for International Economic Cooperation (CAFIEC)

Cui Mingmo: China will open up widely for the next 40 years 
2019 marks the 70th anniversary of China's founding. Over the past 70 years, China has achieved historic achievements in economic development. Looking forward, China has stated it will only be more open rather than shutting its door. This can be seen in China holding the upcoming second Belt and Road Forum for International Cooperation and the recently passed Foreign Investment Law to ensure a good investment environment for foreign investors.

China is showing the world its determination to continue to open up wider. China will continue to adhere to this policy and strive to open up over the next 40 years of reform and opening up.

Ronnie Chan, CCG Co-Chair; Chairman of Hang Lung Properties

Ronnie Chan: The East and the West should seek consensus while reserving differences and respecting each other's views
The new round of globalization has been widely discussed. However, whether there will be one, in what way it will happen, and whether it is a real process of globalization, are questions worthy of consideration at present. Ten years ago, no one would have expected that China would come forward to support a new round of globalization, while the United States turns back the clock.

China has been clear in its commitment to continue to open up in the future. Many developed countries, including the United States, believe that they are open enough. But unpredictable events like Brexit and the inauguration of Trump raise the question whether there might be the need to further open up. Meanwhile, whether China needs to fully open up like the West is also a question worthy of consideration.

The discourse systems of the East and the West are very different. President Xi Jinping proposed a community with shared future for mankind. We should work together to build a future that benefits everyone. Whether the West really wants to seek consensus while reserving differences is unknown, but it is hoped that the West can respect the different views of others. We hope that the East and the West can reach a consensus and pursue a future that is beneficial to all.

Wang Huiyao, President of Center for China and Globalization (CCG); Vice President of China Association for International Economic Cooperation (CAFIEC)

Wang Huiyao: China will continue to expand its opening in Globalization 4.0
Globalization 4.0 has arrived. China will continue to open up and actively promote a new round of global economic opening to provide an important driving force for the development of an open world economy.

The new round of globalization needs more consensuses, so as to expand the opening up and promote the innovation of talents and education, and the progress of globalization 4.0 with the development of science and technology.

In the era of globalization 4.0, China will provide the world with more wisdom and put forward greater plans. With the prevalence of trade protectionism and unilateralism, global governance is facing new challenges and new situations. How to develop a higher level of open economy in the future, how to deal with a new round of globalization challenges and how to better participate in global governance and build a community with shared future for mankind are all urgent issues to be considered.

Liu Shijin, CCG Advisor; Deputy Director-General of Economic Council under the CPPCC; Vice President of Development Research Foundation under the State Council

Liu Shijin: The key to China's future reform is to implement the objectives
Despite experiencing many setbacks, globalization has been moving forward due to the resilience of this process. Internationally speaking, the Sino-US trade relationship has been developing and is likely to result in an agreement in spite of recent trade disputes. It is in the fundamental interests of the two powers, as well as the international community, to expand the common interests they have. This is the impetus of globalization.

At the same time, WTO reform is also imperative. The trade relationships among China, the USA, Japan and Europe may end up with a non-tariff free trade zone. It may take a long time, but the target is there. Domestically speaking, the Chinese economy is experiencing a transformation from high-speed to medium-speed growth. The main sources of China's growth in the future will include the improvement of low-efficiency sectors, income growth, human capital upgrading of the low-income population, the transformation and upgrading of consumption and production structure, cutting-edge innovation and green development.

China is facing challenges both at home and abroad. The system needs to be improved, new reform objectives should be put forward and a high-level market economy has to be built. China's next step is to carry out the reform objectives that have been proposed.

Justin Vasse, Director-General of Paris Peace Forum

Justin Vasse: The Direction of Globalization: Maintenance, Reform and Expansion
There are many reasons behind anti-globalization, including a break in the global value chain caused by 2008 economic crisis, the rapid development of service sectors and trade frictions. There are three directions for the future of globalization.

First, WTO should fulfill its responsibility of maintaining the mechanism of globalization and regulating global trade in a better way. China and the EU are making headway on this and should work together to fight against trade unilateralism.

Second, the WTO does require reform. Responding to this, the EU does not agree with some of the Trump administration's unilateralist policies. China and the EU have been communicating closely with each other and expect a solution to be brought forward by the China-EU working group within the framework of WTO.

Third, we should expand and push forward global governance. In the future, we should pay more attention to the relationships among environment, geopolitics and trade relations. On one hand, in order to reduce carbon emissions and protect biodiversity, we must link it with trade and ensure their coordination.

On the other hand, peace promotes globalization and stability brings greater trade. In the future, we should strengthen the relationship between trade and geopolitics and avoid repeating the same mistakes. We must reduce risks and avert more trade wars, protectionism and geopolitical threats.

Hon. Terry Miller, Director of Center for International Trade and Economics, Heritage Foundation; Former US Ambassador to UN

Hon. Terry Miller: China should learn from the World Bank's experience on BRI 
CCG has created this platform for international exchanges of ideas and promoting mutual understanding. As globalization has entered a new phase, the Belt and Road Initiative serves as an important path in the process of globalization and plays an important role in enhancing cooperation and mutual trust among all countries.

Over the past few decades, China has led hundreds of millions of people out of poverty and towards globalization. With its growing strength, China is becoming more active in integrating itself into the international community. In essence, the Belt and Road Initiative is complementary to the functions of the World Bank and the International Monetary Fund.

Therefore, China can learn more from the existing experience to enhance the transparency of the Belt and Road cooperation by tackling corruption and contributing more to the development of globalization.

---

Center for China & Globalization（CCG）is a leading Chinese nongovernmental think tank based in Beijing. It is dedicated to the study of Chinese public policy and globalization. Boasting a strong research team, it enjoys an impressive record of publications and events with broad public policy impact.

CCG is ranked in the Top 100 Think Tanks worldwide, the Best nongovernmental think tank in China and in the Top 6 Think Tanks in China according to the world-renowned "2018 Global Go To Think Tank Index Report", released annually by the University of Pennsylvania's Think Tanks and Civil Societies Program. CCG is currently the only non-governmental Chinese think tank to hold “UN Special Consultative Status”.

Two well-known scholars, Dr. Wang Huiyao and Dr. Miao Lu, founded the CCG in 2008. Today near 100 in-house researchers and staff serve this thinking hub with subsidiaries and divisions spanning across China including Shanghai, Shenzhen, Guangzhou, Qingdao and Hong Kong.


Webite ：

English：en.ccg.org.cn
Chinese：www.ccg.org.cn 

BRI360.com from RWR advisory

RWR Advisory Group <adavenport@rwradvisory.com>

To:chris.macrae@yahoo.co.uk

26 Apr at 16:36

This edition covers developments from April 9 - 23. You are receiving the standard version of the Monitor. Please note that receipt of the comprehensive list of all regional Belt and Road transactions and activities tracked by RWR now requires a premium subscription. Please contact us to learn more about our services, and feel free to share this newsletter with interested friends and colleagues. Subscribe to the Belt and Road Monitor Belt and Road at a Glance   Top Developments Belt and Road Forum: More Sustainability, Higher Quality  The second Belt and Road Forum is taking place in Beijing April 25-27. According to a draft communique distributed before the forum’s start, representatives from 37 countries will commit to financing practices that respect global debt goals and promote sustainable development. The communique also calls for local currency financing, addressing the danger of repayment obligations swelling as a result of currency volatility. These commitments reflect the imperative in Beijing to address the “debt trap diplomacy” narrative that has taken root since the last forum in 2017. The forum is being attended by representatives from 37 countries, including Japan,New Zealand, Italy, Portugal, and Austria. Several days earlier, on April 22,Jamaica announced that it would be joining the Belt and Road Initiative, adding to the roster of Latin America and Caribbean countries that have signed on in recent months. Peru reportedly also plans to sign a Belt and Road agreement during the forum. Despite Jokowi Win, BRI Faces Speed Bumps in Indonesia  It is all but confirmed that Indonesian President Joko Widodo (commonly known as Jokowi) secured re-election in the country’s April 17 election. Widodo’s primary challenger, Prabowo Subianto, suggested, if victorious, that he would review Belt and Road Initiative projects, such as the Jakarta-Bandung high speed railway, so that Indonesia can get a “better deal.” While Widodo has said that he will improve Indonesia’s infrastructure, his re-election is not a sure sign of a smooth path for the Belt and Road in Indonesia. Indonesia’s investment chief, Tom Lebong, criticized the railway project just prior to the election, complaining that even cabinet officials were having trouble securing information. More recently, Foreign Ministry Spokesperson Arrmanatha Nasir said, “If it won’t be profitable, it should not proceed.” East Coast Rail Link Back on Track at Lowered Cost The governments of Malaysia and China reached an agreement on April 11 to resume work on the East Coast Rail Link (ECRL), which had been suspended for almost a year as part of Malaysian Prime Minister Mahathir Mohamad’s election pledge to review Chinese infrastructure projects. The cost was revised downward from $15.81 billion to $10.7 billion, in part due to contractor China Communications Construction Company (CCCC)’s willingness to sign an MoU with Malaysia Rail Link (MRL) assuming the risks involved in rail operations and maintenance. The resumption, however, has not ended the controversy surrounding the project. On April 23, controversial blogger Raja Petra Kamarudin alleged that CCCC had been given 4,500 acres of land along the route for free as part of the renewed agreement. This has been disputed by government sources. CMEC Signs Contract to Upgrade Bulgaria's Port of Varna  On April 12, China Machinery Engineering Corporation (CMEC) signed a $135 million contract with Logistic Center Varna to upgrade the port of Varna, which is one of Bulgaria’s two main ports, located on the Black Sea’s west coast. As the general contractor, CMEC will be responsible for design, equipment procurement, civil engineering, and construction, as well as installation, commissioning, and training once the project is completed. While the contract is limited in scope, it does mark the first involvement of a Chinese contractor in port construction work on the Black Sea (notwithstanding dredging work in Crimea). CGN to Develop Reactors at Romania’s Cernavoda Nuclear Plant China General Nuclear Power Corporation (CGN) and its subsidiary, CGN Central and Eastern Europe Investment, signed a preliminary agreement with Romanianpower producer Societatea Nationala Nuclearelectrica  on April 10 to establish a joint venture to develop two new reactors, units 3 and 4, at the Cernavoda nuclear plant. The plant currently has two reactors with the installed capacity of 700MW each. This is the latest step in the development of a deal that began in 2013, when CGN and Nuclearelectrica signed a letter of interest regarding the two units. Chinese, Russian Think Tanks Establish Joint Arctic Research Center   During the fifth International Arctic Forum held in St. Petersburg on April 10, the Qingdao National Laboratory for Marine Science and Technology signed an agreement with the Institute of Oceanology at the Russian Academy of Sciences toestablish the China-Russian Arctic Research Center, which will serve as the base for several joint Arctic expeditions and research projects in the future. Research done at the center will allow scientists to forecast ice conditions along the Northern Sea Route (NSR). Tsingshan Expands Plans for Steel Plant, Power Station in Zimbabwe On April 23, Tsingshan Holding Group signed an MoU with Zimbabwe’s Ministry of Mines and Mining Development to expand the scope of an existing MoU todevelop a $1 billion steel plant in Mvuma and a 600MW thermal power station to supply power to the plant, that was signed in June 2018. The expanded MoU provides Tsingshan with a lithium concession for mining and value addition, doubles the ferrochrome production, and allows for exports in addition to domestic consumption. Tsingshan also plans to explore the possibility of building a railway line from landlocked Zimbabwe to Mozambique’s port of Beira. New Project Locations Data from IntelTrak, April 9 - 23. Subscribe to Inteltrak What They're Saying EU SPOKESPERSON Speaking to EURACTIV ahead of the 21st EU-China Summit "Every country is free to establish its investment objectives. At the same time, the EU has concerns over the socioeconomic and financial effects some of China’s investments can have." KARUNASENA KODITUWAKKU Sri Lankan Ambassador to China Addressing loan replayments to China amid debt crisis "If China forced us to obtain loans, you could call it a trap, but every cent we have from China, those were decisions made in Sri Lanka and every loan given to us was on our own request." ALEXANDER VOROTNIKOV Expert, Russia's Project Office for the Development of the Arctic Op-ed in the Russian Defense Ministry’s Zvezda (Star) Weekly "But we should not forget about the pragmatism of the Chinese - they invest only when they can benefit from the partnership." MIKE POMPEO U.S. Secretary of State Remarks made following stop in Chile during Latin America trip "When China does business in places like Latin America, it often injects corrosive capital into the economic bloodstream, giving life to corruption, and eroding good governance." XU BU Chinese Ambassador to Chile Op-ed in Chile's El Mercurio in response to Pompeo's remarks "Pompeo’s body has entered the 21st century, but his mind is still in the 20th century, which is fixated on hegemony and the cold war mentality." ARRMANATHA NASIR Indonesian Foreign Ministry Spokesperson In a media briefing in Jakarta "From the beginning, Indonesia has stressed that Belt and Road projects have to be private sector-driven, a business-to-business cooperation, so it's profit-oriented. If it won't be profitable, it should not proceed. If there is any debt, it is a debt to the private sector" By the Numbers Data from IntelTrak, April 9 - 23. Regional Developments This section is only visible to premium subscribers to the Belt and Road Monitor. It includes granular information about the individual business deals, significant meetings, and important policy developments that took place during the previous two weeks.   To upgrade your subscription, please click here. If you enjoy our Belt and Road coverage, consider checking out IntelTrak: RWR's visual analytic tool that tracks and maps the global activities of Chinese and Russian companies in real time.   RWR Advisory Group is a Washington DC-based research and advisory firm that specializes in the risks present at the intersection of global business activity and national security concerns. Contact us to learn more.

Switzerland joins BRI as the initiative extends further into central Europe

Updated 13:35, 26-Apr-2019

Katrin Büchenbacher

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01:09

Swiss President Ueli Maurer announced on Thursday that Switzerland formally supports China's modern-day Silk Road initiative during a press conference at the Swiss embassy in Beijing.

Maurer, also Switzerland's finance minister, is on a week-long trip to China together with a business and finance delegation, taking part in the second Belt and Road Forum in Beijing that opened on Friday. Chinese President Xi Jinping invited Maurer for a state visit to china which begins on April 29, during which the two sides are set to sign a memorandum of understanding (MoU) to intensify cooperation on trade, investment and project financing in third markets along the routes of the Belt and Road Initiative (BRI).

The MoU will create equal conditions for Chinese and Swiss firms and will be the first of other agreements that will follow, Maurer told the media.

"The projects within the BRI are the most important investment projects of this century. If we want prosperity – and we want prosperity – there has to be investment first," Maurer said. "This project will serve the entire world, and we are happy to make a small contribution to it."

After Italy signed an MoU on March 24, becoming the first Group of 7 country and founding EU member to get on board with the expansive initiative, and Luxembourg, which joined during its prime minister's visit to China on March 27, Switzerland's signing makes it the latest central European state to make a BRI deal with China. Greece, Portugal, and Eastern European countries including Hungary and Poland are already part of it, totaling 26 countries that signed cooperation agreements with China.

Ueli Maurer, president of the Swiss Confederation and federal councilor of finance (C), speaks to the media ahead of the second Belt and Road Forum in Beijing, April 25, 2019, in Beijing. /Qi Jianqiang, CGTN Photo

Cultivating contacts

Switzerland supporting the initiative is to be understood in the context of deepening their bilateral relations, Maurer said. Switzerland seeks to harness the new connections and opportunities for its economy, in particular, its finance and insurance industries, provided by the huge project that spans land and sea routes over Eurasia to Africa and the Americas. It could be a smart move, considering that other small states, such as New Zealand and Singapore, have been able to leverage their competitive advantage in the BRI.

"Swiss companies can benefit from the BRI, while China benefits from the know-how and the reputation of Swiss companies," Professor Ruedi Nützi, director of the School of Business at the University of Applied Sciences and Arts Northwestern Switzerland, told CGTN Digital.

The small state wants to further cultivate its close contacts with China to create as many win-win situations as possible for both nations, Nützi concluded.

Nützi, who was awarded the 2014 Friendship Award by China for his efforts in strengthening cooperation in education, research, and innovation between the two nations, stressed the importance of the rapid launch of Sino-Swiss projects within the BRI to create positive momentum and calls for concrete action.

But at present, Switzerland's participation in the BRI is only in its starting phase.

"We are waiting for specific projects to take form," Maurer said. The current state visit focuses on creating the basic conditions for Swiss companies for those projects to happen, he said.

Guido Fürer, chief investment officer at the Swiss insurance company Swiss Re, also present at the conference, said that the Swiss finance sector is very interested in working out a standardization that would ensure huge investment volumes in the BRI.

Herbert Scheidt, president of the Swiss Banking Association (L) and Guido Fürer, chief investment officer at the Swiss insurance company Swiss Re, speak about opportunities for the Swiss finance and insurance industry within the Belt and Road, April 25, 2019, in Beijing. /Qi Jianqiang, CGTN Photo

No clear strategy

It's unlikely that Switzerland – a non-EU member and neutral economy – signing a deal with China will alienate the U.S. and large EU member states France and Germany, who have not shown interest in joining the BRI yet.

The U.S. National Security Council responded on Twitter when Italy joined the initiative in March that the BRI will bring "no benefits" to the Italian people and criticized the country's endorsement of China's plan.

"Switzerland does not share the U.S.' rejection of the Belt and Road," Maurer said, explaining that as an independent small state, Switzerland does not adhere to any of the big blocs, but can move freely. Maurer said that the BRI involves some risks, and therefore, formulated five principles for Switzerland's engagement: private capital for private investments, diligence with the emerging debts, social responsibility, environmental sustainability, and transparency.

Nützi said as long as the quality of Swiss export products and services remains satisfactory, trade relations with Germany and other EU states will remain good in the future. But like the EU, Switzerland does not have a coherent strategy for China, which is urgently needed, he said. "Part of this strategy must define which role Switzerland and Swiss agents will take in the BRI."

Further market liberalization

Switzerland is the first and so far only European country to have a free trade agreement (FTA) with China. According to swissinfo.ch, the FTA has saved companies in both countries some 103 million U.S. dollars in customs duties in 2017.

A 2018 study by the Chinese University of International Business and Economics, Nanjing University and the Swiss University of St. Gallen has shown that 60 percent of Swiss companies do not utilize the FTA partly because they feel the bureaucratic effort is too demanding. Further cooperation under the BRI framework may help to further extend the FTA.

Maputo Bridge in Mozambique, a supporter of the Belt and Road, built by the China Road and Bridge Corporation. /VCG Photo

China and Switzerland have different approaches to the FTA, Nützi explained, stating that China goes by step-by-step market liberalization.

"Switzerland has to make clear demands for the development of the FTA," Nützi said, stressing that continuous dialogue and dedication to reach mutual successes are decisive.

Swiss-Chinese ties extend almost as far back as the founding of the PRC. Switzerland was one of the first Western nations to recognize the PRC as a state in 1950. After China's reform and opening-up, relations intensified. Today, China is Switzerland's largest trading partner in Asia and the third-largest globally after the EU and the U.S.

Read more:

Interview: Swiss president says Belt and Road Initiative is a 100-year project that brings opportunities

(Top photo: Ueli Maurer, president of the Swiss Confederation and federal councilor of finance, speaks about Switzerland's engagement with the Belt and Road Initiative, April 25, 2019, in Beijing. /Qi Jianqiang, CGTN Photo)

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