Posts Tagged ‘roads’

Hong Kong firms join forces to make deals under Silk Road plan

June 19, 2017

Companies will draw on their experience to initially establish infrastructure projects and industrial parks in Thailand and Vietnam

By Josh Ye
South China Morning Post

Monday, June 19, 2017, 8:48pm

Hong Kong companies will form a consortium to build infrastructure projects and industrial parks in Thailand and Vietnam under mainland China’s Silk Road project, the Trade Development Council says.

Council president Vincent Lo Hong-sui said over 40 business leaders from Hong Kong and Shanghai formed a delegation while visiting the two countries last month and met both prime ministers.

He added that this was one of many steps in further involving Hong Kong companies with the “One Belt, One Road” initiative.

Lo said the statutory body was now forming “a consortium of local companies” to help them enter these developing markets as a collective force.

“We are looking to build infrastructure projects and industrial parks in countries under the belt and road initiative.”

The initiative was launched by Beijing in 2013 to promote the building of railways, roads, power plants and other infrastructure projects in 60 countries from Asia to Europe on its old Silk Road to promote trade and economic growth.

The council has identified eight countries out of the 65 under the scheme as the initial destinations for Hong Kong investment – Vietnam, Thailand, Indonesia, Saudi Arabia, United Arab Emirates, Poland, Hungary and the Czech Republic.

Nicholas Kwan, research director at the council, said Hong Kong investors were seasoned in managing supply chain systems across countries.

 Vincent Lo says numerous multibillion-dollar deals will be closed this year. Photo: Sam Tsang

Lo said the development level of many of the belt and road countries reminded him of mainland China three decades ago.

“Hong Kong investors have garnered a lot of practical experience in developing mainland China,” he said. “This experience is unique and will definitely benefit other countries.”

He said the council aimed to close several deals this year and estimated some projects were worth more than US$10 billion.

Lo added that chief executive-elect Carrie Lam Cheng Yuet-ngor had told him the next administration would fully support the council in furthering deals with countries linked to the trade initiative.

The council also announced that it would host its second belt and road summit in September, which looked to introduce more concrete plans for local firms to enter relevant countries.

http://www.scmp.com/news/hong-kong/economy/article/2099050/hong-kong-firms-join-forces-make-deals-under-silk-road-plan

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Donald Trump’s Infrastructure Plan Faces an Urban-Rural Divide in Congress

June 8, 2017

Representatives and Senators in rural regions are concerned that private investors would focus on cities

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June 8, 2017 8:38 a.m. ET

WASHINGTON—President Donald Trump’s plan to tap the private sector to rebuild $1 trillion worth of roads, bridges and rails has encountered an early problem: geography.

The administration says it will rely on private investors to supply the vast majority of cash to support a decadelong infrastructure rebuilding effort. But members of Congress…

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Trump infrastructure push faces cold shoulder from Congress
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Repairing the nation’s crumbling roads and bridges was supposed to be an area ripe for bipartisan compromise between congressional Democrats and President Donald Trump. Instead, Democrats are panning Trump’s proposed $1 trillion overhaul and even Republicans are balking at some aspects of the emerging plan.

The White House’s self-proclaimed “Infrastructure Week” began with Trump appearing Monday with aviation officials and some prominent GOP lawmakers to announce plans to privatize the nation’s air traffic control system and separate operations from the Federal Aviation Administration.

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“We live in a modern age yet our air traffic control system is stuck, painfully, in the past,” Trump said, noting the FAA had been working to upgrade the system for years.

But the proposal quickly drew bipartisan opposition, and there were few signs it would get far on Capitol Hill. “All but our largest airports nationwide stand to be hurt by this proposal,” said Sen. Jerry Moran, R-Kansas.

Next up will be a series of events throughout the week, including some with the nation’s mayors and governors, that will allow Trump to highlight his effort to muster public and private funding to overhaul the highway, waterway, electrical and airway systems on which the nation depends. The president plans to travel to Ohio on Wednesday to address ways of improving levees, dams and locks along inland waterways that are crucial to agricultural exports.

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The details of the plans must still be fleshed out. According to Trump’s budget proposal, the funding would come from $200 billion in tax breaks over nine years that would then — in theory — leverage $1 trillion worth of construction.

But although the goal of upgrading crucial infrastructure has broad support, Democrats do not like Trump’s plan for paying for it, arguing that his approach would result in taxpayer-funded corporate profits at the expense of investments in rural areas where money-making opportunities are scarce.

“A private-sector-driven infrastructure plan means tolls, tolls, tolls — paid by average, working Americans,” said Senate Minority Leader Chuck Schumer of New York. “It also means that infrastructure that can’t be built with tolls, like repairing our crumbling schools, for instance, will likely get left behind.”

Schumer struck a far different tone in the days immediately after Trump’s election, when he told The Associated Press that infrastructure investment was an area where Trump appeared more aligned with Democrats than with Republicans. Indeed, Schumer said that he’d spoken with Trump, offering his own support for a large infrastructure package but warning that conservative Republicans were unlikely to go along.

Conservative opposition remains a potential roadblock to Trump’s infrastructure plans. Nonetheless, the White House appears to be making little effort to round up bipartisan support on the issue. Trump is holding a series of meetings Tuesday with members of Congress, but they’re all Republicans. And Schumer’s spokesman, Matt House, said the White House never responded after Democrats presented their own infrastructure blueprint in January and shared it with the administration.

Instead of involving the private sector, Democrats’ preferred method is to simply add $1 trillion to the deficit to pay for a range of infrastructure projects they claimed would create 15 million jobs over 10 years.

Still, the White House legislative affairs director, Marc Short, told reporters in a briefing Monday night that the goal remained to get Democratic support for the infrastructure package.

“Infrastructure, the president’s said all along he believes to be a bipartisan exercise and it’s one that we will be looking to partner with them on,” Short said.

The White House and Republicans are already proceeding on a partisan basis with their other two big legislative projects, health care and taxes, with uncertain chances for success on both. Chances for infrastructure legislation may be dim, too, given the poisonous atmosphere in Washington as an undisciplined president courts controversy over Twitter and an angry liberal base goads Democratic lawmakers to battle him at every turn. The investigation into Russian election meddling and ties with Trump’s campaign hang over everything.

“This is not what he campaigned on and I think his voters are going to figure that out, sooner rather than later,” said Sen. Chris Murphy, D-Conn.

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Associated Press writers Ken Thomas, Josh Boak, Jill Colvin and Mary Clare Jalonick contributed to this report.

Philippine minister starts damage control after Duterte’s China war remark — “Now we are on China’s ‘One Belt, One Road,’ and can’t get off?”

May 22, 2017

Reuters

 Newly installed Philippines’ Foreign Secretary Alan Peter Cayetano (R) delivers a statement during a flag raising at the Department of Foreign Affairs headquarters in Pasay City, Metro Manila, Philippines May 22, 2017. REUTERS/Romeo Ranoco
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Talks last week between leaders of China and the Philippines were frank and friendly, with no threats or bullying, Manila’s foreign minister said on Monday, after his president said he was warned of war if he drills for oil in the South China Sea.

Foreign Secretary Alan Peter Cayetano would not disclose more details of the Beijing meeting between President Rodrigo Duterte and China counterpart Xi Jinping, but said they had the kind of relationship in which they could openly discuss preventing maritime conflict.

The notoriously outspoken Duterte said during a televised speech on Friday that Xi warned him there would be war if he tried to explore for oil in a stretch of the sea that both countries claim. China has yet to respond to Duterte revealing contents of the meeting.

“The conversation was very frank. There was mutual respect, there was mutual trust,” Cayetano told reporters.

“The context was not threatening each other, that we will go to war. The context is how do we stabilize the region and how do we prevent conflict.”

The maverick Duterte has faced criticism at home for refusing to push China to comply with an award last year by the Permanent Court of Arbitration in The Hague, which ruled largely in favor of the Philippines.

It also said the Philippines had a sovereign right to access offshore oil and gas fields in its Exclusive Economic Zone (EEZ), including the Reed Bank.

Vietnam, Malaysia, Brunei and Taiwan also have claims to sovereignty in the South China Sea, a vital conduit for trade and a hotbed of territorial squabbling that has stoked nationalist fervor in some countries.

“I will not contradict the president’s words. I am just telling you…my interpretation: there was no bullying or pushing around, it was not a threat,” Cayetano added.

“It was more the threat of conflict will always be there if we don’t have dialogue.”

A Philippine Supreme Court judge on Saturday urged the government to file another international arbitration case over the alleged Chinese threat, and also lodge a complaint with the United Nations.

Supreme Court Associate Justice Antonio Carpio said failure to do that would mean Duterte would be “selling us out” and forfeiting sovereignty to secure Chinese loans and investments needed for his ambitious $180 billion infrastructure program.

Presidential Spokesman Ernesto Abella on Monday said the Philippines was “very clear that we are not giving up our claim of sovereignty and sovereign rights.”

(Reporting by Martin Petty and Karen Lema; Editing by Jacqueline Wong)

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China is preparing for the reclamation and construction on Scarborough Shoal

FILE — In this Dec. 24, 2015, photo, provided by Filipino fisherman Renato Etac, a Chinese Coast Guard boat approaches Filipino fishermen near Scarborough Shoal in the South China Sea. Scarborough Shoal has always been part of the Philippines, by international law. China says it is happy to control fishing in the South China Sea. Credit: Renato Etac

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For about five years China has been loudly proclaiming “indisputable sovereignty over the South China Sea.” China has said, everything north of the “nine dash line” shown here, essentially, belongs to China.  On July 12, 2016, the Permanent Court of Arbitration in The Hague said this claim by China was not valid. But China chose to ignore international law.

Commentary: China’s One Belt, One Road gaining traction but unanswered questions leave funding uncertain

April 22, 2017

By Diaan Yi Lin and Joseph Luc Ngai

Channel News Asia

Coming to four years since China’s unveiling of the One Belt One Road initiative, many substantial questions remain, which has implications for financing this ambitious project.

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One Belt, One Road is an ambitious development initiative, a multi-trillion dollar plan to link Asia to Europe with an unbroken chain of modern infrastructure. It has the potential to kick start economic growth in countries stretching from the South China Sea to the English Channel.

Put forward by the Beijing government, funding for the infrastructure proposal has gained some traction lately with accumulated pledges of about US$240 billion, but private investors will need more persuasion before they commit fully.

The One Belt, One Road initiative was proposed by China in 2013 as a way to modernise trading routes running from East Asia to Europe. The “belt” represents land routes that would run through Central Asia and the Middle East before reaching Northern Europe. The “road” represents sea routes that pass Southeast Asia, South Asia and Africa, before turning northward up the Suez Canal and terminating in the Northern Adriatic Sea.

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If successful, the initiative represents the world’s largest example of regional economic cooperation.

Altogether, it will connect about 80 countries with road, seaports, railways, and pipelines, covering roughly two-thirds of the world’s population, about a third of its GDP, and about a quarter of total global trade in goods and services.

ONE BELT ONE ROAD GAINS INITIAL FUNDING 

As with any ambitious initiative, One Belt, One Road faces significant obstacles, and the first is financing. A crucial factor behind China’s economic miracle in the late 20th century was aggressive infrastructure investment, and to create similar infrastructure improvements through Asia and Africa, annual investment of US$2 trillion to US$3 trillion will be needed. Altogether, the initiative could need public and private investments roughly 12 times the size of the Marshall Plan that helped rebuild Europe after World War II.

Public funding for the effort has already raised hundreds of billions of dollars in pledges. For example, the Asian Infrastructure Investment Bank, funded largely by China, has about US$100 billion available for the program. The Silk Road Fund, also set up by China, has about US$40 billion, and the New Development Bank, which focuses on projects in Brazil, Russia, India, and China, has another US$100 billion. These commitments show the seriousness China and other countries along the route are giving the One Belt, One Road initiative.

While this committed US$240 billion is roughly the annual GDP of Finland, it is still less than an eighth of what is needed annually to finance the infrastructure needs of the emerging economies along the land and sea routes. Further commitments will be needed, not only from developing markets that would be the direct beneficiaries of the infrastructure improvements, but also from European governments that would benefit from improved trade connections as well as private investors.

Meanwhile, the world is watching closely to see whether China’s enthusiasm for the initiative might ebb following a slowdown in the country’s economic growth rates in recent years.

TRANSPARENT IN ADMINISTRATION AND INVESTMENT 

With funding sources starting to materialize, the second major challenge in attacking the One Belt, One Road initiative is to create transparency in all aspects of administration and investment. Private investors especially will hesitate to join the effort unless they are persuaded that the funds and assets will be used effectively.

In particular, how the available funds will be deployed and how the programme will be administered remain critical uncertainties that hinder further commitments. This is because infrastructure investment in emerging markets is notoriously risky, and corruption and wasteful bureaucracies remain unfortunate realities for many of the countries along the routes. So public and private investors will want some assurances that the funds are not being misused on over-priced projects with no real impact on promoting trade.

China, as the primary promoter of the initiative, should take the lead in assuaging these concerns. For China, the initiative has an economic and a political dimension, and officials should be crystal clear on their motives and the economic rationale. If rhetoric can be matched with action, investor scepticism can be turned around.

Operations and projects supported by the investment funds will be scrutinised with some questions in mind. First, can One Belt One Road show that its investments follow market principles? Second, do projects adopt a clear regulatory system that transcends borders? Third, is there an appropriate balance between public and private investment such that risks are shared? If these questions are answered, they can change how private investors think about risk in these regions and for the project.

MIXED RECEPTION BY GOVERNMENTS 

Governments outside China have given the One Belt, One Road initiative mixed receptions. Some, for instance Indonesia and Malaysia, have welcomed the proposal, focusing primarily on the economic benefits it could deliver. For others, however, the economics are muddled by geopolitical disputes and other challenges, such as the conflicting territorial claims to the Spratly Islands in the South China Sea, which make bi- and multilateral discussions about funding and project priorities more complicated.

Countries that are not directly on One Belt One Road land or sea routes, such as Japan and the United States, are also likely to focus on potential political implications. For example, concerns have been raised of whether One Belt One Road will expand China’s economic influence at the expense of these countries. This may be the case especially if the Asian Infrastructure Investment Bank tries to wrestle influence from more established institutions led by developed countries such as the US, like the Asian Development Bank and the World Bank.

MOST WILL WAIT AND SEE 

Faced with these obstacles, it would be easy for investors to wait on the sidelines until there are more certainties around the One Belt, One Road initiative. Outstanding questions should give any executive pause: Is this primarily a foreign policy play by China? Do the economics actually work? Is the geographic breadth too big? Will returns be realised?

While it might still be too early to commit financially unless these questions are answered, aggressive companies will want to devote resources to staying informed of its progress and be ready to commit if the opportunity arises.

On the flipside, for most private and public investors, it is also still too early to decide to opt out. Doing so might relegate them to watching as others seize the opportunities presented by the world largest single trade and development initiative.

Diaan-Yi Lin is managing partner, Singapore and Joseph Luc Ngai is managing partner, Greater China in McKinsey and Company. 

Source: CNA/sl

Read more at http://www.channelnewsasia.com/news/asiapacific/commentary-one-belt-one-road-gaining-traction-but-unanswered-8743648

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Will international law be respected? Will human rights be respected?

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 A Chinese cargo train, to be used as part of China-Iran efforts to revive the Silk Road, arrives in Tehran in February 2016. Photo: EPA
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Chinese ant-terror troops in Kashgar, Xinjiang Uighur Autonomous Region, China, February 27, 2017. REUTERS/Stringer

Paramilitary policemen stand in formation as they take part in an anti-terrorism oath-taking rally, in Kashgar, Xinjiang Uighur Autonomous Region, China, February 27, 2017. REUTERS/Stringer (Is there really so much terrorism there?)
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US construction spending hits more than 10-year high

January 3, 2017

Reuters

U.S. construction spending rose more than expected in November, reaching its highest level in 10-1/2 years, which could provide a lift to fourth-quarter economic growth.

The Commerce Department said on Tuesday that construction spending increased 0.9 percent to $1.18 trillion, the highest level since April 2006. It was boosted by gains in both private and public sector investment

Construction spending in October was revised up to show a 0.6 percent rise instead of the previously reported 0.5 percent increase. Construction spending was up 4.1 percent from a year ago in November.

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Economists polled by Reuters had forecast construction spending rising 0.6 percent in November. November’s better-than-expected increase and October’s upward revision to construction spending could prompt economists to raise their gross domestic product estimates for the fourth quarter.

Spending on private construction projects jumped 1.0 percent in November to its highest level since July 2006 as single-family home building, as well as home renovations, increased.

Investment in private nonresidential structures — which include factories, hospitals and roads — rose 0.9 percent after tumbling 1.5 percent the prior month.

Public construction spending gained 0.8 percent in November to the highest level since March. It was the fourth straight month of increases. Outlays on state and local government construction projects rose 0.6 percent, also gaining for a fourth consecutive month.

Federal government construction spending surged 3.1 percent after rising 0.2 percent in October.

US manufacturing expanded in December

A worker inspects measuring cups at World Kitchen's Pyrex factory in Charleroi, Pennsylvania.

Victor J. Blue | Bloomberg | Getty Images
A worker inspects measuring cups at World Kitchen’s Pyrex factory in Charleroi, Pennsylvania.

Economic activity in the manufacturing sector expanded in December, according to The Institute for Supply Management on Tuesday, and the overall economy grew for the 91st consecutive month.

The U.S. manufacturing index was hit 54.7, an increase of 1.5 percentage points from the November reading of 53.2 percent. Economist expected the index to hit 53.5 for December, according to a Thomson Reuters consensus estimate.

The ISM manufacturing index has topped 50 for nine of the last 10 months. A reading above 50 indicates expansion in the manufacturing sector and a reading below 50 indicates contraction.

“Of the 18 manufacturing industries, 11 are reporting growth in December,” Bradley Holcomb, chair of the Institute for Supply Management, said in the report.

U.S. factories are steadily rebounding from a rough patch hit in late 2015 and early 2016. The decline in energy prices caused cutbacks in orders for equipment and pipelines, while a stronger dollar and slower economic growth abroad hurt exports.

—CNBC’s Berkeley Lovelace and The Associated Press contributed to this report.

New Turkey PM: Erdogan’s loyal servant

May 19, 2016

AFP

© AFP/File / by Burak Akinci | Turkish Transport Minister Binali Yildirim will become the country’s next prime minister

ANKARA (AFP) – Turkey’s incoming prime minister Binali Yildirim is a longstanding and faithful ally of President Recep Tayyip Erdogan who has shown the president unstinting loyalty even before he won the highest office.

The appointment of Yildirim to lead the ruling Justice and Development Party (AKP) and thus lead the government signals a move to a more pliant premiership for Erdogan than was the case under the outgoing Ahmet Davutoglu, who feuded with the Turkish strongman on one too many issues and earlier this month threw in the towel.

Yildirim has worked side-by-side with Erdogan since his widely admired stint as mayor of Istanbul from 1994-1998, moving to federal office after the Islamic-rooted Justice and Development Party (AKP) won power in 2002.

© AFP PHOTO/ADEM ALTAN | Turkish Minister of Transportation Binali Yildirim during a press conference in Ankara on April 17, 2012

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As prime minister, Yildirim’s main task may not be to devise policy of his own, but rather to implement Erdogan’s dream of creating a presidential system in Turkey to enshrine his status as the undisputed number one.

“And now it’s time for the presidential system,” Yildirim said earlier in May just after Davutoglu resigned.

As a ferry company chief and then as transport minister, Yildirim has for the last two decades worked in the transport sector, an absolutely key area in Turkey which is trying to catch up its lag in infrastructure with vast new projects.

As such, he has been a key lieutenant of Erdogan in implementing what the president likes to call his “crazy” projects to create a “New Turkey”, almost always pictured in the press wearing a hard hat and flourescent jacket.

– Unwavering loyalty –

Projects completed so far include new roads, high speed rail lines and most spectacularly of all, the first tunnel under the Bosphorus opened in 2013 which now carries tens of thousands of passengers a day on an undersea rail line.

To be opened in August this year is the third bridge over the Bosphorus, named after the Ottoman Sultan Selim the Grim and which will likely prove a lasting monument to Erdogan’s rule.

Under construction is a brand new international airport for Istanbul while on paper is possibly the most ambitious project of all — a shipping canal that will run parallel with the Bosphorus and take some of the pressure off the clogged waterway.

But in contrast with the sweeping ambition of the projects he has masterminded, Yildirim is softly spoken and almost mumbles his way through speeches.

This will set him apart from Davutoglu who sought to steal some of the limelight from the charismatic president, with populist and sometimes deafening speeches of his own.

The extent of Yildirim’s loyalty was shown in 2014 when he agreed to a near mission impossible to stand for mayor in Turkey’s third city of Izmir, a bastion of the secular opposition.

With the AKP desperate to show one of its heavyweights could garner support in the Aegean city, Yildirim performed creditably, receiving 36 percent of the vote but still finishing a clear second.

Yildirim, 60, worked as head of the Istanbul ferry company while Erdogan was mayor of the city in the second half of the 1990s.

After the AKP won power, he served an almost unbroken stint from 2002 to 2013 and again from 2015 as transport minister.

– Football ‘only difference’ –

According to the columnist for the Hurriyet daily Abdulkadir Selvi, the only serious difference between the two men is that Erdogan supports the Fenerbahce football side and Yildirim their arch Istanbul rivals Galatasaray.

Yildirim has held on to his post as transport minister despite the occasional controversy, notably in 2004 when a new high speed train derailed in the northwest of the country, resulting in the deaths of 41 people.

There was also anger in 2005 when a photo emerged of his wife dining alone while he sat at a table with fellow men, prompting allegations of sexism.

And he also remarked he did not attend the Western-orientated Bosphorus University in Istanbul, saying he was put off by male and female students mixing freely on the campus.

by Burak Akin

Australia increases scrutiny on infrastructure sales to foreigners — compiling a register of agricultural land owned by foreigners

March 18, 2016

AFP

Australia is already compiling a register of agricultural land owned by foreigners

© AFP/File | Under new rules, Australia’s Foreign Investment Review Board is to more closely scrutinise the sale of major state-owned infrastructure to private foreign investors

SYDNEY (AFP) – The sale of major Australian state-owned infrastructure to private foreign investors will face tougher scrutiny under new rules announced Friday, after a deal involving a Chinese company last year drew criticism.

The new rules will apply from March 31 and ensure that sales of critical infrastructure to private foreign investors will be subject to a formal review by Australia’s foreign investment advisory body.

Under previous rules, the Foreign Investment Review Board (FIRB) was only required to assess the sale of such infrastructure to foreign state-owned enterprises.

The rules cover major assets such as airports, ports, public transport infrastructure, and electricity, gas, water and sewerage systems, while existing and proposed roads, railways, telecommunications infrastructure and nuclear facilities could also be reviewed by the body.

“While we welcome foreign investment in Australia it is imperative that critical infrastructure sales are scrutinised to ensure any potential national security risks can be addressed,” Treasurer Scott Morrison said.

The new rules follow the granting in 2015 of a 99-year lease for the Port of Darwin to China’s Landbridge Group.

United States President Barack Obama, whose Marines rotate through Darwin, reportedly chided Prime Minister Malcolm Turnbull over that deal, with the Australian Financial Review quoting him as saying: “Let us know next time”.

Canberra defended the decision which had been made in consultation with Australia’s Department of Defence, but a review of the rules followed.

“Foreign investment is an important source of capital to build the infrastructure that Australia needs and the government recognises that this investment can provide access to funds to restore and enhance ageing infrastructure networks and assets,” Morrison said Friday.

“But the government recognises this investment should occur on our terms, must be appropriately scrutinised and not be contrary to the national interest.”

Under pressure over the seemingly increasing foreign ownership of farmland, the government is already in the process of compiling a register of agricultural land owned by foreigners.

It has also lowered the threshold for screening proposed foreign purchases of agricultural land to Aus$15 million.

Related:

See also:

Chinese investors heat up Australian farm buying
http://www.afr.com/real-estate/chinese-investors-heat-up-australian-farm-buying-spree-20150902-gjd67t

Trade along China’s ‘One Belt, One Road’ won’t succeed without the currency of trust

February 24, 2016

Frank-Jürgen Richter says inherited cultural and political attitudes in Central Asian countries, which are key partners of the Chinese-initiated project, mean there is much work to be done to foster cooperation

By Frank-Jürgen Richter
South China Morning Post

[The future could look bright for China, Central Asian nations and the world by nurturing trust and cooperation along the route.] The future could look bright for China, Central Asian nations and the world by nurturing trust and cooperation along the route.The International Monetary Fund and OECD have forecast global growth will be about 3 per cent, rather than the traditional average of almost 4 per cent. This seems about right, given that the economies of most developed and major developing economies are struggling, for many reasons.

The first is due to the enmeshed cogs of globalisation which determines that, if part of the economy slows, it all slows, though not in each sector instantly.

Second, looking to a fantasy future when all nations become developed, surely global growth must be zero as all we manufacture would be for replacement. A reduction of the 4 per cent average is to be expected as the old nations are already developed and the massive Asian nations, while still claiming developing status, are in many respects developed, so they will exhibit slower growth. Thus, China’s growth might soon be 5 per cent, according to some pessimists.

However, ahead of the G20 meeting of finance heads in Shanghai this week, China has announced US$61 billion in local infrastructure investments to “fill out” earlier investments and has emphasised its economy is in good health. Goldman Sachs has chided investors, both private and institutional, saying the only real issue is “fear itself”: investors ought to stand steadfast.

READ MORE: Our broken economy doesn’t need more stimulus

A worker welds steel frames at a construction site of a railway bridge in Zhengzhou, Henan province. China has announced US$61 billion in local infrastructure investments to “fill out” earlier investments. Photo: Reuters

READ MORE: Laying the foundations for China’s ‘One Belt, One Road’

When President Xi Jinping (習近平) visited Central and Southeast Asia in late 2013, he announced his new “One Belt, One Road” initiative to jointly redevelop local economies and infrastructure, building on China’s growth.

The belt and road will track along the historic Silk Road across land and via maritime routes throughout Eurasia. Over land, it reaches across Central Asian countries to link with Europe as the “Silk Road Economic Belt”; and, via the sea, the “Maritime Silk Road” will redevelop many ports in the South China Sea and the Pacific and Indian oceans.

Few, even now, really understand how to trade with others – mistakes are and will continue to be made

Unlike the original Silk Road development 1,000 years ago, when the people along the road knew of little beyond their short trading journeys to the nearby market towns, most today know about the other nations via TV and the media. But few, even now, really understand how to trade with others – mistakes are and will continue to be made.

We often hear excuses about failures to make a deal stick, although the initial opportunities looked good. We tend to blame others’ cultural differences. Really, though, shouldn’t we look to ourselves, and perhaps examine our knowledge of others, their situation and their history?

A map illustrates China’s “One Belt, One Road” project at the Asian Financial Forum in Hong Kong last month. Photo: Reuters

When we understand where we and others come from, and others’ beliefs and traditions, then jointly we can build a better future.

Old Soviet behaviour and mindsets are embedded in many Central Asian states which have, to an extent, limited their broad development. With regard to roads and rail logistics, Chinese managers will have much to teach to ensure the free flow of materials linking to the east and the west.

Mutual suspicion will need to be tempered by careful analysis and teach-ins, as well as through learning each other’s languages: no small undertaking. These aspects are important, given that one goal of the Chinese initiative is to develop a strong economic belt along the road.

China’s altruism in promoting “One Belt, One Road” could be construed as economic exploitation, especially as the investment status of Central Asian states has been downgraded by ratings agencies, such as Standard & Poor’s. In fact, most oil-based economies have been downgraded recently, given that their fiscal budgets were created with the expectation of oil prices at US$80 a barrel and upwards. Currently, none of the Opec nations are anywhere close to breaking even, with oil at US$30 a barrel.

READ MORE: Hong Kong banking on a big role in financing China’s One Belt, One Road plan

Following joint efforts between Iran and China to revive the Silk Road, the first Chinese cargo train arrived in Tehran this month after a 14-day journey from northwestern China. Mineral-rich Central Asian nations are cash-strapped and need considerable aid to redevelop. Photo: EPA

READ MORE: China must tread lightly with its ‘one belt, one road’ initiative

Thus, the mineral-rich Central Asian nations are cash-strapped and need considerable aid to redevelop. China can supply the financial and in-kind aid through deployment of staff across many sectors – but I fear the hosts may resent or misunderstand the mutual benefits that can evolve.

It is said that a strong economy develops personal wealth and well-being for the populace while also minimising discontent. Think tanks, commentators and the media can aid Central Asia’s redevelopment across a wider spectrum of commercialism than its present reliance on fossil fuel sales. Communicators can analyse and clarify the “grand plans” to help reduce popular anxiety.

Increasingly, better communication of goals will be necessary after 2020 when all nations ought to have ratified the “Kyoto II Protocol”. All agreed at the UN climate change meeting in Paris last December to reduce atmospheric pollution, giving themselves until 2020 to agree on details. The use of coal will be strongly reduced in favour of oil and, better still, gas, to generate electricity – but it will be green energy from renewables like sunlight, wind and hydropower that everyone will concentrate on.

There will be ample opportunity for Central Asia to join this revolution. The future could look bright for China, Central Asian nations and the world. All it will take is for trust and cooperation to be nurtured along the route.

Dr Frank-Jürgen Richter is founder and chairman of Horasis, a global visions community

http://www.scmp.com/comment/insight-opinion/article/1916123/trade-along-chinas-one-belt-one-road-wont-succeed-without