" Belt and Road": Sharing Opportunities
2017/04/23

" Belt and Road": Sharing Opportunities

- Keynote Speech by Mr. Liu Jinsong, Minister and DCM

of the Embassy of P.R. China in India at the Belt and Road Initiative

 Conference at Observer Research Foundation (Mumbai)

April 21st, 2017

Chairman Sudheendra Kulkarni,

Distinguished Ambassadors and scholars,

Dear friends,

Namaste and Good morning!

First of all, on behalf of Ambassador Luo Zhaohui and Consul General Zheng Xiyuan, I'd like to thank the Observer Research Foundation (Mumbai) for the invitation and congratulate you on the opening of the conference. I want to send my special regards to Shri Kulkarni, organizer of the conference. Without your courage, vision, popularity and coordination, we wouldn't have had this great event.

President Xi Jinping will host the Belt and Road Forum for International Cooperation from 14th to 15th May in Beijing. Leaders from 28 countries and the UN Secretary-General will attend the forum. Delegates of various social sectors from 110 countries 61 international organizations will also participate in related meetings under the framework of this Forum. This Forum features cooperation and win-win results. Delegates will review past achievements and charter the future course to realize an early harvest of the Belt and Road Initiative. The event will usher in a new stage and leave a deep mark in history.

I notice that recently Indian media, scholars and think tanks have paid more attention to the Belt and Road Initiative, and also had some debates. The core questions they raise are: whether India should join the Belt and Road Initiative, and is the Belt and Road Initiative good or bad for India.

In this context, I'm glad to have an in-depth exchange of views with you on the Belt and Road Initiative and share with you my own observations on your concerns.

First of all, from a historical and cultural perspective, India has always been on the Belt and Road.

Not long ago, I visited the ruins of the ancient Nalanda Univerisity and Xuanzang Memorial Hall in Rajgir in Bihar. Master Xuanzang is well known in both India and China. He set out from Chang'an City of China, went through the Xinjiang region of China, Central Asia, Afghanistan, Kashmir and finally reached Nalanda University. Xuanzang stayed and studied in India for 17 years, travelled across India and returned along the Silk Road to China.

Xuanzang wrote a book titled Report of the Regions West of Great Tang, which gives a precise depiction of local conditions, customs and religious environment of dozens of kingdoms in the Indian subcontinent. The book is incredibly accurate. Xuanzang contributed greatly in today's reconstruction of Indian history and the study of ancient Silk Road.

A hundred years before Xuanzang, guru Bodhidharma from southern India came to China by the maritime Silk Road. He developed Chinese Zen Buddhism and played an important role in the flourishing of Buddhism in China. The Shaolin Temple where he worked as Abbot is well known among Indian friends as it is the cradle of Chinese Kongfu.

Over 600 years ago, the envoy of Chinese Ming Dynasty Zhenghe had led an expedition fleet to the West for 7 times and berthed in Calicut of Kerala Pradesh for 6 times. In the not faraway Cochin, local people are still building and using fishing nets learned from Zhenghe and his fleet. These Chinese fishing nets are not only means of livelihood for local people but have become landmark tourism sites.

Buffalo, cotton, spinach, Buddhism, Gandhara arts, Indian astronomy, medicine and science had been spread to countries along the ancient Silk Road including China. Similarly, China's silk, porcelain, peach, pear, tea, art of printing, gunpowder and paper had vastly enriched Indian people's life and changed India's economic and social history.

In the more than ten centuries before the western colonists invaded India and China, Chinese, Indian and Arabic merchant ships were navigating intensively between South China Sea, East China Sea and Indian Ocean and huge flow of people, information and trade occurred with the help of monsoon. This is the prelude of today's globalization. China and India are the pioneers of economic globalization.

Today's Belt and Road Initiative is stretching in two directions, the land and the sea, roughly similar to the ancient Silk Road network. The Belt and Road Initiative is the inheritance and upgrade of the ancient Silk Road, as well as the revival of the ancient Silk Road and Asia. Both India and China are the major founders and contributors of the ancient Silk Road, and forged the Silk Road spirit of peaceful cooperation, openness and inclusiveness, mutual learning, mutual benefit and win-win results. The two countries should resume the common efforts and continue to work to revive the Silk Road.

Second, from the perspective of reality, India has already closely linked to the Belt and Road Initiative.

Before the Belt and Road Initiative was put forward, China, India and other countries have reached consensus on the Bangladesh-China-India-Myanmar (BCIM) Economic Corridor, established inter-governmental cooperation mechanism and held a series of meetings. The BCIM Economic Corridor is listed as one of the six land economic corridors of the Belt and Road Initiative. The new round of Joint Working Group meeting on BCIM Economic Corridor will be held at the end of this month in Kolkata.

In 2013, President Xi Jinping proposed the Belt and Road Initiative as well as the Asian Infrastructure Investment Bank (AIIB), which aims to provide financial support for the infrastructure construction in the countries along the routes of the Belt and Road Initiative. India gave positive response to China's proposal and held the second round of negotiation working group meeting in Mumbai. India contributed 8 billion US dollars and became the second largest shareholder at the AIIB.

Last month, the unanimous adoption of Resolution 2344 on Afghanistan issues by the U.N. Security Council called for consensus on assisting Afghanistan and strengthening regional economic cooperation through the Belt and Road Initiative. The resolution urged all parties to provide security safeguard for the Belt and Road Initiative, strengthen the synergy of development strategy and push the cooperation of connectivity. The U.N. Economic and Social Commission for Asia Pacific and the United Nations Development Programme both signed cooperation agreements with China on the Belt and Road Initiative.

China is strongly pushing for the integration of the development strategies between the Belt and Road Initiative and Shanghai Cooperation Organization and its member states. India will be an official member state of SCO, it will be bound by the obligation of documents and treaty and contribute to the development of SCO in the future. China welcomes and congratulates India's membership. The Joint Communiqué of Meeting of Council of Heads of SCO Members indicated that "the leaders reiterated their support to the initiative of the Silk Road Economic Belt and agreed to continue the efforts to implement the initiative as one of the approach of creating advantage for Regional economic cooperation".

Third, the Belt and Road Initiative does not refer to just one "Belt" or one "Road", it is a network of regional cooperation and systematic project with global significance.

The Belt and Road Initiative is a general term of Silk Road Economic Belt and 21st-Century Maritime Silk Road, which were announced by Chinese President Xi Jinping during his respective visits to Kazakhstan and Indonesia at the end of 2013.

This magnificent Initiative may be briefly summarized from number "1" to number "8"

"1": Jointly build one community of shared interests, development, responsibility and destiny. The community will be different from European Union which is characterized by transfer of sovereignty and high-level institutionalization, but is based on respect for sovereignty of countries, uphold the principles of openness, equality and a step-by-step approach, and accommodate each other's comfort level, in order to achieve regional integration, lasting peace and prosperity.

"2": Take Asian and European continents and their adjacent seas as the core, land and sea as the two wings, and plug two wings for the Asia "Garuda".

"3": The Initiative should be jointly built by consultation to meet the interests of all. It was initiated by China, but will not be monopolized by China. The relation between China and other countries concerned is not that between donor and recipient. It is different with the Marshall Plan in nature.

"4": The Belt and Road Initiative will have a direct influence on 4 billion people in Eurasia. Over 40 countries have signed the Belt and Road Initiative cooperation agreements with China. At the Forum in May this year, another over 40 countries and international organizations will discuss and sign cooperation agreements with China. So far, the Belt and Road Initiative has been supported by over 100 countries and international organizations, including developing countries such as Mongolia, Nepal, Malaysia, as well as developed ones such as UK, Germany and France.

"5": To promote policy coordination, infrastructure connectivity, unimpeded trade, financial integration and people-to-people bonds are the five major goals of the Belt and Road Initiative.

"6": The Belt and Road Initiative will focus on developing six economic corridors: new Eurasian Land Bridge, China-Mongolia-Russia, China-Central Asia-West Asia, China-Pakistan, Bangladesh-China-India-Myanmar and China-Indochina Peninsula economic corridors.

"7": The Initiative mainly covers 7 plates: Northeast Asia, Southeast Asia, South Asia, Central Asia, West Asia and North Africa, Russia, Europe and other areas. The Initiative is open to all sharing similar goals. It mainly focuses on the Euroasian continent, yet is not limited to the area of the ancient Silk Road and Euroasian countries. Recently, president Xi Jinping welcomed the participation of the U.S. in the Belt and Road Initiative during his meeting with President Trump. China has also inked a cooperation agreement on the Initiative with New Zealand, a remote South Pacific nation.

"8": Facilities connectivity, industrialization, exploration of energy sources, economic and trade cooperation, financial cooperation, cultural exchanges, eco-environment protection and maritime cooperation are 8 priority areas for implementing the Initiative.

Fourth, the idea of The Belt and Road Initiative is not something coming out of the blue. It is a well-perceived initiative of lasting importance based on many years of practice. It will not only benefit China, but also countries along the routes.

The Silk Road is a historical and cultural heritage shared among countries in the Eurasia continent. During the past decades, the United Nations system, Turkey, the United States and Japan all have put forward regional cooperation initiatives related to Silk Road. But they all have limitations. Many people of vision and countries along the routes hope to revitalize the ancient Silk Road, to expand it and make the Silk Road shine again. China is located along the main section of the ancient Silk Road, the very word "Silk Road" was proposed by Mr. Richthofen from Germany after his survey in China. Therefore, it is a logical and well-deserved move for China to put forward such an initiative named after the Silk Road for a new-type of regional cooperation.

After the cold war, Asian regional cooperation and inter-regional cooperation began to take off, new mechanisms emerging such as the Asia Pacific Economic Cooperation Organization, the Asia Europe Meeting, China-Japan-ROK, East Asia Cooperation and Shanghai Cooperation Organization. These mechanisms have played their respective roles and are complementary to each other. However, they are compartmentalized and fragmented and regional countries have always been yearning for large scale and in-depth cooperation across Europe, Asia and Africa by connecting all kinds of regional cooperation mechanisms. The Belt and Road Initiative meets this need.

For a long time, the eastern and western wings of the Eurasia continent have been rich, and the coastal areas of countries are also relatively richer. This is the result of colonial rule by the West and in line with economic rules. This has caused the economic "cave-in" of the interior of Eurasia continent and the inland areas of countries. Regional economic imbalance is thus created and worsened. How to bring the advantages of the inland areas, optimize the distribution of economic elements and fundamentally solve problems like poverty and extremism in Asia? The Belt and Road Initiative is no doubt a useful attempt.

Asia is rich in savings and strong in demand for investment. At the same time, Asia faces a financing gap in infrastructure construction up to 1.7 trillion US dollars per year. However, the financing resources available from the treasury of regional countries and multilateral financial institutions can only meet less than 15% of the need. The Belt and Road Initiative and the associated AIIB and the Silk Road Fund are an attempt to foster new demands by providing effective supply, accelerating infrastructure building, and turning the savings into effective investment. This way, new driving forces for economic growth can be formed and world economy can be rebalanced.

To get rich, you need road and bridge. There have been connectivity projects across the Eurasia for decades, but there are still a lot of unfinished roads and institutional hindrance to cross-border transportation. For example, China and India, each with over 1.3 billion people, are still not connected by railways. The Stilwell Road built during the Second World War does not play its due role, there are only 40 plus direct flights between the two countries each week, considerably less than the 1000 direct flights per week between China and South Korea. New Delhi and Islamabad are not far apart, but it is more expensive to transport containers by land between the two cities than from Mumbai to London by sea, and takes almost the same time. The Belt and Road Initiative takes connectivity as its priority, and aims at speed up connectivity of transportation networks by land, sea and air, as well as that between the pipelines, power grids, telecommunication, satellites and internet within Eurasia and with other regions to reduce transaction and people exchange costs, so that products from the inland areas can sell a good price and children from the countryside can have better access to quality education, medical services and internet connection.

In China's case, during the early years of reform and opening up, cities in the eastern coastal area took the lead and got rich first, the focus of trade and investment cooperation was that with developed countries, while priority was given to introducing foreign investment. Today with China's economy entering the new normal, we need fully unleash the geographical and resource potential of middle and western China and realize balanced and coordinated development of different regions. There is a need to do more business with developing countries and balance inbound and outbound investment, and push for domestic reform by more in-depth and larger scale opening up. The Belt and Road Initiative meets a host of internal and external needs and is conducive to the upgrading of China's economy and long term stability of frontier regions.

China is a responsible major country. As China develops, it is willing and able to provide more public goods to neighboring countries and the international community. All are welcome to ride on the fast train of China's growth.

China is not just talking the talk in promoting the Belt and Road Initiative. We take our commitments seriously and put in a lot of real work. China's direct investment to countries along the Belt and Road Initiative routes exceeds 50 billion US dollars, a number of landmark projects, like the Jakata-Bandung high-speed railway, Budapest–Belgrade railway, Laos-China railway, China-Myanmar gas pipeline and Egypt Suez economic and trade cooperation zone have been launched. Not long ago, the first rail freight train succeeded in setting off from Yiwu City of Zhe Jiang Province in China to London. In 2016, China's trade in goods with countries along the Belt and Road Initiative routes was nearly 1 trillion US dollars, and its growth rate overtook that of China's overall foreign trade. Chinese businesses have established 56 economic and trade cooperation zones in over 20 countries along the routes, with a total investment of over 1.5 billion US dollars, contributing almost 1.1 billion US dollars tax revenue and 180000 jobs to the host countries.

China contributes nearly 30 billion US dollars of founding capital of AIIB, 40 billion US dollars to the Silk Road Fund and 41 billion US dollars to BRICS New Development Bank. We are putting in solid money and the projects invested have yielded concrete benefits to people in the countries concerned.

Fifth, the Belt and Road Initiative doesn't affect India's territorial and sovereignty interests and will benefit South Asian countries, including India, in the long run.

Some Indian friends say that they are not against the Belt and Road Initiative and they support connectivity, yet as the China-Pakistan Economic Corridor surpasses the northern Kashmir, the Indian side has serious concern over related territorial sovereignty issue.

My point is if this is the only reason that affects Indian friends' will to join the Belt and Road Initiative, this concern could be resolved.

Reason 1: transportation is the basis of CPEC, and the connectivity between China and Pakistan will unavoidably pass through the Kashmir area on the Pakistan side. It's known to all that such transportation could not detour through India and Afghanistan.

Reason 2: the China-Pakistan Karakorum-Kunlun Road was built in the 1960s and put into use in 1980s. Therefore it's no fresh news for India that China and Pakistan's transportation connections and related cooperation surpass the Kashmir region.

Reason 3: China has no intention to interfere in the territorial and sovereignty disputes between India and its neighbors. The Belt and Road Initiative and CPEC aim at promoting economic cooperation and connectivity, it is not related with or affecting sovereignty disputes. China's position on the Kashmir issue has not changed either.

I sincerely hope that Indian friends study carefully the Agreement Between the Government of the People's Republic of China and the Government of Pakistan on the Boundary Between China's Xinjiang and the Contiguous Areas the Defense of Which is Under the Actual Control of Pakistan signed in 1963. The title and content of this Agreement have fully accommodated India's concern.

The Article 6 of this Agreement is read as following: The two Parties have agreed that after the settlement of the Kashmir dispute between Pakistan and India, the sovereign authority concerned will reopen negotiations with the Government of the People's Republic of China, on the boundary as described in Article Two of the present Agreement, so as to sign a formal Boundary Treaty to replace the present agreement...

Reason 4: CPEC is an economic project focusing on development and prioritizing energy and transportation infrastructure, which is the dire need of Pakistani people. Currently, the 18 early harvest projects are progressing smoothly and have so far created 13.000 jobs for local people. Pakistani people would be lifted out of poverty and power shortage, and enjoy more open and better life. CPEC serves the common interests of regional countries to address both the symptoms and root causes of terrorism and extremism. This is also India's expectation, isn't it ?

Reason 5: CPEC is open, transparent, market-driven and international, in compliance with economic logic and legal procedures. Some friends have already suggested that CPEC could extend to India in the future, and BCIM Economic Corridor could be connected with India's North-South Transport Corridor.

Sixth, China and India may well cooperate on the Belt and Road Initiative related areas and jointly build an "Asian Age".

China and India have established the strategic partnership for peace and prosperity and a closer developmental partnership. China always adheres to the Five Principles of Peaceful Coexistence, and respects the reasonable concerns and interests of the Indian side. India plays an important role in the process of global multi-polarization, and China welcomes India to play a bigger and more constructive role in regional as well as global affairs. The sky and ocean of Asia is big enough for the dragon and elephant to dance together, which will bring a true Asian Age.

The Belt and Road Initiative focuses on development, aims for global multi-polarity and democracy by multilateralism, regionalism instead of alignment and sphere of influence. This concept is in line with Indian diplomacy.

In today's world where anti-globalization, protectionism and isolation are on the rise, the Belt and Road Initiative could serve as the new force for openness, cooperation and free trade. It is a typical model of sharing economy, which could help India to integrate further into global industrial and value chain.

India is promoting "Act East", "Think West", "Sagarmala Project", "Diamond Quadrilateral" and the "North South Transport Corridor", which has connectivity as its core. If those policies could be connected with the Belt and Road Initiative, will certainly achieve the effect of "one plus one equals more than two".

India has lot of remarkable tourism resources, and many of them are related with Buddhism and Maritime Silk Road. Experts and businessmen suggest that if China and India could jointly develop quality tourist route, build on infrastructure and promotion, the number of Chinese tourists to India would be more than two hundred thousand as of now, or even more than two million since China's outbound tourism is 120 million last year. On average, a Chinese tourist would spend 2,300 US dollars overseas and that would be a huge benefit of Silk Road tourism for India.

Both China and India are actively participating in the new round of global industrialization and developing new manufacturing industry. An important part of the Belt and Road Initiative is industrial capacity cooperation, which includes financial support measures. Recently China has signed industrial capacity cooperation agreements with more than 10 countries along the Belt and Road Initiative route. One of them is with Kazakhstan which involves 51 projects with a value of 26.8 billion US dollars. China has also established many investment funds with central Asia and West Asia countries. Chinese banks successfully issued the Belt and Road Initiative bonds in some countries to finance key projects.

Chinese companies have supported and participated in the "Make in India" with a total investment of 5 billion US dollars so far. But there is much to explore considering the amount with other countries as well as investment potential between China and India. If India would join the Belt and Road Initiative, it will be a huge boost for our capacity investment and financial cooperation, and there will be more and better solution for trade deficit which is India side concerns.

India has its own "Project Mausam" and "Spice Route", which could be complementary with the Silk Road. China is willing to study and participate in how the projects could integrate with the Belt and Road Initiative, and enhance the people-to-people exchanges between China and India as well as countries along the way.

Three years since its inception, the Belt and Road Initiative has received more appreciation and progress than expected. It is not a China-Only initiative, but an international agenda and multilateral action. Under the framework of the Initiative, there have been a series of new platforms, models, rules and projects of cooperation. If you join early, you would benefit earlier and effectively express your concerns.

For example, the international freight transport between Lanzhou, China and Kathmandu, Nepal was opened last year. The combined railway-highway transportation took only 10 days, and the cost is close to sea transportation. If it further connected to India in the future, the social and economic benefits would be even greater. The Chinese side has proposed to build China-India-Nepal Economic Corridor and the Himalaya Economic Rim, and we look forward to positive response from the Indian side.

As something new, the Belt and Road Initiative is bound to face obstacles and challenges, including how to align the interests of different countries, political and security risks in countries along the route, investment return and financing method for major projects, competition and cooperation between different platforms, future mechanism construction and so on. China and related countries are fully aware of these problems. We will have in-depth discussion at the Belt and Road Forum for International Cooperation and try to solve them through Asian people's wisdom. Confidence will overcome suspicions, and there will be more solutions than problems. The Belt and Road Initiative will only advance rather than fall back. The Belt will be build wider, and the Road be made broader.

When the idea of AIIB was first proposed, there were many doubts and obstacles. Western countries believe that developing countries are unable to build a modern, international and high-standard multilateral financial institution. But what happened next? Those western countries rushed to join, and there are still 25 countries on the waiting list.

India is an important partner of the Belt and Road Initiative. It was, remains and will be so in the future. I used to take charge of the Belt and Road Initiative affairs in the Ministry of Foreign Affairs. When the idea of the Initiative was initially put forward and before Vision and Actions of the Belt and Road Initiative was released, the Chinese side briefed the Indian side thoroughly through diplomatic channel. Through high-level dialogues, diplomatic consultations and academic discussions, the Chinese side introduces to the Indian side the origin, content and influence of the Belt and Road Initiative. Without hesitation, the Chinese side sincerely invites the Indian side to join many the Belt and Road Initiative forums in the first place, including the Forum to be held next month.

India is a country with distinctive character and China always respects India's independent diplomatic choices. China is willing to discuss all problems and possibilities with India on the basis of mutual benefits. In May 2015, President Xi conveyed to Prime Minister Modi that the two sides can enhance communications on initiatives of the Belt and Road Initiative, AIIB as well as India's Act East policy, find out where our interests converge, synergize each other's policies, discuss mutually beneficial cooperation models, and enhance common development. The two countries need to link our development strategies even closer and be complimentary for our economies on a higher level. As the double engine for regional and global economic growth, we need to work together to push forward regional integration and contribute to global economy. Prime Minister Modi also said that India and China are providing support and assistance to South Asian countries. China proposed the Belt and Road Initiative, India also values connectivity in South Asia which would facilitate regional development and prosperity. In this regard, India would like to strengthen cooperation with China in the field.

A close look at the speech by President Xi at Davos World Economic forum and the one by Prime Minister Modi at Raisina Dialogue this year indicate that they share strikingly similar views on globalization. Both leaders believe that globalization will not end, but instead, countries need to adapt to globalization. To confine oneself in a cage or build walls is certainly no way out.

The Belt and Road Initiative and connectivity is not only the cause of country leaders and knowledgeable men, but also has witnessed lots of common people participating. I have noticed recent news saying that a 61-year-old postman named Tamang in Sikkim has been going through the Nathula Pass in the bordering area between China and India to exchange mailbags every day for 25 years under all weather conditions. He is a civil envoy promoting China-India friendship and connectivity.

All these serve as a solid foundation and provide enough room for our discussion today. I do hope that the discussion today as well as those in the future, will be worthy of the trust bestowed by this great era and our peoples.

Thank you.

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