China pledges massive investment in "project of the century"

There has been a mixed reaction to the official announcement of the plan around the world

China pledges massive investment in "project of the century"

Heads of states and officials attend a summit at the Belt and Road Forum in Beijing, Monday, --. Image: Alexei Nikolsky/Sputnik, Kremlin Pool Photo

China's President has said the country's multi-billion dollar plan to build a modern-day Silk Road will be the "project of the century."

President Xi Jinping pledged to invest $124 billion into the plan on Sunday - claiming the project will help to forge a path towards peace, inclusiveness and free trade.

The "Belt and Road initiative" is intended to recreate the trading routes of old - overland and sea - through central Asia, to Europe and beyond, with massive investment in infrastructure along the way.

The ambitious plans span at least 65 countries, including more than 60% of the world's population, and 30% of global GDP.

The estimated $900bn (£698bn) cost would make it one of the most expensive development projects ever attempted - many times the size of the US Marshall Plan to rebuild Europe after the Second World War.

"Golden age" of globalisation

Opening a special summit on the initiative – attended by a host of word leaders – the Chinese president said the project will kick-start a new “golden age” of globalisation – as US President Donald Trump continues to promote his “America First” strategy and questions existing global free trade deals.

President Xi said the world must create conditions that promote open development and encourage, “fair, reasonable and transparent global trade and investment rules.”

"We should build an open platform of cooperation and uphold and grow an open world economy," he said as he opened the two-day summit.

China has insisted the project is a "win-win" co-operation initiative, and talks of building a "community of common destiny," however a number of countries have expressed their reservations – with India launching a scathing attack on the plan and announcing it would boycott proceedings.

Colonial enterprise

According to the Times of India, New Delhi believes the scheme is “little more than a colonial enterprise [that will leave] debt and broken communities in its wake.”

"We are of the firm belief that connectivity initiatives must be based on universally recognised international norms, good governance, rule of law, openness, transparency and equality,” The Indian government said in a statement.

The statement suggested the project could create an unsustainable debt burden for communities along the route while threatening “sovereignty and territorial integrity.”

There are concerns China is using the initiative to lure less powerful nations into its economic orbit and boost its geopolitical power – with question marks over the level of involvement non-Chinese companies will be allowed to have in the project.

With the exception of Italy, no heads of state from the G7 group of leading economies are attending the Beijing summit.

Beijing has insisted the initiative is "not and will never be neo-colonialism by stealth.”

In a commentary published on Saturday, the country’s official news agency said “China harbours no intention to control or threaten any other nation."

"China needs no puppet states,” it said.

The commentary added that the summit was "not an occasion to assert a new hegemony, but an opportunity to bring an old one to an end."

Chinese economy

Ethan Cramer-Flood, Associate Director of The Conference Board's China Centre, told Sky News that the initiative is driven primarily by challenges in China's domestic economy, and its broader, geopolitical ambitions.

"I'm referring specifically to the massive amount of overcapacity that exists within Chinese industry such as steel, cement and engineering and these massive state-owned enterprises that have the capacity in the workforce to do these kind of projects, but don't have as much to do any more,” he said.

“Then of course [there is] the diplomatic goals. This is absolutely, first and foremost, a soft power initiative.

"Clearly the leadership in Beijing envisions the One Belt One Road project as being maybe the most significant part of Xi Jinping's 'China Dream' - and vision of supporting the emergence of China onto the global stage as the next great superpower."

Leaders from 29 countries attended the forum, as well as the heads of the United Nations, International Monetary Fund and World Bank.

Finance ministries from 27 countries – including China – have approved a set of principles that will now guide project financing along the new Silk Road.

Additional reporting from IRN ...