The First AIIB project in China
 
The Asian Infrastructure Bank (AIIB) approved a 250 million USD loan for its very first infrastructure project in China for a natural gas pipelines project in Beijing, which is estimated to provide power to over 200 thousand households and reduce Beijing's coal consumption by 650 thousand tons. The pipeline is expected to be complete in 2021. The project represents China's push to invest in sustainable infrastructure and promote cleaner sources of energy.
 
The Chinese firm Beijing Gas Group will receive the loan, making this the first loan the AIIB has granted to a corporation rather than a nation. Although the AIIB did not officially open until January 2016, it has already 24 projects with a total investment of 3.4 billion USD. Of these 24 projects, 10 focus on energy infrastructure. Read more here and here.
 

The One Belt One Road: from the Maldives to Pakistan                                                                                                                    
China and the Maldives agreed to strengthen bilateral ties under the framework of the Belt and Road Initiative. The Chinese President and the Maldivian President presided over the signing of twelve agreements, which included a memorandum of understanding, a free trade agreement, and agreements on the economy, human resources, oceans, environment, health care and finance. China also encouraged the two sides to share their experience in state governance, and work together to combat problems like crime, terrorism, and drug trafficking. Read more here.
 
At the Sino-Japanese Entrepreneurs and Former High-level Officials Dialogue in Tokyo, Prime Minister Shinzo Abe expressed Japan's approval to cooperate with China on their One Belt One Road Initiative. Japan has heightened their support for OBOR, based on the idea that a free and open Indo-Pacific region brings economic prosperity and peace. In his speech, Abe said he hopes to visit China next year to deepen relations between leaders and to bring Sino-Japanese relations to the next level. Read more here. 
 
Beijing's new guidelines on releasing funds to Pakistan as part of the ambitious China-Pakistan Economic Corridor (CPEC) may force Pakistan to take on a greater share of the burden of anticipated projects. The funding of major infrastructure projects in Pakistan was supposed to be finalized a couple weeks ago. But, the Pakistan government was informed that the existing procedure for releasing funds had been abolished and new guidelines would be issued. Because the total cost of projects in Pakistan equals over 50 billion USD, officials in Pakistan are alarmed at this policy change. This new move reasserts China's position as the dominant player in its Belt and Road strategy, sending the message that they will play, but only on their terms. Read more here.
 
The Asian Development Bank in...
 
Azerbaijan
 
The ADB is loaning 250 million USD to Azerbaijan to support economic diversification in the heavily oil and gas-reliant country. Fossil fuel revenues make up 35 percent of Azerbaijan's gross domestic product, 60 percent of budget revenues, and over 90 percent of export revenues, so the loans aim to alleviate dependence on fossil fuels. The funds will focus on fiscal planning, governance of state-owned enterprises, and encouraging private sector participation.
 
In addition, the ADB is loaning 400 million USD to support Azerbaijani railways and to modernize connections with Russia and Iran. One loan of 250 million USD is for governance and financial management updates. The other 150 million USD loan will focus on the Sumgayit-Yalama rail line tracks. Read more here.
 
Thailand
 
The ADB has subscribed to 88 million USD worth of shares in an initial public offering of Thailand's Gulf Energy Development Public Company Limited (Gulf Energy). ADB's financial support will aid Gulf Energy in increasing Thai power generation capacity and expanding renewable energy efforts. ADB's funding will additionally include an investment on behalf of the Leading Asia's Private Infrastructure Fund (LEAP), which is a major ADB co-financing fund focused on private sector infrastructure.
 
India
 
The ADB is loaning 346 million USD to India for highway upgrades in the state of Karnataka. The project seeks to improve road connections to sustain Karnataka's rapid economic development. The loan will fund increased road capacity, road safety projects, and improvements to the Karnataka Public Works, Ports, and Inland Water Transport Department.
 
Cambodia
 
The ADB is loaning 50 million USD to Cambodia's four largest provincial cities to develop water and sanitation services. The Provincial Water Supply and Sanitation Project aims to increase pipeline coverage and improve wastewater treatment in the rapidly growing urban centers of Cambodia. The project has a total cost of around 119.7 million USD. In addition to ADB's loan, the ADB-administered Japan Fund for the Joint Crediting Mechanism is granting 10 million USD, a jointly financed loan between ADB and the French Development Agency (AFD) will provide 43.54 million USD, the European Union's Asia Investment Facility through the AFD is providing 5.09 million USD, and the Cambodian government is contributing 10.54 million USD. The waterworks and sewerage project is expected to be complete in 2022.
 
Marshall Islands
 
The ADB is granting 2 million USD to the Marshall Islands for renewable energy efforts. The grant will finance the Majuro Power Network Strengthening Project. The project is part of the ADB Pacific Renewable Energy Investment Facility, which aims to provide renewable energy to numerous Pacific island nations. The Majuro Project will focus on the Marshalls Energy Company by assessing the electricity provider and providing plans to step away from Marshall Islands' dependency on diesel generation.       
 
Bangladesh
 
The ADB will provide 538 million USD in financing support to Reliance Power to help build a power plant and an LNG terminal in Bangladesh.
                                                                              
 
Chinese investment in Latin America
 
The former Chilean President, Eduardo Frei, spoke at the 11th China-LAC Business summit. His message was clear: trade deals between Latin American countries and China will be very difficult if Mercosur does not lower its taxes. Mercosur is an organization that includes most South American countries, founded with the purpose of promoting free trade. Read more here.
 
Petrobras, a Brazilian oil company, and the Chinese Development Bank agreed on a financing deal for 5 billion USD. The deal includes a 10-year term and work contracted with the Unipec Asia Company. This contract replaces a deal that will expire in 2019. Unipec Asia will receive preferential treatment and receive nearly 100,000 barrels of oil per day, rather than the 200,000 barrels in the initial agreement. Read more here and here.
 
Panama
 
Recently, China proposed 19 agreements of mass investments and cooperation in Panama. Moody’s Investors Service predicts that Panama will benefit from the major investments. The agency sees three agreements revolving around investment, commerce, and tourism as the most significant. In one agreement, the China Development Bank will open offices in Panama to encourage financing for development. This will help boost industrialism by increasing investment rates that have averaged out at 41 percent recently. Overall the agreement is meant to increase exports from Panama to China that are slim at 50 million USD compared to Chinese imports, which total around 1.1 billion USD.
 
The Panamanian government announced that it is studying the possibility of granting businesses ‘panda’ bonds, or bonds in the Chinese stock market. The ‘panda’ bonds market usually amounts to 300–500 million USD, but it has not been specified how much will be granted to Panama or what consequences the granted bonds might have on the national debt. Panama similarly issued 'Samurai' bonds totaling 500 million USD to the Japanese stock market in 2011. Read more here.
          
                         
China in Africa

Barclays Africa Group Limited and the China Development Bank have signed a memorandum of understanding to strengthen cooperation and explore cooperation on future infrastructure and development projects across Africa. Read more here.
 
Egyptian President Al-Sisi published a decree related to Egypt’s status as a founding member of the AIIB. He laid out his vision for the bank’s role in providing funding to hasten economic development in Egypt and provide better employment opportunities for Egyptians. Read more here.
                                                                                                           
 
China Around the World                                                  
 
A Completed Project in Belarus
 
A Chinese-built pulp mill located in Svetlogorsk, Belarus, officially began operation in December 2017. Built by the China Construction Engineering Corporation, the project cost more than 800 million USD. The Export-Import Bank of China and the Industrial and Commercial Bank of China provided 85 percent of funds on export buyer's credit.
 
Developing the Digital Economy
     
At the 4th World Internet Conference hosted by China, Xi Jinping and Wang Huning, a Chinese political leader and theorist, proposed five appeals for China. One of China's top appeals stated that China is willing to work with the international community to promote development of the Internet and digital economy, and to implement the APEC Internet and Digital Economy Roadmap. With the One Belt One Road Initiative as focus, China will strengthen their cooperation in the digital economy.

For years, China’s economy remained stagnant.

The United States dominated the world market, manifesting a GDP over twice the size of Japan’s, its nearest competitor. The Cold War era distinguished the drive of the American economy and underscored the significance of open market practices.

Distressed by its poor economic performance, the People’s Republic of China faced dilemmas in maintaining its closed communist economy. In 1978, Deng Xiaoping assumed power and carried out significant institutional and  economic reforms. The changes enabled market principles that propelled the Chinese economy. According to the World Bank, in 1978, China’s GDP was 149.5 billion USD compared to the U.S.’ 2.4 trillion USD GDP. Since Chinese  markets have opened, the nation has experienced incredible commercial development and growth. As of 2016, China’s GDP was 11.2 trillion USD--​second in the world, rivaling the U.S.’ 18.6 trillion USD.

​As China achieves the status of a stable economic power, its massive growth rates are now decelerating. To counteract this, China is constantly redirecting its federal funds into foreign investments. This has been observed extensively in Africa, where there is low cost entry and high development opportunity due to developing countries’ lack of infrastructure. Nations that accept Chinese investments are often linked to Chinese institutions through their financial debt and obligation to be of service to China in the future. For instance, one of the numerous major projects is Kenya’s Standard Gauge Railway line. China has offered two loans at a total amount of 3.2 billion USD to fund the infrastructure project under the condition that Chinese firms are contracted for the work. Chinese support through investments might originally seem beneficial, but in reality, nations--like Kenya--​that accept support will be restricted to transactions that might ultimately benefit China.

China increases investment and trade globally and its pivot towards Latin America is becoming evident.

According to AidData, a research lab at the College of William & Mary, China’s total official international finance was 354.3 billion USD from 2000--​2014. In Latin America and the Caribbean (LAC) alone, the data shows that total Chinese financial involvement has vastly expanded in both the number of transactions and the amounts negotiated, with a total amount over 50 billion USD.  In 2000, observed trade volume between China and the LAC was only 12 billion USD. While in 2013, at over 21.7 times its previous size, the trade volume had increased to 260 billion USD.

China’s contemporary advances to Latin America and the Caribbean reform the geopolitical structure of the world, and compel us to evaluate the nature of Chinese interests in the region. After assessing the nature of the transactions, it is seems that China’s commercial interests in LAC vastly outweighs its foreign development financial aid. China’s primary commercial interests mostly revolve around nations with larger oil reserves and larger economic markets. Commercial related finance in LAC concentrated in Venezuela, Ecuador, Brazil and Argentina emphasizes this feature. What stands out is Chinese investment in development aid, as a great deal of these concessional finances were granted because they are related to Chinese commercial interests.

​AidData’s dataset, China’s Global Development Footprint, details transactions tracked from Chinese firms. It seems that China often disguises a large commercial deal amidst several smaller investments classified by AidData as Official Development Assistance (ODA). These investments are  granted for internal commonwealth affairs, such as education and infrastructure development. The larger investments appear to be heaviest in energy generation and transportation projects, which open commercial opportunities for the China in the long-term.

Expanding Diplomatic Relations and Exchanging Natural Resources 

The most Chinese ODA was concentrated in Cuba, with 6 billion USD in debt forgiveness granted by the the Chinese government.This assistance might serve as an act of good faith in expanding commercial and diplomatic relations with Cuba, pressuring the U.S. on both fronts. Costa Rica, Guyana, Ecuador, and Peru are other major benefactors of China’s ODA. Chinese financed projects within these countries include pipelines and transportation systems that are key to exchanging natural resources and goods. For example, in 2013, China’s Export-Import Bank committed 296 million USD for expansion of Costa Rica’s Route 32. The highway is important to the Costa Rican business sector because of its connection to the port at Limón. The Export-Import Bank’s loan to expand the Cheddi Jagan International Airport in Guyana is another exemplary move. The airport is in Georgetown, the capital city of Guyana, and can facilitate the shipment of goods internationally. Overall, Chinese financing under the alias of developmental assistance is China’s main objective to control its geopolitical profile as a cooperative leader of the world.

Bolivia, the most significant target of true ODA investment, follows behind Cuba at  966.4 million USD. Bolivia is the target of a major transportation project, The Twin Ocean Railway, which would allow access to the borders of two major markets: Brazil and Argentina. The main route will likely run from the Peruvian Pacific coast through Bolivia to the Brazilian Atlantic Coast. Argentina and Chile will be incorporated through integrating railway routes.

Securing Access to Oil Reserves

With the Twin Ocean Railway in mind, it is important to notice that Argentina and Brazil both have the highest recorded GDPs in the LAC and are in the top five countries in regards to proven oil reserves. The direct railway lines to the Peruvian port might provide China access to 2.4 billion proven barrels of crude oil in Argentina and 16 billion of Brazilian crude, necessary to maintain its industrial growth. The railway will also be an efficient way to access Argentina’s 316.4 and Brazil’s 429.9 billion cubic meters of proven natural gas reserves. This is significant as China accounts for more than a quarter of the world’s natural gas consumption and is projected to have the most natural gas consumption growth from 2015 to 2040.

China is the world’s largest net importer of oil with growing demand and the LAC could prove to be a major endeavor for China to secure access to oil reserves. China’s Global Development Footprint indicates that China’s transactional profile appears to revolve around securing its sources of energy. Of the 354.3 billion USD in Chinese official finance 134.1 billion was attributed to energy generation and supply. The massive amount of energy-related financing could be telling of China’s future in the LAC.
​
Upon further evaluation, Chinese ODA financing takes on a larger role than simply embracing a “harmonious rise” approach to global relations. The People’s Republic of China’s concessional transactions are not aimed to simply help the most underdeveloped. Nations receiving the most ODA financing are a part of a greater economic agenda, and will serve Chinese self-interest and preservation as a major power.

The One Belt One Road

GEFCO, a logistics group with bases in Shanghai, Paris, and Moscow, received its first train in France filled with Chinese goods after an 11,000 mile trip from Wuhan, China. The goods are intended for GEFCO’s client, PSA. The train arrived in 15 days, after transport through six countries of the new Silk Road route. The arrival marks the first of its kind between China and France. The route provides efficient transportation that is more environmentally friendly than previous methods of goods transfer. This opens doors for GEFCO, who is preparing for more clients. Read more here.
 
The 8th annual meeting of the Academy for International Communication of Chinese Culture invited scholars of various studies to speak on the “Reach and Influence of Contemporary Chinese Culture” in Beijing. Both Chinese and foreign scholars believe the One Belt One Road Initiative will lead to China's even greater cultural influence on the rest of the world. Read more here.
 
At the closing session of the Communist Party of China in Dialogue with World Political Parties High-Level Meeting, the Chinese government expressed support for new multilateralism under the framework of the Belt and Road Initiative. Leaders from nearly 300 political parties and organizations praised China for its new imperative to stay away from isolationism and support a multilateral trade system. President Xi Jinping elaborated, calling on the partner states of the Belt and Road Initiative to create a community with the shared goal of delivering a more promising and prosperous future. Read more here.
       
    
The AIIB: Updates and Criticism
 
Beijing held the 5th High-Level Economic and Financial Dialogue between France and China. According to a fact sheet released by China's Minister of Finance, the two countries have agreed to work towards macroeconomic policies and global economic governance under the AIIB and to continue building the AIIB into a multilateral investment bank of the 21st century. Read more here.
                                                                                                          
In 2018, the AIIB plans on issuing their first international bond in Europe in US dollars. It is estimated that the expenditure of Asian infrastructure will reach 26 trillion US dollar by 2030, and the AIIB will provide aid. Read more here.
 
Cambodia established an inter-ministerial task force for public-private partnership (PPP) infrastructure. Current government financing and multinational funding cannot sustain needed infrastructure improvements, administrative efficiency, and training for human capital. Cambodia is now searching for funds from the private sector through PPPs, and through alternate multinationals other than the World Bank and the ADB. Cambodia is looking to the Japanese International Cooperation Agency (JICA) and Asian Infrastructure Investment Bank (AIIB) to discuss new urban transportation, Electronic Data Interchange for transit, institutional connectivity, and vocational training projects. Read more here.

Japan criticizes the AIIB
 
The Japanese Finance Minister, Taro Aso, criticized the AIIB, comparing the Chinese led investment bank to 'predatory loans' (Japanese: サラ金). Aso was referring to the repayment plan for a port that China reached with Sri Lanka, which leased an 80 percent stake in the port to the China Merchants Holdings for 99 years in exchange for 1.1 billion USD in debt relief. Prime Minister Abe remarked on Aso's criticisms saying 'he made an extremely direct explanation.’
         
                          
News from the Asian Development Bank
 
New projects include women
                                   
The ADB is providing a 500 million USD multi-tranche financing facility for the Second Rural Connectivity Investment Program to improve rural roads in five Indian states. The funding will improve existing roads to reduce waste and costs, and increase climate-risk resilience. 2,000 engineers will be trained to improve road maintenance and safety. The project also seeks to benefit women as it is designed to ease travel, and plans to hire women for at least a third of involved jobs. The program is continuing from the first Rural Connectivity Investment Program, financed by the ADB in 2012.
 
ADB is loaning 20 million USD to Agripacific Holdings (APH) and Kunming Hasfram Flowers (KHF) for flower horticulture in Vietnam, China, and Indonesia. The loans include 5 million USD in CNY to KHF, and 15 million USD in JPY to APH. This is the first ADB private sector loan in JPY outside of the financial sector. Funds will finance climate-controlled greenhouse technology and a vertical-integrated business model. The model will be used later for sustainable vegetable production in Vietnam. APH has also committed to a gender action plan to increase the proportion of women employees to 65 percent and women management and supervisors to 63 percent by 2020. Read more here.
 
Emergency Response
 
ADB is granting 200,000 USD to Vanuatu in response to volcanic eruptions on Ambae Island, Penama province in Vanuatu. The eruptions have forced evacuations, and funding from ADB and other development organizations will help repatriation of evacuees and rebuilding efforts. The grant from the Asia Pacific Disaster Response Fund will support the Vanuatu Manaro Volcano Disaster Response Project.
     
                                                                                                      
Chinese cooperation in Latin America
 
Hydro Global Peru signed a financing deal for 438 million USD with the China Development bank. The funding supports construction and development of the San Gaban III Hydroelectric Plant in Puno, Perú. The plant will support 205 megawatts of potential clean energy. Hydro Global is composed of the China Three Gorges Corporation and EDP Energies of Portugal. Confirming plant construction is a significant step in developing clean energy in Peru. Read more here.
 
The Mexican National Bank of External Commerce and the China Development Bank (CDB) renewed a deal to strengthen cooperation on commerce and investments. Multiple institutions are looking to invest in Mexico to support certain sectors and expedite processes for sharing information. This increases inter-institutional competition that will likely produce deals that are beneficial to the Mexican industrial economy. The agreement also produces rhetoric that allows Mexico’s development bank, Bancomext and the CDB to discuss alternatives for establishing cooperation in infrastructure and telecommunications sectors. Read more here.
 
The 11th China-LAC Business Summit took place in Punta del Este, Uruguay, featuring over 600 Chinese business leaders and over 1500 Latin American firms. The largest of its kind in Latin America, the summit’s goal was to foster greater economic cooperation between China and Latin America on a variety of issues, including manufacturing, agribusiness, and banking and financial services. For Latin American businesses, this summit provided a great opportunity to expand business ties with China, which have been increasingly present in Latin America in recent years. The Summit resulted in many cooperation agreements signed between Chinese and Latin American firms, and was successful in creating synergy across two linguistically and culturally different parts of the world. Read more here.
 

China in Central and Eastern Europe
 
Premier of the State Council of the People's Republic of China, Li Ke Qian, traveled to Hungary to start his Europe visit. Analysts predict this visit will deepen China’s relationship with Central and Eastern Europe, which will be promote cooperation for One Belt One Road Initiative. Throughout the visit, China and Hungary plan to sign several intergovernmental and cooperation agreements. Read more here.
 
China has signed an agreement with the government of Uzbekistan to build a complex for the production of polyvinyl chloride, methanol, and caustic soda. Chinese companies China CAMC Engineering and HQC Shanghai will be the contractors on the project, and the Chinese Export-Import Bank has provided a preferential purchasing loan. Read more here.
                                   
                                                                        
Chinese investment in Iran and trade with Israel
 
The CITIC group has established a 10 billion USD credit line with Iran while Western investment in the country dries up. The Chinese Development Bank considers contributing 15 billion USD. As a part of the One Belt One Road Initiative, China is investing in everything from transportation to the energy industry in Iran. Meanwhile, European companies struggle to find funding for their projects in Iran. Read more here.

Representatives of China and Israel met in Jerusalem to negotiate the creation of the China-Israel Free Trade Area, as well as developing bilateral partnerships in technology and e-commerce. China and Israel have seen an increase in economic ties over the last few years, with the value of trade between the countries amounting to over 11 billion USD. Read more here.
 

China in South Asia

At the recent 16th session of the Governing Council of the Shanghai Cooperation Organization (SCO), India and Pakistan made their official debut as members of the SCO. The addition of India and Pakistan as full-fledged members brings the total membership count of the SCO up to eight nations. Read more here. 
 
Under China's One Belt One Road policy, the China-Pakistan Economic Corridor's (CPEC) first large-scale energy project is now in operation. The Qasim coal fired power plant is located in the Bin Qasim Industrial Zone, 37 kilometers southeast of Karachi City, Pakistan. The project is joint venture between the Power Construction Corporation of China and the Qatari firm Al-Mirqab Capital. Total investment in the project amounted to 2.1 billion USD. Read more here.
 
The third meeting of the Economic and Trade Joint Committee of the Chinese and Afghanistan governments was held in Beijing. Led by Chinese Vice Minister of Commerce Gao Yan and Afghan Minister of Finance Hakimi, the two sides exchanged views regarding bilateral trade, investment, and infrastructure. Read more here.