New ADB Country Plans
The ADB revealed the first country partnership with Turkmenistan for a 5-year plan lasting from 2017 to 2021. Due to the country's reliance on hydrocarbon exports, the plan will focus on three areas: hydrocarbon market diversification and energy trade promotion; infrastructure investment and private sector support to diversify non-hydrocarbon exports; and education on economic diversification. This new ADB country plan will support regional power interconnection projects, namely the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline. The main goal of the ADB will be modernizing institutions and reforming the economy for diversification, with the support of other groups like the Central Asia Regional Economic Cooperation (CAREC). Read more here.
The ADB revealed a new Pakistan country plan for 2018-20, allocating 4.7 billion USD for development. New investments in the energy sector will focus on renewable energy and climate change resilience, and includes a 1 billion USD program for hydropower. Transportation funding includes projects for highways, rails, and canals. Two social programs include the Sindh education project and Punjab workforce training. Public-private partnership projects will be strengthened to enhance public sector investment and management. The new plan aligns with the ADB-Pakistan country partnership strategy (2015-19) and the government's "Vision-2025" development plan. Read more here.
The ADB is loaning 260 million USD to Bangladesh for infrastructure investments, renewable energy projects, and public-private partnership funding. It is the first tranche of a 526 million USD investment in the Third Public-Private Infrastructure Development Facility (PPIDF 3). 500 million USD will go towards medium and large PPP infrastructure projects and 26 million USD to small and medium sized renewable energy projects. 750,000 USD will also be given as technical assistance to the state-owned enterprise Infrastructure Development Company Limited. Read more here.
Global Participation with the AIIB
The United Kingdom gave 72 million GBP to the Asian Infrastructure Investment Bank. This is part of the UK's commitment to spend 0.7 percent of income on foreign investment. Read more here.
India's participation in the AIIB illustrates Prime Minister Modi's belief that the bank is truly a multilateral organization. The Japanese government, however, has remained skeptical of the AIIB in solidarity with the US. However, pressure has increased for Japan to join with other traditional US allies applying for AIIB membership. Read more here.
News in Vietnam, Myanmar, and Indonesia
The President of Vietnam, Trân Dai Quang, met the President of China, Xi Jinping, in Vietnam during a State visit. He warmly congratulated Xi Jinping for the 19th Party Congress and thanked him for Chinese non-refundable aids and assistance during recent bad weather in the country. He asked to reinforce ties with China. Moreover, both leaders reasserted their will to develop the Steering Committee for Vietnam-China Cooperation and to link the One Belt One Road Project to the Two Corridors One Economic Belt Project. Read more here.
In an effort to further enhance bilateral cooperation, China has proposed the creation of a new economic corridor between China and Myanmar. One of the key components of China's One Belt One Road Initiative is the creation of economic corridors that serve to facilitate comprehensive bilateral partnerships. Chinese Foreign Minister Wang Li expressed support for the economic corridor as a framework to tie together various Chinese projects in Myanmar. Read more here and here.
Since the end of 2014, Indonesia's economic growth has been hovering around 5 percent. One reason for the slower-than-expected growth has been sluggish consumption rates. As consumption lags, Indonesian Vice President Jusuf Kalla points out that Indonesia's economy is shifting from being consumption-driven towards being driven by foreign direct investment.
In it's latest report, the ADB points out that China's rapid stabilization makes it an attractive source of investment and opportunity. Chinese companies like Tencent and Didi Chuxing have rapidly expanded investment in Indonesia's transportation industry. The director of the Mandiri Institute in Indonesia even said that China has overtaken the U.S. in its influence on Indonesia's economy. Read more here.
Chinese partnerships in Latin America
Since Panama broke diplomatic ties with Taiwan, China is reaffirming its offer to be involved in Panama's development. The leaders of China and Panama signed 19 memorandums of cooperation, including several agreements regarding maritime, railway, and air transportation. A possible trade deal is speculated, as the countries secured a strategic cooperation between Chinese Development Bank and the Ministry of Trade and Finance of Panama. The agreements are intended to support The New Silk Road and mutually increase industrial capacities. China claims that financial interests are not the reason for the new partnership. Read more here and here.
Bancomext, Mexico’s state-owned bank and export credit agency, and the Chinese Development Bank seek to expand projects in Mexico with funding from China. The agreements involve co-financing projects in important sectors such as technology, equipment, tourism and renewable energy. In the coming decade, the countries plan to increase investment to over 250 billion USD. This was announced after the Forum for Economic and Commercial Cooperation China-Latin America and the Caribbean, where 120 businesses participated. Read more here and here.
The Export Import Bank of China will finance a 400 million USD solar energy project in Cauchari, Argentina. The project will be the second largest solar park in the world. Cauchari I, II, and III, will construct a solar park with 1.2 million solar panels and the potential for 300 MW of generation. Power China will be responsible for the constructing the plant, and Talensun will construct the solar panels. The project will create an estimated 1,600 jobs and generation will power around 100,000 homes in the region. Read more here.
Venezuela is the seventh largest oil exporter in the world, and the leading exporter of oil to China from South America. Venezuela cooperates with China on economic, technological, educational, and military fronts. In 2016, Venezuela exported 5.5 billion USD worth of goods to China and imported roughly 2.5 billion USD worth of Chinese goods. Venezuela has been the most significant recipient of Chinese investment in Latin America. Through the Chinese Development Bank and the Export-Import Bank, China has invested 141 billion USD over the past decade to maintain its political and commercial interests in Venezuela. Read more here.
China and Europe
Growing trade and investment between China and European countries part of the Belt and Road Initiative has resulted in a rail boom, with over 3000 freight trains traveling on a total of 57 railroad systems between China and various European cities. Under the Belt and Road Initiative, freight rail routes connected China to Europe, opening up transcontinental transportation, improving cost and logistics management, and promoting sustainable development. Two projects currently under development include a transcontinental expressway linking Lianyungang to St. Petersburg, and linking Harbin to several European cities. Read more here.
The President and Vice-President of the Chinese National commission for Development and Reform held a meeting with the European Commission, represented by Margrethe Vestager. They reasserted the importance to cooperate in the field of concurrence and especially in terms of control of the State aids. The European Union warmly welcomed China’s initiative to adopt an analytical system to guarantee the free circulation of goods and the role of the state in the market. This meeting took place in a broader movement of cooperation between China and the EU. Read more here.
Chinese investment in Africa
Chinese company Future Group plans to expand its business in Africa by setting up five industrial parks. The first park will be built in Mozambique starting next year. The General Manager of Future Group, Yin Yiqiao, estimates that each industrial park will employ up to 1000 people and cost about 50 million USD. Having conducted business in Africa for 20 years, Yin's effort is a part of a growing trend of private Chinese enterprises investing in Africa, particularly in the manufacturing of industrial materials. Yin has previously invested in the production of aluminum alloy for furniture, and the planned industrial parks will produce items like batteries and small-scale electronics. Read more here.
Morocco and China signed a Memorandum of Understanding regarding China’s One Belt One Road Initiative. Morocco is the first African country to join the project. Read more here.
Green Finance and Internship Programs
The European Investment Bank (EIB) and the China Green Finance Committee (CGFC) are working together to create a common taxonomy to discuss initiatives for green finance. The Chinese Development Bank (CDB) is one of the biggest issuers of green bonds. Read more here.
The Asian Development Bank’s Trade Finance Program (TFP) launched its first Bank Internship Program on 13 to 16 November with TBC Bank from Georgia, CitiBank and Bank Eskhata from Tajikistan. The program seeks to improve the capacity for investment and development in Asia through the sharing of expertise. Read more here.