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.
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.