"Climate-resilient infrastructure is very important."
– Jin Liqun, AIIB President at the inaugural Financial Times - AIIB Summit
The ADB focuses on environmentally conscious projects
The ADB is loaning 170 million USD to Vietnam for urban climate change resilience through the Secondary Green Cities Development Project. The loan will focus on urban areas that lag behind other more developed urban centers like the capital Hanoi. The project will fund water and wastewater infrastructure, green spaces, and road enhancements. Read more here.
The ADB and the UN-backed Green Climate Fund (GCF) are funding 1.5 billion USD to develop Chinese green business. The funds will focus on logistics sector efficiency in a "sharing economy" and alternative energy development. Corporate money, along with public investment, will fund the project with big supporters like the ADB, GCF, and other large Chinese banks. The project stems from growing environmental concerns in China to meet standards for the 2022 Winter Olympics and the 2035 "beautiful China" concept. Read more here.
The Green Climate Fund is granting 12 million USD in additional support to the Cook Islands Renewable Energy Sector Project. Backed by the ADB, European Union, and the Cook Islands, the project has been working to lower the Cook Islands' reliance on fossil fuels. The funds plan to build five solar power plants. Read more here.
The ADB funds power lines from Turkmenistan to Pakistan
ADB Bank officials will provide 150 million USD in funding and technical assistance for power transmission lines running from Turkmenistan to Pakistan through Afghanistan.
China funds fossil-fuel projects in Pakistan and Bangladesh
A consortium of Chinese banks led by the China Development Bank and the Export-Import Bank, will fund a 1.5 billion USD project to provide coal-powered energy in Balochistan, Pakistan. Read more here.
Bangladesh signed a project framework agreement with China to build a 220-kilometer oil pipeline, along with other infrastructure. The project is expected to cost 5.5 billion USD. China believes the project is significant to China-Bangladesh-India-Myanmar Economic Corridor. Read more here.
One Belt One Road updates: a digital Silk Road and Iran as a transport hub
The Chinese One Belt One Road (OBOR) framework has typically been centered on land and maritime infrastructure networks. However, China's advances in cyber technology and digital infrastructure mark a new component to the OBOR strategy.
The Belt and Road Digital Economy Alliance was established in Ji'nan, with plans to integrate information technology as a part of a new Digital Silk Road. The alliance features major Chinese firms, such as the Export-Import Bank of China and the China Development Bank, as well as large foreign firms, including Cisco and IBM.
The goal of this new alliance is to create new opportunities in technology for Belt and Road countries, including new datacenters, cloud services, smart finance, smart home, smart taxation, smart cities, and other total technology solutions. The alliance already has plans for projects in a variety of countries in Asia and Africa. Read more here and here.
China supports Iran's plan to build a network of rail transportation. This support has the potential to transform Iran into a Eurasian transport hub, critical to China's OBOR policy. Read more here.
Why the One Belt One Road?
China's One Belt One Road Initiative is a signal of the country's transition into a more market-based economy, and that China's macroeconomic policy has been embracing free trade and economic globalization.
Chinese President Xi Jinping has praised the idea of creating an Asia-Pacific free trade area, and this policy has become even more likely after the withdrawal of the United States from the Trans-Pacific Partnership. China hopes to create new bilateral and multilateral trade and development initiatives under the OBOR Initiative. This has lead China to engage in dialogue with a variety of countries and international organizations regarding potential opportunities. China's goal is to export its industrialization to other developing countries, and to consolidate its political-economic centrality in the Asia-Pacific region. Read more here.
The AIIB's investments extend far beyond China and the Asia region into areas such as North Africa. Despite claims that the OBOR initiative is meant to solely benefit China, the AIIB continues to make commitments far outside of China to the benefit of people all over the world, not just the Chinese. Read more here.
The AIIB's first international bond investment is imminent, says AIIB President Jin, without specifying any details. Countries with projects ready for investment will likely be the recipients. Additionally, Jin encouraged both the US and Japan to join the AIIB, which are the only two countries from the Group of Seven that have not committed as members. Read more here.
China and Russia cooperate for aerospace technology, shipping, and subways
Last week in Beijing, the Chinese Prime Minister, Li Keqiang, and the Russian Prime Minister, Dmitri Medvedev, met to discuss future cooperation between their nations. The meetings produced 20 new bilateral agreements, in areas as diverse as agriculture, energy, and aerospace technology. Read more here.
President Xi Jinping met with Russian Prime Minister Medvedv to discuss a new facet to the One Belt One Road initiative, which would utilize Arctic-shipping routes to connect Europe and Asia. President Putin initially proposed the plan in May, and is looking to capitalize on the possibility of new Arctic shipping routes as previously frozen waters melt. The plan is expected to benefit Russia by bringing in Chinese capital to develop Arctic-shipping routes. In return, China will benefit by gaining access to these new routes. Read more here.
China's state-owned China Railway Construction Corporation will be financing a subway infrastructure project in Moscow. This is the first time Russia has established such a joint venture with a foreign firm, and the first Chinese subway project in Europe. The project is expected to open at the start of 2018 with China investing 500 workers and 2.25 billion CNY to construct the approximately 4-kilometer long subway. Read more here.
China in Latin America
New interactions between Latin American governments and the Chinese government have increased growth in the rapidly expanding Latin American region. This growth is partly prompted by Chinese investment in the region. Read more here.
At a press conference in Zhuhai, China, the China-Latin America International Exhibition was announced. This expo will bring together executives from nearly 500 Chinese and international companies. The expo will feature a main forum titled China-Latin America Economic and Trade Cooperation Forum. There will also be three parallel forums revolving around Chinese corporate cooperation with Latin American firms. China views the expo as a way to build friendly relations that will support the One Belt One Road initiative. Read more here.
Nextel Brazil reached an agreement that redefines the terms for payment of loans from the China Development Bank, the Bank of Brazil, and the Federal Economic Fund. Sinosure, a local export credit insurance agency, must review the terms before 31 December 2017. The loans contributed to Nextel’s goal of upgrading cellular coverage to 4G and eradicating 3G broadband networks. Nextel’s ultimate goal of the agreements is to significantly reduce its debt. Read more here.
China increases economic cooperation around the world
China and Greece held the second meeting of the three-year China-Greece Action Plan in Athens. Chinese and Greek state officials, and representatives of enterprises signed a series of agreements in transport, energy, and telecommunications to promote economic cooperation between the two countries. Read more here.
At the Third China PPP Financing Forum in Shanghai, China, the China-Africa Development Fund CEO, Jiyang Shi iterated the importance of Africa to China's One Belt One Road initiative. According to Shi, China-Africa cooperation is mutually beneficial because China lacks the natural resources of Africa, but can provide the financial investment African countries need. By 2020, bilateral trade between China and Africa is expected to reach 400 billion USD, and bilateral investment to reach 100 billion USD. Read more here.
Construction on the China-UAE Capacity Cooperation Park is expected to begin in January 2018. The park will be located in the Khalifa Industrial Park in Abu Dhabi, UAE, with an initial size of 2.2 square kilometers. However, up to 10 square kilometers of space have been reserved for the park's expansion. Thus far, 10 enterprises have signed agreements expressing intentions to enter the park, with an initial investment of 3.4 billion RMB. Read more here.
According to W. Wicklein, the Country Director for the ADB Indonesia delegation, China's economic stabilization is a positive factor for maintaining a steady and balanced growth in Indonesia. The ADB and the World Bank forecast the Indonesian economy to achieve 5.1 percent and 5.3 percent growth in the next two years. Chinese investment is rapidly expanding Indonesia's e-commerce sector. As an example, the Chinese firm Alibaba invested 1.1 billion USD in the Indonesian e-commerce company, Tokopedia. Read more here.
President Donald Trump's Asia tour
Japanese observers expect President Trump to strengthen his position on China, ahead of his Asia tour this week. This expectation is partly due to Secretary of State Rex Tillerson's remarks in October criticizing the Chinese for funding the creation of a port in Sri Lanka only to create a debt forgiveness deal. The deal forgives Sri Lanka of 1.1 billion USD of debt in exchange for Chinese rights to the port. President Trump is expected to announce his push for a free and open "Indo-Pacific" region, aiming to bolster cooperation with allies such as Japan, Australia and India.