Beijing Diary: China's Silk Road Initiative Provides Growth Opportunties

By Samantha Tan Chiew Ting BEIJING, Jan 20 (Bernama) -- The ancient Silk Road made famous by Italian merchant traveler Marco Polo connected the people of Europe and Asia and vice versa for centuries, bringing prosperity to the society along the route. Though the famous trading route has gone into oblivion amidst the rise of new civilisations and the opening of new land and sea routes, China has been reviving this ancient route due to its huge economic potential. However, China's ambitious plan goes beyond the ancient terrestrial Silk Road, that is now rebranded as "Silk Road Economic Belt", to include the maritime route known as the 21st Century Maritime Silk Road covering much of Southeast Asia. The Silk Road Economic Belt and the 21st Century Maritime Silk Road are the two components under China's "Belt and Road Initiative". The Silk Road Economic Belt initiative over land traverses from Beijing in China to Turkey in Europe while the Maritime Silk Road connects Quanzhou in China through sea to Iran in the Middle East and extends further to the African continent. The Belt and Road Initiative has already spawned an infrastructure boom with countries like Iran and Turkey in the western end of the route witnessing huge Chinese investments in infrastructure. In Turkey, there is a joint Chinese-Turkish high-speed railway project underway connecting Asia and Europe across the Bosporus Strait. Interestingly, the line between Ankara and Istanbul will be extended to Bulgaria, paving the way for a rail line connecting Beijing and London in the future. So just imagine the immense potential of China's One Belt, One Road Vision! Does Malaysia stands to benefit from this far sighted initiative of China? Certainly yes. However, it is the 21st Century Maritime Silk Road that is of significant interest to Malaysia and other ASEAN member states as the maritime silk route passes along the South China Sea and the Melaka Strait. Furthermore, ASEAN including Malaysia is highly recognised in China's Belt and Road Initiative. China-Malaysia Qinzhou Industrial Park (Guangxi) Development Co Ltd's chief executive officer Ong Chong Yi notes that the level of enthusiasm of each region on the initiative depends on the economic returns. He highlighted that Malaysia has many major ports - Port Klang, Port of Tanjung Pelepas and the Kuantan Port - that sits along the Maritime Silk Road, which could complement the Silk Route partnership with China. Ong, who is the former minister counselor for economic affairs at the Malaysian Embassy in Beijing, said Malaysia should leverage its strength in these ports to gain greater benefits from the China's Silk Road initiative. The Asian Infrastructure Investment Bank (AIIB) is to finance infrastructure construction and promote regional interconnectivity and economic integration under the maritime silk road initiative. With authorised capital of US$100 billion (RM438 billion) and subscribed capital of US$50 billion (RM219 billion), AIIB will invest in Asia's infrastructure development including energy, transportation, rural construction and logistics as well as education and healthcare. The three largest shareholders of AIIB are China, India and Russia, with a 30.34 percent, 8.52 percent and 6.66 percent stake respectively. Malaysia only holds 0.11 percent share and 0.36 percent of voting share in AIIB. Nonetheless, whether in the East or West, China's "One Belt, One Road" initiative has not only created excitement for the countries along these routes but also attracted international attention. The initiative could also help China to bolster is faltering economy after recording impressive double digit growth figures for more than two decades. China's news agency Xinhua reported that the Export-Import Bank of China (China Exim Bank) made more loans last year to countries involved in the Belt and Road Initiative. The bank financed more than 1,000 projects in 49 countries, covering transportation, electricity, resources, telecommunication and industrial parks, with outstanding loans up 46 percent from the beginning of 2015 to 520 billion yuan (nearly 80 billion U.S. dollars) at the year-end. "Those projects are not only a boon for local growth but facilitate a unified regional market and industrial value chains," China Exim Bank spokesperson Dai Peng was quoted saying by the agency last Thursday. In the bigger picture, China's "One Belt, One Road" initiative could well be the new stimulus for growth and reverse the global economic gloom. --BERNAMA