Archive: Belt and Road Updates September 23

Belt And Road Update September 23
2019.09.23

Six Years of Belt and Road Development: Since China launched the Belt and Road Initiative (BRI) in 2013, six years’ joint construction with participating countries has not only brought remarkable progress to regions along the routes, but also helped speed up global cooperation. As People’s Daily reported on April 22, notable headway has been made in infrastructure development. So far, 126 countries and 29 international organizations have signed cooperation agreements with China on jointly building the Belt and Road. China has held two Belt and Road Forums for International Cooperation, in 2017 and 2019, in Beijing with national leaders and high-level representatives, broad consensus and fruitful outcomes.

Trade in goods between China and countries and regions along the Belt and Road registered a volume of more than $6 trillion from 2013 to 2018, during which more than 244,000 jobs were created for local citizens. China’s direct foreign investment under the framework has exceeded $90 billion. In the past six years, China has signed 173 cooperation documents with its BRI partners, which include currency swap agreements with 20 countries along the Belt and Road and renminbi clearing arrangements with 7 countries.

The China-Europe freight trains, connecting China with 50 cities in 15 European countries, had completed more than 14,000 trips by the end of March 2019. Moreover, the BRI is actively seeking alignment with other national or regional development plans, including the African Union’s Agenda 2063, Russia’s Eurasian Economic Union, Italy’s InvestItalia program, Saudi Arabia’s Saudi Vision 2030, Kyrgyzstan’s 2040 National Sustainable Development Strategy, and Mongolia’s Development Road program.

At home, the BRI has also sought to facilitate the development plans of the Beijing-Tianjin-Hebei region, the Yangtze Economic Belt and the Guangdong-Hong Kong-Macao Greater Bay Area, securing tangible benefits for the Chinese people.

Smooth progress is underway in China-Laos Railway and China-Thailand Railway projects. The Nairobi-Mombasa railway funded and built by China has carried more than 2.5 million passengers and nearly 3.9 million tons of cargo since its launch in May 2017.
In Ethiopia, a new China-assisted terminal at its capital airport was inaugurated earlier in January to accommodate 22 million passengers annually — tripling the airport’s previous capacity and marking a major step taken by Ethiopia towards becoming a key aviation hub of the African continent.

For a detailed reading of the main achievements of the BRI from 2013-2019, read: The Belt and Road Initiative Progress, Contributions and Prospects

BRI Revenues Make Chinese Contractors Top the Global Ranks
According to U.S. journal Engineering News-Record Chinese contractors, aided by revenues generated from China’s Belt and Road Initiative (BRI), have emerged as the world’s top earners in 2018. In 2018, Chinese contractors took in almost $120 billion in revenue outside their domestic market, one quarter of all international construction revenue.

The survey also found that Chinese builders had won 60% of all cross-border construction revenue in Africa and 40% of non-domestic revenue in Asia. Chinese players held the top spots in contracts for transport, power and factories. One result is that Chinese enterprises now make up 76 of the world’s largest 250 contractors.

Nikkei Asian Review, reporting on the success of the Chinese contractors, noted in an article today some of the difference between Chinese contractors and their Japanese counterparts. Nikkei quoted an engineer with a Japanese plant contractor who last year visited a Chinese-built petrochemical complex that was completed in two years, rather than the more usual four. He commented that Chinese companies are able to develop their technical expertise in the domestic market, and can also benefit from financing deals that limit competition for projects.

German Broadcaster Deutsche Welle Corrects misconceptions about the Belt and Road:
In a commentary, Deutsche Welle’s China correspondent Frank Sieren mentions a recent survey conducted by the media network “Investigate Europe,” which finds that there is no evidence of economic damage to participating countries or of extreme dependence because of the Belt and Road Initiative or the New Silk Road. On the contrary, it found that investments so far, on the whole, have had a positive effect on local economies and labor markets. China has implemented over 3,000 projects around the world; from an oil pipeline in Myanmar to a railway line in Kenya. There has only really been great controversy over two projects in Sri Lanka, with China being accused of luring Colombo into a debt trap. However, China plays a small role in Sri Lanka and only holds 10% of its external debt.

Nor is China trying to split the European Union, Sieren observes. It is the governments of certain EU member states themselves which are using investments into the New Silk Road project to free themselves from Brussels’ micro-managing. For example, the Hungarian government, although it receives large sums of money from the EU, is often happy to veto any EU attempt to issue a joint declaration criticizing China because it hopes to receive more money from Beijing in the future. This approach also seems to goes down better with voters than trying to find a compromise with Brussels.

“What we underestimate in the West is that while we’re worried about losing influence because of the New Silk Road, the perspective from the recipient countries is different,” Sieren writes. “For them, the project represents hope and the opportunity to be connected to wealthier states. China seems able to better understand the perspective of these countries than the West and to exploit this for its own purposes. That’s why it has built up a collection of bilateral trade and development deals.”

Sieren continues, it is recommended by Investigate Europe’s survey, as well as by another one carried out by the Bertelsmann Foundation, that the West should develop its own institutions, technologies, business models and sets of values to propose alternatives to the offers from China. They also say that the EU should attempt to set standards in third-party countries that Chinese investments also have to adhere to. “This is easier said than done. The EU is currently not able to find a common policy towards China and this does not seem likely to happen any time soon…. The lack of unity in the West has less to do with China’s rising influence than the fact that we cannot actually find compromises and work together.”

China and Russia to align the BRI and the Eurasian Economic Union- two Dozen agreements signed.
Russian President Vladimir Putin met with Chinese Prime Minister Li Keqiang on September 18 at the Kremlin as part of Li’s official visit at the invitation of Russian Prime Minister Dmitry Medvedev. Putin told Li that he hopes to meet with Chinese President Xi Jinping at the BRICS and Asia-Pacific Economic Cooperation (APEC) summits, set to take place in Brazil (Nov. 13-14) and Chile (Nov. 16-17). “I hope I will have an opportunity to meet with the Chinese President on the sidelines of two big events, the BRICS and APEC summits, that will be held in Latin America in November,” Putin said, asking Li Keqiang to convey his “best wishes” to the Chinese leader.

Putin pointed out that early October will mark the 70th anniversaries of the founding of the People’s Republic of China and diplomatic relations between Russia and China. “Our country — it was the Soviet Union back then — was the first to recognize a new Chinese state. We have come a long way in the past decades as far as cooperation is concerned. Today, we are strategic partners in the full sense of the word, we maintain comprehensive cooperation, which is Russia’s unconditional foreign policy priority,” the Russian President stated, reported TASS.

For his part Li said cooperation between Beijing and Moscow “contributes to the development of the two countries, as well as to regional and global development, particularly amid increasing instability and uncertainty in the global economy.”

Li’s visit to Russia began on Sept. 16. It was the 24th regular meeting of heads of the Russian and Chinese governments and took place in St. Petersburg on Sept. 17.

Following their meeting, Medvedev said the talks showed that “the Russian-Chinese comprehensive partnership and strategic cooperation has entered a new stage.” Medvedev stated that Moscow and Beijing plan to increase trade from $108 billion to $200 billion by 2024, which they will achieve through joint projects in energy, industry, high-tech sector and agriculture. “At the meeting, we exchanged views on key areas of cooperation, touched upon the issues of interconnection between the Eurasian Economic Union and China’s One Belt One Road initiative,” Medvedev said. “Of course, we are committed to deepen cooperation further in all areas, achieving concrete mutually beneficial results,” said Medvedev. “We maintain a close dialogue. Our bilateral practical ties are expanding, filling up with new content. This is especially significant in the year when we celebrate the 70th anniversary of the establishment of diplomatic relations between our country and China.”

Referring to the fact that the two countries signed almost two dozen agreements, Medvedev went on: “These are, indeed, significant documents. I would specifically mention those relate to cooperation on science and space, while the Economic Development Ministry and the Ministry of Commerce (of China) have adopted a roadmap to stimulate and develop mutual trade in goods and services until 2024.”

Roscosmos Director Dmitry Rogozin and China National Space Administration Director Zhang Kejian signed an agreement on cooperation in the establishment of the Joint Moon and Outer Space Research Center. This includes an agreement in the coordination of the Russian mission using Luna 26 orbiter and the Chinese research mission of the Moon’s polar area Chang’e-7.

Mexico: “Stronger relations with China, a priority”:
Speaking Sept. 17 at a forum in the Mexican Senate, Deputy Foreign Minister Julian Ventura emphasized that strengthening and broadening relations with China “is a priority” for the Mexican government of Andrés Manuel López Obrador. Ventura was addressing the forum on “Chinese and Mexican Media: A New Era for Relations among China, Mexico and Latin America.”

Chinese Ambassador Zhu Qingqiao in his remarks, emphasized that both Mexico and China are in crucial phases of reform, and that López Obrador is leading the Mexican people toward a great transformation, Xinhua reported. He also noted that many more Ibero-American countries are joining the Belt and Road Initiative, given the opportunities it offers them.

Ventura emphasized that López Obrador’s government represents a new era for Mexico, and seeks to “build and strengthen, through political dialogue and the growing complementarity of [Mexican and Chinese] economies, new avenues for cooperation in many areas.” A Senate communiqué on the event quoted Sen. Ricardo Monreal, president of the Senate Political Coordinating Committee, who stressed that China will soon become the world’s most important political, economic and political power, and that Mexico should build a productive and harmonious relationship with it.

Mexico and China must forge a strategic relationship, Monreal underscored. Given China’s many achievements in areas of IT, innovation, biotechnology, robotics and related areas, he emphasized, Mexico “must be present in these developments the future is preparing for us.” Sen. Cora Cecilia Pinedo Alonso, head of the Asia-Pacific-Africa Foreign Affairs Committee, added that on the 70th anniversary of China’s founding, conditions now exist for a “relaunching” of bilateral relations. Moreover, she said, “We see a magnificent opportunity to establish broader commitments between the Mexican Congress and China’s People’s Congress,” she said.

Philippines’ Finance Minister admires China’s development and the BRI:
Addressing the Philippines-China Trade and Investment Forum, attended by about 100 business leaders from the industrial city of Chongqing in southwest China, held in Pasay City, the Philippines on Sept. 16, Philippines’ Finance Secretary Carlos Dominguez III expressed his admiration for its past and present leadership for accomplishing its goal of virtually eliminating poverty among its people. “No other country, at the size and scale of China, has ever achieved this in human history,” Dominguez said, Philippines’ Department of Finance website reported.

Dominguez said that China, under President Xi Jinping’s leadership, has moved ahead with its Belt and Road Initiative (BRI), which is the “single largest enterprise in human history,” which will “reshape the global economy for the new century” and bring Asian economies closer together through enhanced trade linkages and seamless connections for investments. He said the Philippines fully supports BRI, aware of its vast economic potentials for all countries both in the region and outside it.

“Enhanced trade will encourage more efficient investment flows. Improved connectivity will enhance the inclusiveness of our growth patterns. We have everything to gain from this,” he said. Dominguez went on, that the Philippines also has its own BRI in the form of the “Build, Build, Build” program, which is the centerpiece of President Duterte’s economic strategy of making economic growth sustainable and inclusive for all law-abiding Filipinos.

Chinese Present 600 kph Maglev Train
According to a September 18 report in China Daily, CRRC Zhuzhou Locomotive Co., Ltd. unveiled the key components of its magnetic-levitation train with a designed speed of 600 kph (375 mph) in central China’s Hunan Province last Tuesday. Key parts of the train’s power system, including a long stator linear motor and two transformers, were unveiled in the city of Zhuzhou.

He Yunfeng, an official of the company, said that in contrast to traditional electrical motors, the long stator linear motor features a simple structure, strong climbing ability, low noise, low energy consumption, and quick start and stop.

The long stator linear motor plays the role of the “heart” of the high-speed train, and the transformers provide a constant and stable direct current power for the linear motor, equivalent to a “blood supply system.”

The high-speed maglev train can fill the service gap between current high-speed rail and aviation services and is of great technological and economic significance for improving the country’s high-speed passenger transport network. High-speed trains in China now run at a speed of up to 350 kph (217 mph). For long distances between cities, the new maglev can cut the current 4.5 hours for air travel, and 5.5 high-speed rail travel, between Beijing and Shanghai to 3.5 hours.

A prototype 600 kph magnetic-levitation train rolled off the production line in the eastern city of Qingdao in May.

The high-speed maglev train features high speed, safety, reliability, low noise and vibration, large passenger capacity, on-time performance and low maintenance costs. It can be used to connect major cities or city clusters to boost regional integration.

Kenyan government fast-tracking Naivasha Dry Port and Lamu Port to connect to Uganda and Sudan.
Business Daily Africa reported earlier this month that the Kenyan cabinet had approved a Sh6.9 billion budget for the development of Naivasha dry port in a bid to boost standard gauge railway (SGR) operations. The China-built Mombasa-Naitobi 485 Km SGR is part of the East African Railway Master Plan to connect the East African countries with landlocked Uganda, Sudan, Rwanda, Burundi and eastern Congo (DRC). The Naivasha dry port is a key hub for transshipment between Kenya and Uganda. Kenyan President Ehuru Kenyatta has reportedly “been working overdrive to develop both Naivasha and Mombasa ports to keep business from Uganda and South Sudan.” The head of State also awarded Uganda and South Sudan free land in March and July respectively to build godowns to ease movement of goods at the dry port.

Mr Kenyatta said Kenya was fast-tracking the completion of the Lamu Port South Sudan Ethiopia (LAPSSET) projects, including transnational highways, oil pipeline and the Lamu Port, among others, to link the neigbouring countries. “The first berth (of the Lamu Port) will be ready this August while Berths 2 and 3 are expected to be completed within the year 2020. I will invite Your Excellency, with other regional leaders, to inspect the Lamu Project in due course,” he said when President Salva Kiir made a state visit to Nairobi in July.

New Pardigm eclipses old as tonnage on Kenyan SGR continues to rise.
While this particular article in Business Daily Africa is slanted to favor schemes to “save” the century old British Meter Guage Rail (MGR) system, toward the end are the figures which indicate just how the Mombasa-Nairobi SGR has come to be the preferred option for freight traffic– either import or export– between the port of Mombasa and Nairobi (and beyond).
The paper reports in the final chapters of the article: “Since the introduction of the 485km standard gauge line from the Port of Mombasa to Nairobi depot, MGR has remained unviable with SGR hauling the largest percentage of the cargo. Statistics show that the total SGR throughput has been increasing steadily over time. The number of trains leaving Mombasa port for Nairobi has risen to a high of 214 trips in January this year carrying a total of 22,624 TEUs. Similarly, the number of trains leaving Nairobi for Mombasa port also increased to a high of 134 in the same period carrying a total of 12,920 TEUs. Overall total TEUs moved by SGR was approximately 323,158 from January 2018 to February 2019, out of which exports constituted 33 percent.”

Uganda’s 600 MW dam enters test period after Sinohydro complete enginnering works:
“Engineers constructing the 600 MW Karuma hydropower dam in Kiryandongo District have successfully conducted the first phase of tests on key installations at the facility,” reported the Ugandan Monitor earlier this month. It cited Li Ji, the deputy manager of Sinohydro Corporation Ltd which is undertaking the construction works, that “tests have been conducted on the intake, radial and spillway gates, including some turbines”.

“The confirmatory tests push the project to 95 per cent completion status. At our current work pace, we expect all the works to be complete by December, the commissioning deadline,” he said. According to the Monitor, the $1.7 billion power plant was initially expected to be commissioned in December 2018 but due to some challenges, it was pushed to December this year. According to the project owner, the Uganda Electricity Generation Company Limited (UEGCL), construction of the fish ladder (a non-over flow section) is currently ongoing. The section enables fish and other aquatic life to move freely upstream to feed and reproduce. Mr Andrew Kamagara, an engineer at Sinohydro Corporation Ltd, said a team of Ugandan engineers is being trained to manage the project so that upon its commissioning, they are ready to assume responsibilities of operations and maintenance once the contractor leaves.

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