China's "motives" for financing Belt and Road Initiative

(PEOPLE'S DAILY ONLINE)Along with China's Belt and Road Initiatives project comes huge financing needs. Funding requirements and reasonable design are two important parts of promoting and implementing the initiative.

As financing difficulties arose, the downward pressure of the Chinese economy increased. In addition, infrastructure is still inadequate in many areas of the country. Therefore, there has been skepticism over China's motives for promoting economic cooperation among countries along the proposed Belt and Road routes. Has China been disingenuously generous?

In fact, China's Silk Road Economic Belt and 21st Century Maritime Silk Road are closely connected to the needs of the market. For domestic enterprises that want a bigger international market, the initiative provides good support and opportunities.

The economic needs and goals of China and the other states in the proposed economic belt are also complementary, according to the Chongqing Academy of Social Sciences, which conducted research on 65 countries' trade data over the course of 10 years.

As China provides a large number of loans financing "One Belt, One Road" projects, the country will indeed face economic pressure in the short term, said Zhao Xijun, deputy dean of the school of finance at Renmin University.

Zhao told People's Daily that the Chinese economy has been transforming its growth pattern from labor-intensive to capital-intensive. In the future, China can provide capacity and technology to other developing countries in exchange for market space. At the same time, China continues to introduce equipment, technology and personnel from developed countries, which will ultimately form a two-way flow of trade and investment.

American political scientist Francis Fukuyama said that if the One Belt, One Road initiatives meet Chinese planners’ expectations, China’s model of development will blossom outside of China, raising incomes and demand for Chinese products in stagnating markets in other parts of the world. Rather than being at the periphery of the global economy, Central Asia will be at its core.