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Opinion

Trade along China’s ‘One Belt, One Road’ won’t succeed without the currency of trust

Frank-Jürgen Richter says inherited cultural and political attitudes in Central Asian countries, which are key partners of the Chinese-initiated project, mean there is much work to be done to foster cooperation

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<p>Frank-Jürgen Richter says inherited cultural and political attitudes in Central Asian countries, which are key partners of the Chinese-initiated project, mean there is much work to be done to foster cooperation</p>
Frank Jurgen-Richter
The future could look bright for China, Central Asian nations and the world by nurturing trust and cooperation along the route.
The future could look bright for China, Central Asian nations and the world by nurturing trust and cooperation along the route.
The International Monetary Fund and OECD have forecast global growth will be about 3 per cent, rather than the traditional average of almost 4 per cent. This seems about right, given that the economies of most developed and major developing economies are struggling, for many reasons.

The first is due to the enmeshed cogs of globalisation which determines that, if part of the economy slows, it all slows, though not in each sector instantly.

China’s growth might soon be 5 per cent, according to some pessimists

Second, looking to a fantasy future when all nations become developed, surely global growth must be zero as all we manufacture would be for replacement. A reduction of the 4 per cent average is to be expected as the old nations are already developed and the massive Asian nations, while still claiming developing status, are in many respects developed, so they will exhibit slower growth. Thus, China’s growth might soon be 5 per cent, according to some pessimists.

However, ahead of the G20 meeting of finance heads in Shanghai this week, China has announced US$61 billion in local infrastructure investments to “fill out” earlier investments and has emphasised its economy is in good health. Goldman Sachs has chided investors, both private and institutional, saying the only real issue is “fear itself”: investors ought to stand steadfast.

READ MORE: Our broken economy doesn’t need more stimulus

A worker welds steel frames at a construction site of a railway bridge in Zhengzhou, Henan province. China has announced US$61 billion in local infrastructure investments to “fill out” earlier investments. Photo: Reuters
A worker welds steel frames at a construction site of a railway bridge in Zhengzhou, Henan province. China has announced US$61 billion in local infrastructure investments to “fill out” earlier investments. Photo: Reuters

READ MORE: Laying the foundations for China’s ‘One Belt, One Road’

When President Xi Jinping (習近平) visited Central and Southeast Asia in late 2013, he announced his new “One Belt, One Road” initiative to jointly redevelop local economies and infrastructure, building on China’s growth.

The belt and road will track along the historic Silk Road across land and via maritime routes throughout Eurasia. Over land, it reaches across Central Asian countries to link with Europe as the “Silk Road Economic Belt”; and, via the sea, the “Maritime Silk Road” will redevelop many ports in the South China Sea and the Pacific and Indian oceans.

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