Reading and speaking to those who have attended the summit on day one, some interesting observations can be made. As a reminder, the summit is being held in Beijing on May 14-15 and called by Xi Jinping. This is to give a forum for China to outline its vision of a new global economic order. The event is a significant platform as part of the strategy to return “Chinese Pride” and establish its place as a global economic leader. Reinforcing the significance of the event, 28 countries and 1400 invited delegates are in attendance, as well as 4000 journalists. This in itself is a big step forward in ambitions to show China is openly transparent regarding OBOR and its intentions.
The opening address went to great lengths to extol the Confucian principles of “win win thinking” that are said to underpin the initiative. With a number of sceptics as to the real intent of the initiative, including countries such as the USA and India, much emphasis was made on the inclusive nature of the infrastructure programme. Special emphasis was given to defending the claim that China was not using the initiative to gain geo-political dominance in the Region. This was highlighted by Xi Jinping claiming that,
“China is willing to share its development experience with the rest of the world, but we will not intervene in other nations’ internal affairs, export our social system and development model, nor force others to accept them.”
There were a number of interesting observations arising out of day one, some of which point to the success / failure of OBOR and others to regional roles to be played by particular countries. Strategically, from a Myanmar perspective, the country / geo-political issues noted that need to be considered:
- India did not attend and puts the Bangladesh, China, India, Myanmar (BCIM) corridor in the spotlight, particularly the Kyauk Phyu / Myitsone Dam development discussion,
- Ongoing civil / terrorist attacks in Pakistan placing the Qwadar Port connection at risk and adding to future security costs of the China / Pakistan transport corridor.
There has also been much debate as to what SE Asian cities would be in the prime seat to take advantage of the OBOR. I have argued that Singapore was at grave risk, particularly to Hong Kong. This appears to be taking shape as the delegation form Hong Kong were given preferential treatment at the summit. Despite being one of the smaller groups at the summit, 30 delegates only, the Hong Kong delegation had front row seats, with 10 places reserved. Compare this to the free seating arrangement for other attendees.
Furthermore, Hong Kong CEO Leung was given time to address the summit, giving him an opportunity to sell the notion of Hong Kong’s so-called “super-connector” role in the strategy. The city’s strengths in financial services to the summit’s panel on finance connectivity were highlighted. The Hong Kong Monetary Authority chief executive Norman Chan Tak-lam was also able to speak to the panel. Highlighted in their presentations was:
- the city was “the preferred destination” for capital flows from the mainland,
- the city’s status as the largest offshore settlement centre for yuan trade and,
- the city’s title as the world’s No 1 stock market for new listings in 2016.
Despite the US$113bn pledge by Xi Jinping to fund the OBOR initiative, most agree that this is well short as to the funding actually needed. Funding estimates range from US$1.3 trillion a year to US$26 trillion in total. What will be interesting for the second day is how other funding mechanisms are to be included and how they will be used to fill in the gaps. This takes on particular importance as Xi Jingping did not fully articulate his ambitions with regards to rewriting the global rules of trade. What is clear is that Beijing is unlikely to allow China’s core interests to go unmet should they conflict with other countries, this is very true for the likes of India, Myanmar and Singapore.
In summary, day one was interesting, not so much in terms of what was said, but more in terms of the silent pointers. These silent nuances point to issues of: Security, Funding and City dominance in financial transaction terms.