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Zhou Wenzhong: From "One Belt, One Road" Initiative towards a Community of Common Destiny

Time:2017-04-13 09:58:59    Views:146512    Origin:Boao Forum for Asia

President Xi Jinping’s idea of developing a community of common destiny serves as a guide for the systematic implementation of the "One Belt, One Road" initiative as well as a safeguard against fragmented project distribution.

The BFA Annual Conference 2017, which concluded on March 26, 2017 around the theme of "Globalization & Free Trade: The Asian Perspective", was based on four modules—Globalization, growth, reform and new economy.

But why was the "One Belt, One Road' initiative defined as the foremost topic? In my opinion, the challenges facing globalization can never be addressed without creating a community of common destiny in a way that is consensus-driven, collaborative and shared. In fact, this initiative represents China's vision for globalization.

It is not only a catalyst of improving the depth and breadth of regional economic cooperation around the world, but more importantly, it is a strategic lever for China to be part of the transformation and improvement of the existing international order and rules as an institutional right. For the past three years since it was first proposed, the initiative has been positively received by more than 100 countries and international organizations. To date, China has signed MOUs for cooperation with over 60 countries, signaling the initiative’s transition from the planning to the implementation stage.

At this critical stage, I think we should highlight the concept of a community of common destiny proposed by President Xi as a guide for the systematic implementation of the initiative as well as a safeguard against fragmented project distribution.

In transition to a new international economic, financial and political order, the world has found it increasingly difficult to sustain the old post-war order and rules, while the new ones are still in the making. In this context, how can we create a new international economic, financial and political security order and bring about a smooth switch between the old and the new? In retrospect, the world order was always shaped by major powers triumphing in rivalry. The international orders created after World War I and II are both examples of this winners-take-all approach.

President Xi’s vision has not only indicated the direction for reforming and improving the existing international order—under the framework of a community of common destiny—that will serve the shared needs of mankind in the 21st century in a win-win manner, but also serves as the roadmap, which is by collaboratively advancing the “One Belt, One Road” initiative in a way that is open, inclusive, balanced and win-win.

In this sense, this initiative has a bearing not only on the economic sustainability of the world, but also on the transformation and reshaping of the world order and rules. It is an enhanced epitome of peace and development—the two themes that will dominate the 21st century. Through this initiative, countries can work together to boost sustainable development; on the other hand, the specific collaborative projects under the initiative will also help reform and reshape international trade and investment rules, improve financial and monetary regimes and create a more equitable framework for political and economic order.

Over the past several years, I strongly felt the popularity of this initiative among the countries along the Belt and the Road, as well as the enthusiasm of Chinese companies to participate in the initiative. However, there are also two trends that merit attention: one is that certain countries along the Belt and the Road expect a free ride on China's development, or even anticipate aid from China. These countries have high expectations for Chinese investments and their returns on investment. The other is that Chinese companies are highly concerned about who will protect their rights and interests if their trade or investment projects encounter problems, particularly in countries beset by political volatility and inadequacy of market rules.

The above two trends point to the same problem — the absence of institutions and rules to ensure mutual benefits and win-win results. Even in politically stable countries with better market institutions, inequity and unfairness can still be found in the existing trade and investment rules. Some Chinese businessmen have already called for the establishment of a WTO version of organizational and protection systems for global investment. Therefore, relevant institutions and rules must be created for the execution of specific projects under the initiative. In line with the initiative’s progress, we should also help create a mechanism for global investment protection and arbitration as an institutional shield for our projects along the Belt and the Road. Such institutions and rules development should first start with different sectors on a micro level to gradually bring about impact on a macro level, thereby improving and transforming the international order towards a community of common destiny that will deliver win-win and mutual benefits.

In short, when pushing ahead with the initiative, we must balance trade and investment projects with systems and rule development to institutionally ensure the win-win and mutual benefits of collaborative projects, as part of the effort to improve relevant order and rules.

One area of focus in the transition of international order and rules is the upgrade of industry standards or rules. For example, as a revolutionary leader, information and communications technology (ICT) is entering the 5G era, which will surely result in the revision of relevant technical standards. The rapid rise of E-commerce is calling for the creation of a WTO-like framework of rules. The technological progress in EHV power transmission has also made cross-border smart grids a reality, making it imperative to develop relevant technical standards.

In these three sectors, China is a world leader with internationally leading companies that have influential say. In the telecom sector, Huawei is becoming one of the global standard setters for 5G; E-commerce giant Alibaba is appealing for the creation of a WTO-like organization to govern the E-commerce world. On the smart grid front, China is already ahead of the world in smart grid & EHV power transmission technology and led the establishment of a global organization for smart grid cooperation and development–an institutional foundation for cross-border smart grid development.  

Moreover, Chinese companies from these three sectors possess obvious market advantages and technical expertise that qualify them as standard setters. Starting with these three sectors and achieving connectivity will not only promote the development of systemic and institutional framework in other sectors in China, but will also help establish China’s dominance and influence in the institutional arrangements of these three domains, thus allowing China to play a leadership role in the systematic implementation of the initiative and the creation of a new international order that will shape the community of common destiny for mankind.

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