How China’s belt and road ambitions can take flight – one win-win deal at a time
G. Bin Zhao considers the areas of economic cooperation that Beijing can consider with the economically and culturally diverse belt and road countries, and the important role renminbi internationalisation can play
Economic cooperation must be the top priority at the forum. So which areas are expected to achieve breakthroughs? According to data from China’s State Information Centre, in 2016, total international trade of the 64 belt and road countries amounted to US$7.2 trillion, accounting for 21.7 per cent of global trade. China’s total international trade amounted to US$3.7 trillion, accounting for 11.2 per cent of total global trade. Obviously, in terms of economies of scale, trade volume of the belt and road countries is much higher than China’s.
Data shows that, apart from the members of the Association of Southeast Asian Nations, China’s trade volume with most belt and road economies is not commensurate with their economic scale and overall trade. For example, among the top 10 belt and road economies, Turkey (fourth), Poland (sixth) and Iran (eighth) are not among China’s top 10 trading partners. However, six Asean member countries are among the top 10 economies that have the most trade with China, showing the power of the China-Asean free trade agreement.
Therefore, signing free trade agreements may be the most effective way for China to enlarge its trade volume with the belt and road countries. Outside the 10 Asean countries, the other 54 belt and road countries have differing levels of economic development, and different trade scenarios with China. It is relatively complicated to promote free trade with them.
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