Zhang Xiaoqiang: The Belt and Road and The Lancang-Mekong Cooperation (LMC)

A speech delivered by Zhang Xiaoqiang at the Dianchi Forum for Lancang-Mekong Cooperation 2017

In May this year, the Belt and Road Forum for International Cooperation was held in Beijing, China. China’s President Xi Jinping, other heads of state and government from 29 countries, the UN Secretary-General and representatives from over 130 countries attended the summit. The meeting summed up the past experience, made plan for the future and many consensuses have been reached. In his speech, President Xi pointed out that over the past three years, the Belt and Road initiative has made remarkable progress. More than 100 countries and international organizations have joined the initiative, and the resolutions and documents of the UN General Assembly, the UN Security Council, the Mekong regional cooperation have either incorporated or embodied the Belt and Road initiative. With the concerted efforts of all parties involved, the interconnection and network has gradually taken shape and the trade and investment have risen sharply. The key cooperation projects have been implemented gradually, such as the progress made by China-Laos Railway. The establishment of Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund have provided solid support for financial cooperation, such as the loan received by the Myanmar Power Station project.

At the forum for international cooperation, 270 agreements in 5 major categories were concluded and 76 of them are of great significance, including the cooperation document between the Ministry of Commerce of China and the Ministry of Transport of Cambodia in infrastructure. The participants agreed that the second Forum to be held in 2019. From January to October this year, China invested 11.2 billion US dollars in 53 countries along the Belt and Road, accounting for 13% of all China’s overseas investment, and an increase of 4.8 percentage points over the same period of last year. In 61 countries along the route, the new foreign contracted projects amounted to 102.1 billion US dollars, a year-on-year increase of 21%. The huge achievement made by the belt and road in just four years is the result of “Joint consultation and construction, sharing and win-win”. The initiative proposed by China, but the result benefits the entire world. I believe that this undertaking will continue to make contributions to regional and global development.

In the report of the 19th National Congress of the CPC, General Secretary Xi Jinping pointed out that China has entered a new era and will adhere to the path of peaceful development, promote the building of a common community of shared future for all mankind, and build an open world economy with other countries. We should focus on the building of the Belt and Road, value both inward and outward investments, and follow the principles of mutual consultation, joint construction and sharing so as to form a new pattern of opening-up. After the 19th National Congress of the CPC, President Xi Jinping and Premier Li Keqiang took part in the APEC and China-ASEAN conferences and visited Vietnam, Laos and the Philippines, fully demonstrating the importance attached by the Chinese leaders to cooperation with the Asia-Pacific and ASEAN countries. During his talks with the Vietnamese leaders, Xi stressed that China has opened a new course of developing a more open economy, it will further promote the building of the Belt and Road and add new impetus to common development. The Vietnamese government welcomes and supports the Initiative, and will put the signed documents into practice.

During President Xi’s visit to Laos, a joint statement was issued by the two governments, in which President Xi stressed that China supports Laos as a co-chair of the Lancang-Mekong Cooperation in 2018 and will speed up the connection of the building of the Belt and Road with Vietnam’s national strategies. When meeting with the Prime Minister of Cambodia, Hun Sen, China’s Prime Minister Li Keqiang fully affirmed the important role played by the LMC mechanism. All these events show that China highly values the cooperation with ASEAN and the relationship between the LMC and the Belt and Road, which has become an important part of the Belt and Road. From January to October this year, the trade between China and ASEAN reached 2.8 trillion RMB, up 18.5 percent over the same period of last year, 2.6 percentage points higher than the growth of China’s foreign trade (15.9％). The imports from ASEAN amounted to about 1.4 trillion RMB, up 26.2% year-on-year, which is 4.7% higher than the growth of China’s imports (21.5%). The development momentum is encouraging.

The participants of the LMC complement each other in terms of geography, humanity, and economy. It is a vital platform for promoting development and prosperity of the participating countries, and establishing a common community of shared future. All countries have clearly defined three pillars of cooperation, namely, political security, economy and sustainable development, and social and humanity. Besides, five priorities have been agreed, connectivity, capacity cooperation, cross-border economic cooperation, water resources, agriculture and poverty reduction. More importantly, a number of projects have already been initiated or completed. I would like to make several suggestions on the theme of the conference, “discussing new initiatives, building a new mechanism, achieving win-win and new development.”

First, we should actively promote the construction of major infrastructure projects such as energy and transportation. For example, in addition to railways, highways and ports, we have to give full play to the role of water transport and actively push forward the upgrading of the Lancang-Mekong waterway in order to achieve high-efficiency development with low-cost. We must emphasize the revolutionary role played by information technology and accelerate the construction and upgrading of communications infrastructure, as this will help developing countries to drive economic growth through modern science and technology and narrow the “digital gap” with developed countries. China should share its experience in this area with other countries. Regardless of electric power or traffic construction, we should give full consideration to the construction of supporting facilities and systems. When implementing major projects, we should have a master plan and promote the transmission lines, rural and urban power grids, as well as rural road systematically, so as to exert a broad spillover effect, which will surely benefit the general public.

Second, we must make simultaneous efforts to protect the ecological environment while pursuing economic development. China has successful experience in this regard, but also failed lessons. Once, I visited the Nangli Hydropower Station in Laos and I was very pleased to find that the hydropower station not only provided clean and renewable energy for the development of Laos, but also takes care of the interests of the local peasants and fishermen. For example, the Chinese enterprises built new roads and take other measures to promote the development of local fishery. However, there are also some Chinese enterprises who do not pay enough attention to the protection of ecological environment when making overseas investment. In the process of industrial development, mining development and urban-rural construction, we should adhere to strict ecological and environmental standards. The government should enhance supervision, the entrepreneurs should take responsibilities, and the public should be encouraged to participate so as to lay a solid foundation for sustainable development.

Thirdly, we should allow the market to play the decisive role in allocating resources and give better play to the role of the government. While the enterprises play a major role in the LMC, the government agencies also have an important role to play in policy communication and creating a good environment for cooperation. We should deepen coordination and cooperation in development strategies, financial cooperation, customs clearance, inspection and quarantine, port construction, exit and entry in order to provide convenient and efficient services for business cooperation and cultural exchange. For example, China has been actively cutting its coal production in recent years. From January to October this year, it produced 2.85 billion tons of coal, up by 4.8% over the same period of last year. At the same time, it continued to import high-quality coal with competitive price. From January to October this year, about 230 million tons of coal was imported to China, a year-on-year increase of 12.1%, and Mongolia’s coal exports to China continued to grow. In recent weeks, several thousands of large trucks are waiting at the border between China and Mongolia, they have to queue up for five days to cross the broader because of lack of transport infrastructure and lagging development of customs clearance capacity. Therefore, the business owners and truck owners in both countries sincerely hope that the governments from both sides can strengthen cooperation and create a better trading environment. The comprehensive upgrading of the China-ASEAN cooperation is making progress, and the LMC should set a good example in trade and investment liberalization and facilitation.

Fourthly, we should promote both multilateral and bilateral cooperation. The LMC is an open and new cooperation mechanism led by local governments, and it is in line with the existing GMS and the ASEAN-Mekong cooperation. Under this mechanism, cooperation can be conducted in a flexible and diversified manner. When the foreign minister of China, Wang Yi visited Burma on November 19th, he said that China is willing to work with Burma on the basis of Burma’s national development plan and actual needs, together, we can build the Sino-Myanmar economic corridor covering the cities along the border of the two countries. Experts from China and Myanmar will conduct discussion in this regards and strive to formulate a viable cooperation plan. In my opinion, such kind of bilateral cooperation will help to deepen the LMC. When I was the deputy director of the National Development and Reform Commission, the senior government officials from Bangladesh, India and Myanmar and I hosted the first intergovernmental meeting on the Bangladesh-China-India-Burma economic corridor in Kunming. At that time, all parties reached a consensus on actively carrying out bilateral cooperation. The meeting was flexible and pragmatic, which should be carried forward.

Fifth, we should deepen the cooperation in humanities and strengthen the people-to-people bond. The LMC is aimed at benefiting all the people, whose participation will in turn ensure the successful implementation of the LMC. So far, the two sides have already started cooperation in education, science and technology, apart from the forthcoming medical and health cooperation. In February 2012, on behalf of the National Development and Reform Commission of China, I signed the Memorandum of Understanding on the Establishment of Laos Digital Television Broadcast Network with the Lao Ministry of Information, Culture and Tourism in Beijing. In recent years, remarkable achievements have been made in this aspect. By 2015, 60,000 of the 120,000 households in Vientiane, the capital of Laos, are digital terrestrial users, and there are more than 100,000 users nationwide, that means more than 500,000 people benefit from this project as 54 digital television programs were being broadcasted. This cooperation has enriched the people’s life and strengthened cultural exchange, and hence has become a successful example of the cooperation between China and Laos.

There are more opportunities in tourism. The number of outbound tourists from China has increased every year, and ASEAN is a popular area for Chinese tourists. For example, Thailand has become the largest tourist destination for Chinese people and the Chinese tourists to Thailand may reach nearly 10 million this year. Also, travel to Vietnam and Cambodia continue to heat up, and the number of tourists to Laos and Myanmar has risen rapidly. These will not only increase employment, promote economic and social development, but also enhance cultural exchanges, mutual understanding, and friendship between these nations. As one of China’s national high-end think tanks, China Center for International Economic Exchanges (CCIEE) hosted the thematic session of the Belt and Road Initiatives forum for international cooperation in the past May. Representatives from different international think tanks put forward valuable recommendations on building the Belt and Road, and a number of agreements have been signed to undertake joint research, organize seminars, and build databases and websites. We are also willing to strengthen exchanges and cooperation with Yunnan Province and think tanks or social organizations from other countries, so as to jointly promote the LMC.