China powers Asia-Pacific growth with infrastructure investment, connectivity

The AIIB has brought confidence and hope for the Association of Southeast Asian Nations (ASEAN) members as it will provide financial support for major projects in the region, said Bambang Suryono, president of the Nanyang ASEAN Foundation based in Jakarta.

Wilson Lee Flores, a columnist of the Philippine Star newspaper, said China can contribute to the Asia-Pacific region's inclusive economic growth "by actively helping modernize infrastructure like high-speed trains, highways, etc., which will spread the fruits of economic growth to more people."

"It is a very unusual pursuit and new strategy that I've never seen before. Through the initiative, China encourages countries to form economic partnership and really promote connectivity and integration," said Lim.

Even before the establishment of the AIIB, China has already sought increased cooperation with related countries to promote connectivity in the region.

The launch of China-Thailand and China-Laos railway projects marks a milestone in stepping up connectivity in the Asia-Pacific region.

The China-Laos railway is the first overseas route that will connect Laos with the vast railway system in China. The 845-km railway in Thailand will be connected to the China-Laos railway.

The two railway projects are expected to help promote exchanges and cooperation among Asia-Pacific countries in trade, investment, logistics, tourism, science and technology and culture.

Roads to prosperity

Prosperity could continue in the region with massive investment in infrastructure from China and related countries.

According to 2014 World Economic Outlook, the International Monetary Fund pointed out that more infrastructure spending is vital to boosting global economy.

The report finds that if done efficiently, $1 of infrastructure spending can drive as much as $3 in output.

"When the Belt and Road initiative gets underway, it will create demand and opportunities for people in the Asia-Pacific region for many years," said Elaine Lo, senior partner and Asia chair of Mayer Brown JSM.

"You provide infrastructure first and then development will come. Without infrastructure no sustainable development can happen," Pieter P. Bottelier, a senior adjunct professor of China studies at the School of Advanced International Studies of the Johns Hopkins University said.

China has large capital and "so much experience in infrastructure construction not just in roads, bridges, but also in equipment, especially high-speed trains and ordinary trains," Bottelier added.

In October 2015, China and Indonesia sign a joint-venture agreement on construction and operation of a high-speed link between Jakarta and Bandung.

"This is a brand new episode in Indonesia, particularly in transportation project as it will further boost economic activities in areas along the corridor served by the high speed train that eventually contributes to the national economic growth," the chairman of PT Pillar Sinergi BUMN Indonesia said after the signing of the deal.