West China seeks fortune along the modern Silk Road

While China's western provinces mainly depend on their affluent eastern peers for investment, a national strategy to revive the centuries-old trading routes connecting Asia, Europe and Africa gives them the unique advantage of "looking west" for development opportunities.

Over the weekend, more than 12,000 officials and businessmen from 37 countries and regions and delegations from 27 Chinese provinces convened in Xi'an, the capital of Shaanxi province, for the Silk Road International Exposition, or the 20th Investment and Trade Forum for Cooperation between East and West China (ITFCEW).

From hinterland to heartland

Three decades of reform and opening-up have given China prosperity, but unbalanced development between the east and west is an outstanding problem.

Landlocked western provinces used to rely on mechanisms like ITFCEW for business opportunities. Inter-provincial investment deals reached during such a forum have grown from 29 billion yuan ($4.5 billion) in 1997 when it was launched to 790 billion yuan in 2013.

As the Chinese economy moderates in its transition and eastern provinces strive for new ways forward, West China is in urgent need of new platforms to keep its economy rolling.

Proposed in 2013, the Belt and Road Initiative - the Silk Road Economic Belt and the 21st Century Maritime Silk Road - works for improved cooperation between China and countries in a vast part of Asia, Europe and Africa.

The Chinese government published an action plan specifying the principles, framework, priorities and mechanisms for the initiative in March last year. A $40 billion Silk Road Fund, designed to finance Belt and Road, was launched last year.

The initiative soon gained traction. Direct investment in 49 countries along the Belt and Road route rose 18.2 percent to $14.8 billion in 2015, accounting for 12.6 percent of China's total outbound investment. Bilateral trade volume between China and these countries reached $995.5 billion, or a quarter of China's total trade volume.

To reflect this latest development, the ITFCEW forum has been officially given the prefix the Silk Road International Exposition since this year.

At the eastern end of the ancient Silk Road, Shaanxi has achieved renewed prominence, serving as a bridgehead connecting China with Belt and Road countries. An International freight train launched in 2013 starts from Xi'an and reaches Central Asian countries including Kazakhstan, Uzbekistan and Kyrgyzstan.

(HK Edition 05/18/2016 page7)