Li Keqiang's 2014 Foreign Visits: The Infrastructure Theme Throughout the Year

Abstract The infrastructure going out, capacity docking, and financial support became the key words of Premier Li Keqiang's 2014 foreign exchange visit. On the evening of December 20, the official visit of Kazakhstan and Serbia and the attendance of the SCO, China-Central and Eastern European Countries Economic and Trade Commission...
The infrastructure going out, capacity docking, and financial support became the key words of Premier Li Keqiang’s 2014 foreign visit.

On the evening of December 20, after completing the official visits of Kazakhstan and Serbia and attending the SCO, China-Central and Eastern European Countries Economic and Trade Conference and the Greater Mekong Subregion International Conference, Li Keqiang returned to Beijing.

The "First Financial Daily" reporter combed the four official speeches made by Li Keqiang during the visit and found that in the face of different countries in the Greater Mekong Subregion of Central Asia, Central and Eastern Europe and Southeast Asia, Li Keqiang’s speech covered three aspects. In summing up the speeches in Central and Eastern Europe, it is "taking infrastructure as the traction, taking capacity cooperation as the starting point, and supporting financial cooperation."

During this visit, China and Kazakhstan reached a consensus on capacity cooperation; the “Central European Land and Sea Express” will also be launched; in Serbia, Li Keqiang also witnessed the completion of the first bridge project undertaken by Chinese companies in Europe. The Sino-Thai Railway and agricultural cooperation, which has more than a year of twists and turns, finally landed in Thailand after the regime change.

The idea of ​​promoting China's overseas infrastructure construction and driving China's equipment and manufacturing to go global has already been reflected during Li Keqiang's visit to Southeast Asia and Africa this year. At the end of the year, in the end of the year, "taking infrastructure as the traction, taking capacity cooperation as the starting point and supporting financial cooperation" constitutes a new model of China's foreign cooperation.

Infrastructure interconnection

Li Keqiang said that the Central and Eastern European countries themselves need to resist the impact of the crisis and need to expand effective investment. To improve people's livelihood, it is also necessary to strengthen public investment. Infrastructure construction cannot be delayed. The Central and Eastern European countries have natural harbors and are connected with railways, highways and other transportation routes, which can exert a huge comprehensive effect.

For the Mekong River Basin countries, Li Keqiang suggested deepening cooperation in the field of infrastructure. The Mekong River Basin countries are in a critical period of development. Infrastructure construction in transportation and other fields will become a new growth point for stimulating the economy and expanding employment. The interconnection of the Indo-China Peninsula is an important guarantee for the economic integration of the Minjiang-Mekong River sub-region.

Huang Jianhui, deputy dean of the China Development Bank Research Institute, told the reporter of China Business News that from the perspective of international demand, both developed and developing countries are facing infrastructure shortages and transformation. There are large shortages of ports, airports, railways and highways in Asia, Africa and Latin America. Pulling a new round of economic growth, infrastructure has become a consensus.

"China, as a country that has just developed from a low-level developing country and is close to middle-income, is similar to the development of Asia-Africa countries, and the economic structure is complementary in gradient and height." Huang Jianhui said.

At present, China's infrastructure is developing rapidly and has strong construction and equipment manufacturing capabilities. In Huang Jianhui's view, there is no second world in China's railway design and manufacturing capabilities.

Shi Zhan, director of the Center for World Politics of the School of Foreign Affairs, said in an interview with this reporter: "President Li Keqiang has an idea behind Central and Eastern Europe and local visits, which is to introduce Chinese manufacturing and drive China's high-speed rail to go out."

New highlights in capacity cooperation

The excess capacity generated by the 4 trillion yuan stimulus in 2009 has become a heavy burden for China's economy and the environment in the past two years. It has been said that the transfer of domestic excess capacity has been one of the driving forces behind Chinese companies' going global. However, mentioning excess capacity seems to mean high energy consumption and high pollution. Not all destination countries are willing to accept it, and they are suspected of wishful thinking.

During this visit, Li Keqiang repeatedly mentioned the production capacity, but used the words "excess, high level" to describe. For example, Li Keqiang once said that "China has sufficient and high-level equipment production capacity, high cost performance", "to make China's surplus production capacity more utilized", "China is willing to build advanced production capacity and equipment in Central and Eastern Europe." Carrying out production can also drive employment in Central and Eastern European countries.

In the consensus on capacity cooperation between China and Kazakhstan, the two sides believe that China has sufficient and high-level equipment production capacity, high cost performance, and the construction of steel, cement and flat glass required by Kazakhstan in various ways in Kazakhstan. As well as large-scale infrastructure projects such as thermal power, the development of deep processing cooperation in agricultural products is conducive to creating new economic growth points, coping with downward pressure on the economy, promoting the upgrading of resource industries, helping Kazakhstan's industrialization process, promoting China's equipment to go global, and achieving mutually beneficial cooperation between China and Kazakhstan. Win and common development.

Shi Zhan pointed out that the development of infrastructure itself has demand for local cement, glass, and steel basic building materials. For China's excess capacity, Central and Eastern European countries have the potential to open up markets.

Huang Jianhui believes that surplus capacity is a current feature of China. 4 trillion yuan has stimulated many steel, cement and glass companies to expand their production capacity to accommodate the large-scale infrastructure and real estate development at that time, but in the past few years, the problem of where such a large supply capacity is going . Huang Jianhui told this reporter: "The developing countries in Asia, Africa and Latin America need funds and technology, and China needs markets and resources. The demand and supply capacity of both sides are highly complementary."

Financial cooperation support

Among the many proposals for interconnection, infrastructure construction, transfer of surplus capacity, and encouragement of Chinese companies to invest locally, Li Keqiang mentioned the financing capabilities of Chinese financial institutions and Chinese companies. Financial institutions such as China Exim Bank, China Development Bank, China Construction Bank, and Bank of China have always been important escorts for leaders' visits and important backing for many major foreign cooperation projects.

Li Keqiang mentioned the financing issue in four speeches. On the Council of Heads of Government of the SCO member states, Li Keqiang said that China will officially launch the first batch of projects for the China-Eurasia Economic Cooperation Fund and is willing to set up bilateral sub-funds with all parties to support the implementation of economic projects in the region. At the same time, better play the role of the "Silk Road Fund" and other funds. China hopes that the members of the SCO will reach a consensus and steadily promote the formation of the SCO development bank process and establish a long-term and stable financing platform for the region. The Chinese side supports the proposal of the SCO member states to expand currency swaps and local currency settlements proposed by Kazakhstan.

China and Central and Eastern European countries are also setting up a new framework for investment and financing cooperation, including a $10 billion special loan, encouraging Chinese companies and financial institutions to participate in the privatization process of Central and Eastern European countries, setting up a $3 billion scale investment fund, and launching the second phase of 10 A billion-dollar China-Central and Eastern Europe investment cooperation fund, as well as the issuance of RMB bonds, the establishment of the RMB Central and Eastern European Cooperation Fund.

Li Keqiang said that China and the Mekong River countries have carried out pilot projects for cross-border trade in local currency settlement, expanding the scale of direct exchange of local currency, and mentioned the $10 billion China-ASEAN infrastructure special loan established by China Development Bank and the Asian infrastructure investment under construction. Bank support for regional interconnection financing.

Huang Jianhui told this reporter that China has the investment and financing strength to support overseas infrastructure construction and capacity cooperation. China has huge foreign exchange reserves. At the end of September 2014, the balance of foreign exchange reserves reached 3.89 trillion US dollars. At the same time, China has always been a country with high savings rate. At the end of 2013, the balance of RMB deposits reached 112.66 trillion yuan.

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