Yearender: China powers Asia-Pacific growth with infrastructure investment, connectivity

The Belt and Road initiative and the Asian Infrastructure Investment Bank (AIIB), proposed by China to improve infrastructure and connectivity in the region, are set to boost multilateral ties and economic growth in the Asia-Pacific region.

Thanks to the joint efforts of China and related countries on infrastructure development and connectivity in the region, Asia-Pacific countries will see stronger social development and robust economic growth in the coming years.

INFRASTRUCTURE DEVELOPMENT AND CONNECTIVITY

An Asian Development Bank (ADB) study found that 8 trillion U.S. dollars is required for infrastructure investment in the Asia-Pacific region.

Asia-Pacific countries have realized that those with better infrastructure facilities develop faster and it's a shared recognition that regional economic integration is beneficial to all, analysts said.

The Belt and Road initiative was proposed as a trade and infrastructure network. It will connect Asia to Europe and Africa through the Silk Road Economic Belt and the 21st Century Maritime Silk Road.

"That's where the Belt and Road initiative and Asian Infrastructure Investment Bank come in. With ample investment, countries could accelerate infrastructure construction so as to further push forward economic growth," said Benito Lim, political science professor of Ateneo de Manila University.

For the past two years, the initiative, which offers opportunities for joint development among participating countries, has been widely accepted and applauded by countries on the three continents.

China's Belt and Road initiative will be essential for bridging the massive infrastructure spending deficit in Asia, said Richard Javad Heydarian, a specialist in Asian affairs and assistant professor in political science at De La Salle University.

China is in a unique position to improve inter-connectivity and improve the overall infrastructure landscape in Asia, he added.

CHINA BRINGS HOPE

During the APEC summit held in Manila this November, Chinese President Xi Jinping announced that China has established and put into operation the Silk Road Fund, and is now working actively with more than 50 countries to prepare for the launch of the AIIB.

Calling the AIIB an important platform supporting regional connectivity, Xi said China and other related countries are accelerating the preparations and the bank is expected to be formally established by the end of this year.

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, one U.S. dollar of infrastructure spending can drive as much as three U.S. dollars 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. Endit