The New Era of China’s Belt and Road Initiative – Economic Analysis

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2021 marked the 100th anniversary of the founding of the Communist Party of China (CPC) and ushered in a new era of “national rejuvenation of the Chinese people and the Chinese nation” in which the pursuit of the policy of opening up China and the expansion of China’s Belt and Road Initiative was the dominant theme. Despite the challenges and uncertainties resulting from the COVID-19 pandemic and heightened Sino-US tensions, Chinese overseas investments are expected to provide new opportunities for offshore law firms in the Greater China region.

As Chinese President Xi Jinping mentioned in his 100th anniversary speech of the CPC on July 1, 2021, China should promote the high-quality development of the Belt and Road Initiative through joint efforts and use China’s new achievements in providing the world with new opportunities; China should also deepen reform and opening up at all levels and strengthen the country’s strength in science and technology.

In a joint statement of the special ASEAN-China summit to commemorate the 30th anniversary of ASEAN-China dialogue relations on November 22, 2021, ASEAN and Chinese leaders agreed to explore mutually beneficial and high-quality cooperation with the Belt and Road Initiative and explore cooperation on low-carbon, circular and green economy, such as the Belt and Road Partnership for Green Development and Bio, Circular and Green Economy .

In a white paper titled “China and Africa in the New Era: A Partnership of Equals” released by China’s State Council Information Office on November 26, 2021, Chinese President Xi Jinping highlighted forward the principles of China’s African policy (sincerity, practical results, friendship and good faith and the pursuit of the common good and common interests), chart the course of China’s cooperation with Africa and provide the basic guidelines. In recent years, a number of transportation infrastructure projects between China and Africa have been completed and opened to traffic under the Belt and Road Initiative, including the Addis Ababa- Djibouti, the Mombasa-Nairobi standard gauge railway in Kenya, the No. 1 National Road of the Republic of Congo, the Thiès-Touba highway in Senegal, and the Port Gentil-Omboue coastal road and the Booué bridge in Gabon. Following the outbreak of the COVID-19 pandemic, China and Africa have strengthened mutual cooperation in terms of financial assistance and vaccine donation, with China canceling the unpaid debts of 15 African countries in the form of loans without interest expired at the end of 2020. As stated in the white paper, Chinese and African leaders have endeavored to continue to support the Belt and Road Initiative and carry forward the China-China comprehensive strategic and cooperative partnership. Africa at a higher level.

China’s recent pledge to strengthen ties with its ASEAN and African allies coincided with the conclusion of the virtual summit between Chinese President Xi Jinping and US President Joe Biden in November 2021, the second call between the two world leaders since US President Joe Biden take their place. While the summit represented an ongoing effort by the world’s two largest economies to put aside their differences and strengthen cooperation, it produced no major breakthroughs in easing tensions stemming from deep-rooted ideological differences, underscoring the need of China to strengthen regional ties with its allies to counter the American policy of containment of China. The outbreak of the COVID-19 pandemic saw an initial period of downplaying and denial of the coronavirus by the US administration and a rare absence of US leadership on the world stage. Filling the global leadership vacuum left by the United States at the start of the pandemic, China has stepped up its vaccine diplomacy by providing more than 2.1 billion doses of COVID-19 vaccines to more than 120 countries and organizations, including 50 African countries and the AU Commission, as of March 4, 2022, and strives to provide an additional 1 billion doses to African countries. To contain the spread of the Omicron variant of COVID-19 in recent weeks, China has pledged to donate 600 million doses of vaccines to Africa and send 1,500 medical team members and experts in public health in Africa to contribute to Africa’s anti-pandemic effort. China’s humanitarian assistance and global leadership role during the pandemic demonstrate its long-term commitment to taking China’s comprehensive strategic and cooperative partnership with Africa and other allies to new heights as the CPC begins its second 100-year journey, laying a solid foundation for mutually beneficial cooperation under the Belt and Road Initiative.

China’s strategy to accelerate the implementation of the Belt and Road Initiative is also driven by geopolitical factors. US President Joe Biden announced the Build Back Better initiative at the G7 summit in June 2021, with the goal of creating a “values-driven, high-level, transparent infrastructure partnership led by major democracies” to help finance infrastructure projects in developing countries. world. This initiative was seen as a measure to counter Chinese influence in the developing world and as a Western democratic alternative to China’s “Belt and Road” initiative. The recent formation of AUKUS, a trilateral security pact between Australia, the United Kingdom and the United States in the Asia-Pacific region, under which Australia will embark on a military program to equip its navy nuclear-powered submarines, is another initiative. staged to counter China. Xi Jinping Thought, the ideologies promulgated by Chinese President Xi Jinping, underpin China’s commitment to safeguarding international order and promoting the development of the Belt and Road Initiative with Chinese characteristics. , without “Western intervention in its internal affairs”. As Xi Jinping mentioned in his 100th anniversary speech of the CPC on July 1, 2021, “The Chinese party and people have shown the world that the Chinese people have stood up and the moment the Chinese nation may fall victim bullying and abuse by others was gone forever.” China is therefore expected to thwart the US containment policy by strengthening regional ties with its strategic allies through the Belt and Road Initiative.

China’s development goals of advancing mutual cooperation and regional connectivity with its allies over the next 100 years of the CCP through better implementation of the Belt and Road Initiative to counter Ongoing geopolitical and economic tensions with the United States present new opportunities for the offshore legal space, from the creation of offshore investment funds to offshore bond issues and IPOs with the use of offshore listing to raise funds for Belt and Road infrastructure projects.

In the context of the Belt and Road Initiative, recent developments, including (i) China’s new data security law, (ii) rules proposed by the China Securities Regulatory Commission strengthening the control of Chinese companies listed overseas for national security reasons, and (iii) the United States Securities and Exchange Commission’s adoption of amendments to finalize rules implementing audit submission requirements and of disclosure in the Foreign Owned Company Liability Act is expected to result in a trend of US-listed Chinese tech companies incorporated in the Cayman Islands to delist from the US. and re-registration in Hong Kong. Over the past two years, Alibaba Group Holding Limited, JD.com, Inc., Baidu, Inc. and Bilibili Inc., all of which are Chinese tech giants listed in the United States and incorporated in the Cayman Islands, have sought a listing high school in Hong Kong. . This trend is expected to continue as China ushers in the new era of its Belt and Road Initiative.

Appleby’s Hong Kong office advises on the laws of the Cayman Islands, British Virgin Islands and Bermuda, popular jurisdictions of choice for overseas Chinese investment under the Belt and Road Initiative. Road”. The laws of these jurisdictions provide tax neutrality, regulation and profitability for Chinese companies seeking to invest overseas through the establishment of offshore funds, offshore listings and offshore bond issuances. Corporate law and regulations in these jurisdictions are also flexible and adaptable to the needs of clients in other jurisdictions. With multilingual offshore legal experts fluent in English, Mandarin, Cantonese and other Chinese dialects specializing in a wide range of business practice and dispute resolution areas from 10 global offices (including Hong Kong and Shanghai), Appleby is uniquely positioned to provide a one-stop offshore legal service for its Chinese and international clients.

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