Rwanda, a landlocked country in east central Africa and also known as the “Land of a Thousand Hills,” is one of the world’s leading coffee-growing nations. One in every 30 people in the country works in coffee growing. But, in the past, a lack of transportation channels had affected exports of Rwanda’s coffee beans, requiring them to pass through several intermediate wholesalers before they reached the Chinese market.
However, in 2018, China and Rwanda signed a memorandum of understanding under the Belt and Road Initiative (BRI), which aims to boost connectivity along and beyond the ancient Silk Road routes. In that year, Rwanda also became the first country in Africa to join the Electronic World Trade Platform, a framework for cross-border electronic trade launched by Chinese e-commerce giant Alibaba. From then on, Rwandan coffee beans began entering the Chinese market directly through trade conducted on e-commerce platforms. Direct logistics chains mean Rwanda’s coffee farmers now earn $4 more for every kg of coffee beans they sell.
While Rwandan coffee is now filling the cups of more Chinese consumers, Chinese tea, a key commodity traded on the ancient Silk Road, is still reaching consumers in countries along the modern BRI routes. Now, Chinese tea makes its way to Russia on the China-Europe freight trains launched a decade ago. General Administration of Customs of China data showed that China exported 19,700 tons of tea to Russia in 2022, up nearly 9 percent year on year.
Under the BRI framework, China’s economic and trade ties with partner countries and regions have been strengthened over the past decade. The Third Belt and Road Forum for International Cooperation (BRF), held in Beijing on October 17-18, wrapped up with notable results in economic and trade cooperation. Gathering together representatives from 82 countries and regions, the CEO Conference held during the forum saw the conclusion of agreements worth $97.2 billion. Chinese President Xi Jinping pledged during his keynote speech at the forum on October 18 that the China Development Bank and the Export-Import Bank of China will each establish a 350-billion-yuan ($48.75-billion) financing window to provide financing support for BRI participants.
In the next five years, China’s goods and services trade is expected to exceed $32 trillion and $5 trillion, respectively, Xi said.
“The initiative has linked participating countries with the huge demand of the Chinese market, delivering mutually beneficial results. Despite downward pressure on global economic growth in recent years, China’s trade with BRI countries has seen resilient growth,” Qi Xin, Director of the Belt and Road Economic and Trade Cooperation Institute at the Chinese Academy of International Trade and Economic Cooperation, told Beijing Review.
Trade connection
China and BRI partners have seen increased economic exchange and trade over the past decade. China released a white paper titled The Belt and Road Initiative: A Key Pillar of the Global Community of Shared Future on October 10. It stated that the cumulative value of imports and exports between China and BRI partner countries totaled $19.1 trillion from 2013 to 2022. Cumulative two-way investment between China and partner countries amounted to $380 billion during the same period, including some $240 billion from China, the white paper said.
In the first three quarters of this year, China’s imports from and exports to BRI partners reached 14.32 trillion yuan ($1.95 trillion), accounting for 46.5 percent of its total foreign trade in the period, according to the General Administration of Customs.
BRI links have been enhanced through China-Europe freight trains and routes including the China-Laos Railway, which began operation in 2021. China-Europe freight trains, which numbered 80 in 2013, jumped to 16,000 in 2022, linking over 200 cities in 25 countries.
As Anouphab Tounalom, Secretary of the Central Committee of the Lao People’s Revolutionary Party, told a forum on subnational cooperation at the BRF, the China-Laos Railway, which was launched in December 2021, has transformed the landlocked country into a land-linked one, and connects Laos to China— which is a large market. Total exports and imports of goods along the railway have reached 730 million tons, including 663 million tons of goods transported to China. As of September this year, it had transported over 3 million passengers, also boosting the nation’s tourism industry.
“The BRI has opened doors to new possibilities and collaborations. It has boosted infrastructure including the Chinese-built Mombasa-Nairobi Railway, promoting exports of agricultural products from Kenya such as coffee beans, bananas and avocados,” Anne Mumbi Waiguru, Chairperson of the Council of Governors of Kenya and Governor of Kirinyaga County, Kenya, told the forum.
Industrial parks jointly built by China and BRI partners are putting participants on the fast track to economic development. The China-Egypt TEDA Suez Economic and Trade Cooperation Zone initiated in 2008 in Ain Sokhna, Egypt, is now a key project under the BRI framework. Over 140 Chinese enterprises manufacturing items including textiles and home appliances, have settled in the park, making over $1.6 billion in investments and achieving a total turnover of more than $3.7 billion as of today. It has provided employment for around 50,000 local people.
Narrowing the gap
Digital technologies are narrowing the gap between BRI countries by providing support in fields such as telecommunications and agriculture and driving e-commerce trade. According to the white paper, China had established bilateral mechanisms of e-commerce cooperation with 30 countries by late September this year.
Chinese e-commerce companies including Alibaba have established overseas logistics hubs connecting China and BRI partners. Kilimall, an online shopping marketplace started by a Chinese businessman in Kenya in 2014, is the first Chinese e-commerce platform entering the African market, providing convenient delivery services to Kenyan consumers while also introducing African products to China.
“Silk Road e-commerce is making good use of China’s large market and upgraded domestic consumption. It has provided opportunities for all parties involved and expanded global cooperation on digital economy,” Qi said.
BRI cooperation is also narrowing the gap between eastern and western regions in China, Qi said. Many western regions in China, due to their inland location, used to see far less robust economic growth compared with coastal regions in the east, which have more booming foreign trade and manufacturing industries.
Located on the northern Silk Road, Sayram Lake in northwest China’s Xinjiang Uygur Autonomous Region was once the only lake in the country without any fish due to its cold water fed by melting snow on the surrounding mountains. Decades ago, China began importing eggs of the northern whitefish (Coregonus peled), a cold-water fish species from Lake Baikal in Russia, which is environmentally similar to the lake in Xinjiang.
Today, the fish, known for its tenderness and flavor, has become one of the most famous local specialties of the Sayram Lake region. While locals are supplied with fresh aquatic products, caviar harvested from fish in Sayram Lake has also been exported to Finland and other countries.
By building connections with Central Asian countries, Xinjiang is also becoming a hub for exports. According to customs authorities in Urumqi, capital of Xinjiang, the region exported electric vehicles, solar cells and lithium-ion batteries, which have been China’s three new major exports in recent years, totaling 1.17 billion yuan ($159 million) in the January-July period of this year, up 100.6 percent year on year.
Seeking benefits for all
According to Vice Commerce Minister Guo Tingting, China has signed free trade agreements with 28 countries and regions, including 20 BRI countries. “A free trade network covering neighboring countries, BRI partners and reaching out to the world is taking shape,” Guo said.
To further BRI trade growth, Chinese authorities need to introduce policies to continue China’s opening up, expand free trade zones, and jointly develop trade-related rules and regulations with BRI countries, Qi said.
Sang Baichuan, Dean of the Institute of International Economy at the University of International Business and Economics in Beijing, was present at the forum on trade connectivity during the recent BRF and witnessed the hopes of BRI participants for furthering trade cooperation and building an open world economy. “Digital economy and green development are two highlights of the forum. China has been playing a leading role in BRI cooperation on digital economy. The two sectors will be key drivers of high-quality BRI development,” Sang told Beijing Review.
BRI countries should also improve exchange and investment cooperation on green technologies and services, especially clean energy, new-energy vehicles, green finance and green infrastructure, Sang said.
Many experts and officials expect the BRI to further integrate and drive the global economy. “The infrastructure connectivity of the BRI has brought great opportunities to participating countries. Decoupling would only jeopardize the global economy,” Justin Yifu Lin, former Senior Vice President and Chief Economist of the World Bank, said at the trade forum.
As Hungarian Foreign Minister Péter Szijjártó told the trade forum, Eastern and Western economies are interdependent today. Decoupling could bring risks including of millions of people losing their jobs. Confrontation in today’s world will lead to the failure of all. –The Daily Mail-Beijing Review news exchange item
