One Belt One Road Initiatives in the Neighbourhood & Beyond Monthly Roundup

SECTION 1 – NEIGHBOURHOOD

Pakistan

1. The first CPEC project in the power evacuation and transmission sector, the 660kV High-Voltage Direct Current (HVDC) Matiari-Lahore transmission line, started commercial operations on 01 Sep 21.ⁱ

2. Pakistan is engaging China to leverage its advancement in farming technologies to boost the country’s agrarian economy through CPEC projects. Pakistan aims to utilise this partnership for improving the quality of seeds, improve yield, and modernise its mechanical cultivation and harvesting.ⁱⁱ

3. A Pakistani Senate panel on 16 Sep 21 expressed concern over the slow pace of development on the CPEC and dissatisfaction being expressed by the Chinese companies over the negligible progress over the past three years.ⁱⁱⁱ

4. Pakistan and China have begun talks for the rollover of USD 3 billion worth of CPEC debt and have also agreed to hold a much-delayed meeting of the CPEC strategic committee.^iv

5. On 25 Sep 21, Pakistan government unveiled a plan to rebuild Karachi’s coastline under the CPEC with USD 3.5 billion “direct Chinese investment” that aims to overhaul city’s seaboard with new berths for the port, a new fishery port and a ‘harbour bridge’ connecting it with Manora islands and Sandspit beach.^v

6. Pakistan's Ambassador to Afghanistan, Mansoor Ahmad Khan on 27 Sep 21 stated that Pakistan has discussed joining CPEC with the Taliban-led Afghanistan government.^vi

7. According to a report released on 29 Sep 21 by AidData, a US-based international development research lab, a substantial amount of Chinese development financing under the CPEC consists of loans that are at or near commercial rates as opposed to grants. It was noted that Chinese government has not disclosed these loans. ^vii

Afghanistan

8. Taliban spokesperson Zabiullah Mujahid on 06 Sep 21 expressed that the group "desires" to join the CPEC.^viii

Nepal

9. Huaxin Cement Narayani has completed construction of its 3000t/day Dhading cement plant in Bagmati and plans to commence production before November 2021. The plant is a Sino-Nepal JV and is the second cement plant backed by Chinese investors^ix.

Sri Lanka

10. The International Monetary Fund, and the Bank of China and the Bank of Bangladesh have provided USD 1.237 billion in aid to strengthen Sri Lanka’s foreign reserves.

Myanmar

11. An agreement to conduct preliminary field investigation work for the Kyaukphyu Special Economic Zone (SEZ) Deep Sea Port Project has reportedly been signed, signaling another step forward for the project.^x

SECTION II – BEYOND THE NEIGHBOURHOOD

Southeast Asia

1. ASEAN. At an online OBOR Summit meeting, ASEAN ministers called for more multilateral investments through OBOR to support economic recovery while the COVID-19 pandemic continues to depress regional economic growth.^xi

2. Singapore. Chinese Foreign Minister Wang Yi called on Deputy Prime Minister Heng Swee Keat and met Foreign Minister Vivian Balakrishnan in separate sessions on 13 Sep 21. During the meeting of the two foreign ministers, Balakrishnan and Wang discussed advancing cooperation on Singapore's government-to-government projects with China in Suzhou, Tianjin, and Chongqing and exploring new areas of cooperation such as the digital economy.^xii

3. Laos.

(a) The power supply project for the China-Laos Railway was put into operation as the electricity was transmitted from the Khoksaad substation on the outskirts of Lao capital Vientiane to the Vientiane South Traction Substation of the China-Laos Railway. The power supply project for the China-Laos Railway is the first BOT (build-operate-transfer) power grid project in Laos.^xiii

(b) A ceremony was held in Vientiane on 29 Sep 21 to start the full power generation of all seven plants of the Nam Ou river cascade hydropower project, which was developed by Power Construction Corporation of China (PowerChina).^xiv

4. Vietnam.

(a) Southwest China's Chongqing Municipality has launched a new highway-based cross-border freight line with Vietnam. Traveling about 1,400 km, trucks from Chongqing can pass through the Longbang Port in South China's Guangxi Zhuang Autonomous Region before arriving at their destinations in Vietnam in around two days.^xv

(b) A cargo train departing from Hanoi arrived in Chongqing Municipality on 23 September, marking the launch of a new cross-border railway service between China and Vietnam.^xvi

5. Indonesia. The Indonesian government reportedly wants China to partner in the semi-high-speed rail link connecting capital Jakarta to Surabaya in East Java, initially only earmarked for Japan. The Indonesian government intends to extend the project into a Jakarta-Bandung-Surabaya high-speed railway. The initial Jakarta-Bandung high-speed railway had exceeded by one-third i.e. 8 Billion USD. ^xvii

Eurasia

6. Russia.

(a) China’s Wison (Nantong) Heavy Industries Co reportedly won a bid to build the hulls for two floating nuclear power plants for Rosatom, a Russian state nuclear energy corporation, for USD 226 million. The two floating nuclear power plants will be used to supply power to the Baimsky mining and processing plant in Chukotka in Russia’s far east.^xviii

(b) Gazprom Neft, the oil arm of Russian gas giant Gazprom, stated that it had started using yuan in China for aviation fuel purchase settlements.^xix

(c) The Blagoveshchensk-Heihe highway bridge, the first highway bridge connecting China and Russia across the Heilongjiang River, is ready to open to traffic.^xx

7. Mongolia. The completion and commissioning ceremony of the China-funded expansion of a thermal power plant was held in Erdenet, capital of Mongolia's northern province of Orkhon. The project was executed by China's Hunan Industrial Equipment Installation Company.^xxi

Oceania

8. Federated States of Micronesia. The Federated States of Micronesia will reportedly use US funds to construct a Pacific undersea communications cable, after rejecting a Chinese company-led proposal that was deemed a security threat by US officials.^xxii

Latin America

9. Columbia. Reduction in credit to Latin countries and increase in support for Chinese companies for the development of OBOR through Public-Private Partnerships have significantly improved investment in Columbia at a time when Columbia needs foreign investment to tackle fiscal and social crises.^xxiii

Europe

10. Germany.

(a) COSCO Shipping Ports Limited (CSPL) has agreed with Hamburger Hafen und Logistik AG (HHLA) to acquire a 35% share in HHLA Container Terminal Tollerort (CTT) in the port of Hamburg^xxiv.

(b) Shanghai launched a freight-train service "Shanghai Express" to Hamburg, Germany, which is a cross-border railway service between Shanghai and Europe.^xxv

11. UK. The UK is reportedly planning to remove China from a project to build a USD 27.17 billion Sizewell C nuclear power station on the Suffolk coast.^xxvi

12. Estonia. Estonian Prime Minister Kaja Kallas said Europe, the US and their allies need a better, single infrastructure investment project to rival China's OBOR. The Estonian government is hosting the Tallinn Digital Summit this week, gathering officials from Europe, the U.S. and other countries to discuss how to align foreign investment programs to promote "trusted connectivity" and secure networks.^xxvii

13. Italy. A Hong Kong based firm has bought a majority stake in an unnamed Italian company that makes military-grade drones for NATO at 90 times its actual value in 2018.^xxviiiThe deal, however, is reportedly under investigation by the Italy’s financial crimes police. The firm was also in the process of moving drone production to the eastern Chinese technology hub of Wuxi.

14. Montenegro. The Smokovac-Matesevo section of the Montenegro North-South Expressway, the largest project under China's USD 10 billion concessional loan to CEE countries constructed by the China Road and Bridge Corporation (CRBC) is expected to be completed in Nov’ 2021.^xxix

15. Lithuania. Lithuania’s defence ministry recommended its citizens to avoid buying Chinese mobile phones and advised to dispose of the ones they have now after a government report found the devices had built-in censorship capabilities.^xxx

16. Hungary. Hungary has started revamping the Budapest-Belgrade rail line with a view to transporting Chinese goods from Greek ports to Europe via Hungary.^xxxi

Africa

17. Zambia.

(a) Jiangxi United Industrial Investment Ltd is building and will operate a multi-facility economic zone (MFEZ). The Jiangxi MFEZ will be a combination of an industrial park, technical innovation centre and agricultural processing zone^xxxii.

(b) The report released on 28 Sep 21 titled “Zambia’s Chinese Debt in the Pandemic Era”, found that 18 major and minor Chinese financiers had provided external loans to Zambia and its state-owned enterprises since 2000. Lusaka owed Chinese financiers USD 6.6 billion as of August – nearly double the USD 3.4 billion that the southern African nation had disclosed previously.^xxxiii

18. Kenya.

(a) As analysed by Central Bank of Kenya (CBK), China, at present, accounts for 67 per cent of the Kenya's total external debt, up from just 13 per cent in 2011.^xxxiv

(b) Kenyan government is reportedly determined to challenge activists’ demands in court for disclosure of the USD 3.2bn Standard Gauge Railway (SGR) contract with China.^xxxv

(c) Kenya is considering using reserves from the International Monetary Fund (IMF) to repay for Chinese loans.^xxxvi

19. Nigeria. The research by the Global Voices Civic Media Observatory on China’s OBOR identified two major catego­ries of infractions by Chinese companies in Nigeria: industrial accidents caused by lack of safety standards, and forced labour.^xxxvii

21. Democratic Republic of Congo.

(a) Felix Tshisekedi, the president of the Democratic Republic of the Congo (DRC), called for the “technical and financial details of Sino-Congolese contracts” for a review of mining contracts signed with China in 2008 by his predecessor.^xxxviii

(b) China has ordered six companies - BM Global Business, Congo Blueant Minerals, Orientale Resource Congo, Yellow Water Resources, New Continent Mineral, and Groupe Cristal - that broke laws and environmental standards in the Democratic Republic of Congo to cease operations and leave the country.^xxxix

(c) Democratic Republic of Congo’s state cobalt buyer Generale du Cobalt (EGC) and China’s biggest cobalt refiner Zhejiang Huayou Cobalt are reportedly in talks to end a dispute over the Chinese refiner’s subsidiary Dongfang International Mining SARL’s (CDM) continued presence at Kasulo mine, in Congo’s Lualaba province.^xl

Other Issues.

22. President Xi Jinping has said that China will increase support for the services sector in countries participating in the OBOR Initiative when addressing the Global Trade in Services Summit of the 2021 China International Fair for Trade in Services.^xli

23. Aid Data released a new report titled, “Banking on the Belt and Road: Insights from a new global dataset of 13,427 Chinese development projects”. It captured 13,427 projects worth USD 843 billion across 165 countries in every major world region over an 18-year period. The analysis found recipient nations are concerned about project issues and Chinese debt burdens being ‘substantially larger’ than previously understood..^xlii

24. The Beijing-based China-Africa Business Council (CABC), released a report detailing Chinese companies’ investments. It showed China’s FDI in Africa grew in 2020 year on year despite the coronavirus. The cumulative total of USD 47.4 billion invested by the end of 2020 included USD 2.96 billion last year, according to Chinese commerce ministry data – up from 2019’s USD 2.7 billion. A United Nations report showed that global foreign investment in Africa fell 16 per cent in 2020.^xliii