“One Belt One Road”will Become New Engine for China’s Economy Growth

The “One Belt One Road” International Summit Forum on International Cooperation was held in Beijing from 14 to 15 May， many people including heads of state and government participated the meeting. The forum is the highest specification forum held by China in the past three years since China put forward this initiative. The smooth convening of the forum will play an important role in further strengthen the future cooperation between countries along One Belt One Road countries and rebuilding the new international trade order and promoting economic development in emerging economies.

It is worth noting that this International Summit Forum was held at the right time. At present， Chinas economy is undergoing a period of adjustment， facing some challenges from both inside and outside.

From the inside， since the reform and opening up China has experienced more than 30 years of high economic growth. However， since the financial crisis broke out in 2008 Chinas three major dividends （demographic dividend， dividend and environmental dividend） are gradually decreasing， and economic growth has to rely on the more and more investment of production elements. According to statistics， Chinas total factor productivity （TFP） after 2008 rapidly declined from 3.4% to 3.8% to about 1%. It is the decline in the rate of return on investment in the real economy， that lead to the marginal effect of currency issuance on economic growth gradually reduced， too much money flowed into the financial sector， the economy relying on the financial sector is becoming more and more obvious. The financial sector in order to obtain high yields only can use the leverage effect through outsourcing or other financial products to achieve. In recent years， the rapid expansion of to-tal assets of banks indirectly proved this point. According to statistics， from the end of 2007 to March 2017， the total assets of commercial banks increased from 54.1 trillion yuan to 236.1 trillion yuan， with an increase of 336%. Thus， in order to maintain financial security， this year regulators have introduced a strong financial leverage and strict real estate regulation and control policies， aimed at further standardizing the financial chaos and curbing the asset bubble， so that the financial sector can better serve the real economy. In this context， the first quarter the annual high economic growth of recorded 6.9% is very likely， PPI published recently has been a downward trend compared with the same period.

From the outside， the financial risk spillover effect which caused by the superposition effect of the US monetary and fiscal policy on China can not be ignored. The United States has entered the rate hike cycle， the current rate hike has been three times， the market is generally expected that the frequency of increasing the interest rates in the future will gradually increase. At the same time， the Trump team announced largescale tax cuts in the United States at the end of April which is the strongest in recent decades. If the program can be passed in Congress， the possibility of overseas US companies and other multinational companies to return to the United States to construct factories will substantially increase.

For the world， after the United States President Trump came to power， he firstly targeted to Mexico， wanted to impose 20% of Mexican import tariffs， and issued a presidential administrative order to withdraw from the “crossPacific Strategic Economic Partnership Agreement” （TPP）. In his presidential campaign had claimed to tear NAFTA（North American Free Trade Agreement） and withdraw from the WTO（World Trade Organization） bring the implementation of trade protection policies and high trade barriers. At this point， a new round of global trade protectionism， anti-globalization trend has a sharp rise in the signs. On the other hand， in the context of the rising share of capital gaining in global wealth distribution， global wealth has also recently developed from developing countries to developed countries. According to the McKinsey Global Institute report， investors from developed countries control 75% of the wealth of the global 200 trillion dollars of financial assets. Moreover， the US dollar as a major global trade settlement currency and reserve currency， its each expansion and contraction has a huge potential risk for emerging economies.

Therefore， under the background that the global trade order is being reestablished， a vast number of emerging economies have a strong demand on the economic development and infrastructure construction and Chinas economy is facing the slowdown risk， China as a responsible economic power put forward the “One Belt One Road”strategy. The scale and influence has gradually expanded. In these years， the countries involved and the trade volume and investment between these countries achieved a breakthrough. The latest data shows that “One Belt One Road” construction has attracted more than 100 countries and international organizations to participate in. China has signed a cooperation agreement to build “One Belt One Road” with more than 40 countries and international organizations. Over the past three years， the total trade volume between China and the countries along “One Belt One Road” was about 20 trillion yuan， whose growth rate is higher than the global average growth rate.

At the same time， since the reform and opening up， China has accumulated sufficient capital and rich experience in infrastructure construction and industrial manufacturing. By increasing investment in infrastructure areas in other developing countries， making Chinas capital， technology combine with the labor of the countries along “One Belt One Road”， land and other elements， we can achieve mutual benefit and winwin situation. Over the past three years， Chinas enterprises foreign direct investment in the relevant countries reached to more than 50 billion US dollars， Chinas enterprises have built 56 foreign economic and trade cooperation zone in 20 countries along “One Belt One Road”. The current total investment is more than 18.5 billion US dollars and created more than 1.1 billion US dollars in taxes and 180，000 jobs for the host countries.

In addition to cooperation in the economic field， the “One Belt One Road” construction is he exchange and depth of integration of the national culture of the related countries. The establishment of the ancient Silk Road has changed the Westerners traditional recognization for the East， and now“One Belt One Road” construction is the embodiment of integration between the modern Chinese culture and the national culture of the countries along“One Belt One Road” and opens up a new window for the world to understanding of China.

Of course， there are misunderstandings and short-term difficulties in the “One Belt One Road” construction， such as the United States may set the obstacles to avoid the hegemony of the dollar being challenged； another example is that the economic fundamentals of the countries along “One Belt One Road” are relatively weak and the legal environment is not perfect making Chinas investment in some of its infrastructure is not strong profitability， the cost recovery period increased， which also affected Chinas investment scale in the countries along “One Belt One Road”.

But with the passage of time and along the gradual development of the national economy of these related countries， their identity for cultural and investment philosophy of us will also increase. In todays rebalancing environment of world pattern， the “One Belt One Road” construction is undoubtedly the establishment of a new order of world trade and another feat of promoting further extension of globalization and is an important way to blend Eastern and Western cultures. And it also is another important strategic initiatives of our country following the reform and opening up， and joining the WTO and is expected to become Chinas new economic growth point.