Japan will cooperate with China’s One Belt One Road if various conditions are met

Prime Minister Shinzo Abe said Monday that Japan is ready to cooperate with China’s “One Belt, One Road” cross-continental infrastructure development scheme, under certain conditions.

Speaking at a forum in Tokyo on Asia’s future, Abe said those conditions would include “harmony with a free and fair Trans-Pacific economic zone,” alluding to the terms of the Trans-Pacific Partnership free trade pact, to which Japan is a signatory but China is not.

The One Belt, One Road initiative, put forward by Chinese President Xi Jinping in 2013, would involve massive investment to connect up both a land-based economic belt based off the ancient Silk Road and a maritime corridor spanning from China to Southeast Asia, India, Africa and Europe.

Xi has said he wants to create a “big family of harmonious coexistence” through the project, but skeptics see it as a bid to position China as a viable alternative to U.S. global leadership.

Abe lauded the initiative’s “potential to connect East and West as well as the diverse regions found in between.”

ut he cautioned that it is “critical for infrastructure to be open to use by all, and to be developed through procurement that is transparent and fair.”

“I furthermore consider it essential for projects to be economically viable and to be financed by debt that can be repaid, and not to harm the soundness of the debtor nation’s finances,” Abe said, adding Tokyo is “ready to extend cooperation from that perspective.”

The statement may be part of efforts to foster warmer relations with China as Japan seeks to host a postponed trilateral summit with the leaders of China and South Korea by the end of the year.

It also comes amid speculation that the United States could be considering joining the China-led Asian Infrastructure Investment Bank, a move that would likely put pressure on Japan to follow suit.

In response to Abe’s remarks, Chinese Foreign Ministry spokesperson Hua Chunying said, “We believe the One Belt, One Road initiative can be a new platform and a testing field for China and Japan to achieve mutually beneficial cooperation and common development.” Hua also reiterated China’s insistence that OBOR is committed to being a series of projects committed to “fair” and “transparent” rules of international trade and investment.

However, cooperation is still tentative, and nothing is formalized yet. Instead, China and Japan are directly competing for port rights along the OBOR – including Sihanoukville Autonomous Port in Cambodia, the Port of Colombo in Sri Lanka, and Thilawa Port in Myanmar.

SSE, Kazakhstan to Co-build Astana Int’l Exchange

On the occasion that Chinese President Xi Jinping is visiting Kazakhstan, a new achievement in the campaign sponsored by the Shanghai Stock Exchange (SSE) for serving the Belt and Road Initiative (B&R Initiative) is seen in Kazakhstan. Recently, the SSE and Astana International Financial Center Authority of Kazakhstan (the AIFC Authority for short) have signed an agreement to co-invest in building the Astana International Exchange. According to the agreement, the SSE, as a strategic partner of the AIFC Authority, will hold 25.1% shares in the Astana International Exchange, and will provide all-round support for the exchange’s establishment in the aspects of technological consultation, business planning, product design and marketing. It is a new major measure of the SSE to implement the fruits achieved at the B&R Forum for International Cooperation and strengthen the financial cooperation for the B&R Initiative after it signed a strategic cooperation agreement with Moscow Exchange on May 22.

The Astana International Exchange, an important part in the construction of the Astana International Financial Center of Kazakhstan, has drawn high attention from government officials of Kazakhstan including President of Kazakhstan. According to the plan, the Astana International Exchange will be built into a major platform for securitization of Kazakhstan’s state-owned assets and grow into a RMB trading center in Central Asia and a crucial financial platform on the Silk Road Economic Belt, thus providing financing service for implementation of the projects of the B&R Initiative. The exchange will base itself inn Kazakhstan, serve Central Asia and radiate to Russia and Mid-East, aiming to turn itself into an international exchange offering integrated services of listing, trading and clearing, with a wide range of products such as stocks, bonds, derivatives, funds and commodities.

As the place of origin and a key cooperative country for the B&R Initiative, Kazakhstan is the first station in the Silk Road Economic Belt, as well as the first station in the new Eurasian continental bridge economic corridor and China-Central Asia-West Asia economic corridor among the 6 major economic corridors advocated in the B&R Initiative. Guided by the China Securities Regulatory Commission, the SSE attaches great importance to cooperation with Kazakhstan in such aspects as capital markets and especially in providing a financing service platform for the B&R Initiative, and confirms the guideline of stressing on both strategic significance and sustainable commercial development. All these efforts spell the reasons for Kazakhstan to choose the SSE as its strategic partner in the co-building of the Astana International Exchange in the competition among an array of global exchanges

Considering the construction of the Astana International Financial Center and its development plan, the SSE will give full play to the features of the Chinese capital market and its advantages as well as to its role as a financing platform on the capital market through the cooperation with Kazakhstan in co-building the Astana International Exchange, in a bid to provide feasible financing service for the settlement of the B&R Initiative in Kazakhstan and even Central Asia, and render this cooperation of capital markets into a model one between countries along the B&R and China.

While participating in the investment in the Astana International Exchange is a pivotal point in the overall layout of the SSE’s service for the B&R Initiative, the SSE will continue to strengthen learning and implement on an overall basis the requirements in the key speech of General Secretary Xi Jinping at the summit forum on international cooperation for the B&R Initiative, as well as seize the opportunities in the B&R Initiative, study and implement the overall layout of the SSE’s services for the B&R Initiative, with an aim to become a pioneering force for going global of the Chinese capital market, and play an special role in the facility connectivity for the B&R Initiative.

Source: Shanghai Stock Exchange