As the U.S. pulls back from globalization, China is stepping into the breach with programs including the One Belt One Road (OBOR) infrastructure initiative, experts said at the World Economic Forum (WEF) Asean meeting this week.
Cambodia, for one, made it clear China’s investment was welcome.
“Other countries have a lot of ideas, but no money. But for China, when it comes with an idea, it also comes with the money. That is the hope of all countries around,” Hun Sen, prime minister of Cambodia, said at the WEF Asean (Association of Southeast Asian Nations) this week in Cambodia’s capital Phnom Penh.
“For example, to fund the Silk Road project, China invested $40 billion in order to give other countries the opportunity to benefit,” he said.
Cambodia isn’t alone. Earlier this month, Pakistan’s Finance Minister Ishaq Dar reportedly said his country “fully supports” the OBOR plans.
Launched in 2013, the initiative, backed by China’s President Xi Jinping, aims to revive the ancient Silk Road and strengthen Chinese ties with more than 60 countries across Asia, Europe and East Africa through infrastructure, trade and investment.
The attraction to China is opening up vast areas of Central Asia that still retain trade links established centuries ago to routes in South Asia, Persia, Arabia and Africa, but now often lack the modern infrastructure needed to attract large-scale investment and trade.
China’s wide-ranging infrastructure projects with developing countries along the Silk Road link that are planned or underway, have an estimated worth of more than $900 billion, Fitch Ratings estimated earlier this year.
China’s big push comes as the U.S. has appeared to abandon what former President Barack Obama called a pivot to Asia. Current President Donald Trump has pushed a more nationalist and protectionist agenda, although he’s walked back or contradicted some of his harsh rhetoric from the campaign trail.
Arancha Gonzalez, executive director of the International Trade Centre, a joint development agency of the World Trade Organization (WTO) and the U.N., said China was stepping up.
“What we are seeing is this very famous saying that nature abhors a vacuum and China is very clearly using this moment to assert itself,” she told CNBC’s “Squawk Box” on Friday on the sidelines of WEF Asean.
“Of course, it creates frictions with others that were there before that now need to give a bit of space to China. That is why it’s multi-polarity that is obliging all countries to recompose a bit former bipolar world relations,” she said. “Countries don’t like to choose. They like to also live in this world where they have much more linkages with a variety of players that did not exist before.”
That can be seen in Cambodia’s efforts to attract investment.
On the sidelines of the conference, Pan Sorasak, Cambodia’s minister of commerce said, “We welcome all FDIs (foreign direct investments) coming in. Lately, China is coming first. We like to welcome all investors to come here.”
By Leslie Shaffer