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2015 Business Review X: Active Advancement of Silk Road Economic Belt Construction in Eurasian Region

The Ministry of Commerce (MOFCOM) further deepened economic and trade cooperation with Eurasian countries to actively propel the process of jointly building the Silk Road Economic Belt in 2015, when the construction of the Belt and Road started.

Firstly, policies and mechanisms matched quickly. The outstanding features of boosting Silk Road Economic Belt in Eurasian region were early policy docking, fast action and broad coverage. As at December 2015, the MOFCOM has signed inter-ministerial cooperation agreements on jointly building Silk Road Economic Belt with eight Eurasian countries, actively implemented the important consensus reached by Chinese and Russian heads of state on the docking of the construction between Silk Road Economic Belt and Eurasian Economic Union (EAEU), signed the Joint Communique on Launching the Economic and Trade Cooperative Partnership Agreement Negotiation between China and the Eurasian Economic Union with Eurasian economic committee; meanwhile, it has impelled the docking between the China-Kazakhstan new economic policy of 鈥淓nlightenment Road鈥and Silk Road Economic Belt strategy, made active efforts to discuss docking cooperation between the Silk Road Economic Belt construction and Russia across the Eurasian railway reconstruction and the 鈥淕rassland鈥initiative by Mongolia, and built China-Mongolia-Russia Economic Corridors; also, it has led the establishment of local cooperation council between northeast China and Russian far east region with the Development Ministry of Russian Far East.

Secondly, the construction of free trade zone and trade facilitation made a breakthrough. The MOFCOM completing the feasibility research on the Free Trade Agreement ("FTA") negotiation with Georgia officially initiated the FTA negotiation, and Georgia is expected to be the first country signing the FTA with China in Eurasian region; the MOFCOM agreed with the EAEU to take the establishment of FTZ as a long-term development goal, and will launch the economic and trade cooperative partnership agreement negotiation in the near future. Promoted by China, the Shanghai Cooperation Organization ("SCO") established the working mechanism of trade facilitation, and initiated the system arrangement schedule of trade facilitation.
Thirdly, major projects went smoothly. A batch of influential interconnectivity and capacity cooperation projects have been completed consecutively, which not only promoted the improvement of local people's livelihood, but also became an important early harvest in the beginning year of Silk Road Economic Belt.

In terms of road construction, two presidents from Kyrgyzstan and Tajikistan were present at the road opening ceremony, and spoke highly of such projects as the connecting line's repairing of road around the Issyk Kul in Kyrgyzstan and the completion of freeway from Ayni to Panjakent in Tajikistan; the quality and progress of tunnel projects, namely, Angren - Pape tunnel in Uzbekistan and Vahdat -Yovon tunnel in Tajikistan, which went well, have been recognized by leads for more than once.

In the aspect of cross-border logistics transport cooperation, Lianyungang has become an important cargo transshipment base for Central Asian countries re-exporting goods to Japan, South Korea and Southeast Asia, and its total volume of transshipment cargo is expected to reach 250 thousand standard containers by the end of 2015; the China-Kazakstan Horgos Frontier International Cooperation Center has improved cross-border infrastructure conditions; in the China-Russia Tongjiang - Nizhneleninskoye railway bridge project, China has finished 65% of total progress, and plans to start the construction of Heihe-Blagoveshchensk highway bridge and cross-Heilongjiang river ropeway in mid-2016. By the end of October, China-Eurasia railways have totally opened 1,070 including 207 for return trip, which have increased by 15 times more than last year.

In terms of energy infrastructure construction, the construction of natural gas pipeline of the China-Russia eastern line has been initiated, and both parties are negotiating on natural gas pipeline of the China-Russia western line and other projects; the natural gas pipeline of China-Central Asia C line has been completed, checked and accepted; meanwhile, D line in Tajikistan has started the construction; the second phase of China-Kazakhstan natural gas pipeline has been put into production on schedule, and the project of South-North power artery (Datka - Keming 500KV high-voltage power supply and transformation project ) in Kyrgyzstan has been finished; grid-generation has been achieved by the first unit of No.2 thermal power plant in the first-stage project in Dushanbe, Tajikistan.

In the aspect of the construction of overseas economic and trade cooperation zones, the MOFCOM and the Ministry of Finance have confirmed the evaluation of five zones among the 23 overseas economic and trade cooperation zones built in Eurasian region, which involves many industries, such as wood processing, petroleum equipment manufacturing, further processing of building materials, communications and so forth. After China-Belarus Industrial Park was jointly inspected by the president Xi Jinping and president Aleksandr Lukashenka in May, its development is accelerated, and various projects including infrastructure construction in starting zone, attracting investment, financing support and supporting policy went smoothly by the end of 2015.

With respect to capacity cooperation, China and Kazakhstan signing 52 early harvest projects have signed project agreements with the amount of 23 billion dollars; further discussion has been made with Uzbekistan and other Central Asian countries; three refineries established by China in Kyrgyzstan filled up the Kyrgyzstan鈥檚 industrialization blankness, and "Taldy Bulak Levoberzhny Gold Mine" was successfully put into production. In December, Chinese proposed to expand China-Kazakhstan capacity cooperation mode to member countries of the SCO, which had received positive responses from all parties.

In terms of livelihood projects, a batch of cooperative projects including social security housing, hospitals, and schools, constructed under the aid of the Chinese government for Eurasian countries brought good social benefits in local area.
Fourthly, the financing progress was obvious. China concluded bilateral domestic currency swap agreements worth CNY210.7 billion in total with seven Eurasian countries and the RMB settlement proportion for Sino-Russia trading increased to 5% of the bilateral trade; in particular, the People's Bank of China have used the domestic currency for twice, totally exchanging RUB10 billion since October 2015, which is mainly used for bilateral trade settlement. China activated the listing for trade of exchange rates of RMB against the TJS. The Bank of China issued the first KZT loan to companies in Kazakhstan under the framework of domestic currency swap agreement, which promotes the RMB internationalization and the Sino-Kazakhstan trade and investment facilitation. Seven countries in the Eurasian region become the founding countries with intention of the Asian Infrastructure Investment Bank ("AIIB"). The establishment of the Silk Road fund, the Sino-EEU cooperation fund and the Sino-Kazakhstan capacity cooperation fund has greatly enriched the local investment platform where China invests in.

Fifthly, the regional economic cooperation of the SCO was promoted steadily. In July, President, Xi Jinping attended SCO Summit and the BRICS Summit for Heads of States and proposed four initiatives including promoting the interoperability within the regions, enhancing the capacity cooperation, cooperation on capability construction and developing investment and financing cooperation; all member states reached an agreement on joint establishment of Silk Road Economic Belt and wrote it in the Summit manifesto, which marks that the SCO regional economic cooperation has entered into a new stage of integrated development with "the Belt and Road".

In September, at the 14th Economic and Trade Ministers Meeting of SCO Member States, successfully held in Xi'an, all parties reached nine pragmatic measures on deepening the SCO regional economic cooperation; the SCO Countries Commodity Fair held in the same month attracted over 200 enterprises and more than 500 exhibitors from 12 countries, with the exhibition watchers of over 100,000 and the intentional volume of business of nearly CNY5 billion, and established a new platform for the promotion of smooth trade among SCO member states.

In December, important economic achievements were acquired at the 14th Meeting of the Council of Heads of Governments (Prime Ministers) of the SCO held in Zhengzhou. First, prime ministers of all states adopted the statement on regional economic cooperation focusing on the joint establishment of Silk Road Economic Belt; second, the Report on the Progress Status of the Implementation of the Program for Multilateral Cooperation in Trade and Economy of the SCO Member States was approved; third, the customs departments of all member states signed the 2016-2021 Outline for Customs Agencies of the SCO Member States; fourthly, China proposed six economic and trade initiatives including promoting capacity cooperation, carrying forward the SCO trade facilitation, setting up SCO e-commerce union, further promoting the SCO cooperation in interoperability field, enhancing the investment and financing cooperation and SCO capability construction.

At present, with respect to the SCO regional economic cooperation, attention has been paid to the systems governing regional trade facilitation and trade liberalization is gradually accepted as a development goal. The SCO is moving steadily towards the "three goals鈥 namely, trade and investment facilitation, economic and technological cooperation and the establishment of free trade zones.

Sixthly, endless highlights were found in important events. In 2015, China participated in the sixth Russia international innovative industry exhibition held at Yekaterinburg, Russia as the main guest of honor for the first time, and organized over 130 leading enterprises of ten key industries from seven provinces to join in the exhibition, which focused on exhibiting the new results in equipment manufacturing and technological innovation; China successfully held the Second Sino-Russia Exhibition, the participation scale and levels of which were further improved when compared with the first session; China organized over 70 large scale enterprises and financial institutions to participate in the first Russia oriental economic forum as a foreign participant with the highest level and largest scale; and successfully held the SCO Countries Commodity Fair in Xi'an, at which over 200 enterprises and more than 500 exhibitors of the 12 countries within the SCO framework appeared intensely with their most competitive preponderant products in their countries.

2016 is the first year for the implementation of the 13th Five-Year plan; China will, according to the development guidelines of innovation, coordination, environmental protection, opening and sharing, insist on the principles of joint consultation, establishment and sharing and continue further promotion of the joint establishment of Silk Road Economic Belt with Eurasian countries to benefit people in all countries.

Translated by Hou Zuowei
Proofread by Eddiea

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