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China strengthens the levers of economic diplomacy

Starts with Asia, but involves Europe and the Middle East

China strengthens the levers of economic diplomacy

By the end of 2015, the Asian Infrastructure Investment Bank (AIIB), which financial experts are actively talking about today, should complete all the necessary organizational procedures, form management structures and start work. By the beginning of May, the bank's charter was discussed, which is reported to be signed in the middle of this year.

55 countries of the world have announced their participation in this financial project proposed by China. The United States and Japan refrained from joining the emerging international banking structure, although major US allies such as Britain, France and others rushed to join the new financial initiative.

Russia managed to join the project on March 30, the last day set aside for making a final decision on whether or not to participate in the AIIB. Nevertheless, our country became one of the co-founders of a new international financial institution. And representatives of the Ministry for the Development of the Russian Far East expressed their hope for attracting AIIB finances to infrastructure projects in the Russian Far East, making a reservation that Japanese investments will play the main role in the development of the Far East. Although the Netherlands and South Korea have been more active here so far, not Japan.

A new investment bank with a capital of $ 100 billion, 50% of which is invested by the PRC, along with the IMF, the World Bank and the Asian Development Bank, can become an important institution for financing the Asian economy. Unlike the IMF and the World Bank, controlled by Washington, the new structure represents a completely different and, importantly, a completely new financial fund, which has defined the sphere of its influence, in fact, all of Eurasia.

According to experts from the Asian Development Bank, Asia alone needs at least $ 8 trillion for various infrastructure projects. The US-controlled World Bank and related financial institutions are unable to meet this huge demand for infrastructure investment. And Beijing's proposal in these conditions turned out to be very appropriate.

The complex interweaving of different-level interests, the concentration of production capacities, raw materials and high technologies objectively make the region an extremely important, fundamental element of the entire geopolitical and geo-economic architecture. One gets the impression that in the concept of the newest "Eurasianism from Lisbon to Vladivostok" being implemented today, China could take a leading role. Moreover, this is quite consistent with the growing role of economic diplomacy in China's international policy as a whole.

Economic diplomacy after 18-th Congress of the Communist Party of China, held in November 2012, under the new leadership, has actually become an important innovative component of Chinese foreign, and strengthening the levers of economic diplomacy is becoming an indispensable component of the implementation of China's foreign policy objectives.

In 2002, the volume of Chinese investments abroad was estimated at only $ 2,7 billion. Five years later, this figure increased to $ 25,9 billion, and by the 18th Congress of the CPC, the growth of Chinese investments had increased to $ 87 billion. Speaking at the Boaos Forum in April 8, Chinese President Xi Jinping said that over the next five years, China's foreign investment will reach $ 2013 billion. In other words, now China will annually invest abroad an average of $ 500 billion. In passing, I would like to note that the total volume of Chinese investments in Russia has not reached another 100 billion dollars, although additional joint investment funds have been created.

Another serious financial institution may be the BRICS Development Bank, the launch of which should be announced in the near future. The bank, which will be headquartered in Shanghai, will accumulate $ 100 billion, in which China's share will amount to $ 41 billion. Brazil, India and Russia will each contribute $ 18 billion, the rest - South Africa.

China's investment levers will undoubtedly become a strong economic support for the implementation of China's foreign policy tasks, which today are grouped mainly in the Asia-Pacific region, Central and Western Asia, in the Middle East, and are also increasingly moving to the western part of the Eurasian continent. Here, China is strengthening its political position, expanding business activity, and striving to ensure stable access to energy and raw materials.

One of the most popular theses regarding the establishment of the AIIB by Beijing was the thesis about the inevitability of a clash of financial and economic interests of the United States and China and the beginning of a serious economic confrontation between the two world economic giants in the APR zone. One of the arguments in favor of this judgment is called the irritated statements of US President Barack Obama in his April message to Congress on the Trans-Pacific Partnership, which argued that the laws of the world economy should be written by the United States, not China. Earlier, Washington expressed doubts that the new investment bank could be effectively managed.

The negative "restraint" of Americans towards the Chinese banking initiative seems to be connected with fears that Beijing is increasingly building its financial and economic activities in the international arena as a counterbalance to the American dollar influence.

Chinese diplomacy, including economic, is characterized by the absence of confrontational rhetoric. China is doing everything possible so that the formation of new banking structures, regional trade and economic associations, does not look like opposing US interests. Beijing does not intend to demonstrate its readiness to fight America in the economic sphere, and seeks to emphasize its desire to be friends with all players, to take into account the interests and needs of Asian countries. In any case, this is exactly what this direction will look like at the public level.

But it is equally clear that Beijing will persist in strengthening the levers of economic diplomacy. And in the long term, build the foundation of your influence beyond your own borders with the help of these levers.

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