Speech

BRI 2.0: Stronger Frameworks in the New Phase of Belt and Road

April 26, 2019

Excellencies, Distinguished Guests, Ladies and Gentlemen — good afternoon! Xia Wu Hao!

I would like to commend President Xi and the Chinese government for their leadership in hosting this important summit.

Yesterday, we discussed the financial links that can create jobs and opportunities for nations involved in the Belt and Road Initiative — known as the BRI.

Tomorrow, leaders will meet to discuss the next phase of the BRI, focused on implementation. This will include ways to further promote trade, foster greater financial inclusion, and facilitate more people-to-people connections.

Today, as we prepare ourselves for this new phase — or what I like to call “BRI 2.0” — it seems fitting to first review where we have been. And then, together, consider the lessons learned for achieving greater balance moving forward.

To borrow from a Chinese proverb, “It is easy to start a venture — the more difficult challenge is what comes next.” That is where we find ourselves today, at the more difficult challenge.

The BRI is clearly having an impact. From stimulating infrastructure investment to developing new global supply chains, some of the promises of BRI are being realized.

Consider Kazakhstan, where a new manufacturing zone is beginning to unleash previously untapped economic potential.

Or look at Senegal, where robust economic growth of over 6 percent in each of the last four years was supported partly by BRI-linked investment projects, including the construction of a new highway linking the airport to three large cities.

At the same time, history has taught us that, if not managed carefully, infrastructure investments can lead to a problematic increase in debt.

I have said before that, to be fully successful, the Belt and Road should only go where it is needed. I would add today that it should only go where it is sustainable, in all aspects.

Fortunately, the Chinese government is already taking some steps to ensure this is the case. The new debt sustainability framework that will be utilized to evaluate BRI projects is a significant move in the right direction.

BRI 2.0 can also benefit from increased transparency, open procurement with competitive bidding, and better risk assessment in project selection.

The launch of the green investment principle at this conference is a further important step forward for the BRI — and a step forward for green, low-carbon and climate-resilient investment.

Debt sustainability and green sustainability will strengthen BRI sustainability.

I know the Chinese authorities are committed to this idea — and to partnerships between China, BRI participants, international institutions, and the private sector. The IMF stands ready to assist through our policy advice and capacity development programs.

One key example. Since its launch last year, the China-IMF Capacity Development Center has trained over 140 officials representing 45 countries. As you can see, the IMF is your partner in implementing the next phase.

So, as BRI 2.0 moves forward, I trust it will be guided by a spirit of collaboration, transparency, and a commitment to sustainability that will serve all of its members well, both today and tomorrow.

Thank you very much. Xièxiè.