as the epidemic spreads around the world, there are some arguments that the schedule and financing quota of the one belt and one road project have been affected. on june 22, gain new summer summit in 2020, before the people's bank of china governor zhou xiaochuan said that in the current situation, development of "area" have a good condition, is the overall global capital abundant, prices are low, should be a good chance of financing, is also a good chance to optimize the existing financing.
"some of the negative comments or some of the sceptical comments are that the one belt and one road project is on schedule [affected], that one belt and one road funding has been reduced. it is quite normal for me to say this, because the epidemic has prevented people from congregating, and many transportation facilities have been blocked. therefore, it is necessary to maintain a social distance, or "social distance", so that many project personnel and technical personnel, whether domestic or international, cannot get there. so these all affect the progress of some 'one belt and one road' projects. but we have also seen some good projects that have persisted despite the epidemic. one example is the china-laos railway, the railway between china and laos." zhou xiaochuan said.
he believes that under the current circumstances, the belt and road initiative is also facing an advantage, that is, the global capital is abundant, the price of capital is low, is a good opportunity to finance and optimize the existing financing. he noted that savings rates in some countries have risen because of the impact of the outbreak on consumer spending, which is also conducive to one belt and one road funding.
"these savings are also looking for opportunities, looking for opportunities that can be used and appropriately preserved and increased. of course, [the epidemic] also has a negative impact on the savings rate. the negative impact is that unemployment has increased. in most countries it looks like unemployment is likely to increase by one or two percentage points, three or four percentage points, but in some countries it's double-digit increases in unemployment, and the effect of unemployment is because they have no income, or they are dependent on subsidies, which in this case has a negative effect on the savings rate. but the combination of the two or other factors, the savings rate as a whole has gone up, so the funding support for one belt and one road is positive." zhou xiaochuan said.
in addition, the new trend of one belt and one road is to emphasize green development and sustainability. zhou said the outbreak has given people a lot of enlightenment and made them realize the importance of social affairs and governance, so the demand for esg is also on the rise.
'there are also those who have taken the issue of debt sustainability to a very high level and linked it to' one belt and one road, ' 'mr. zhou said.' some statements sound like they have ulterior motives. ' the epidemic has indeed created difficulties. some time ago, g20 ministers and central bank governors have put forward a plan to alleviate the debt. during the epidemic, the debt repayment burden of developing countries can be postponed or postponed.
"but we also need to recognize that a significant portion of the global debt burden has multiple causes, many of which have nothing to do with the epidemic itself. for example, we see all the time the world is concerned about the international organizations including especially the imf are very concerned about global problems of argentina, and outbreak not too direct, the relationship between outbreak, of course, may also be a certain degree aggravate the current problems, but it is impossible to put all of these problems can be solved through basket in this outbreak, or want to go back to find our different solution, for their respective reasons and the condition of different medicine, where to fall where to climb up. and we also hope that in this case the international institutions will play a bigger role and the g20 will play a bigger role." zhou xiaochuan said.
to deal with the problem of high debt and high leverage, zhou xiaochuan said the experience from the difficult situation is that these countries should create productivity, reform their systems, give play to their comparative advantages and use the opportunity of integration into globalization to solve the problem.
for the internationalisation of the renminbi in the current situation, how should go, zhou replied that rmb internationalization is a long-term, gradual process, to a great extent, and the development of china's economic and trade are related, and the deepening of china's reform and opening up at the same time there is a relationship, this will help to improve the confidence. at the same time, we also want to see in the aspect of reform and opening to the outside and some do not place, these should be with more courage and drive to move forward, so not only for the chinese economy is good for the international cooperation, also for the future of international status, the extent of used and free to use, good.
"but at the same time the subject is a relative one, which is actually complementary to the choice of other currencies to be used in the international context. we have always said that if the dollar, the euro, the yen, the pound, the swiss franc and so on, the most important is the dollar, if they have some policies that make people less confident in using the dollar, then people will choose other currencies to trade instead, providing more opportunities for other currencies. first of all, it concerns the stability of america's own economy, whether there will be another round of economic and financial crises of one kind or another. of course, it also concerns that these big countries will not use currency to impose sanctions on other countries or transactions, which will affect the monetary feasibility. "there is also a complex issue of global capital flows, and the way in which global capital flows go and to what extent they affect currency choice." in general, zhou said, if china has the patience to carry out its reform and opening up, the issue will move forward gradually and there is no need to rush.
source: sina finance and economics