Source: Xinhua    Published: 2015-10-30

The initiative of the Silk Road Economic Belt and the 21st Century Maritime Silk Road is being offered up by China as a vision for a more prosperous region with connectivity and interdependence, an Australian economist said.

While some compare old colonialism of the western countries to China`s "Belt and Road" initiative, James Laurenceson said old colonialism was based on a foreign power controlling resources for its own benefit. The Belt and Road initiative is an entirely different model.

"China understands that the `Belt and Road` will be impossible without cooperation from other countries. That said, overseas the Belt and Road has been received enthusiastically because other countries see that they will also benefit," he told Xinhua in an interview.

The "Belt and Road" initiative, proposed by Chinese President Xi Jinping in 2013, is aimed at reviving the ancient trade routes that span Asia, Africa and Europe.

The remarks were made while Chinese decision makers just concluded an important meeting, drafting the socio-economic development plan for the next five years.

Looking back at the past five years of the 12th Five-Year Plan, Laurenceson said China has contributed around 40 percent of global income growth over the past five years.

"The International Monetary Fund (IMF) forecasts that China`s economy will be 44 percent bigger in 2020 than now. This means that China will remain the leading source of global growth in the coming five years."

He said he was pretty optimistic that China could overcome the middle-income trap as Chinese leaders had made it clear that they want to deliver higher living standards.

"I think we can draw considerable confidence from the nature of the reforms that are now being discussed: opening up will continue, growth will be driven by private sector innovation and entrepreneurship, and so on," said Laurenceson.

He admitted that doing so was easier said than done in China or elsewhere.

"But I see no reason why we should be particularly pessimistic. In fact, China`s track record to date suggests the opposite. Take economic rebalancing for example. This process is not easy and is far from complete, but good progress is being made," he said.

The economist warned that sometimes in people`s impatience for greater reform they also miss major achievements.

"For example, a few days ago China cut interest rates, and this attracted great attention. But far more significant was that China completed the process of interest rate liberalization, a process began back in 1996 and ought to be recognized and celebrated as a major milestone in China`s financial sector reforms."

Laurenceson said there should not be too much worries about China`s determination to carry out reform and opening up.

"When China joined the WTO there were grave concerns that foreign banks would displace domestic banks. This fear proved unfounded ... Opening up the domestic market is a powerful tool of reform that can benefit China," he said.

Laurenceson said at an economy-wide level, academic studies have shown that the degree of competition in China is even higher than in the United States.

"True, there are some sectors that remain protected and these sectors will be a focus of reform in the coming five years. I expect that lower barriers to entry for private sector firms, both domestic and foreign, will be a major focus of the 13th five-year plan."