China’s Xi Promises Open Markets and Billions in New Investments for ‘Belt and Road’ Projects 

Chinese President Xi Jinping and distinguished guests arrive to attend the opening ceremony of the third Belt and Road Forum for International Cooperation at the Great Hall of the People in Beijing, capital of China, 18 October 2023. (EPA/Wang Ye/ Xinhua China / UK and Ireland)
Chinese President Xi Jinping and distinguished guests arrive to attend the opening ceremony of the third Belt and Road Forum for International Cooperation at the Great Hall of the People in Beijing, capital of China, 18 October 2023. (EPA/Wang Ye/ Xinhua China / UK and Ireland)
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China’s Xi Promises Open Markets and Billions in New Investments for ‘Belt and Road’ Projects 

Chinese President Xi Jinping and distinguished guests arrive to attend the opening ceremony of the third Belt and Road Forum for International Cooperation at the Great Hall of the People in Beijing, capital of China, 18 October 2023. (EPA/Wang Ye/ Xinhua China / UK and Ireland)
Chinese President Xi Jinping and distinguished guests arrive to attend the opening ceremony of the third Belt and Road Forum for International Cooperation at the Great Hall of the People in Beijing, capital of China, 18 October 2023. (EPA/Wang Ye/ Xinhua China / UK and Ireland)

Chinese President Xi Jinping promised foreign companies greater access to China’s huge market and more than $100 billion in new financing for other developing economies as he opened a forum Wednesday on his signature Belt and Road infrastructure initiative.

Xi's initiative has built power plants, roads, railroads and ports around the world and deepened China’s ties with Africa, Asia, Latin America and the Middle East.

Tt the forum’s opening ceremony at the ornate and cavernous Great Hall of the People, Xi promised that two Chinese-backed development banks – the China Development Bank and the Export–Import Bank of China – will each set up 350 billion yuan ($47.9 billion) financing windows. An additional 80 billion yuan ($11 billion) will be invested in Beijing's Silk Road Fund to support BRI projects.

“We will comprehensively remove restrictions on foreign investment access in the manufacturing sector,” Xi said. He said China would further open up “cross-border trade and investment in services and expand market access for digital products” and carry out reforms of state-owned enterprises and in sectors such as the digital economy, intellectual property rights and government procurement.

The pledges of hefty support from Beijing come at a time when China's economy has slowed and foreign investment has plunged.

Xi alluded to efforts by the United States and its allies to reduce their reliance on Chinese manufacturing and supply chains amid heightened competition and diplomatic frictions and reiterated promises that Beijing would create a fairer environment for foreign firms.

“We do not engage in ideological confrontation, geopolitical games nor clique political confrontation,” Xi said. “We oppose unilateral sanctions, economic coercion and the decoupling and severance of chains,” a reference to moves elsewhere to diversify industrial supply chains.

Reiterating Chinese complaints that such moves are meant to limit China's growth, Xi said that “viewing others’ development as a threat or taking economic interdependence as a risk will not make one’s own life better or speed up one’s development.”

“China can only do well when the world is doing well,” he said. “When China does well, the world will get even better.”

Representatives from more than 130 mostly developing countries are attending the forum, including at least 20 heads of state and government. Russian President Vladimir Putin is attending, reflecting China’s economic and diplomatic support for Moscow amid the isolation brought by its war in Ukraine.

Addressing the forum right after Xi, Putin praised BRI as being “truly important, global, future-oriented, aimed at creating more equitable, multipolar world relations."

“This is truly a global plan,” he said, adding that it aligns with Russia's plan “to form a large Eurasian space, as a space of cooperation and interaction of like-minded people, where a variety of integration processes will be linked.”

He referred to other regional organizations, such as the security-oriented Shanghai Cooperation Organization, the Association of Southeast Asian Nations (ASEAN), and the Eurasian Economic Union of former Soviet states.

Several European officials including the French and Italian ambassadors to China and former French Prime Minister Jean-Pierre Raffarin walked out while Putin spoke and returned afterwards.

On Tuesday, Putin met with Hungarian Prime Minister Viktor Orbán, who is the sole European Union government leader attending the forum. Their meeting was a rare instance of the Russian president meeting a European leader since the start of Russia’s war in Ukraine in February 2022.

Putin met with Xi after the opening ceremony.

Also in attendance are the presidents of Indonesia, Argentina, Kazakstan, Sri Lanka, Kenya among other countries, as well as UN Secretary-General António Guterres. Most Western European countries and US allies sent lower level or former officials to the forum.

Guterres highlighted the BRI’s potential to bring development to neglected areas while stressing the need for projects to be environmentally sustainable. He said the initiative could help drive the transition away from reliance on fossil fuels.

“Developing countries will need massive support for a fair, equitable and just energy transition toward renewables while providing affordable electricity to all,” Guterres said.

He also called for an “immediate, humanitarian” ceasefire in the Israel-Palestine war after a strike killed hundreds at a Gaza City hospital on Tuesday.

With the BRI, China has become a major financer of development projects on a par with the World Bank. The Chinese government says the initiative has launched more than 3,000 projects and “galvanized” nearly $1 trillion in investment.



Dollar Resumes Upward Trend, Euro Hits Lowest since Nov 2022

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
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Dollar Resumes Upward Trend, Euro Hits Lowest since Nov 2022

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

The dollar hit new multi-month highs against the euro and the pound on Thursday, the first day of 2025 trading, as it built on last year's strong gains on expectations US interest rates will remain high relative to peers.

The euro fell to as low as $1.0314, its lowest since November 2022, down around 0.3% on the day. It is now down nearly 8% since its late September highs above $1.12, one major victim of the dollar's recent surge.

Traders anticipate deep interest rate cuts from the European Central Bank in 2025, with markets pricing in at least four 25 basis point cuts, while not being certain of even two such moves from the US Federal Reserve, Reuters reported.

The dollar was hitting milestones across the board and the pound was last down 0.65% at $1.2443, its lowest since April, with its fall accelerating after it broke through resistance around $1.2475.

"It's more of the same at the start of the new calendar year with the dollar continuing to extend its advances in anticipation of Trump putting in place friendly policies at the start of his term," said Lee Hardman, senior currency analyst at MUFG.

US President-elect Donald Trump's policies are widely expected to not only boost growth but also add to upward price pressure. That will lead to a Fed cautious about cutting rates too much further, in turn underpinning US Treasury yields and boost dollar demand.

A weaker growth outlook outside the US, conflict in the Middle East and the Russia-Ukraine war have also added to demand for the dollar.

The dollar also reversed an early loss on Thursday to climb against the Japanese yen, and was last up 0.17% at 157.26.

It reached a five-month high above 158 yen in late December, potentially putting pressure on the Bank of Japan, which is expected to raise interest rates early this year, but possibly not immediately.

"If dollar/yen were to break above 160 ahead of the next BOJ meeting, that could be a catalyst for the BOJ to hike in January rather than wait until March," said Hardman.

"Though for now markets are leaning towards March after the dovish comments from (governor Kazuo) Ueda at his last press conference."

Even those who are more cautious about sustained dollar strength think it could take a long time to play out.

"The dollar may be vulnerable – but only if the US data confound market expectations that the Fed doesn’t cut rates more than once in the first half of this year, and not by more than 50bp in the whole of 2025," said Kit Juckes chief FX strategist at Societe Generale in a note.

"There's a good chance of that happening, but it seems very unlikely that cracks in US growth will appear early in the year – hence my preference for taking any bearish dollar thoughts with me into hibernation until the weather improves."

China's yuan languished at 14-month lows as worries about the health of the world's second-biggest economy, the prospect of US import tariffs from the Trump administration and sliding local yields weighed on investor sentiment.

Elsewhere, the Swiss franc, another victim of the recent dollar strength, gave back early gains to last trade flat at 0.90755 per dollar.

The Australian and New Zealand dollars, however, managed to break away from two-year lows touched on Tuesday. The Aussie was 0.36% higher at $0.6215 having dropped 9% in 2024, its weakest yearly performance since 2018.

The kiwi rose 0.47% to $0.5614.