When it comes to investment pledges, $46bn[LINK/SOURCE?] is a sum that really grabs people’s attention. That is what China is supposedly ploughing into Pakistani energy and transport projects, according to plans unveiled during last month’s visit to Islamabad by President Xi Jinping. Delegates at the Asian Development Bank’s annual meeting in Baku, Azerbaijan, this week, could talk of little else. The ADB, historically run by Japan, could not dream of such firepower. Last year it lent about $13bn across the entire region.
It is easy, of course, to talk big. Much of Beijing’s promised investment in Pakistan — which would, among other things, help that country’s chronic energy problem by doubling electricity capacity — may not see the light of day. (To put it another way, the lights may never actually come on.) Still, if even a fraction of the sums bandied about turn up as roads, railways and power stations, Beijing will be making its formidable economic firepower felt.
China’s bid to extend its influence goes far beyond Pakistan. It is setting up the Asian Infrastructure Investment Bank, a rival to the ADB that will have initial capital of at least $50bn. Beijing’s “one belt, one road” initiative, which aims to improve land and maritime links between western China through Asia to Europe and north Africa, are gradually leaving the realm of fantasy and turning into concrete (lots of concrete) plans. To start things off, Beijing has dipped into its considerable foreign currency reserves for some small change: $62bn.