Chinese president Xi Jinping, who described the move as an “historic step”, also announced that China would donate $10 million “for institutional development and capacity building” of APEC, the country’s state run Xinhua News Agency said.
Members of APEC’s Business Advisory Council (ABAC) proposed the free trade area as part of a package of recommendations presented to heads of state and government attending the APEC economic leaders’ meeting which began in China on 10 November.
ABAC’s recommendations (68-page / 1.62 MB PDF) included encouraging public-private partnerships to “increase investment required to bridge infrastructure gaps in the region”.
ABAC chairman Ning Gaoning said that the full benefits of the free trade area “cannot be realised without robust infrastructure to connect our region more efficiently”. However, Ning said “the current level of infrastructure investment in the region is inhibiting economic growth”.
Ning said: “The private sector has the capacity to help bridge the gap. Governments can spur private investment and domestic consumption by creating a better policy environment, developing more public-private partnerships and mobilising long-term savings through the development of capital markets and effective regulatory frameworks. Multilateral institutions also have a vital role to play. In this respect, ABAC welcomes and supports the expansion of multilateral financing facilities for infrastructure development.”
ABAC said regional governments need “a comprehensive and holistic approach to planning high-quality infrastructure projects that takes into account long-lasting asset value, stability of long-term cash flow and lifecycle cost in drawing private investments”.
ABAC also urged leaders to back initiatives to “help nurture the development, adaptability and sustainability of small, medium and micro-enterprises” in the Asia Pacific region, as well as promoting greater use of information communications technologies and e-commerce.
The International Monetary Fund (IMF) has backed APEC plans to boost infrastructure in the region. IMF deputy managing director Naoyuki Shinohara said last month that a “key priority” for encouraging new infrastructure projects is to “improve the quality of public investment”.