Chinese Imperialism – the Belt and Road initiative
The ‘BRI’ has generated a lot of hype – some have dubbed it a Chinese Marshall Plan, a state-backed campaign for global dominance, a stimulus package for a slowing economy, and a massive marketing campaign for something that was already happening – Chinese investment around the world. The Belt and Road Initiative (BRI) was conceived in 2013 with the aim to connect Asia, Africa and Europe and is estimated to cost more than $1tn (£760bn). This article will assess the claim of whether the BRI represents a new era in Chinese Imperialism, and if the reaction to it has been justified.
Dubbed as the 21st Century Silk Road, the BRI has essentially become a term which encompasses all of Chinese’s foreign engagements. The BRI comprises a Silk Road Economic Belt – a trans-continental passage that links China with south east Asia, south Asia, Central Asia, Russia and Europe by land – and a 21st century Maritime Silk Road, a sea route connecting China’s coastal regions with south east and south Asia, the South Pacific, the Middle East and Eastern Africa, all the way to Europe.
Naturally, the reaction to has been more than hostile. Many Americans fear that the Belt and Road Initiative is an extension of efforts by the Chinese Communist Party (CCP) to undermine the security and economic architecture of the international order. China’s growing largesse, they worry, comes largely at the expense of international institutions and American influence. This angst was brought to light at the last APEC gathering: where Australia, Japan, and the United States declared that they had formed their own trilateral investment initiative to help meet infrastructure needs in the Indo-Pacific – forcing the question of what is there to fear?
On the face of it, it seems to be a pretty good scheme. The Asian Development Bank has estimated that developing countries in the continent will need $1.7 trillion dollars per year if the region is to ‘maintain its growth momentum, eradicate poverty and respond to climate change’. The BRI is surely the answer, its flagship project is the $62 billion China–Pakistan Economic Corridor (CPEC) that will run throughout the country. Bangladesh is set to receive investment totalling $38 billion under the Bangladesh-China-India-Myanmar Corridor. These are – or should be – game-changing ventures for the many countries involved, which span one third of global trade and GDP and more than 60 per cent of the world’s population.
Sri Lanka provides a perfect case study of what is to fear from the BRI. The government had to sign over Hambantota Port on a 99-year lease after it couldn’t meet its debt commitments. The Centre for Global Development found eight more Belt and Road countries at serious risk of not being able to repay their loans – Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Montenegro, Pakistan and Tajikistan – are among the poorest in their respective regions and will owe more than half of all their foreign debt to China. This adds weight to concerns that the BRI will allow China to use ‘debt-trap diplomacy’ to extract strategic concessions – such as over territorial disputes in the South China Sea or silence on human rights violations. Some suggest that this is a deliberate plan on Beijing’s part that will condemn states to “strategic subservience”. Others wonder if Chinese-run ports will be used to facilitate military projection.
Further worries emanate from the fact the BRI is not purely about hard infrastructure. China plans to set up international courts, in Shenzhen and Xi’an, the former hub of the original Silk Road, to resolve commercial disputes related to Belt and Road – A WTO 2.0. In a 2018 FT article, Jonathan Hillman, director of the Reconnecting Asia project at the Centre for Strategic and International Studies in Washington. Explained how the BRI could serve as a vehicle for China to write new rules, establish institutions that reflect Chinese interests, and reshape ‘soft’ infrastructure. ‘the BRI courts underscore how China is working to revise the current rules-based order’ , and warns how the ambition of the Courts may also expand , by making itself more central in the dispute settlement process.
But despite the hype, some argue that the BRI has been a strategic blunder for China. Many of the BRI projects in South and Southeast Asia are yet to yield return on investment. The sovereign debt of 27 BRI countries is regarded as “junk” by the three main ratings agencies, while another 14 have no rating at all. Meaning the financial viability of the project is in disrepute, and adds reality to fears to systematic risk in terms of debt.
Moving forward however, what can China do to correct some current negative perceptions? The key would be to increase transparency in terms of cost and scale, as the lack of transparency is the fuel to many of the BRI’s criticisms. A report by HSBC revealed that
‘The $5.2 billion stretch of this rail line that goes through Thailand is already seeding growth in multiple sectors. Airports and seaports are being built, homes are appearing, a major theme park is being developed and social institutions such as hospitals and schools are being constructed along the right-of-way of the impending track’
Revealing that the BRI is not all doom and gloom, and ultimately has the potential to do a lot of good. The Trade War between the US and China demonstrates the most visceral backlash against the BRI and growth of Chinese Ambitions, buts the fact that it is being resolved reveals that China being a key partner in the Global economy, rather than a antagonistic – If successful, the BRI could boost international commerce, particularly for countries that have been unable to fully integrate in the world economy.
References –
https://foreignpolicy.com/2018/12/06/bri-china-belt-road-initiative-blunder/
https://www.ft.com/content/b64d7f2e-8f4d-11e8-b639-7680cedcc421
