Great Potential, Many Pitfalls

Understanding China's Belt and Road Initiative

Bijan Omrani

• Publisher: Routledge
• Year: 2021
• Print ISBN: 9780367516581
• eBook ISBN: 9781000428742
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Asian Politics
• Index: Politics & International Relations

China's Belt and Road Initiative (BRI), China's globe-girdling infrastructure and trade corridor project, is a rare watershed in international affairs. It affects, whether directly or indirectly, nearly the entire world, directly involving more than 60 countries, nearly 4.5 billion people (about two-thirds of the world's population), up to $8 trillion, and around 40 per cent of the global economy.

BRI also entails a rising power—perhaps the next superpower—endeavouring to build one of the biggest and most expensive super-projects the world has ever seen. If it achieves its potential, BRI could even pose a threat to the Bretton Woods global economic model that has prevailed since the end of World War II. BRI has the potential to change the world in a big way. And yet, the project also confronts security and financial challenges that are as serious as its potential is soaring. In this way, BRI is a topic that needs serious examination. This book features chapters on BRI prepared by top international scholars who have been tracking the project closely. The chapters assess the project's impact across Asia, highlight its opportunities and challenges, and consider what might be in store in the future.

The chapters in this book were first published as a special issue of the Asian Affairs.

The Belt and Road Initiative: Modernity, Geopolitics and the Developing Global ORDER

SHIRLEY YU

Introduction

In March 2013, a speech was given by Chinese president Xi Jinping in Astana, Kazakhstan, initiating the strategy of the ‘Silk Road Economic Belt’. In November 2013, a further speech was given by President Xi in Jakarta, Indonesia, launching ‘the 21st Century Maritime Silk Road’. Both speeches combined marked the birth of the grand strategic vision of the fifth generation of Chinese Communist leadership. This vision is commonly referred to as the Belt and Road Initiative.

Definition of China’s Belt and Road Initiative

“The Silk Road Economic Belt” and “21st Century Maritime Silk Road” (一带一路, or “BRI” hereafter) encompasses 66 countries across Central & Eastern Eurasia and the maritime Asia Pacific. It covers 63% of the global population and over 1/3rd of the world’s GDP. It contains almost every current major world religion, and straddles six of the seven fault lines between civilizations, as envisaged by Samuel P. Huntington.

BRI is China’s unilateral vision for the future structure of the greater Eurasian region. It attempts to promote infrastructure connectivity and investment through land-locked continental Eurasia, develop efficient maritime connections from the South China Sea and Africa to Western Europe, and hopes to exert China’s comprehensive geo-economic, geopolitical and strategic influence in the whole region.

Figure 1 Map of the BRI

In 2015, a book entitled One Belt One Road, China’s Top National Strategy was published with an official endorsement, signalling that the BRI had become China’s overriding National Strategy. I equate China’s BRI to the Grand Strategy of the U.S. post-WWII in its international significance and objectives. The U.S. over this period of time established multilateral financial institutions including the IMF and the World Bank, and supranational institutions including the United Nations. It initiated the Marshall Plan to promote regional economic growth, NATO as the regional security framework, and the Bretton Woods system to establish the U.S. Dollar-standard for the global monetary system. China has built a comparable multilateral regional framework over this period, very similar to the grand strategy of the U.S. post-WWII.

Table 1 BRI’s Regional institutions in comparison to the current global mechanisms

Multilateral institutional mechanism	BRI region	Global order
Regional Trade Integration	16 + 1 Regional Comprehensive Economic partnership ASEAN + 3 BRI Economic Corridor	WTO European Union
Regional Financial Integration	Asian Infrastructure Investment Bank Silk Road Fund New Development Bank	The World Bank
Regional Military Security Organization	Shanghai Cooperation Organization	NATO
Lender of Last Resort and Supranational Organization	To be developed	IMF United Nations

There has been much speculation about the total scale of investment under China’s BRI. Popular estimates range from $1 trillion to $8 trillion¹ across the established multilateral investment platforms and debt financing through China’s policy banks, including the China Development Bank and EXIM Bank.

China’s BRI works in coordination with President Xi’s Two ‘One Hundred Year Plans’. The first One Hundred Year Plan is that by 2021, upon the centennial anniversary of the founding of the Chinese Communist Party, China should reach the living standards of the poorer countries in Europe. The other is that by 2049, China should attain ‘modernity’, and be among the greatest nations of the world. The Belt and Road Initiative will serve as China’s transitory grand strategy between 2013 and around 2050. If BRI were executed successfully over the coming three decades, China’s ultimate grand strategy by 2050 would be to assert a Chinese version of a global order. Just as the Post-WWII grand strategy of the U.S. served as the means for the ultimate foreign policy objective of Pax-Americana, BRI is China’s grand strategy, but not the end in itself of China’s grand strategy, rather a means to its ultimate end, i.e. Pax-Sinica.

Deconstruction of China’s BRI

• 1) The BRI is about economics, but not simply about economics.

President Xi Jinping’s BRI was postulated as a two-pronged vision. One is the Modernization Vision, and the other, the Common Destiny Vision. The first one is clearly economic, and the latter, political.

The Modernization Vision, in Xi’s own words, is for regional countries to ‘jump onto China’s economic high-speed rail’. To paraphrase the jargon, BRI countries will participate in China’s economic prosperity through infrastructure development and infrastructure investments made possible by China.

The Common Destiny Vision, in President Xi’s own articulations, is for regional countries to build a ‘Community of Common Destiny’.² During his speech in Davos in 2017, Xi’s regional vision further transcended to a grander ‘Common Destiny as Humankind’.³ This vision captivates a high moral ideal and invites much more complex dialogues than simple understanding of the BRI as a common economic policy prescription for the region. A ‘community of common destiny’ elevates the BRI to similar strategic significance as the Manifest Destiny, a founding principle of U.S. foreign policy. The declaration of China’s vision of a global destiny has essentially promulgated China’s quest for its own version of a world order.

• 2) The success of the BRI is contingent upon the cohesion and integrity of the achievement of both visions in its entirety.

The modernization vision

Infrastructure investments and the long-term accessibility to financing which China provides will have a positive effect on the BRI countries’ economic growth, and therefore enhance the living standards of BRI countries. This is largely in accordance with developmental economics. It should be stressed that development is taking place both in heavy infrastructure, such as railways and highways, and also digital communications and the internet. It has become clear that dollar-for-dollar, investments in modern communications technology have a far greater return than from money invested in traditional infrastructure developments, such as railways and highways. The telecom infrastructure networks led by Huawei and ZTE are currently expanding rapidly through the BRI region. Further, China’s success in setting and leading the global telecommunications standards particularly in 5G will be more fundamental in shaping economic development patterns of the region than the expansion of physical infrastructures over a wide geographical scale.

The common destiny vision

What are the geopolitical implications for the region with the modernization of the countries along the BRI? The answer to this question is essentially a revival of the decades-long debate that started with political scientist Seymour Lipset. Lipset tested the causal relationship between a country’s economic development and its political openness.⁴ He further advanced the conclusion that democracy is the outcome of economic development. This ‘Modernization–Democratization’ concept has since been tested, retested, and contested, and generated a large number of political analyses in the field over the past few decades. It is significant in understanding the future direction of the BRI region as regional countries go through economic modernization supported by China.

If Lispet, his followers including former President Bill Clinton, and the believers in the Washington Consensus were right, BRI countries would have a tendency to become democracies as they economically develop. These countries would then naturally be inclined to align themselves with countries of the West, believe in Western values and, for all practical purposes become part of the West. Therefore, despite the development of the BRI, there would be no common destiny between China and the 65 regional BRI countries as they carried on their course of economic development. Further, democracy would be revealed as the common destiny of these economically developed nations. This is certainly not the desired outcome of Xi’s vision. However, empirical analysis drawn on economic data from the World Bank and political data from the EIU Global Democracy Ranking suggests that as the BRI regional countries develop economically, there is no significant tendency for them to turn towards liberal democracy, and that Lipset’s hypothesis does not reflect the practical reality in these circumstances.⁵ This may be disappointing to the liberal West. However, this tendency makes Xi’s Common Destiny vision possible. Therefore, the achievement of both the Chinese economic and political visions of the BRI becomes feasible.

• 3) The success of the BRI is predicated upon the continued success of the China Model and the political preferences of the countries in the region.

According to the Economist Intelligence Unit’s global democracy rankings 2015, of the 66 countries in the BRI region, two countries are full democracies, i.e. the Czech Republic and New Zealand. There 24 ‘flawed democracies’, including countries in Southern Europe and in South Asia. There are 17 hybrid regimes, including Singapore, Turkey, and various ASEAN countries, and Iraq; and 23 authoritarian regimes, including the Gulf countries, Central Asian countries, and countries in North Africa.

The China Model is essentially built upon political authoritarianism and a certain degree of economic liberalization, selected privatization and limited industry deregulation, often classified as authoritarian capitalism. Due to the natural political profile of the BRI region being predominantly quasi-democracies, failed democracies and autocracies, the China Model would allow these countries to develop economically, while still maintaining tight political control by the people in power. When faced with a dire need for economic development, regional countries are offered a choice between the Chin...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Citation Information
• Notes on Contributors
• Preface
• Introduction Great Potential, Many Pitfalls: Understanding China’s Belt and Road Initiative
• 1 The Belt and Road Initiative: Modernity, Geopolitics and the Developing Global ORDER
• 2 China in Central Asia: the First Strand of the Silk Road Economic Belt
• 3 Beijing’s Response to the Belt and Road Initiative’s “PUSHBACK”: A Story of Assessment and Adaptation
• 4 The China-Pakistan Economic Corridor: The Lure of Easy Financing and the Perils of Poor Planning
• 5 Flawed by Design: The Challenge of Flawed Democracies to China’s Rise
• 6 Is the Belt and Road Initiative a Chinese Geo-Political Strategy?
• 7 China-Pakistan Economic Corridor – Is It the Road to the Future?
• Index