The BRI as an Agenda for International Development and Cooperation
The 2nd Belt and Road Forum will be held in Beijing, China on April 25-27, 2019. (Photo: AP)
By Yongnian Zheng & Bojian Liu

The BRI as an Agenda for International Development and Cooperation

Apr. 22, 2019  |     |  0 comments


Introduction


For a long time in modern history, Western countries were the major forces driving globalization, but the procedure was not morally perfect. They led the primordial globalization by virtue of colonialism and imperialism, which was accompanied by too much inequality and hatred insofar as it eventually resulted in the two world wars. After the World War II, the West reevaluate about the legitimacy of colonialism, and the rise of the United States propelled institutional establishment aiming to facilitate world peace and collaborations. International organizations conducive to free trade and capital flow were formed one after another. However, since the third Industrial Revolution, especially in the past two decades, international capitals represented by those in Wall Street has become less interested in real economy and manufacturing because these were not that lucrative. Along with the IT revolution, given growing demand from various countries for better capital allocation, the high-tech industry represented by the Internet, as well as the virtual economy represented by the modern financial industry, have been the main components of Western development.


Marked by the financial crisis in 2008, three hidden risks have emerged in global political and economic development. First, inequality across countries in the world is escalating, which also happens within major industrialized economies. Second, developed countries are much less willing to help developing countries and provide the world with opportunities for economic development. Third, populism and anti-immigrant movement are brewing in Western developed countries represented by the United States, and waves of the anti-globalization movement are initiated by the low-income group. To adapt to the political trend of populism, trade protectionism has become more salient in many developed countries.


Against this backdrop, China rolled out the Belt and Road Initiative (BRI). As a major manufacturer and exporter, China might be the last country that wants to see retrogression in globalization, and the BRI proposed by China can help resolve the severe imbalance in the current world economic order. In the long run, in developing countries, a full-fledged national infrastructure can help build better conditions for economic takeoff, which includes attracting high-quality foreign direct investment. For instance, China’s infrastructure project in Sri Lanka has aroused India’s and Japan’s interests in investing there. In future, with the improving infrastructure in central Asia and Africa, particularly with the popularization of new-generation Internet and personal mobile devices, these countries are very likely to embrace unprecedented investment opportunities. Therefore, BRI offers a new solution advancing globalization towards a new stage while narrowing the gap between the South and North. Notably, this solution is open and flexible in nature, and the platform it builds as well as the opportunities of development largely serve as an international public product.


From a macro and long-term perspective, divergence of commercial interests amongst countries along the Belt and Road isn’t the most imperative challenge to BRI. In practice, what’s most difficult to deal with is criticism of BRI from the West that usually lacks evidence, which is fundamentally casting doubts on the legitimacy of China’s role in the BRI. The most common criticisms are “neo-colonialism”, “neo-imperialism”, “neo-expansionism” and “debt imperialism”. However, in fact, China’s outbound investment had never been accompanied with military force[1] and it has no record of interfering in the internal affairs of the host country.


Hence, in substance, the BRI is a project of economic development, rather than a strategy in the security sense. At least, it is not a “strategy”[2] like those in geopolitics, where it requires at least three pre-conditions to form a geopolitical strategy. The first is that geopolitical strategy has at least one imaginary rival or competitor[3]; the second is that in most cases, geopolitical strategy is implemented under the leadership of one state or states in alignment; and the third is that international cooperation amongst states in the process of strategy implementation is highly exclusive, especially to their common rival or competitor.


At the 2015 Boao Forum for Asia, Chinese President Xi Jinping announced that the BRI upheld the three principles of “jointly built through consultation to meet the interests of all”. In the same year, Chinese Foreign Minister Wang Yi said “the BRI isn’t a solo of China, but a symphony played by all stakeholders.” In the opinion of Chinese leaders, China serves only as the initiator of the BRI. Even though it has the largest stake in AIIB, the bank isn’t a policy bank, but an international commercial bank dedicated to supporting infrastructure development. AIIB loans adopt commercial rates and the loan applicants should pass rigorous assessment of loans repayment. In recent years, nearly all credit rating agencies in the world rated AIIB high[4]. Therefore, as a commercial international financial institution, the AIIB actually plays a very small role in China’s foreign policy and its effect is far below the strategic level.


Meanwhile, although the US and Japan had more or less criticized the BRI, Chinese leaders have repeatedly announced on different occasions that all countries including them are welcomed to join the BRI initiative. In other words, the BRI doesn’t target at any imaginary rival or competitor. More importantly, it only stresses economic and trade cooperation and development and it has no agenda for international security or military cooperation. Furthermore, as the largest investor of the bank, China actually bears immense risks in AIIB and in almost every infrastructure project, most of which won’t make any profits in the short term.


Unfortunately, most of the Western criticisms of the BRI take it for granted that the initiative is a geopolitical “strategy”. It must be pointed out that the criticisms or even denial from the West don’t represent the stance of the BRI beneficiaries. Although Western views are sometimes quoted and heard in countries and regions along the Belt and Road, they mostly serve the purpose of election or politics only. Taking Myanmar’s democratic transition for example. Even though Aung San Suu Kyi once led the National League for Democracy to criticize China’s investment in Myanmar, she sang a different tune after she came into office and turned to support Chinese investment. Later she even organized the BRI steering committee in Myanmar. Similar to Myanmar, Sri Lanka changed its negative position towards Chinese-funded projects after the 2015 election.


Sino-US Relations and the BRI


Perhaps, if the US could adopt another approach of thinking about the BRI, instead of being strategically anxious over China’s rising future, the current new type of major-country relationship between the two countries would be strengthened in many aspects, which would prevent them from falling into the “Thucydides’ Trap”. But the formulation of this mindset about the BRI requires two preconditions: (1) China continues to show benign intention to the US, despite the fact that it might be costly; and (2) political elites and mainstream public opinions in the US continue to support a better Sino-US relation instead of curbing China’s rise.


To a large extent, China’s rise in the past 30 years is attributed to the US-led post-WWII free trade system, and China needs this system to continue working in order to succeed in the BRI proposed by President Xi Jinping and to achieve the “Two Centenary Goals”[5]. There is no doubt that the leadership of the US is very important for the stability of this system, and China will definitely have to proactively support the US leadership in maintaining the international free trade system for a long time to come.


In fact, at the very beginning, China had made great efforts to join the US-led Trans-Pacific Partnership (TPP). However, due to the clauses in the TPP that were obviously aimed to exclude China, misgivings and nationalistic emotions arose against it in domestic China. On the other hand, if it wasn’t for the US leadership, China wouldn’t have had the period of strategic opportunities in the 21st century, during which China was enabled to focus on economic development. In view of the recent trade frictions and negotiations between the two countries, China was on the defensive and tried to, within its reasonable range, make concessions and show goodwill in exchange for the understanding and trust of the US.


To some extent, throughout the process of China’s modernization since the 1980s, it has been humbly learning from the US in many respects, ranging from education, scientific research, finance to corporate management, and it more or less takes the US as a model of modernization. This is the most important sign that differentiates the Sino-US major-country relationship from various relations between an established hegemon and a rising power in history. According to data of 2017-2018, China was America’s largest source of foreign students, and the number of Chinese students in the US increased 3.6 percent and accounted for about 33 percent of all foreign students while the total number of foreign students there decreased for the second straight year[6]. Even today, there are very few Russian students studying in American colleges, and Russia has shown much less enthusiasm and modesty than China in learning from the US. As far as this is concerned, the current difficulties in Sino-US relation are largely a one-way problem, namely the US has far more anxieties and misgivings about China than the other way round, while China is getting increasingly confident and humble.


It is reasonable to say that the BRI isn’t the result of China’s pursuit of leadership[7]. As developed countries, including the US, flinch when facing the agenda of international economic governance, China, as a major manufacturer and exporter, has no choice but step up and take up the responsibility, otherwise it may fail to achieve its goals of modernization.


To a large extent, this is exactly the great power responsibility that the US used to demand China to bear[8] in the last two decades. Nevertheless, America’s fulfillment of its superpower responsibilities is weakening on issues such as climate change and nuclear non-proliferation, which has brought enormous uncertainties to the world. Besides, as discussed earlier, a major context of the BRI[9] is the argument in China over its strategic relation with the US, and the focus is on how to avoid a direct confrontation with the US, how to minimize the risk of them falling into the Thucydides’ Trap, and consequently ensure a longer period of peaceful development for China.


Therefore, as similarly highlighted before, the BRI isn’t a geopolitical strategy aiming to pursue great power. It is an essential part of China’s efforts to signal goodwill to the US. To put it more simply, China, as the fast growing and second largest economy, should always avoid any direct confrontation or conflict with the US. Second, it should explore opportunities for international cooperation according to its goals of economic transformation and development. Third, it should bear the major-country responsibility for global governance. These three points succinctly generalize the background for the BRI.


Therefore, the BRI isn’t the result of major country competition. On the contrary, it has incorporated China’s consideration of avoiding frictions with the US since the very beginning. At present, the BRI focuses on infrastructure construction, a field where China and the US almost have no competition because for many years the US hasn’t paid much attention to infrastructure or to improving its global competitiveness in the industry of infrastructure building[10]. In fact, global infrastructure building has not been a priority in America’s foreign economy for quite a long time, largely because of the sector’s huge capital input, low profitability and long payback period. This further proves that there might be no causality between the BRI and the Sino-US major country competition.


In our opinion, to fully unleash the BRI’s potential to be a ballast in Sino-US relation, the BRI should move beyond the current infrastructure-centered approach of development. In future, it should emphasize more on the collaboration in industrial structure and value chain among Belt and Road countries. As in the ongoing trade war between China and the US, countries like Malaysia and South Korea are exporting large quantities of intermediate goods to China and the US over the years. Once China and the US begin to levy high tariffs on each other, not only will their own economy be seriously damaged, but many other countries that provide intermediate goods for them will also suffer. Besides, if the US keeps raising its tariffs, it may probably trigger a global movement of trade protectionism, which is hard to accept for many export-dependent countries today.



As an international agenda of economic development, the BRI requires not only the joint contribution of those countries involved, but also sharing its opportunities with more countries while maintaining a high degree of inclusiveness.



Therefore, if the BRI can intensify the value chain cooperation among countries along the route, it will definitely make them more economically interdependent. Furthermore, once China or the US implements trade protectionism, neither of them will be able to bear the economic cost thanks to the existence of the cross-national value chain. In other words, if the BRI can further deepen the industrial division and cooperation among countries along the route, it will be both a restraint of economic unilateralism and a guarantee of mutual economic benefits for great powers like China and the US.


It is noteworthy that the BRI has put forth the concept of “a community with a shared future for mankind” by Hu Jintao and Xi Jinping in succession, but the outside world has not fully understood its connotations, especially regarding the part concerning major-country relation. The author holds that China should openly dialogue with the US on this concept. After all, the Sino-US relation is deemed as the most important bilateral relation in today’s world, and the “community with a shared future for mankind” contains the community with a shared future for China and the US. Further, China should share this concept with the US in a reassuring, peaceful and confident manner. It’s natural that the US will find it hard to completely accept this concept in the short term, but China has to be tolerant and patient, particularly on issues such as choosing the path of global governance. All in all, in terms of the history of international relations, America’s reaction to China’s rise is normal, but China’s reaction to America the hegemon has almost no precedent. Seldom has there been a rising nation like China that learns from a hegemon comprehensively, let alone signals goodwill and seeks mutual trust with the US in many aspects at the same time.


How Should China Make Iterative Improvements in BRI Implementation?


Obviously, in many opening statements about the BRI, a lot of policy experts and the mass media have abused the word “strategy”, which has deepened the West’s misperceptions of China. Considering the BRI’s importance for China’s opening-up in the current stage, we believe it can be further interpreted and defined as a major international cooperation agenda underpinning “China’s opening policy in the new era”. Such an interpretation has two folds of implication.


First, by illustrating China’s resolve of opening-up, it will help reduce the bias against the China-proposed BRI. In the past six years, doubts about this initiative were focused on China’s opening-up policies. Some people in the West believed that it was a challenge to the West, especially to the US, and it might augurs that China would shift the focus of economic and trade exchanges from the West to the Eurasian continent[11] and turning from its own opening-up to “demanding other countries to open up”. Apparently, these doubts widely deviated from China’s original intention. It must be underscored that today’s BRI doesn’t totally equate with the Silk Road in history. To be more specific, the BRI today should by no means be limited to the regions involved in the ancient Silk Road and Maritime Silk Road, which are just a historical symbol. The ideas like cooperation and engagement and development that those historical projects stand for are largely universal and applicable to most bilateral and multilateral relations in the world.


Second, by stressing the “new-era” attributes as a feature of the BRI, it implies innovations in China’s old approaches of opening-up, as represented by the multilateral opening-up mechanism. In other words, China’s opening-up in the past 40 years was mainly opening its own market and consequently obtaining development opportunities through the global free trade system. In contrast, the BRI today carries China’s vision for deepening multilateral cooperation worldwide, especially realizing multilateral opening-up through multilateral cooperation. Actually, even before the BRI was put forth, China has already become a primary trading partner for many countries in the region. If we can disseminate the experience in promoting development and integration through opening-up even further and give more encouragement to the US and Japan to participate into the BRI, the initiative will have more stakeholders and therefore become more open, multilateral and stable.


Recently the US rolled out the “Indo-Pacific strategy” and attempted to set up a fund focusing on infrastructure aid as oppose to the BRI, However, based on official reactions of India, Southeast Asia and even US allies such as Australia and Japan, they didn’t utterly endorse the US position. Even India, the country that was always suspicious of the BRI, had made it clear that apart from economic and trade cooperation and normal military exchanges, New Delhi didn’t want to confront China via the US-proposed conceptions. What’s more intriguing is that Southeast Asian countries were even more prudent. Even if they actively responded to America’s “Indo-Pacific strategy”, they didn’t put it in the opposite position against the BRI.


In fact, for countries located both along the Indo-Pacific region and the Belt and Road, they all hope to seek maximum opportunities from China and the US for empowering themselves and improving livelihoods. Being stakeholders in both countries, they don’t want to see the two major countries fall into an all-round confrontation. One simple reason is that these countries all have deep dependence on both China and the US. Once they are asked to take side, their national interests will be minimized while their national security will be at stake.


As the current progress reveals, China relies heavily on state-owned enterprises (SOEs) to implement the BRI projects, but the SOEs’ commercial operation relies heavily on the government. If they continue to play a dominant role in China’s BRI investment, the SOE reform will face more difficulties and a fair market environment will be hard to sustain. Therefore, China has to support and encourage more private and foreign companies to engage in BRI projects.


In essence, private businesses prefer projects with shorter turnover period, and, compared with SOEs, they are better at localizing their overseas business, financing, talent recruitment, supply chain management and marketing. Further, their businesses concentrate more on consumer goods and their brands tend to have a higher rate of recognition in local markets. In contrast, the financially powerful SOEs focus on infrastructure construction and energy drilling, while the SOEs’ customers are usually governments, so they barely conduct any branding and marketing targeted at the ordinary consumers in the host country, hence overseas markets have lower appreciation of SOEs than private brands.


Moreover, private enterprises, which bear full responsibilities for their gains and losses, are not only more innovative and vigorous, but also more prudent in market operation and understand local regulatory system better. More importantly, since private enterprises have little government background, their engagement will make the BRI more transparent, and the outside world will associate the BRI less as a geopolitical strategy. When making a review of the BRI at its 5th anniversary, Xi Jinping emphasized that it has to benefit the local people. Apparently, encouraging both SOEs and private businesses to engage in it is an effective way to achieve that goal.


In addition, regarding future BRI projects, China may have to encourage local enterprises (either state-owned or private) to take a part even if the projects are funded by Chinese SOEs. In supply chain management, China should provide fairer, more transparent and favorable cooperation opportunities for local suppliers as that will give a considerable boost to the local and international recognition of the BRI.


In sum, as far as BRI projects in the past seven years are concerned, China-funded projects needs to make more amendments. For instance, in the early years when China made infrastructure investments overseas, it relied too much on ties with the central government and ruling party of the host country, while most Chinese enterprises overseas lacked the awareness of forming friendly relations with the local political groups and social communities. Besides, although China is attaching more importance to environmental protection when dealing with overseas infrastructure projects in the past two years[12], BRI projects have to meet the high standards of environmental protection not just set by China, but those in developed countries such as Western Europe and the US. Besides, undertakers of those projects should also work with local environmental groups and media to establish and maintain a sound public image.


For instance, a few years ago, the construction of the Myitsone hydropower station in Myanmar was resisted by the National League for Democracy and other political groups exactly because the Chinese investors of the project didn’t consult enough with the local people and communities, causing doubts on the project’s economic, ecological and social benefits as well as its fairness. The railway project in east Malaysia faced a similar problem. Especially after PM Najib Razak and his National Front lost the 2018 general election, Chinese enterprises finally realized how important local public opinions and societies were for the completion of the project.


In sum, when implementing the BRI, China should cautiously take it as a public platform to promote international development. It should not engage in sensitive industries like military and security, nor should it become an outbound propaganda campaign that aims at blurting China’s strength and promoting the so-called “China model”. Otherwise there will be more misunderstandings of China’s intention of proceeding with the BRI.


To be honest, “over-propaganda” has been a long-standing phenomenon in Chinese initiatives of international development. In recent years, a lot of international cultural, educational, academic, artistic and sports activities held by Chinese has been rigidly borrowing the logo of BRI, sometimes as their brand, as if everything has to be somehow linked with this initiative, but that actually undermines the reputation of BRI given its multilateralist and globalist principles. In fact, Chinese leaders have emphasized that China serves only an initiator of the BRI, and it is not a solo, but requires all participants to jointly enrich its connotations. As mentioned previously, that’s the message conveyed clearly by the principle of “jointly built through consultation to meet the interests of all”.


It is not that hard to understand why those activities borrowing the BRI brand are hard to be accepted by the local people and may easily become the target of criticisms. Some countries began to wonder whether those projects were sponsored by Chinese government with purpose of changing them. All in all, the BRI only attempts to share China’s developing experience with the world, but never to forcibly market it. The core of the initiative remains unchanged, which is to facilitate economic development for participant countries and create more development opportunities for them, just like how China welcomed the whole world to participate in its development by launching the reform and opening-up since early 1980s.


However, as a caveat, by appealing to China to learn from its mistakes in proceeding with the BRI, we are not denying the validity of them. Be it the Myitsone hydropower station in Myanmar or the railway project in east Malaysia, the value of those projects should not be entirely erased. China still has to complete them with good quality work and through a more acceptable approach. To put it another way, China has to make iterative improvements consistently based on past experience until it reaches or approaches the ideal win-win pattern.


Conclusive Remarks


To make an analogy, in unfolding the all-round implementation of the BRI, China has drawn up the blueprint of its big diplomacy consisting of “two legs” (“new type of major-country relationship” and “BRI”) and “one circle” (neighborhood diplomacy). To be more specific, the first “leg” refers to the new type of major country relationship that China has formed with the US, Russia and India, the second “leg” refers to the BRI that mainly comprises developing countries, and the “one circle” means neighborhood diplomacy conducted in East Asia.


Complementary with one another[13], the “two legs” and “one circle” need to be institutionalized, which will help manage the divergences between China and other major powers, particularly the US, and the institutions will foster correct recognition of each other’s evolving international status, thereby reducing the risk of falling into the “Thucydides’ Trap”. By doing so, China will find it easier to proceed with the BRI and its neighborhood diplomacy.


Indeed, as the biggest beneficiary of the free trade system after the Cold War, China is exploring how to improve this versatile system while enhancing China’s own goals of modernization. As an international agenda of economic development, the BRI requires not only the joint contribution of those countries involved, but also sharing its opportunities with more countries while maintaining a high degree of inclusiveness.


For China, the BRI in the next stage will continue to focus on opening-up and bringing in more participating countries. Moreover, it will probably incorporate China’s own opening-up and thereby providing shared opportunities and two-way interactions, in which more countries would be able to benefit from both China’s investment and China’s huge market. Therefore, the geographical misinterpretations of the BRI will fade in the long run. Finally, China, as the initiator, has to properly expand the historical definition of the BRI, in which the BRI should not necessarily mean the exact route or business as its name or history indicates. After all, the Silk Road Economic Belt and Maritime Silk Road in history did have geographical boundary, but their cultural connotations should not.



[1] Except for UN-mandated security forces, such as the peacekeeping forces and the escort missions in Somali waters.

[2] Although the word “strategy” is often used to describe the BRI by Chinese media and in semi-official documents, it differs widely from the “strategy” concept in international relations or geopolitics.

[3] Hew Strachan, “The Lost Meaning of Strategy,” Survival 47.3 (2005): 33–54.

[4] Happy 3rd birthday to AIIB: 93 members, 35 projects and USD7.5 billion loans,” Economic Daily, http://intl.ce.cn/specials/zxgjzh/201901/16/t20190116_31280425.shtml.

[5] At the 100th anniversary of the founding of CPC, national economy will be more developed and institutions will be further refined; at the 100th anniversary of the founding of the People's Republic of China, modernization will be primarily achieved and an affluent, strong, democratic and civilized socialist country will be completed.

[6] “Number of foreign students to the US dropped 2nd year in a row,” http://www.xinhuanet.com/world/2018-11/14/c_1123712357.htm, November 14, 2018.

[7] This is proved by the fact that, as mentioned in the first section, developed countries including the US are less willing to take the lead in helping developing countries.

[8] Please refer to the best-known example, Former World Bank President Robert Zoellick’s call for China’s shouldering of major-country responsibilities: “Whither China: From Membership to Responsibility?” Robert B. Zoellick, Remarks to National Committee on U.S.-China Relations, New York City, September 21, 2005.

[9] The BRI itself isn't a security strategy, but it's undeniable that objectively it has strategic geoeconomic significance. For the difference between geoeconomic strategy and geopolitical strategy, please refer to Matthew Sparke, “Geopolitical fears, geoeconomic hopes, and the responsibilities of geography,” Annals of the Association of American Geographers 97(2) (2007): 338-349.

[10] “The 21 countries in the world with the best infrastructure,” https://www.businessinsider.nl/wef-countries-in-the-world-with-the-best-infrastructure-2016-10/, October 5, 2016.

[11] See, for example, Theresa Fallon, “The New Silk Road: Xi Jinping's Grand Strategy for Eurasia,” American Foreign Policy Interests, 37(3) March 2015.

[12] Pratch Rujivanarom, “China ‘protects environment’ in its Belt and Road initiative,” http://www.nationmultimedia.com/detail/national/30354741, September 19, 2018.

[13] Zheng Yongnian, Zhang Chi, “Belt and Road and China’s Grand Diplomacy,” Contemporary World 2 (2016): 8-11.



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