The Belt and Road Initiative (BRI) was first announced by Chinese President Xi Jingping in 2013. It was now officially described as “a visionary blueprint for global economic development in the new world order”. The routes covered more than 60 countries from Asia to Europe, currently accounting for some 30 per cent of global GDP and more than 35 per cent of the world's merchandise trade. By 2050, the BRI region aimed to contribute 80% of global GDP growth, and advance three billion more people into the middle class.[i] The BRI was “set to reinvigorate the seamless flow of capital, goods and services between Asia and the rest of the world, by promoting further market integration and forging new ties among communities”.[ii] BRI was also officially described as the “proposed trade and infrastructure plan connecting Asia with Europe and Africa”.[iii] The BRI aims at “a modern transnational network connecting Asia with Europe and Africa, with the aim of promoting common development among all parties involved”.[iv] The BRI was planned to be China’s path-breaking grand scheme to expand its politic and economic influence. It was a global development agenda integrating various regions through highways, railways and other communication networks.[v] China has big plans to fund the initiative. The China Development Bank, the lead financial body for BRI, will invest $890 billion into over 900 projects. This largesse will be spread over 60 countries.[vi] By 2020, BRI projects could be worth some $8 trillion. Other banks involved in the financing of BRI projects are along with the establishment of the $40 billion Silk Road Infrastructure Fund, Export-Import Bank of China, the $100 billion Asian Infrastructure Investment Bank (AIIB), and $50 billion New Development Bank. [vii] So far, more than 100 countries and international organizations have joined the initiative, of which more than 40 had signed cooperation agreements with China.[viii]
Trade between China and countries along the BRI totaled $913 billion in 2016, more than a quarter of China’s total trade value. Chinese firms invested more than $50 billion in countries along the BRI, and assisted in building 56 economic and trade cooperation zones in 20 of those countries, generating nearly $1.1 billion in tax revenue and 180,000 local jobs.[ix] So far, the AIIB has seen its membership increase to 70, with the multilateral development bank’s total lending amounting to over $2 billion.[x]
The BRI “exceeds both in scope and ambition the Marshall Plan used to rebuild Europe after World War II”.[xi] It is far more than just an economic initiative. The BRI’s geopolitical aspects emphasize national security.[xii] China has viewed the BRI as “a strategy needed to support its growing economic might”.[xiii] The initiative involves developing six economic “corridors”, including a China-Pakistan corridor (CPC). Together, the six corridors “form a trade and transport network across Eurasia, laying a solid foundation for regional and transregional development plans”.[xiv]
Chinese President Xi Jinping said in January 2017 that more than 40 countries and international organizations had signed cooperation agreements. The BRI imitative now included 65 countries.[xv] The financial infrastructure for BRI is gradually taking shape. Already, more than $900 billion in projects are planned or underway.[xvi] The total worth of BRI projects was now $1 trillion. For China, the BRI would also serve to redirect the country’s domestic overcapacity and capital for regional infrastructure development to improve trade and ties with partner countries.
The BRI had achieved international recognition and was largely assessed as having progressed well despite some setbacks. China claimed the policy of the “Three Nos”: no interference in the internal affairs of other nations; no intention to increase the so-called “sphere of influence”; and no motive to strive for hegemony.[xvii] Having overbuilt in many domestic industries, China was now redirecting its capital abroad and its infrastructure investment projects now spanned the globe.[xviii] The Chinese economy had been stimulated by unloading from industrial overcapacity. The BRI financed infrastructure projects abroad also provided short-term employment, create some growth abroad, and cemented influence and ownership of Chinese assets in other countries. Over the past two years, China had generated huge momentum for BRI and its firms, mainly state-owned, had signed investment deals worth $171bilion. Significantly, China’s state-owned construction conglomerates have successfully ventured out into BRI nations. With these giants leading the build-transfer-operate schemes, smaller private enterprises have followed suit. The major achievements of the BRI were expected to be further highlighted at the coming two-day Belt and Road Forum for International Cooperation, which will be opened by President Xi on May 14 in Beijing. This summit would discuss what was expected to be the largest global economic program. Chinese Foreign Minister Wang Yi stated on April 21, 2017 that China was positive about the BRI in increasing mutual development and was willing to direct more energy into it. The BRI had become an important public good China was contributing to the world.
A total of 28 heads of state and government and UN secretary-general, World Bank president and International Monetary Fund managing director will attend the opening. Over 80 leaders from international organizations, 100 ministerial-level officials, as well as 1,200 delegates from various countries will also attend. China was expected to sign agreements with around 20 countries and 20 organizations at the event. The BRI was China’s most ambitious foreign economic development initiatives which was now the cornerstones of the country’s global trade policy. The BRI was also considered as one of the greatest achievements of President Xi.
The European Union (EU) was also cautiously welcoming BRI. The US, UK and other states have lately started to take cognizance of BRI’s tremendous transformative potential. Meanwhile, United States improved relations with China may prove beneficial to Pakistan. Earlier, prospects for China-United States relations had worsened with Donald Trump’s campaign rhetoric against China. Since then, the Trump administration had walked back, gradually, from its most extreme positions. United States Defense Secretary Mattis assured that the South China Sea disputes would have to be resolved through negotiations. Then President Trump acknowledged continued adherence to the One China policy. Finally, President Trump will not declare China a “currency manipulator” and had asked for China’s help on North Korea. Very recently, President Trump argued that: “President Xi was working to try and resolve a very big problem... North Korea…is maybe more important than trade”. [xix]
President Xi’s should offer Chinese participation in Trump’s plan to restore and modernize America’s aging infrastructure. China has the finance, expertise and recent experience to make a significant contribution. The Trump should also welcome China’s contribution.
Such cooperation on infrastructure may open the door to United States participation in the BRI. China has already invited United States participation in the project. It could be extremely lucrative for US corporations and industry. A first step in this direction may be active US participation in the BRI project. The Asian Development Bank and the World Bank are already financing some BRIC-related projects in Asia. American companies are also involved as equipment suppliers for power plants and financial, technical and legal consultants in various projects.[xx]
China was now taking pragmatic steps for realizing BRI. It was estimated that some $5 trillion was to be spent on BRI projects in the next five years. The BRI was now seen as a path towards global peace, stability and prosperity. [xxi] China’s size and trading status was quickly reshaping the economics and geopolitics of Asia. The global infusion of Chinese capital had fostered some geopolitical tension as well. Russia was obviously unhappy about losing preeminence in Central Asia, a region it had dominated for two centuries.[xxii] It was reasonable to claim that the BRI initiative would have a significant impact only over an extended period.[xxiii]
Why was China now pushing BRI? After three decades of rapid growth, China needed to seek new investment and trade opportunities beyond its borders and the BRI was addressing this predicament. The infrastructure projects China build in BRI countries will help absorb a sizable portion of the country’s overcapacity, and counter its economic slowdown. Also, China wanted to develop its frontier regions. For example, western China had often been troubled by tension between the financially-weak Uighur Muslims and China’s Han majority in Xinjiang province, economic development in the region could pacify the Uighurs and reduce ethnic conflicts. Overall, China wanted to consolidate its position at the center of the global supply and manufacturing networks which would be the key to the global economy over the coming decades.[xxiv]
The BRI was a bold move by the current Chinese leadership which was essentially bringing the country on the world stage as a rising global power with superpower ambitions. China was flexing its economic and political muscles in a manner not imaginable even two decades ago. The BRI does offer global corporations unmatched opportunities to exploit new markets in China itself, South and Southeast Asia, the Middle East, and Central and Eastern Europe. It had the potential to develop these regions through greater Chinese investments primarily in infrastructure which would increase trade substantially for the benefit of all participants. It was fervently hoped that the Trump Administration would take full use of the historic opportunity presented by BRI and partner with China to establish a new world order emphasizing economic development over military competition, armed rivalry, power struggle, and conflict. When established, this partnership can indeed change the world for the better. Let us hope for the best.
Dr. Sohail Mahmood is a faculty member at Oxford Higher Academy, UK and Professor & Board Member, Department of Political Science, Faculty UniVirtuelle, Methodologica Universitas.
[i] Belt and Road, http://beltandroad.hktdc.com/en/belt-and-road-basics, accessed May 3, 2017
[iii] “What to expect from Belt and Road Forum”, Xinhua, The State Council, Peoples Republic of China, May 1, 2017, http://english.gov.cn/news/top_news/2017/05/01/content_281475642425749.htm. Accessed May 1, 2017
[v] PRAVAKAR SAHOO, “Why the OBOR is a masterstroke for China”, Daily Mail, December 15, 2917, http://www.dailymail.co.uk/indiahome/indianews/article-3361660/Why-OBOR-masterstroke-China.html, accessed March 28, 2017
[vi] Zabihullah Mudabber, “Where Does Afghanistan Fit in China’s Belt and Road?”, The Diplomat, May 03, 2016, http://thediplomat.com/2016/05/where-does-afghanistan-fit-in-chinas-belt-and-road/
[vii] Financing of OBOR projects, The Star, April 30, 2017,http://www.thestar.com.my/news/nation/2017/04/30/financing-of-obor-projects/, accessed April 30, 2017 and “What to expect from Belt and Road Forum”, Xinhua, The State Council, peoples Republic of China, May 1, 2017, http://english.gov.cn/news/top_news/2017/05/01/content_281475642425749.htm. Accessed May 1, 2019
[viii] “What to expect from Belt and Road Forum”, Xinhua, The State Council, peoples Republic of China, May 1, 2017, http://english.gov.cn/news/top_news/2017/05/01/content_281475642425749.htm. Accessed May 1, 2017
[xi] Where Will China’s ‘One Belt, One Road’ Initiative Lead? Mar 22, 2017http://knowledge.wharton.upenn.edu/article/can-chinas-one-belt-one-road-initiative-match-the-hype/, accessed April 13, 2017
[xvii] HO WAH FOON, Belt-road changes world order, The Star, http://www.thestar.com.my/news/nation/2017/04/30/beltroad-changes-world-order-chinas-ambitious-economic-plan-is-set-to-draw-up-a-new-global-paradigm/, accessed April 30, 2017
[xix] For WH, North Korea Justifies Health Bill, China Policy, Duterte Visit, TPM,
By MATT SHUHAM Published MAY 1, 2017 10:47 AM
http://talkingpointsmemo.com/livewire/north-korea-currency-manipulation-health-care-duterte, accessed May 1, 2017
[xx] Munir Akram, “Rising dragon, wounded eagle”, Dawn, April 16, 2017
https://www.dawn.com/news/1327278/rising-dragon-wounded-eagle, accessed April 16, 2017
[xxi] http://nation.com.pk/columns/11-Apr-2017/the-chinese-belt-and-road-initiative, accessed April 11, 2017
[xxii] - William T. Wilson, Ph.D., is a senior research fellow in The Heritage Foundation’s Asian Studies Center. http://www.heritage.org/asia/commentary/chinas-huge-one-belt-one-road-initiative-sweeping-central-asia, accessed April 11, 2017