It’s 2013, Xi Jinping is delivering a speech in Kazakhstan1 in which he mentions a new economic belt going along the old silk road, the ancient corridor linking Asia to the European continent and the middle east for approximately 2,000 years. A month later he is in Indonesia2, talking about a “maritime road” to facilitate maritime trade by building new routes. These two sentences are the first mentions of his plan, its two main components are the “belt” composed of six corridors that go from china to different parts of the west; and the “road”, a chain of seaports that passes through most of the important straits and ports in the Indian ocean, stretching from Africa to the south China sea. This initiative is a composed of multitude of infrastructure projects in hopes of facilitating world connections to China. It has made many trade routes possible and economic growth is staggering in the region; however, the west is concerned and keeping an eye on the plan. So why do some see it an economic opportunity while others consider it a threat? This topic is interesting since it shows us how these investment projects are not at all strictly economic, but also have a political mission behind them. It is also relevant because it could be the driving factor of the end of the unipolar world we have today. In this study, I will begin by giving context to the BRI, then explain the risks it carries, and finally, the future of this initiative.

 

First, let’s tackle what the BRI is about: it is primarily a massive trade network, connecting Europe and Africa to china through central Asian ports, highways, power stations, bridges and railways, which can range from being built from scratch by China or upgraded through loans that are handed out to these countries. It regroups 2,600 projects3 in over a hundred countries that agreed to sign these projects, amounting to a two trillion-dollar plan that China calls a win-win for everyone. The world bank4 estimates that this initiative could lift 7.6 million people out of extreme poverty and could potentially boost global trade by 6.2%. So, this colossal project clearly isn’t only about trade, it’s also a political vision. Analyst Tom Miller5 calls it a “web of interdependence”, where China is the big player, forcing developing countries to trade with it. Many countries are eager to take China’s money, such as Djibouti, where China invested in all kinds of projects ranging from gas pipelines to railways to ports, investing 14 billion dollars6 between 2012 and 2020. Although this cooperative operation has its useful advantages, the risks are very much present, starting from corruption to dangerous debt. China is investing in some of the least democratic countries in the world, opening a door for corrupt politicians to take advantage of the inflow of money for personal benefit while plunging their countries into deep debt. For example, Djibouti’s debt to China amounts to over 70% of its GDP6, making the payback very hard, especially for a developing country. Sri Lanka, for example, couldn’t pay back the Chinese loan after the agreed time, and ended up signing a new deal that gave China absolute control of the port for 99 years7. This exact example is what the world bank8calls “debt distress”, debt traps that lock these vulnerable countries into vicious circles of payback, threatening their sovereignty. Many countries followed a similar path to Sri Lanka, most recently Laos: the country had to sell a big part of its electricity grid9 last year to make up for the huge debt owed to Chinese creditors. Laos’ level of debt to China amounts to 64.8% of its GDP10, this is including the 35.4% of GDP that is “hidden debt”, caused by corruption and kept off the balance sheets.

 

After many of these countries got in dangerous debt, western countries got involved. Typically, the west is creating investments and offering financial support towards developing countries. However, there are many conditions and ethical standards that must be met (such as the respect of human rights or the environment) for developing countries to receive Western aid, which is what sometimes incentivizes these countries to trade with China instead, requiring far fewer conditions and willing to offer much more money in loans. The western powers were involved during the last G7 conference11, especially the United States, setting out their own plan to compete against the BRI. They call it the B3W, standing for “Build Back Better World”, they are emphasizing what China lacks in its projects, values such as monetary transparency, environmental efforts, good governance and engaging the private sector into funding these projects.“Through B3W, the G7 and other like-minded partners will coordinate in mobilizing private-sector capital in four areas of focus—climate, health and health security, digital technology, and gender equity and equality—with catalytic investments from our respective development finance institutions” (White House statement12, 2021). But it is obvious that this plan is forced and rushed, with its main purpose being the westernized adaptation of the BRI. Furthermore, it lacks budget specifics and a clear plan. At first glance, it would look like the west is getting on track to increase development and promote its values, but the B3W is obviously just another area of competition between them and China, where the unipolarity of the world might be shifting. Today, many scholars discuss the question of where will developing countries head, Brett Bruen, president of the global situation room, poses the issue as two sides, one with developing countries casting their lot with China and its low demanding contract deals and autocratic approach of governing, and the other one with these countries siding with western democracy, reflecting the latter’s values on the big picture. Other scholars do not view this area of competition as a bad thing, another way to look at this contrast is that competition between the west and China could eventually lead to more growth-funding opportunities to those in need. Sanusha Naidu, senior research fellow at the institute for global dialogue, says that “The developing world has an agency and can decide for itself how it wants to engage in terms of development agenda”.

 

We can analyze the Belt and Road Initiative starting from the individual level, where Xi Jinping has a vision for himself, glorifying his personality and gaining the charisma and power needed to outweigh other global actors. Ever since he assumed office in late 2012, his utmost priority has been to legitimize his image. We can also say that his authoritarianism and autocratic way of rule helped him gain this label of emperor, willing to rule China eternally with an endless number of mandates. Meanwhile, because of his new approach to development by China and its trading partners, he is not only glorifying himself but also his country, which brings us to the state level of analysis: it is no secret that China made tremendous economic progress, creating millions of jobs and greatly. improving the tech industry. The initiative will most importantly benefit China by reorienting the world’s economy towards it, by building these corridors, the flow of goods to and from China is now easier than ever, countries around it trade freely with it and more efficiently than others in the west with America, bringing back the true incentive of the old Silk Road. It is also captivating political gains. Beijing could consolidate its power and exploit its financial size to align partner countries’ policies with its own, especially in some Asian countries that need better administration, good governance, and robust rule of law. With over a hundred allies, the inter-state level of analysis is emphasized by the partnerships the country has built over the past few years. Influence with others is prominent today, examples include the political pressure to cut diplomatic relations with Taiwan or keep the Uyghur genocide unmentioned by many countries. Finally, on the global level of analysis, China’s challenge to the west increases, outshining potential rivals on the world stage and highlighting its presence on the map as the center of world trade and economic structure. In the past two months, China’s exports to the world grew by 27% and similar growth numbers were seen last year, surpassing barriers such as the coronavirus pandemic, which minimally impacted the country where it originated. With fast recovery and positive management of the pandemic, China demonstrated the efficacy of its policies on the world stage.

 

What we can deduct from the study is that China’s growing influence is clearly challenging the power of the US, which has been the world’s only superpower for decades now. The BRI is simply China’s way of increasing leveraging power to become the global leader, however, it also connects all of the participating countries to one another by roads and ports, not just to China, which is essentially what the ancient silk road was about. It surely brings economic benefits to China but also allows for prosperity to all.

Moreover, it has ignited a global competition to provide infrastructure that will likely have a positive outcome for countries that need the investments and the projects, even if they have to be weary of forced attempts in ideological manipulation. By building relationships, constructing corridors, establishing values, and dominating strategic checkpoints, China is well on its way to control global trade.

 

 

 

 

 

 

Sources

1- https://www.nytimes.com/2013/09/08/world/asia/china-looks-west-as-it-strengthens-regional-ties.html

2- http://www.asean-china-center.org/english/2013-10/03/c_133062675.htm

3- https://www.refinitiv.com/content/dam/marketing/en_us/documents/reports/refinitiv-zawya-belt-and-road-initiative-report-2019.pdf

4- https://www.worldbank.org/en/topic/regional-integration/brief/belt-and-road-initiative

5- China’s Asian Dream – Tom Miller

6- https://www.france24.com/en/africa/20210409-djibouti-china-marriage-slowly-unravelling-as-investment-project-disappoints

7- https://www.ft.com/content/e150ef0c-de37-11e7-a8a4-0a1e63a52f9c

8- https://www.worldbank.org/en/news/press-release/2021/10/11/low-income-country-debt-rises-to-record-860-billion-in-2020

9- https://thediplomat.com/2021/03/laos-grants-25-year-power-grid-concession-to-chinese-majority-firm/

10- https://www.rfa.org/english/news/laos/china-debt-10012021161618.html

11- https://www.cfr.org/blog/g7s-b3w-infrastructure-plan-cant-compete-china-thats-not-point

12- https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/12/fact-sheet-president-biden-and-g7-leaders-launch-build-back-better-world-b3w-partnership/

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