BELT AND ROAD INITIATIVE

Introduction

Since becoming president of The People’s Republic of China (PRC), Xi has added an enigmatic dimension to the Chinese policy outlook. During his eight-year rule, he has consolidated his position at the helm of Chinese politics and altered institutionalised mechanisms in the Communist Party of China’s (CPC) functioning. Considered one of the most decisive Chinese leaders since Mao Zedong (founder of the PRC), Xi’s role in Chinese and international history books has been written.

Having etched his legacy in the CPC and Chinese constitutions, Xi is now looking at an unprecedented third term which is expected to be finalised at the 20th National Congress towards the end of 2022. As such a hallmark election draws close, emphasis on the Belt and Road Initiative (BRI) —widely touted as Xi’s ‘pet initiative’— emerges fast and strong. The ambitious infrastructure connectivity venture will continue to remain the embodiment of Xi’s economic statecraft. Hence, for understanding the upcoming direction of Xi’s BRI, an extensive analysis is needed.

Xi has utilised the BRI momentum in the international landscape to solicit domestic political obedience which suggests that a failure of BRI can possibly lead to disastrous implications for Xi’s standing within the CPC, and the Chinese society. BRI has attracted criticism on many issues in recent years. Several nations have shown concern over the massive debt that Chinese investments bring with them leading to debate over the Chinese ‘debt-trap diplomacy’. Several state and non- state actors have also voiced dissatisfaction with the disregard shown by the BRI-related activities in areas of human rights, labour rights, environmental sustainability, and inclusive development. The Western countries led by USA have united in raising concerns over the rising Chinese foothold in global markets and have started scrutinizing the Chinese investments and their implications more closely, with the coming years proving to be decisive for the mammoth initiative.

In many ways, BRI reflected Xi’s overt manifestation of the next step in China’s foreign policy outlook that involves moving away from Deng Xiaoping’s ‘hide your strength, bide your time’ policy. Seizing the opportunity created by the aftermath of the 2008 financial crisis, BRI was readily accepted and earned Xi many partners across continents. These partners were lured by Chinese investments, having been neglected by Bretton Woods alternative. Others saw China’s rising position in the global geopolitical, geo-economic and geostrategic spheres as inevitable, thus deciding to board the sailing ship. However, there lies a possibility of a united opposition emerging through concepts like the G7’s ‘Build Back Better World’ (B3W) and EU’s Global Gateway strategy therefore Xi is expected to face challenges in taking the BRI forward. Against this backdrop, BRI’s ultimate objective for Xi and a BRI beyond Xi needs to be evaluated.

BRI: Cornerstone of CPC and Xi’s ‘Chinese Dream’

The rise of Xi as PRC’s president in 2013 brought with it the BRI vision. First highlighted in a September 2013 speech in Kazakhstan, envisioning the Silk Road Economic Belt, the idea was expanded next year in Indonesia, with a 21st century Maritime Silk Road. Since then the initiative has transformed into a project conceptualised with six overland economic corridors (Mongolia- Russia, Eurasia, Central-West Asia, Pakistan, Indian-subcontinent, Indochina), and three blue economic passages (China-Oceania-South Pacific, Europe-Arctic, China-Indian Ocean-Africa- Mediterranean). Further, new concepts like the Digital Silk Road, Silk Road in Outer Space, Polar Silk Road and a Health Silk Road have been added making BRI an all-encompassing foreign policy framework.

BRI is summarised by Xi as an approach to actively promote international cooperation through infrastructure, trade & finance and people-to-people connectivity and thus, build a new platform for international cooperation and shared development. As an infrastructural development project, BRI mainly manifests itself in initiatives in the domains of transportation connectivity (rail, road, and sea); energy security (renewable, non-renewable); information technology and communication (telecom, 5G, cyber infra, etc.); and financing. BRI’s overarching scope also includes substantial soft projects with economic and geopolitical implications, such as tariff agreements, special economic zones, currency swap agreements, free trade agreements, and promoting Chinese culture and values among partner nations.

Although, built around a narrative of ‘peace and development’, based on aspects like people-to-people exchanges, uninterrupted trade, financial integration and policy coordination, the BRI is argued to be a framework for fabricating a Sino-centric world order with China as the hub, and its partners as spokes. So far 144 countries have joined BRI from across continents. Xi has forwarded BRI as a way to ‘move towards a community of common destiny for embracing a new future’. In reality, BRI remains a highly centralised project with Xi at the top.

While BRI now looks inseparable from China’s foreign policy discourse, it has also assumed a vital place in the domestic political dynamics. According to a report from the Organisation for Economic Cooperation and Development (OECD), mutual benefit is a feature of BRI that will ‘help develop markets for China’s products in the long term and to alleviate industrial capacity in the short term’.

In many ways, the BRI initiative is the map towards achieving Xi’s ‘China Dream’, explained by Xi’s ideology as having two main objectives- making China a ‘moderately well-off society’ by 2021 and making China a ‘fully-developed nation’ by 2049. Therefore, achieving the China Dream depends on BRI’s success.

BRI for Xi and CPC

What started as regional cooperation between China and Central Asian Countries in 2013 turned into a mega amphibious economic project that entails the Silk Road Economic Belt and the Maritime Silk Road. While announcing the BRI project, President Xi described it as a “community of like-minded nations—united by geography, principles of sovereignty, and the common enemies of terrorism, extremism, and separatism that would come together to form a more cohesive bloc”. The modus operandi behind the project lies in stark contrast to Deng Xiaoping’s dictum of taoguang yanghui, that advocated keeping a low profile on the international stage and avoiding involvement in faraway issues. BRI in tandem with China’s politico-military interface with the rest of the world, makes this shift evident. Regarding President Xi, BRI shows his confidence, audacity and ambition to embark on a grand strategic transformation aimed towards the great rejuvenation of the Chinese nation through a combination of soft power (economic loans and infrastructure projects) and hard power (border assertion tactics during Xi’s presidency) policies.

Xi was appointed the title of ‘core leader’ by CPC, becoming only the fourth leader to be given the title. In another historic feat, Xi’s thought “Socialism with Chinese Characteristics for a New Era” was instituted in the two constitutions, making him only the third leader after Mao Zedong’s Thought and Deng Xiaoping’s Theory to receive this honor. Xi has been able to gain power and legitimacy to embark on the world stage by an authoritative leadership that often resorts to nationalism and periodic military confrontation at borders. External instability to pacify internal dissension is an old tactic in China’s rulebook. Scholars have pointed out that Belt and Road initiative provided an opportunity for Xi to demonstrate his international leadership potential, thereby justifying the end of terms limit for the Chinese president at the nineteenth National Congress of the CCP in 2016.

Through BRI, Xi also intended to convey to the West that China, under his leadership, is the champion of global trade. At the first BRI Forum summit, Xi emphasised that global growth and economic development will flourish under the leadership of China. Since the second Belt and Road Forum, also described as BRI 2.O, Xi has instituted fundamental changes in principles driving the investments under BRI. Analysing the experience and criticism over past years, BRI now includes qualitative expressions such as “quality development”, “innovation,” “science”, “green”, “multilateralism” and “sustainability”.

Further, analysing the risks posed by a growing consensus towards competing against the BRI, Xi has sought to refashion his initiative. In a white paper released in January 2021, China pushed the need for BRI to incorporate the paradigm of development cooperation based on mutual assistance between developing countries. Xi seeks to advance new areas of cooperation like low-carbon development, cross-border e-commerce, and pandemic control. The same reflects his bid to reach out to the BRI partners with a softer approach. This new approach for propounding a softer, more considerate Chinese image is exemplified in the recent publications of the Chinese media that emphasize new developments such as animal passes being incorporated in BRI projects; BRI being a project for ‘south-south cooperation’; and the creation of more than 110,000 jobs for the Lao people during its construction.

At the 19th National Congress of the Communist Party of China held in 2017, the promotion of the Belt and Road Initiative (BRI) was included as one of the major future objectives through an amendment to the Party’s Constitution. The amendment was particularly significant as the BRI was no longer solely an economic initiative, China’s external engagement policy or leader specific programme. Rather it became a ‘Chinese State Strategy’ linking it intrinsically to domestic political and international outlooks. The amendment also manifests the importance of communism for the Chinese state linking it organically with future objectives. Further, it signifies that BRI will continue to be a long-term national project even after Xi’s presidency. BRI also advances CPC’s narrative such as ‘building a community of shared interest’ and ‘shared growth’. The project can be seen as a step towards establishing a China-centric world order. Granting constitutional status to BRI has addressed domestic and political factionalism which grants overriding powers to CPC in terms of its implementation. This modus operandi exemplifies the notion, “CPC is the country and Xi is the party- BRI strengthens the position of both”.

Economic engagement and degradation

Issues with BRI Project: The Belt and Road Initiative is aimed towards building a massive economic, financial and infrastructural ecosystem that stretches from East Asia to Europe, financed by Chinese state-owned banks. China, with its low-interest loans, is luring developing countries globally. These countries possess little capacity to meet the later debt requirements and lease their national assets, making them fall into a debt trap. Such an economic approach is called Debt Trap Diplomacy. Sri Lanka is the latest partner who has fallen prey to the Chinese debt trap as it has leased Hambantota port for 99 years to China. Sri Lanka’s example is one of the many unsustainable infrastructural investments that China has made under BRI. The list of all unsustainable projects and the resulting instability is listed in table below. In this regard, it is important to analyse why these projects are facing such negative responses when they are implemented practically. It was observed even before the advent of COVID-19 that Chinese high- profile projects under BRI were unsustainable because countries started struggling to pay off their debts. To pay the debts, they resort to more debts or are coerced towards leasing important national assets. 

 Table 1: BRI projects facing problems across continents

As evident from Table 1, BRI projects cross-continentally are facing immense trouble. Several reasons can be attributed for the failure of the BRI projects globally. Most of the countries welcomed Chinese investments initially because they were in desperate need of economic stimulus and were lured by infrastructural grandstanding by China. These countries included Pakistan, Sri Lanka, Djibouti, Malaysia and Cambodia. China’s investment pattern and construction of infrastructures is the primary cause of resentment. Along with Chinese investment, Chinese workers also make inroads in the region. This creates a general conflict between locals and Chinese workers. Environmental concerns and land grabbing are issues that further hinder the sustainability of the projects. Long-term sustained financial commitment is an important challenge for China as most of the finances are coming from Chinese state-owned financial institution rather than the private sector. With countries defaulting on debt payment, requesting for restructuring of loans, and seeking to reduce the number of investments, Chinese financing institutions may face economic strains. A study on the BRI discovered that corruption, labour violations, pollution and public protests affect 35% of Belt and Road projects. Capitalising on the opportunity, global powers such as the United States of America, Japan, and European Union have started launching alternatives to BRI.

International Responses to BRI

As a counter to the overwhelming expansion of BRI, supplemented by a wide array of criticism regarding the sustainability of the projects under it, global powers have started launching their versions of extensive economic engagement plans. This section divulges into the responses explicitly.

Japan inaugurated the ‘Partnership for Quality Infrastructure: Investment for Asia’s future’ for quality infrastructural investment. This initiative is based on the four pillars of expansion and acceleration of assistance through full mobilisation of Japan’s economic cooperation tools; Collaboration between Japan and the Asian Development Bank (ADB); Measures to double the supply of funding for projects with relatively high-risk profiles by the enhancing the functioning of the Japan Bank for International Cooperation (JBIC); and promoting “Quality Infrastructure Investment” as an international standard. Despite acknowledging that Japan cannot confront the massive Chinese BRI, Shinzo Abe made his country adamant enough to fill any gap that is visibly clear to the beneficiaries of BRI. Gradually, as the unsustainability of BRI projects became evidently visible, Japan picked up the thread from a qualitative aspect and envisioned filling Asia’s infrastructural gap through their gold standard investment. For Japan, ‘quality investment’ means considering a wide range of factors when making investment decisions, including environmental and social impact, debt sustainability, the safety and reliability of the construction, and the impact on local employment and technical expertise. As attempt to reinforce its own version of infrastructural development vision, former American president Donald Trump signed the Better Utilization of Investment Leading to Development (BUILD) Act. The act with its 60 billion portfolio investment aimed towards establishing the United States International Development Finance Corporation (USIDFC) to streamline developmental finance. The Biden administration along with the G7 partners unveiled the Build Back Better World (B3W) initiative to embark upon a chain of infrastructural developments across continents as an answer to the Chinese BRI.²¹ The B3W is an initiative for meeting tremendous infrastructural requirements in low- and middle-income countries focusing primarily on climate, health security, digital technology, and gender equality.

The European Union came up with the ‘Global Gateway’ initiative as a counter to the BRI. The Global Gateway strategy will boost smart, clean and secure links in the digital, energy and transport sectors in a bid to strengthen health, education and research systems across the world. For this, the EU members and institutions will mobilise approximately 300 billion euros between 2021- 2027, for investment in infrastructure development. In an attempt to address recipient resentment against the BRI, the ‘global gateway’ initiative promises to deliver sustainable and high-quality projects, taking into account the needs of partner countries and ensuring lasting benefits for local communities.

The Blue Dot Network was launched by Australia, Japan and the United States of America to promote sustainable infrastructure development around the world. The Blue Dot Network will audit and certify quality infrastructure projects based on criteria such as quality infrastructure investment that is open and inclusive, transparent, economically viable, Paris Agreement aligned, financially, environmentally and socially sustainable, and compliant with international standards, laws and regulations. India came up with its own initiative termed as the ‘Security and Growth for All in the Region (SAGAR)’ project, which attempts to integrate countries in the Indian Ocean Region through maritime cooperation. Along with SAGAR, the Indo-Pacific Ocean Initiative (IPOI) is another partnership of like-minded nations launched by New Delhi. The initiative aims towards wealth creation, welfare promotion and cooperative win-win strategies. These projects along with Indian domestic policies such as Bharatmala, and Sagarmala, provide solid internal logistical support to India’s grandstanding externally.

BRI: Post Xi’s tenure

The Belt and Road Initiative has been a cornerstone of Xi’s ‘Chinese dream of national Rejuvenation’. It came as an outcome of a recognition among top leaders of CCP that underdevelopment and inequality is the root cause of social instability. However, the momentum and infrastructure driving BRI have existed for decades. Much of the expertise and infrastructural base for BRI was already in existence. Beyond the ancient Silk Routes, the Great Western Development strategy, which was an effective culmination of the ‘double opening’ strategy and ‘Kunming Initiative’, had already envisaged the connectivity between interiors of China and abroad. The infrastructural base created under the Double opening strategy has been utilised for New Eurasian Land-bridge, the China-Central Asia-West Asia Economic Corridor, and the China- Pakistan Economic Corridor under the BRI. Likewise, the Kunming Initiative had become the basis for the Bangladesh-China-India-Myanmar Economic Corridor, the China-Indochina Peninsula Economic Corridor, and the more recently announced China-Myanmar Economic Corridor.

The relevance of BRI post Xi can better be articulated by posing questions such as what the driving forces are, who are the policy supporters, and what interest groups are involved in the BRI process. The extensive web of BRI reflects competition, lobbying and compromises among state-owned enterprises, provinces and ministries. Research findings suggest that domestic economic crises and fragmented bureaucracies are equally responsible for its emergence. Unlike the general understanding, the BRI is more than individual leadership. Prior crises in the Chinese economy played an equally important part in its emergence. Although President Xi has successfully projected BRI as a signal to China’s rise to great power, the project is essentially an effort to alleviate China’s most pressing problem of domestic industrial overcapacity, and also huge foreign currency reserves. To optimally utilise these reserves and to overcome domestic economic woes, state-owned enterprises spearheaded the campaign to invest massively in middle and low-income countries as the domestic opportunities declined.

There is no denying that Xi pushed the campaign with great vigor and conviction. He used it to advance China’s ambitions politically. Xi utilised BRI to project his authority as a necessity for Chinese great power ambitions and in process made himself an unparalleled leader. This is evident by removing term limits on the Chinese presidency that effectively guaranteed him being president for life. Hence, Belt and Road Initiative is not newfound idea that can solely be attributed to President Xi Jinping. Therefore, the fulcrum on which the BRI is based was already in existence. Xi has only utilised it to project the idea on a psychological level, both domestically and internationally. Hence economic complications and campaigns go beyond Xi’s presidency.

Factionalism in CPC on BRI

As it is evident from the above arguments, economic stability in China is paramount for the survival of BRI and Xi’s aim of guiding the Chinese economy from rapid to high-quality growth. However, in the Chinese ‘Party-State’ led by CPC, economic disruption and stability is directly linked to the Chinese political dynamics. Xi’s institutional maneuvering to tighten control over CPC functionaries and their corporate affiliates have led to further dissents and factions within the party. The ongoing anti-corruption campaign since Xi’s consolidation of power was reinforced institutionally in 2018, via the formation of an anti-corruption body called National Supervision Commission (NSC). The NSC will supplement the already existing antigraft body, the Central Commission for Discipline Inspection (CCDI) established by the Communist Party. Ruthless anti-corruption campaigns against party members and corporate super-giants have created discontent within and outside the party. Since 2018, campaigns against corporates and their political aides has led to nearly 40,000 supposed criminal syndicates and corrupt companies being convicted, with more than 50,000 Communist Party and government officials punished for abetting them. The CCDI has investigated and punished more than 4 million cadres which includes 500 senior officials. However, the campaign has been accused of targeting dissenting officials and well-functioning corporates which are critical of the Chinese political leadership. Xi’s excessive emphasis on a personality cult and undermining of the CPC’s institutional structures and conventions (through constitutional amendments) has brought him into conflict with political, bureaucratic and business interests.

Conclusion

The Belt and Road Initiative is not just a personality led program that is doomed to see its demise along with Xi’s personality cult. It is an efficient synthesis of the decade old economic reform process started by Deng Xiaoping and led by leaders like Jiang Zemin and Hu Jintao. Although Xi Jinping has added great vigour and intensity to the infrastructural campaign linking it inextricably to Chinese great power ambitions, its genesis however still lies in the domestic economic woes and the infrastructural overcapacity. Apart from the domestic economic issues, the increase in external assertion may spill over to the economic landscape and cost Beijing dearly. As mentioned, the responses to BRI represent an overt expression of unease among other powers. If successful, these initiatives will have significant implications for BRI. However, at the moment, the National Party Congress and Xi’s political fate has attracted the attention of scholars across the globe. With the 20th National Party Congress being scheduled later this year possibly leading to questions around Xi’s leadership, the CPC also faces challenges which could have direct and indirect implications on the ambitious Belt and Road Initiative.