Amid growing rivalry between China and the United States, the polarization of assessments in the Belt and Road debate is becoming increasingly noticeable. Chinese officials and mainstream analysts insist on it being the path toward common prosperity and common development, while foreign critics see the Chinese project as a geopolitical tool.
The second Belt and Road Forum for International Cooperation (BRF) will be held this week in Beijing. This high-profile event, to be attended by 37 heads of state and government, 5,000 participants from 150 countries and 90 international organizations, is a good reason to reflect on the current status of China’s Belt and Road Initiative and its prospects.
More than five years have passed since the Belt and Road idea emerged in the fall of 2013. It became clear to the outside world that Belt and Road is aimed not only at promoting economic projects, but also at increasing China’s political influence and its capabilities in reforming global governance and the system of international relations. Although Beijing has consistently put the economic component at the forefront and denied any geopolitical motives, Western experts are increasingly criticizing Belt and Road.
Shortly before the opening of the Belt and Road Forum in Beijing, the Center for a New American Security, a Washington-based think tank, released a special report listing and analyzing the challenges faced by countries that agree to join China in the Belt and Road framework. Apparently, they will be threatened by the “erosion of national sovereignty” once Beijing takes control of the infrastructure projects located on their territory through equity arrangements, long-term leases or multi-year operating contracts. Chinese projects are described as obscure, their implementation contributing to the spread of corruption; the burden of Chinese loans is becoming unbearable for the debtors.
It is noteworthy that American experts have not overlooked the “geopolitical risk” of using Chinese technologies for the development of national telecommunications networks, because the equipment can be used for espionage. Obviously, it is becoming increasingly difficult to isolate America’s “concerns” about the interests of emerging countries from its policy of all-round pressure on Chinese companies to prevent them from becoming world leaders in telecom equipment production.
Amid growing rivalry between China and the United States, the polarization of assessments in the Belt and Road debate is becoming increasingly noticeable. Chinese officials and mainstream analysts insist on it being the path toward common prosperity and common development. Foreign critics see a geopolitical tool in the Chinese project. Last November, US Vice President Mike Pence declared that America would not “offer constricting belts or a one-way road” to Asian countries, explicitly hinting at China’s unacceptable plans. Trump’s special assistant, Garrett Marquis, called Belt and Road “China’s infrastructure vanity project.” The US military sees Belt and Road as a tool of strategic expansion, apparently fearing that cargo ports built with the participation of Chinese capital will turn into Chinese Navy bases overnight.
The growing controversy on Belt and Road is reviving the long-standing Western propaganda clichés such as the Chinese threat and the upcoming collapse of China. Some dub Belt and Road a Chinese Trojan horse, meaning it will mask the expansion of China’s regional influence and its military and political expansion. Others argue that Belt and Road is doubly dangerous, since it can pull into the debt trap not only its unlucky partners, but also China itself. Supporters of the impending collapse theory claim that in the future China will definitely face internal economic difficulties leading to political instability, so then China will give up on Belt and Road and its partners will be back at square one. Foreign media are increasingly reporting widespread discontent with expanding investments in Belt and Road projects in China, where citizens are demanding the money be spent on domestic development problems instead.
There are so many inconsistencies in Belt and Road assessments that one can hardly rely on a single analytical report or review without the risk of making a mistake or adopting someone’s one-sided position.
On the one hand, China allegedly has its partners by the throat with the help of loans and is taking away debtors’ property. On the other hand, the Chinese citizens apparently fail to appreciate this tenacious grip and consider the cost of Belt and Road unnecessary.
On the one hand, analysts point to the dissatisfaction of Eastern European countries that have placed more hope on cooperation with China in the 16 + 1 format. On the other hand, Italy’s signing a memorandum of cooperation with Belt and Road has made the rhetoric of Beijing using “new Europeans” for “splitting” the EU senseless. “Old” Europeans seem to be fighting for Chinese investment with an ever-increasing zeal.
The recent experience of cooperation between China and Malaysia is a vivid example of a quick change of emphasis. In 2018, after Prime Minister Mahathir bin Mohamad came to power, he suspended the high-speed East Coast Rail Link (ECRL) construction China was involved in, citing the unaffordable price of the project for Malaysia as corrupt motivation for making the deal in the first place. All this time, the story has served as confirmation for critics that Belt and Road was a lame investment.
However, in mid-April the Malaysian authorities said they had bargained with the Chinese side and negotiated a one-third price cut, so the construction would continue. Now, critics are happy that Mahathir “beat” China. This is indeed a significant concession. But it is also a precedent that showed that you can bargain with China and negotiate favorable terms. Foreign analysts are looking forward to seeing all partners act the same way, so China will have no profit and will go bankrupt on the Belt and Road projects.
But then, where does the debt trap label go? Anyway, in this case, one has to recognize that it is not about geopolitics, but about the skill of watching one’s money and defending one’s business interests. China always insists that countries unable to repay loans should not enter into large infrastructure projects with it.
Foreign experts often compare Belt and Road to the American Marshall Plan. After the end of WWII, the Americans provided substantial assistance to destroyed Western Europe so that it could return to economic growth. But their main motive was to prevent the spread of Soviet influence on the European continent.
Although Belt and Road also combines political and economic motives, this comparison looks superficial and far-fetched. The point is not only that Belt and Road offers development opportunities to countries that are not targets of geo-economic competition, which have no other source of investment. The most important difference is that post-war Europe had a vivid memory of what an efficient market economy was. For all the devastation and losses, they still had the institutions, legal regulations and the educational system. China’s Belt and Road extends to where roads and factories still have to be built, institutions need to be created and governance must be drastically improved. It is a long-term task that requires patience and perseverance; the Chinese experience should be of use here.
Belt and Road is not a charity project. And the West has no reason to hold a grudge against China for launching this initiative. The American authorities officially spent about $2 trillion on the wars in Iraq and Afghanistan; according to other estimates, this amount may be two or three times greater. These huge expenses have failed to bring prosperity or stability to emerging countries. China would use the money to give Asian countries a real chance at development.
It is possible that in the future, China and the West will learn to cooperate. This will reduce foreigners’ outrage at the lion’s share of Belt and Road contracts going to Chinese state-owned companies. If the Chinese side shares and attracts Western firms as developers of feasibility studies, technology suppliers (including environmental protection technology), subcontractors, or even contractors, there will be fewer reasons for criticism, and the positive image of Belt and Road abroad will predictably strengthen.
But it is much more likely that America will come up with a new Marshall Plan to counter the expansion of China’s influence in the 21st century, the same way that the US resisted the Soviet influence in the 20th century. This is where the current US administration is heading; and they attach such great importance to the use of international development assistance. However, the potential size of this financial aid is about $60 billion – roughly about the size of China’s investment in the China-Pakistan economic corridor. It is a significant part, but still only a part of China’s investment in Belt and Road. With such limited resources, the Americans are unlikely to replicate the success of last century’s Marshall Plan. The talk about high-quality Western investment compared with Chinese outlays does not help.
Russia has the opportunity to independently form a cooperation strategy with China as part of the Belt and Road project. With the Western sanctions in place, it can’t hurt to get Chinese cargo transit as a source of income and to build roads with Chinese money. The coordination of the Chinese initiative and the Eurasian Economic Union will establish transport corridors involving many countries coordinated by the EAEU governing bodies. In the future, cooperation between China, the EAEU and the EU can become an important factor in the joint economic development of the entire Eurasian continent. Kazakhstan and Kyrgyzstan are already inside the coordination space; SCO mechanisms could be possibly used to coordinate infrastructure and investment plans with other post-Soviet countries in the region.
China shows that it is ready to compromise. It can offer significant discounts, as was the case with Malaysia. It is willing to take into account the world community’s concerns about debt issues and environmental protection related to Belt and Road.
Meanwhile, the outside world, including Russia, should recognize that Belt and Road is not going anywhere and will be with us for a long time anyway. The Chinese model is quite stable, and therefore the role of Chinese state-owned enterprises in this project will be much greater than liberal economy supporters would like it to be.
The Chinese say people should not refuse food for fear of choking. This also goes for the development of an approach to Belt and Road. Only, one should not mindlessly put anything in their mouth.