The concept of One Belt and One Road (OBOR) was first introduced by President Xi Jinping in 2013. It is a grand vision requiring vast investments to connect the continents of Asia, Europe and Africa via land (roads and railroads) as well as by sea lanes (ports in Pacific to Indian Ocean) to facilitate commerce traffic among nations along the Belt and Road. China quickly formulated a formal plan after receiving some welcome messages from neighboring countries, thus OBOR has also been known as the Belt Road Initiative (BRI). The BRI project has drawn more than 60 countries to show interests or participate in its plan. However, the BRI project has also drawn some criticisms from countries either reluctant to join this project or acting out of political considerations.
Nadege Rolland, a Senior Fellow for Political and Security Affairs at the National Bureau of Asian Research, has published an essay, Reports of Belt and Road’s Death Are Greatly Exaggerated - Don’t Underestimate China’s Resilience, in Snapshot, Foreign Affairs, January 29, 2019. In this paper, the author cited that the Chinese intellectuals had expressed concerns about BRI’s wasteful spending and overstretches. The author also correctly pointed out that several governments that were initially enthusiastic about Chinese investment had later faced popular backlash to the terms of the loans and the potential for corruption. Some other observers have claimed that the Chinese leadership has failed to understand the dynamics that have led other countries to push back thus it may make China’s project of the century to eventually become a fiasco.
Nadege has cited some outdated information as follows: In 2015. Indonesia and Thailand both discontinued high-speed railway projects underwritten by China because of differences in financing and land acquisition. (both projects are still alive as of late 2018) In 2017, Bangladesh decided to work with Japan reneging her agreement with China to build her first deep-water port.(China won a $3.1B contract to build a 120km/hr railway connecting the capital Dhaka to Jessore) Nepal also canceled a deal it had struck with China to build a hydropower plant. (Nepal granted China, Gezhouba Group Corp, a $2.5 B Hydropower Plant Project in Fall 2018) The government of Sri Lanka had borrowed heavily from China to build its Hambantota port. By the end of 2017, the port had failed to pull in sufficient traffic to pay its debts. The Sri Lankan government decided to cede the port to China for 99 years which was used by critics to questionChina’s intentions and to warn small countries about such a “debt trap”. In fact, the planning and negotiation of these mega projects do require years to mature, sometimes going through government leadership changes.
In May 2018, Malaysia’s newly re-elected prime minister, Mahathir bin Mohamad, wanted to renegotiate his country’s high speed rail contracts with China, describing them as “unequal treaties”.(Malaysia Foreign Minister Saifuddin Abdullah said in February, 2019 that the project is in the last mile talks to be revived.) The Maldives, Myanmar, Pakistan, and Sierra Leone soon began to reconsider the scale and scope of their cooperation with China. Obviously inspired by the concept of BRI, other potential investors formed the Asia-Africa Growth Corridor, signed by African countries, India, and Japan, in May 2017 and the European Union also unveiled a plan for investing in Asia’s infrastructure. These alternatives including the U.S. participation will compete with China in supplying local governments with alternative financing.
I agree to Rolland’s conclusion in his paper that one cannot write off China’s BRI, although he offered no concrete evidence. Thus it is useful to review the achievements in BRI and make a projection for its future. First, the BRI Plan is a broad comprehensive world development plan; it not only will benefit China but also will benefit all its participating countries. The BRI initiative consists of five strategies (policies, infrastructure, investment and finance, communication and cultural exchange) to make the project successful. Coordination of political policies with participating countries takes first priority. Up to now, China has signed 103 documents of collaborative directives with 88 countries. China also has presented the BRI Initiative at various international conferences including UN conferences and its own first summit meeting in 2017 where policy matter and strategies were discussed, making BRI and its policy transparent. Hence, 88 countries have climbed on board of the BRI. In Xi’s trip in March 2019 to Europe, Italy, Monaco and France, China has pleasantly signed up Italy to BRI. Italy Prime Minister, Giuseppe Conte, will personally attend the Second BRI Summit in Beijing in April.
Infrastructure construction and investment programs are the key aspects of the BRI. In these strategic areas, the achievements speak easily for their successes, hence wide acceptance by the world. China-Lao railroad, Yaji rail, Kenya’s Munne rail (its extension to be open in May, 2019), YaWan high speed railroad and Hungarian railroad and Gwadar Port and Port of Piraeus have all progressed well. Up to mid 2018, there were 9000 rail transport routes connecting Russia, Germany, Poland, Spain,11 nations and 29 cities with eight provinces and major cities in China internally linked. (Xinjiang, Shanxi, Gansu, Sichuan, Chongqing, Shanghai and Zejiang ) Over all, China has contacts with more than 600 ports and 200 countries and territories maintaining her world number one position in volume of shipping. China also has automated the YangsanPort in Shanghai with higher efficiency. In air transportation, China has signed agreement with 62 BRI nations, established direct flights with 45 countries and elevated Guangzhou, Shanghai and Beijing as world’s major airports. China also has invested $91.2 billion in electric utilities inBRI countries.
The commerce, communication and cultural activities followed the progress of infrastructure and investment programs closely. China has been effectively driving their achievements and presenting them proudly in various conferences and at her biennial BRI Summit. The 2017 Belt and Road Forum for International Cooperation, or BRFIC was held on May 14–15, 2017 in Beijing, which drew 29 foreign heads of state and government and representatives from more than 130 countries and 70 international organizations. Xinhua reported the purpose of the summit as building "a more open and efficient international cooperation platform; a closer, stronger partnership network; and to push for a more just, reasonable and balanced international governance system.” In the West, CNN reported the meeting with a headline "China's new world order" and the Los Angeles Times ran an article "Globalization 2.0: How China's two-day summit aims to shape a new world order".
The outlook of BRI can be predicted from its Summit meetings. The 2019 second BRI Summit will be held in Beijing in the second half of April, expecting to be bigger and richer in substance. So far, Russia, Philippine, Malaysia and Italy, their head of states have already committed to attend. An introductory exhibit will be shown in Xian in this month. The stock market responded positively to the BRI Summit in 2017. Likewise the stock market anticipating a successful 2019 BRI Summit has displayed excitement with ten stocks entered trading halt on March 20th and nine on March 21st. Foreign Minister Wang Yi’s visit to Africa (February) and President Xi’s visit to Italy, Monaco and France in March will drum up more attention to the BRI Summit in April as well as the Silk Road Expo scheduled to be held in Xian in May. We shall certainly get a complete progress report on the BRI Summit but there are enough score cards already for us to predict the outlook of the BRI. (To be continued in Part II)
RSS Feed