Briefing Outline

Topics Covered

• Economic Background

• China’s Debt Diplomacy

• China’s International Investments

• What Does China Hope to Achieve? 

  • The Modernization Vision

  • The ‘Common Destiny’ Vision 

  • What Are The Potential Roadblocks?

• International response

  • United States

• Other countries

  • India  

  • Japan 

  • Europe

  • Russia

• Conclusions 22​

 

Intro:

 

China’s Belt and Road Initiative (BRI), or the so-called New Silk Road, is one of the most ambitious infrastructure projects ever. In 2013, during his official visits to Kazakhstan and Indonesia, President Xi announced the initiative. The plan was two-fold: the Maritime Silk Road and the overland Silk Road Economic Belt. Initially, they were collectively referred to as One Belt, One Road Initiative but later became known the Belt and Road Initiative (CFR.org, 2020).

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Xi’s vision encompassed creating an extensive network of highways, railways, energy pipelines, and streamlined border crossings, both southward to Pakistan, India, and the rest of Southeast Asia and westward—through the mountainous former Soviet republics. According to Xi, such a network would expand the international use of Chinese currency, the renminbi, and “break the bottleneck in Asian connectivity.” (The Asian Development Bank estimated that the region faces annual infrastructure financing shortfall of almost $800 billion.)

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Besides physical infrastructure, China is planning to build fifty special economic zones modeled after the Shenzhen Special Economic Zone-which was launched in 1980 during its economic reforms under leader Deng Xiaoping. Xi subsequently announced plans for the 21st Century Maritime Silk Road at the 2013 summit of the Association of Southeast Asian Nations (ASEAN) in Indonesia. To accommodate expanding maritime trade traffic, China would invest in port development along the Indian Ocean, from Southeast Asia to East Africa and parts of Europe (CFR.org, 2020).

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The ultimate goal of the BRI is two-fold: develop the Chinese economy’s resource base by improving overland connections and expanding economic capacities in BRI countries and, at the same time, significantly expand China’s economic and political influence. On the face of it, China’s colossal infrastructure investments are supposed to aid in the growth of economies and trade in Asia and beyond. But skeptics think that China is laying a debt trap for borrowing governments. Some experts view the project as an unsettling extension of China’s rising power. The opposition has grown in some countries as the costs of many of the projects have skyrocketed.

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Meanwhile, the U.S. shares the same concern as some countries in Asia that BRI could prove to be a Trojan horse for regional development and military expansion by China. Under President Donald J. Trump, Washington has raised the alarm over Beijing’s actions, but it has struggled to offer governments in the region a more appealing economic vision (CFR.org, 2020). The Chinese leadership views BRI as a way of both legitimizing China’s model of government and economic development to the rest of the world and positioning China as the leader of alternative new world order from the one authored by the U.S. after 1945 (The Conversation, 2020).

 

BRI is composed of six economic corridors. China’s development model views development in terms of economic corridors. Infrastructure investment along the BRI is concerned with six economic corridors covering enormous energy and resource-rich parts of the world (OECD, 2018):

1. New Eurasia Land Bridge: involving rail to Europe via Russia, Kazakhstan, Poland, and Belarus.

 

1. Russia, China, Mongolia Economic Corridor: including railway links and the Steppe Road— this will link with the land bridge.

2. Central Asia, China, West Asia Economic Corridor: linking to Kazakhstan, Kyrgyzstan, Turkmenistan, Uzbekistan, Tajikistan, Iran, and Turkey.

3. China Indo-China Peninsula Economic Corridor: Vietnam, Thailand, Cambodia, Lao People’s Democratic Republic, Myanmar, and Malaysia.

4. China-Pakistan Economic Corridor: Xinjiang Province will be the most affected. This vital project links the landlocked Kashgar city (free economic zone) in Xinjiang with the Pakistan port of Gwadar, a deep-water port used for commercial and military purposes.

5. China, India, Bangladesh, Myanmar Economic Corridor: This is likely to move more slowly due to mistrust over security issues between India and China.

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Continued at the briefing.