The Belt and Road Initiative is the vanguard for Beijing’s reach for global power. It may not work, given all the imponderables of a project on this scale, not to mention conflicting interests with nations along its route. But at least the Chinese are showing the kind of social energy necessary to achieve great things. Do Americans still have that trait?
The state-owned press in China was all aglow about President Xi Jinping’s address to the G20 summit in Hamburg, Germany. Xinhua proclaimed how “Many overseas experts and scholars have praised” it. Towards the end of his remarks, President Xi brought up his pet project; recreating the ancient Silk Road that once linked Imperial China to Europe through Central Asia and the Middle East. He proclaimed, “Commitment of the Belt and Road Forum is highly compatible with the goal of the G20” and should be seen as part of a “new and inclusive globalization.” The Belt and Road Forum for International Cooperation had been held in Beijing, May 14-15. It attracted 29 heads of state (including Russian President Vladimir Putin) and representatives of 130 other countries (including the U.S.), plus the leaders of 70 international organizations, including UN Secretary-General António Guterres.
Called the “Belt and Road Initiative” (BRI), or the One Belt, One Road (OBOR) project, the plan (first mentioned in 2013) calls for China investing up to $4 trillion in infrastructure projects across Eurasia and Africa, crossing some 60 countries. How the first trillion will be used is already under discussion. The aim is to impose what President Xi calls a “common destiny for Eurasia” encompassing over half the world’s population. The Hamburg summit had as its theme “Shaping an Interconnected World,” which played directly into President Xi’s plan. He called on the G20 to “stay committed to building an open global economy.” Open, that is, to Chinese penetration; but no longer just to imports from factories “outsourced” to China from the West. Now the world is to be open to the capital earned from those trade surpluses so Beijing can buy up the remaining productive assets that have remained in Europe (and America). That is the path to expansion, wealth and power. Earn profits from productive activity, then invest the money into building – or buying more productive assets. Success breeds success. Nations rise and fall depending on whether they are acquiring assets or having to sell them to cover their losses.
From Trade to Investment: Success Breeds Success
According to the United Nations Conference on Trade and Development (UNCTAD), China’s foreign direct investment (FDI) increased 44% from $127 billion in 2015 to $183 billion in 2016. China led all other countries in FDI in developing countries. As the Belt and Road projects boost local economic growth, Chinese investors will be in a position to take advantage of new opportunities and further expand their FDI holdings. Beijing will want the largest share of the benefits its capital will generate as have past imperialists.
In the BRI scheme, state-owned banks will provide loans at low interest to developing countries to fund the building of roads, bridges, railways, sea and airports, communications and energy grids. Beijing founded an “international” bank, the Asia Infrastructure Investment Bank, which has attracted the participation of 56 countries with many more showing interest. This should, however, be seen as a cover for legitimacy; the real money will come from Chinese banks and corporations as another demonstration of the fortitude of state-capitalism.
Last February, Global Times, a media outlet of the Chinese Communist Party, argued that “The Belt and Road forum will project China, which supports globalization, as the ballast for the world economy in the face of rising protectionism in the West.” The “America First” program of President Donald Trump was mentioned, but there was also concern for policies in France, Italy and Germany. President Xi mentioned the danger of protectionism at the BRI Forum. If competition with the advanced economies will become more difficult, then China will look towards controlling the new assets being created in the developing world; pre-empting the rise of any future rivals.
Africa has long been a major focus of China as a source of oil and minerals (paid for by Chinese exports of manufactured goods), so can be seen as a prototype for the BRI. The lure has been almost irresistible to poor countries that have neither the skills nor money to create the core networks needed to become modern societies. In 2014, Vice Foreign Minister Zhang Ming talked about China-Africa cooperation as “a model of mutual complementarity. China and Africa are both at a critical stage of development. With different features and advantages, our economies are cut out for each other. China has mature, applicable technologies and equipments and relatively abundant capital. Africa, on its side, boasts great strengths in market size, labor cost and resources.” Called a “win-win” situation in Beijing, it is just the old “division of labor” common to imperialism.
There has been a backlash in Africa against a trade pattern than suppresses local industrial development and often brings in Chinese workers rather than provides skilled jobs to Africans. And, there is an effort to set up Chinese enterprises to control the distribution of exports down to the retail level to maximize the gains from trade. Chinese interest in African agriculture is also strong, setting off concern about food security as the Chinese buy up farm land and export harvests. As The Economist reported in 2015:
Africans are increasingly suspicious of Chinese firms, worrying about unfair deals and environmental damage. Opposition is fuelled by Africa’s thriving civil society, which demands more transparency and an accounting for human rights. This can be an unfamiliar challenge for authoritarian China, whose foreign policy is heavily based on state-to-state relations, with little appreciation of the gulf between African rulers and their people.
Economics and Geopolitics
Social Energy + Vision = Greatness
The Belt and Road Initiative is one of the most ambitious ideas of the modern age. It is truly transformative in its strategic vision. It could do great things in lifting millions out of poverty. The Asian Development Bank estimates there is an annual need for $1.7 trillion in new infrastructure across the region. China seems poised to provide the largest share of that, though there is still room for other powers to make their prescience felt as well. But will they?
In his landmark speech in Warsaw, Poland just before the G20 summit, President Donald Trump warned, “Today, the West is also confronted by the powers that seek to test our will, undermine our confidence, and challenge our interests,” then asked, “The fundamental question of our time is whether the West has the will to survive?” There seems to be a lack of collective vision in the West, and even in the United States, that can match President Xi’s drive to “make China great again” on a global scale.
The Belt and Road Initiative is the vanguard for Beijing’s reach for global power. It may not work, given all the imponderables of a project on this scale, not to mention conflicting interests with nations along its route. But at least the Chinese are showing the kind of social energy necessary to achieve great things. Do Americans still have that trait? How the 21st century plays out depends on the answer.
Full article: One world under China? Beijing rolls out BRI initiative; U.S. can’t agree on renewing its own infrastructure (World Tribune)