Strategic implications of China’s Belt and Road Initiative too big to ignore
31 Aug 2018|

Now five years into its existence, China’s Belt and Road Initiative (BRI) appears to be attracting both new supporters and opponents on a daily basis.

Included among the former is Papua New Guinea, which in June joined more than 70 countries Beijing already counts as formal participants in a plan whose centrepiece is potentially trillions of dollars’ worth of new infrastructure investment.

In the latter category it now seems safe to locate the governments of Australia, the United States and Japan, which last month backed their often oblique but persistent criticisms of the plan by launching their own Indo-Pacific infrastructure drive.

At the announcement, the then Australian foreign minister Julie Bishop listed some potential goals that also served as reminders of perceived BRI flaws: ‘global standards of transparency, accountability, engaging local workforces and ensuring that unsustainable debt isn’t imposed on the recipient nations’.

The ambition of the BRI alone—targeting, by one estimate, about two-thirds of the world’s population, a third of global GDP, and a quarter of all trade—represents a major disruptive threat to the status quo, though the question remains: To what ends?

As I note in a new ASPI paper out today, answering this necessarily entails a high degree of scepticism about official Chinese state pronouncements. While the urgency of addressing the key challenges that they identify—a lack of regional interconnectivity and rising levels of protectionism among them—is not in doubt, the ability of Beijing’s responses to produce what Chinese President Xi Jinping suggests is a spirit of ‘win–win’ cooperation certainly is.

An alternative, unvarnished assessment of the BRI’s potential is possible from studying the context in which the plan arose and continues to evolve, as well as more honest reflections on it offered by members of the Chinese academic, policy and business communities. What this reveals is considerable evidence to support a view of the BRI as both economically and strategically focused and overly Sinocentric.

Links between cause and effect of this nature are, indeed, often fairly explicit, perhaps as a result of the expedience of successfully delivering new Chinese models of domestic and international governance at a time when the Chinese Communist Party’s power is both great and potentially fragile.

The party’s considerable need for continued domestic economic reforms to maintain its legitimacy is a prime motivator of both the BRI’s focus on offloading excess industrial capacity and its attempted creation of new trade linkages to benefit new innovation-based Chinese ventures.

A desire to subdue what Beijing views as threats to national security and political cohesion is in turn served by developing impoverished areas, which, in the case of Xinjiang’s Uyghur population, also coincides with an increase in mass detention and surveillance.

Yielding to Xi’s noted preoccupations with history and his ‘China Dream’ of national rejuvenation of past glories, the BRI can ultimately be viewed as a tool not only for securing China’s place as the centre of global trading routes, but also as master of its own destiny in its region and, potentially, globally. The most significant BRI capacity from this perspective is the potential to militarise assets under some degree of Chinese control, which already include a number of Indian Ocean ports.

Efforts of this nature are, in turn, largely informed by far more recent concerns, primarily about the US. As one representation, the geographic orientation of most of the BRI’s six planned corridors is likely informed by an influential 2012 article from Beijing University’s Wang Jisi urging the country to ‘march west’ into areas of Central and Western Asia and onward towards Europe, building power and influence in areas less touched by Washington.

Of course, the mere presence of such a strategy is no guarantee of success, as increasing pushback against some of Beijing’s actions might attest. Examples such as the new Malaysian government’s cancellation of problematic deals signed by its predecessor offer some encouragement to the likes of Canberra, Washington and Tokyo looking to offer parallel pathways to the BRI or simply wishing for mitigation of its ill-effects.

Such setbacks might alternatively spur Beijing to recalibrate the BRI to become more palatable, including to the more robust economies, institutions and companies whose involvement is likely critical to the plan succeeding on anywhere near the scale currently imagined.

Taking nothing for granted, however, what needs to also be considered is the extent to which, as Australia’s own 2017 foreign policy white paper notes, competition built around trade and infrastructure development might merely accentuate strategic rivalries.

Consideration might also be given to the troubling parallels between the current escalation of Indo-Pacific geo-economic competition and that sparked between the US and the Soviet Union by the post–World War II Marshall Plan—an agenda to which the BRI is itself frequently compared.