2020 - CHINA'S BELT AND ROAD INITIATIVE: A STRATEGIC AND ECONOMIC ASSESSMENT

Christian TYBRING-GJEDDE (Norway)

15 June 2020

In 2013, Chinese President Xi Jinping announced perhaps the most ambitious investment and infrastructure programme ever conceived. The ‘Belt and Road Initiative’ (BRI) has since become the boldest expression yet of China’s global economic, diplomatic, and strategic ambitions. This draft report argues that this grand project will shape the geopolitical landscape of the 21st century in ways that that the transatlantic community simply cannot ignore.

The draft report notes that official Chinese government documents list a set of benign goals for the project: fostering greater regional connectivity in Eurasia; enhancing trade, investment, and economic prosperity; deepening political trust; and maintaining closer economic ties among nations. Western policy makers and analysts, however, have ascribed many other drivers more aligned with national security policy and China’s ambitions to achieve global superpower status as the driving force of this effort. 

While China is a strategic rival to the West, it is also an important commercial partner and a key link in global value chains. The draft report suggests that China cannot easily be isolated from the world economy. To attempt to do so would inflict very high costs on the West, which will need to work collectively to ensure that the BRI becomes more of an opportunity and less of a threat. That will not be an easy undertaking.

In practical terms, the BRI can be essentially understood as three inter-linked initiatives: the Silk Road Economic Belt, the Maritime Silk Road, and more recently the ‘Digital Silk Road’. Along these corridors, a broad array of infrastructure projects are underway or envisioned including oil pipelines, roads, railways, ports, and digital networks including 5G, as well as a host of industrial investments facilitated by this infrastructure. China also intends to set up at least 50 special economic development zones within the borders of some countries participating in the BRI. These zones would be governed by special commercial and trading rules that collectively aim to facilitate investment and deepen China’s trading ties with these regions. The report also discusses an Arctic dimension to this wide ranging undertaking.

The draft report next explores the specific risks to the West posed by the project. These include allegations that the BRI funds and builds infrastructure that could be used to facilitate China’s military expansion; it creates debt traps through opaque lending practices; it pays scant attention to environmental sustainability; it opens opportunities for espionage, particularly through the Digital Silk Road, it engages in questionable labour practices, and it turns a blind eye to corruption and therefore weakens international efforts to improve governance.

There are also concerns that China is pursuing a divide and conquer strategy in Europe through the BRI. Indeed, Europe has not achieved a significantly unified approach to this ambitious Chinese project. There are also risks of transatlantic tensions here as the United States government is deeply suspicious of the BRI and sees it more in geo-strategic than economic terms.  

The draft report concludes by urging Europe and North America to work towards developing a shared approach to the BRI that both recognises China’s geo-strategic ambitions embedded in the BRI, but also acknowledges the economic rationale for continued engagement with China. It calls for the transatlantic community to hold out for another model of development and investment premised on principals of transparency, sustainability, liberal market principals, and good governance.

Finally, the draft report, written as the coronavirus pandemic was just beginning, notes that this crisis could well alter the dynamics of relations with China, although it is very difficult to predict how at this moment.