The Belt and Road Initiative: Responding to Beijing’s Ambitious Endeavor

An Initiative Serving both International and Domestic Objectives

China’s Belt and Road Initiative is said to have been originally proposed in a speech delivered by President Xi Jinping during a visit to Kazakhstan in 2013. It was based on a number of regional diplomatic undertakings that Beijing had been promoting since the administration of his predecessor, Hu Jintao. These efforts had produced results including the formation of cooperative frameworks with the Association of Southeast Asian Nations, the South Asian Association for Regional Cooperation, and a group of 16 countries in Central and Eastern Europe, along with the establishment of the Shanghai Cooperation Organization. The Belt and Road concept—originally styled “One Belt [and] One Road” in English—represented President Xi’s desire to bring these frameworks together and to present the various infrastructure-building projects being conducted in these regions as part of a single broad endeavor.

The Belt and Road proposal was also motivated by domestic economic considerations. In the wake of the 2008 financial crisis, which set off a global recession, China had overinvested and found itself with excess production capacity. It seems likely that the new initiative was in part aimed at dealing with this excess and giving a boost to the many state-owned enterprises involved in infrastructure construction around the country. They were short of work because of the drying up of demand in this sector following the completion of a round of projects within China; the Belt and Road Initiative offered the prospect of construction work for them in other countries.

Favorable Conditions Bring Progress

A Testing Ground for Xi’s “New Type” of International Relations

Concerns Relating to Systems and Order

Even in Japan, however, and in the countries of the Belt and Road area—as well as in India and the West—quite a few people have been pointing out problems relating to the initiative. Some of these involve the manner in which the Chinese implement projects. There are also problem points concerning the facilities and infrastructure they have built. In addition to such specific issues, there are broader concerns relating to systems and order. Here let me note some examples:

First are the concerns in the economic and political spheres and in the area of military security. Advanced countries have used their economic strength as the basis of their national power and as a diplomatic tool, wielding it, for example, to impose sanctions on countries that disrupt the international order. This pattern can be seen in the way Japan has implemented its program of official development assistance. So it may seem unreasonable to single out the Chinese for using their Belt and Road Initiative as a tool for pursuing their own foreign policy agenda. But China has clearly adopted a two-step process under which the provision of development assistance based on its position as the world’s second-largest economy is followed by the projection of its status as the world’s number-three military power

Also, many of the Chinese companies operating overseas are state-owned enterprises and receive funding from the government-run Export-Import Bank of China. They have much more of a public-sector character than companies from advanced countries. So even what seem to be private-sector activities are often firmly positioned as part of China’s national strategy.

A second concern involves China’s lending. In quite a few cases, the volume of the loans has been in excess of the standards set by the Development Assistance Committee of the Organization for Economic Cooperation and Development, and developing countries have been experiencing fiscal crises—“debt distress”—as they struggle to pay back what they borrowed from China.

When leaders of developing countries are looking for large-scale loans, advanced countries will often decline to provide the volume of funding that they seek, citing the need for soundness in government finances. But if they turn to China, the leaders can get quick, ample funding for use during their own terms of office. In this respect, the Chinese have changed the prevailing order.

The Center for Global Development, a Washington-based think tank, recently published a report titled “Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective”(*2) in which it identified eight countries at particular risk of debt distress in connection with China’s initiative. In order to pay off their debts, they may offer China port-operation rights or mining rights, or they may provide concessions in the military sphere.

A third concern is the possibility that China may be able to gather personal information about leaders as well as ordinary citizens in countries under authoritarian regimes to which it supplies its satellite navigation and public safety systems. In response to such observations, the Chinese ask why they should be singled out in this way, noting that countries like Britain and the United States have in the past taken advantage of their positions of global leadership to establish fundamental control of communication infrastructure and to draw intelligence from it.

But inasmuch as China lacks democratic systems like information disclosure and protest filing, arrangements for one-way flows of information to the Chinese government and Communist Party may well be seen as changing the prevailing order both within China and internationally.

Creating an Attractive Framework to Maintain the Prevailing Order

How should the international community engage with China?

The first point is to create a multilateral framework for maintenance of the prevailing order and to have many countries commit to it—as seen in the advancement by Japan and other countries of the “free and open Indo-Pacific” concept. This is not a move in opposition to China’s Belt and Road Initiative but one aimed at engagement, with multifaceted significance as a basis for acting in partnership, coexisting competitively, and applying restraint. But unless numerous countries find it attractive, it is liable to look like a self-serving initiative on the part of the countries advancing it, such as the United States, Japan, Australia, and India.

The second point is to encourage China to implement the Belt and Road initiative and the various policies under its “new type” of international relations, of which this initiative is an element, in conformity with the prevailing economic and financial order. To make this happen, it will be necessary to cooperate with the developing countries receiving Chinese assistance and strengthen their ownership of the development process so that they can assert themselves in their dealings with China.

In particular, the international community should engage closely with the governments of developing countries and keep in touch with conditions in local societies instead of taking the approach of cutting off assistance to countries and governments that fail to meet strict conditions relating to democracy and human rights.

The third point is to build an Indo-Pacific framework for checking, sharing information, and confirming views regarding the current status of China’s military moves and intelligence activities. While there are many concerns about China’s growing presence, so far it seems not to have sent warships to call at the port in southern Sri Lanka to which it was recently granted a 99-year lease. It will be important for countries to share information about matters like these, and also to closely consider what sort of results the various initiatives directed toward China have produced and what sort of perceptions the Chinese hold.