Making sense of China's Belt and Road Initiative

Before discussing the Belt and Road Initiative (BRI), we should understand some Chinese history, as it might help our understanding of the BRI. China is an old civilization and enjoys a long history spanning several thousand years. It has passed through many ups and downs in its long history. The Tang Dynasty (618-906) was probably the most prosperous era in earlier Chinese history.

However, the last two centuries saw China going through what could be considered the worst era in its long history; it saw the colonial era, the opium wars, World War I and World War II. In the pre-liberation era, under the naïve government of the Nationalist Party (Guo Min Dang), China was pressurized and blackmailed, corruption reached new peaks, and foreign interventions dominated the country.

Ordinary people suffered while the ruling elite made money immorally and illegally, enjoying their lives at the cost of the national interest. Under this scenario, the Communist Party of China (CPC) took the lead, mobilized the masses to get rid of corrupt and incompetent rulers, and finally liberated China on the 1st of October, 1949, establishing the People’s Republic of China (PRC).

Between 1949 and 1978, political reforms were introduced under the great leadership of Chairman Mao, aiming to unite the scattered and divided nation under one flag as “China.” However, during this period, due to several reasons, the economy of China was weak, droughts hit the country for several consecutive years, and food shortages hit the nation adversely.

The second phase started in 1978; economic reforms were launched under the visionary leadership of Deng Xiao Ping. China witnessed remarkable developmental progress that is unmatched in human history. The Chinese economy grew from US$216 bn in 1978 to US$10,361bn in 2014. Today, China has become the second-largest economy in the world, just behind the US.

It is projected that with the current rates of economic growth it will surpass the US economy within a few more years. China has already emerged a geopolitical power. As a result of economic reforms introduced in 1978, the Chinese economy picked up and prosperity was visible by the 1980s. In the 1990s, the vast domestic market was generating economic growth, and domestic consumption was enormous.

Since the 2000s, China has started focusing on the international market, especially after joining the WTO, and now proactively targets global markets which has enhanced its exports exponentially. Today, China is the number one country in respect of exports and enjoys a trade surplus with almost all nations.

Exports mean earning foreign exchange, and China’s foreign exchange reserves are the highest in the world. Bloomberg calculated China’s foreign exchange reserves as totalling US $3 trillion in 2017. With its domestic market almost saturated, the only option left for lucrative business is foreign trade and China is investing heavily around the globe.

BRI: Setting up a Framework for Cooperation

The BRI is a concept for an open and inclusive mutually beneficial model of cooperative economic, political, and cultural exchange (globalization) that draws on the deep-rooted values of the ancient Silk Road. It also reveals China’s rise as a global power, its industrial re-deployment, enlarged outward investment, and need to expand energy sources and routes.

The BRI also involves the creation of a framework for open cooperation and new multilateral financial tools. It is designed to lay the infrastructural and industrial foundations to secure and solidify China’s relations with countries along the Silk Road and to spread the march of modernization and poverty reduction to emerging economies.

The BRI has changed the global trade pattern as well as its routes. New trading partners have emerged; many traditional allies and trading partners have witnessed a visible shift away from them. The idea was discussed and deliberated, and in-depth research was conducted on it for more than a decade by experts of various fields.

Thousands of scholars were engaged in many conferences and seminars were held where pros and cons were discussed. Before announcing the BRI in September and October 2013 during President Xi Jinping’s visits to Kazakhstan and Indonesia, all preparations were finalized and a comprehensive strategy was devised. The BRI is a Chinese dream, and China sincerely wanted to make it an economic and political role model.

Go Global: China’s Overseas Investment

Under the stated policy, China’s slogan of “Go Global,” China has been investing heavily overseas. According to a UNCTAD report, China had become the third-largest foreign direct Investment (FDI) exporter country in the world by 2013. The value of China’s overseas investment and construction combined exceeds $2 trillion since 2005. Initially, China focused its investment on Europe and America.

However, when the recession in 2008-2009 hit the global economies hard, especially the Europeans and Americans, China learned a bitter lesson, after suffering huge losses, which was that “you should not put all your eggs in one basket.” Chinese think tanks, intellectuals, scholars, and policymakers opined that China should diversify its investment. They explored several options based on their pros and cons; they reached a consensus which is the BRI.

Some of these countries are rich in Oil and Gas but need to develop pipelines for efficient means of transportation and distribution, and the BRI incorporates such demands as well

Europe and America were almost saturated, and the future of their economies looked dim – at stand-stills or in decline, so only investing there might not be a wise decision. The other options available were the ASEAN countries, which were a good option but were seen to be limited markets that may quickly become saturated.

By comparison, South Asia, East Asia, Central Asia, Russia, the Middle East, and Africa were untapped markets where considerable populations and a vast space for development exist, and would take 50 to 100 years before becoming saturated. For long term investment, these were the priority regions, which are all covered under the BRI. The focus of the BRI is the ancient Silk Route, and developing and underdeveloped nations for sustainable investment opportunities.

Win-Win Cooperation

The concept of the BRI is very rational and flexible; it is open-ended, providing any partner country to include or exclude any mutually agreed upon projects. The basic principle is to ensure win-win cooperation, keeping the interests of both sides. China has never pressurized or coerced any country and is not attaching political strings to the BRI. It is a purely commercial, mutually beneficial initiative and protects the interests of both sides.

The BRI’s focus is on connectivity by road, rail, ship, or air-routes, and thus relevant infrastructure is constructed or upgraded in partner countries. Connectivity means improving transportation, resulting in more trade and a greater flow of passengers. The enhanced business will ensure the economic cycle moves faster and generates greater economic activities.

The increased travel of people means more interaction, resulting in more understanding and harmony between various cultures and societies. More knowledge of each other should help to build a more robust relationship among different nations and countries. Currently, many new terminologies are emerging like the Knowledge Corridor, Media Corridor, Information Corridor and Culture Corridor.

As long as the aim of any corridor is to help humanity, protect humanity, and serve humanity, it can be accommodated under the BRI. Some countries lack electricity; the BRI helps them construct energy sources such as hydropower plants, renewable energy, coal-fired powerplants, and nuclear powerplants. There are some nations that lack motorways and highways, and the BRI permits such projects.

Some of these countries are rich in Oil and Gas but need to develop pipelines for efficient means of transportation and distribution, and the BRI incorporates such demands as well. There is no specific restriction on the nature of projects; as long both sides agree, the BRI can encompass it.

With Pakistan, CPEC covers almost all sectors of the economy, starting from infrastructure development to agriculture, industrialization, optical fiber transmission, oil & gas pipelines, and the social sector. Especially in the case of Pakistan, China and Pakistan have been deeply engaged in many projects, with some of them being very strategic in nature. The cooperation between China and Pakistan, within CPEC and outside CPEC, is very much diversified.

BRI: Six Planned Corridors

China-Pakistan Economic Corridor

The China-Pakistan Economic Corridor (CPEC) is a flagship project of the BRI and is the most feasible amongst all six-planned corridors. It is the only bilateral corridor, involving only China and Pakistan, who enjoy a good friendship, no political hurdles, and are neighbouring countries. The distance from the Gwadar port in the South of Pakistan to Kashgar in China, which is at the border of both countries, is roughly 3000 km.

It is well understood that the involvement of more countries makes the situation more complex, and that the longer the distance is, the more difficulties are expected. In the case of CPEC, the total length of the corridor and political harmony both are favorable. It is in a relatively advanced stage, and many projects are partially operational.

Pakistan is the single largest beneficiary of the BRI, and the people of Pakistan are enjoying the fruits of CPEC in many forms; CPEC has already reduced load-shedding and improved network of motorways and highways. Almost 22 Projects have been completed under CPEC, and an almost equal number of projects are under execution or in their planning stage.

The early harvest projects were focused on power generation and infrastructure development, which were high initial investments and the return might have been slow but they were vital for the next advanced stage that is aiming at industrialization and agriculture improvements. The second phase includes SEZs, agriculture, and the services sector, which will have an immediate impact on the Pakistani economy and bring visible prosperity in the society.

With the launch of CPEC, Pakistan’s geostrategic importance has further increased as it will be linking Eurasia, East-Asia, Central Asia, and South Asia with the Middle-East, Africa, and Europe. CPEC has created unlimited opportunities for Pakistan, however, along with this have come geopolitical challenges.

Bangladesh-China-India-Myanmar Economic Corridor

The Bangladesh-China-India-Myanmar Economic Corridor (BCIMEC) was proposed by both China and India in May 2013, with the objective of linking the two of the world’s most populous markets of China and India and enhancing regional inter-connectivity. However, India backed out and started opposing the BRI. As a matter of fact, in South Asia, India is the only country opposing the BRI and acting as an adversary of China.

However, Work on Bangladesh-China-Myanmar Economic Corridor is under execution and satisfactory. Myanmar and Bangladesh are close allies with China despite being a victim of Indian coercion and threats. The economic corridor will strengthen Bangladesh and Myanmar’s economies and overall stability in the region.

The China-Indochina Peninsula Economic Corridor (CICPEC)

The China-Indochina Peninsula Economic Corridor (CICPEC) includes China’s Pearl River Delta, goes westward along the “Nanchong-Guang”, an Expressway, and the Nanning-Guangzhou High-speed Railway via Nanning and Pingxiang to Hanoi and Singapore. It joins China with the Indochina Peninsula and crosses through Vietnam, Laos, Cambodia, Thailand, Myanmar, and Malaysia.

It is intended to boost China’s cooperation with ASEAN countries. ASEAN countries are in China’s close vicinity and require enhanced cooperation for mutual benefits. This corridor will be vital for the economic and political stability of the region. There exists a strong interaction between ASEAN and China, and it will be further strengthened after the completion of this corridor.

China-Central Asia-West Asia Economic Corridor

The China-Central Asia-West Asia Economic Corridor (CCWAEC) connects China, Central Asia, the Gulf, the Mediterranean Sea, and the Arabian Peninsula, just as the well known ancient silk route did. It covers these vast regions full of natural resources, especially rich in energy, and with a manageable population. The corridor is initiating from China’s Xinjiang region and crosses Central Asia before reaching the Gulf, the Mediterranean Sea, and finally the Arabian Peninsula.

It passes through five Central Asian countries: Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan, and 17 countries and regions in West Asia, including Iran, Saudi Arabia, and Turkey. It is a huge and immensely complex corridor, as the long distances encompass great cultural and political diversity. However, it has many more opportunities, along with any challenges it poses.

China-Mongolia-Russia Economic Corridor (CMREC)

The idea of the China-Mongolia-Russia Economic Corridor (CMREC) emerged in September 2014 during the first trilateral meeting of the heads of states. The CMREC has two significant arteries: one extends from China’s BeijingTianjin-Hebei region to Hohhot in Inner Mongolia and on to Mongolia and Russia, while the other extends from China’s Dalian, Shenyang, Changchun, Harbin, and Manzhouli to Russia’s Chita.

Both routes are equally important and have a unique significance. Seven significant areas of cooperation are envisaged: transport infrastructure, port construction, customs and border inspection, quarantine services, industrial capacity development and investment, trade, cultural exchanges, environmental protection and cooperation with adjacent regions. Transport has emerged as a central focus.

New Eurasian Land Bridge

The New Eurasian Land Bridge (NELB), also known as the Second Eurasian Continental Bridge, is an international passageway linking the Pacific and the Atlantic. This Corridor has enormous potential for economic and security cooperation and will serve a bridge for global security and stability in the future.

Distinct from the Siberian Landbridge, which goes from Russia’s eastern port of Vladivostok through Siberia to Moscow and onward to West European countries, this “second” bridge goes from China’s coastal cities of Lianyungang and Rizhao to Holland’s Rotterdam and Belgium’s Antwerp. It connects more countries and opens unlimited opportunities for all nations en route the corridor.

The 10,800 km-long rail link runs through Kazakhstan, Russia, Belarus, Poland, and Germany, and serves more than 30 countries and regions. To date, several transcontinental rail routes, which showcase the potential of the Belt and Road Initiative, have entered service.

These include the ChongqingXinjiang-Europe Railway reaching Germany’s Duisburg via Poland, the Chengdu-Xinjiang-Europe Railway reaching Poland, and the Yiwu-Xinjiang-Europe Railway reaching Madrid, Spain. These trains have set a new trend of connectivity and set examples of new trade routes benefitting almost 30 countries. This approach to touching the heart of Europe is unmatched by any other initiative.

Political Dimensions

Some analysts compare the BRI with the Marshall Plan launched by the US after World War II, where the US helped to develop war-torn infrastructure in Western Europe and subsequently utilized it for political and economic gains. However, China, being an old civilization having its vision and wisdom, is unique in its approach which is incomparable with any other model.

Contain China, Counter China, and Resist China’s Rise is the type of terminology often used by the Western media. China and the BRI are facing colossal opposition today

It aims to promote connectivity, infrastructure development, and creating harmony between diverse cultures. It will reduce misunderstandings and conflicts, promote stability, and security. It will enhance people to people interaction, generate more opportunities for economic activities, bring prosperity to all, and help eradicate poverty. It is an ideal approach to create a world of shared destiny, where all nations are bonded under one platform, the BRI, with the singular objective of “Peace, Stability and Prosperity” for all.

Opposition to the BRI

As long as China was poor and underdeveloped, the western world was happy with China, extending assistance and aid to China until the 1980s. They entered China intending to capture the huge, untapped market. Initially, they were exporting to China. Then, the western world used Chinese natural resources, raw materials, and cheaper labor to make huge profits by shifting their industry into China.

China offered them flexible and lucrative policies to attract them. However, later on, China picked up the pace and started to export Chinese products at highly competitive prices to Europe and America. Soon, the tables had turned, and Europe and America became markets for Chinese goods instead of the other way around.

The Chinese economy kept on growing at an unmatched speed and surpassed the German economy in 2006, emerging as the third-largest economy in the world. German civilization has a long history of productivity; they related with the hard work of the Chinese people and appreciated their efforts to uplift their economy. There was no ill feeling on the German side, and they have accepted China’s rise with an open heart.

The real problem started in 2010 when China surpassed the Japanese economy and was declared as the second largest economy of the world. The China-Japan rivalry has a long history, and the Japanese could not digest China’s rise and began to actively resist it. It is projected that if the same growth rate is sustained, China will surpass the US economy by 2025.

This is alarming for the US, as the lone superpower in a unipolar world, and it cannot afford any other country to become more prosperous than it. Since President Obama’s years in office, signs of enmity from the US side have started to grow, and measures were implemented to impede China’s rise.

However, it became more evident under President Trump’s administration and an open opposition to the BRI was declared. “Contain China,” “Counter China,” and “Resist China’s Rise” is the type of terminology often used by the Western media. China and the BRI are facing colossal opposition today.

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Making sense of China’s Belt and Road Initiative