International Institute for Middle East and Balkan Studies (IFIMES) from Ljubljana, Slovenia, regularly analyses developments in the Middle East, Balkans and around the world. Dr Maria Smotrytska is research fellow at IFIMES/DeSSA, a senior research sinologist, specialized in the investment policy of China. In her comprehensive analysis entitled “IFIMES Analysis of China's “Belt and Road” Initiative: Genesis and Development” she emphasizes the importance of the initiative and its contribution to the cohesion of the countries of the 3 main continents (Asia, Europe, Africa) and the disclosure of their economic potential.
Understanding the foreign policy and geo-economic strategies of countries, especially in such a difficult time when national borders are closed and the “militarization” of cybersecurity (Hopkins, 2012), becomes an important, if not vital, task for each individual country in its attempts to take its rightful place in building a new world order and development economy.
In the XXI century, it was impossible not to notice the rapid economic growth of Asia, given that the growth rates of each of the national economies of the region exceed those of the Western countries (Mudbhary, 2006).
For a long time, Asian countries have taken the best of both worlds, building economic relations with China, and maintaining strong ties with the United States and other developed countries. Many Asian states for a long time have considered the United States and other developed countries as their main economic partners (US Dep. of State, 2020). But now they are increasingly taking advantage of the opportunities created by China's rapid development.
Moving away from Asia, let’s have a quick look what is happening in East Europe, or Central Asia, or Latin America, or even Africa. Most of the countries in these regions are struggling (Nedopil, 2021) to take their place in “the geopolitical game” in pursuing of the benefits that Chinese investment can bring. But what is the main core and nature of Chinese Investments or Chinese geoeconomic “One Belt – One Road” project? The answer to this question is still unclear for most countries seeking to join (Jiang, 2021). To understand the Belt and Road Initiative, let us also take a brief look at 10 key basics of this initiative:
The Belt&Road Initiative (BRI) – is an umbrella initiative spanning a multitude of projects designed to promote the flow of goods, investment, and people. The new connections fostered by the BRI could reconfigure relationships, reroute economic activity, and shift power within and between states.
The Scope of the Initiative is very big which makes it difficult to clearly identify the main initiative’s goals. Thus, the best way to understand the purpose of the BRI – is to have a quick look on its development phases, each of which has its’ own aim and perspective:
1. Preparation period (1990s – 2000s)
After fruitful economic reforms in China (1970 – 1980s: during Deng Xiaopin's reforms which pushed forward the transformation of China’s economy), in 1990s with the implementation of the concept of “one country, two systems” (biggest offshore zones Hong Kong and Macao returned under Chinese jurisdiction), the strengthening of Chinese geoeconomics became even bigger. As a result, during 1990s – 2000s financial crises China was the only country with steady currency (while regional stock markets collapsed), being able to provide to the region a platform for further economic boom (Sharma, 2002).
After 2008 global financial crisis it became clear that Chinese stock market is stable and can protect the development of regional economies (Wayne, 2009). China is starting to play a dominant role in the region (shift from “country with closed policy” into regional leader).
2. Conceptualization (2000 – 2012)
While 2000 – 2010 were accompanied by stable economic development (export oriented), the development gap between Chinese regions was getting bigger, weakening the status of a strong regional (and further global) economic power (OECD, 2010). Due to these Chinese administrations was trying to work on ways to develop less developed regions of the country – started to think on creating a regional integration mechanism within Asia, where China would play the key supplier role. Starting from 2004 China is getting more involved into supplying activities in the region, expanding the production and manufacturing, logistic facilities in low-developed areas of the country (2004 – opening of TRACECA transhipment line; 2008 construction of the transcontinental highway “West Europe – West China”; 2009 construction of gas transportation infrastructure between China and Iran; the early-mid-2010s large-scale transport and infrastructural projects in Central Asia etc.).
In 2011, when US Secretary of State H.Clinton proposed the development of a New Silk Road with Afghanistan as a centre (US Dep.of State, 2011), Chinese leadership decided to step in and to move from individual projects to a large-scale Eurasian strategy (Wade, 2016). This decision led to the creation of the BRI.
3. Implementation (2012 – 2017)
The main role of this stage was to build a stable basis of the Initiative, which could guarantee stable economic and infrastructural development. While promoting the BRI, Chinese were concentrating on diversification and facilitation of regions logistics system. Another important element of this stage was the creation of economically strong financial base of the initiative (2013 – launching of the BRI initiative (starting budget USD47 billion) (Page, 2014), October 2014 – creation of the Asian Infrastructure Investment Bank, Silk Road Fund etc.). and Initiative’s promotion (by May 2015 about 60 countries joined the AIIB (decision to join BRI project).
While putting enormous amount of investments into regions’ (mainly ASEAN, Russia, Central Asia) transportation systems, Beijing decided to spare a profit and export products outside using already existent transhipment routes (through TRACERA, Suez, Malacca straights etc.). As a result, in 2013-15, 348 international projects were started, while volume of USD 24.7 bln., in 2015 Chinese investment increased of 37% compared to 2014 and BRI became a “process – brand”, the period 2016 – 2017, total cost of infrastructural projects is estimated at USD 60 billion (Korolyov, 2019).
4. Expansion (2017 – ..)
In May 2017 radical changes in the dimension and nature of the initiative happened (Liangyu, 2017):
These changes brought certain results into the development of BRI and China itself:
Thus, 2017 played a crucial role in turning the “regional integration initiative” into a new global level one.
To sum up, during Initiative transformation, its’ aims were gradually transforming as well:
Nevertheless, few general aims, which were there from the very first day of BRI’s implementation, can be identified:
The end result of BRI should be the creation of a “Community of Common Destiny for Mankind” (人类命运共同体), defined as a new global system of alternative economic, political, and security “interdependencies” with China at the centre (zhongguo, 中国). For this reason, Chinese leaders describe BRI as a national strategy (zhanlüe, 战略), with economic, political, diplomatic, and military elements (综合国力), not a mere series of initiatives (People’s Daily, 2017).
Thus, BRI directly supports many elements of China’s national security strategy. At a macro level, it seeks to reshape the world economic order in ways that are conducive to China’s drive for Great Power status.
While talking on the role of BRI in Globalization trends, its’ global and national scopes (impacts), should be empathized:
Contribution to the “world’s” Globalization:
Responding to global trends in globalization, based on the principle of mutual benefit and having a far-sighted perspective, BRI has several foreign policy strategic advantages that can contribute to the cohesion of the countries of the 3 main continents (Asia, Europe, Africa) and the disclosure of their economic potential.
Contribution to the “country’s” Globalization:
Attachment 1: Strategy on “Globalizing” of China
While thinking on BRI as a new trend in Chinese foreign policy, it is worth noting that it was the new way of thinking (and developing of the policy strategy) of The 5th generation of the P.R.C. administration (Administration of Xi Jinping). His predecessors were mainly concentrated on inner policy of China (namely strengthening of Chinese inner market, economy and reducing the “development gap” between the Chinese provinces and cities) and further strengthening of China as regional player (late years of the Administration of Deng Xiaoping). New Administration (Xi Jinping since 2012) decided to take Chinese foreigner policy to next level, announcing the conversation of the doctrine of the “Chinese Dream” (improving of well-being of Chinese people within China) into proper international status (first regional leader, then expansion of BRI into at least 3 continents).
What’s more, no Chinese leader has done more globe-trotting within such a short time (first term 2012 – 2016, second term 2016 – …). Since 2013, president Xi has logged 28 overseas trips that brought him to 56 countries across 5 continents, as well as the headquarters of major international and regional organizations.
As a result of BRI implementation, at least in terms of two of China’s policies – bringing in (qingjinlai) and going out (zouchuqu) – Xi’s first term (2012 – 2016) already marked a new era in Chinese foreign policy. But there was much more to the new era than the flurry of diplomatic visits. Xi introduced four new concepts into Chinese foreign policy: a new type of major country relations (P2P diplomacy, bilateral diplomacy approach, hub-regions integration (ASEAN, CEE etc.), major country diplomacy with Chinese characteristics (strategy of “blue water” (Koda, 2017), “diplomacy of straights” (Smotrytska, 2021) etc.), a global community of common destiny (strategy “Chinese dream” (BBC, 2013), and a new type of international relations).
Further, in 2017, while announcing the start of the expansion phase of BRI, Xi Jinping underlined again the importance of the balanced development of both China and BRI: “Chinese government seeks to
Thus, it can be seen, that in 2012 new Chinese Administration (Xi Jinping) noticed that China’s relatively slow growth rate since 2009 has required a rebalancing of its economy away from investment-led growth and towards a more consumption-driven economy (SRS, 2019). The realization of this fact forced new Administration to think on other possible ways to sustain and develop Chinese economy, which further turn into idea of the creation of new economic integration mechanism in the region (and further continent) – the Belt and Road Initiative. The further phrases of its development have been commonly used in China to indicate the importance of this recalibration.
Meanwhile, because of Xi Jinping new approach of the development of China, the country gained a profound impact on global economic development (which, is safe to say, China has never had before).
China is both a long-established diplomatic partner and a new investor in Africa (Wade, 2019). Chinese interests on the continent encompass not only natural resources but also issues of trade, security, diplomacy, and soft power. China is a major aid donor, but the scope, scale, and mode of Chinese aid practices are poorly understood and often misquoted in the press (since they mainly analyse Sino – African relations only in terms of “what does China gain out of these relations”). It will be fair to emphasize, that few analyses have approached Sino – African relations as a vibrant, two-way dynamic in which both sides adjust to policy initiatives and popular perceptions emanating from the other.
While analysing the main reasons of the development of Sino – African ties (within BRI or not), it can be underlined that China has four overarching strategic interests in Africa:
1. China wants access to natural resources, particularly oil and gas. It is estimated that, by 2025, China will import more oil worldwide than the United States (Moran, 2010). To guarantee future supply, China is heavily investing in the oil sectors in countries such as Sudan, Angola, and Nigeria.
2. a huge market for Chinese exported goods, might facilitate China's efforts to restructure its own economy away from labour-intensive industries, especially as labour costs in China increases.
3. China wants political legitimacy. The Chinese government believes that strengthening Sino – African relations helps raise China's own international influence. Most African governments express support for Beijing's “One China” policy (HK and Taiwan, Xinjiang Uygur Autonomous Region are fully Chinese territories), a prerequisite for attracting Chinese aid and investments.
4. China has sought a more constructive role as contributor to stability in the region, partly to mitigate security-related threats to China's economic interests.
At the same time, African governments are counting on China to ensure political recognition and legitimacy and contribute to their economic development through aid, investment, infrastructure, and trade. To some degree, many African leaders hope that China will interact with them in ways that the United States and other Western governments do not – by engaging economically without condescendingly preaching about good governance, for example, or by investing in high-risk projects or in remote regions that are not appealing to Western governments or companies. Some Africans aspire to replicate China's rapid economic development and believe that their nations can benefit from China's recent experience in lifting itself out of poverty.
As one of the interviewers from African country noticed: “we (Africans) prefer to work with China, because if it (China) promises us (Africa) something (i.e. to build a highway or a plant, to invest in solar power facilities etc.) – it will do so, but if the same is promised by the US or Western Europe – we (Africans) will never see the results and furthermore will pay huge percentages and loans for nothing”. Afterall, it makes sense, as Central – East – European countries are mainly willing to cooperate with China because of the same reasons. Thus, it’s not surprisingly that not very high-developed (in terms of economy and infrastructure) countries are tempted to choose Chinese investments, over the Western countries or the WTO.
Thus, BRI, which mainly focuses on the development of large infrastructure projects, is a real hope for many African countries to fill their own infrastructure gap, with less cost and in a more efficient way (so far Chinese companies are top in logistics and infrastructure development and improvement) (Teixeira, 2019). As a result – as of September 2019, 40 of 55 African countries had signed some sort of memorandum of understanding or other agreement on the BRI (Development Reimagine, 2019).
Africa is also an important end user of China’s industrial overcapacities, particularly coal, cement, steel, glass, solar, shipbuilding, and aluminium, for use in BRI projects.
Also, it must be emphasized another, not necessarily official goal of BRI in Africa – geopolitics and geo-economics. Thus, with the help of African continent, BRI also increases China’s control of critical global supply chains and its ability to redirect the flow of international trade in the world’s sea. Central to these efforts are steps to open new sea lanes and expand China's access to strategic ports around the world. Thus, while The Silk Road Economic Belt establishes 6 land corridors (or high-speed train and highways networks, oil, and gas pipelines), connecting China’s interior to Central Asia and Europe, The Maritime Silk Road (and possible Polar Silk Road) further establishes 3 “blue economic passages” knitted together through a chain of seaports from the South China Sea to Africa that also direct trade to and from China. (See Details in Attachment 2).
Attachment 2: Transhipment lines from Far East to Western Europe and Africa
African continent is of great importance to the implementation of China’s 13th Five Year Plan, a document adopted in 2016 that provides long-range implementing guidance in five-year increments, which calls for the “construction of maritime hubs” to safeguard China’s “maritime rights and interests” as it embarks on laying a “foundation for maritime Great Power status” by 2020 (GT, 2020). The centenary of the founding of the People’s Republic of China, 2049, has been set as the year when it will become the world’s “main maritime power” (海洋强国). Accordingly, China’s drive to acquire port access and secure supply lines are likely to intensify alongside the expansion of the Maritime and Polar Silk Roads.
The Maritime trade routes help China diversify its supply chains and create a China – Indian Ocean – Africa – Mediterranean Sea Blue Economic Passage to connect Africa to new maritime corridors in Pakistan, Bangladesh, Sri Lanka, and Myanmar. (See Details in Attachment 2).
But it worth noting, that China’s return on investment from increased port access and supply chains is not only about economics. In five cases (2 of which are in Africa) – Djibouti, Walvis Bay (Namibia), Gwadar (Pakistan), Hambantota (Sri Lanka), and Piraeus (Greece) – China’s port investments have been followed by regular People’s Liberation Army (PLA) Navy deployments and strengthened military agreements. In this way, financial investments have been turned into geostrategic returns. (See Details in Attachment 3).
Attachment 3: Global BRI strategy: roadmap