BELT AND ROAD FORUM

Context

The recent Third Belt and Road Forum for International Cooperation in Beijing, China, held on October 17-18, has once again thrust Chinese President Xi Jinping's signature initiative, the Belt and Road Initiative (BRI), into the global spotlight.

1. China's Version of the Marshall Plan

• Leading Chinese academics offer insights into the BRI's underlying goals.
• Xue Li compares the BRI to the United States Marshall Plan, viewing it as a means for China to transition from a regional power with global influence to a global powerhouse with comprehensive strength.
• Wang Yiwei asserts that the BRI represents China's bid to reshape globalization and address its shortcomings.
• Additionally, given China's concerns about potential disruptions in the Strait of Malacca, the BRI aims to establish new transport and trade routes.

2. The AIIB and the BRI

• China has backed its BRI ambitions with substantial financial firepower through the Asian Infrastructure Investment Bank (AIIB), boasting a $100 billion war chest.
• Scholar Ju Jiejin highlights the AIIB's potential to realize early gains from the BRI.
• Moreover, President Xi's initial pitch for the use of local currency in trade aimed to reduce reliance on the US dollar, laying the groundwork for an economic order centred on China.

3. China's Global Reach

• The BRI, initiated during Xi's leadership, serves as a vehicle for him to portray himself as a global statesman while projecting China's power and influence worldwide.
• Domestically, it has gained significant prominence, entering the Communist Party of China's constitution in 2017 and receiving top billing in the 14th Five-Year Plan unveiled in 2021.
• The Chinese government's white paper on the BRI showcases over 200 cooperation pacts with more than 150 nations, resulting in a total two-way investment of $380 billion from 2013 to 2022.
• The World Bank reveals startling statistics: 675 million people lack access to electricity, 2.3 billion lack potable water, and 450 million live beyond the reach of broadband connectivity worldwide.
• Bridging this infrastructure gap requires an annual capital infusion of $1.5 trillion through 2030, approximately 4.5% of the GDP of low- and middle-income countries.
• Under China's Marshall Plan, significant investments have been made in motorways, power plants, ports, railway networks, and digital infrastructure.

4. The Unpleasant Realities

• Despite China's ambitious infrastructure projects, there are disturbing realities on the ground.
• Reports from the ISEAS-Yusof Ishak Institute have highlighted ecological damage, displacement of local populations, disputes over compensation, and labour unrest in BRI projects.
• Examples from Indonesia and Laos illustrate these issues. Laos, for instance, owes China approximately $12.2 billion, equivalent to 65% of its GDP.
• The China-Pakistan Economic Corridor (CPEC) has also faced criticism for perceived imbalances in revenue sharing.

5. Global Countermeasures

• In response to the BRI, several nations have initiated alternative infrastructure development projects.
• During the Trump administration, the United States and Japan launched the "United States-Japan infrastructure investment alternatives in the Indo-Pacific region".
• The Biden administration introduced the 'Build Back Better World' (B3W) initiative, now rebranded as the Partnership for Global Infrastructure and Investment, focusing on private capital for climate change, energy security, healthcare, digital technology, and gender equity.

6. India's Response

• India has been a vocal opponent of the China-Pakistan Economic Corridor (CPEC) due to sovereignty concerns and unsustainable debt issues.
• Despite these concerns, India's efforts to sway global opinions have often been overshadowed by China's narrative.
• The G-20 Delhi summit has put forth the India-Middle East-Europe Corridor (IMEC) as a potential alternative to the BRI.
• This corridor aims to connect India, West Asia, and Europe through railways and shipping lines while also envisioning trade connectivity, electricity and digital infrastructure development, and a clean hydrogen export pipeline.
• The future of the BRI remains uncertain, particularly as China grapples with economic challenges tied to debt and unemployment.