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What’s driving China’s New Silk Road, and how should the West respond?


Brookings.edu

Kadira PethiyagodaWednesday, May 17, 2017

The Silk Road Summit, covering China’s One Belt, One Road (OBOR) initiative, is as much about celebrating Beijing’s rise as the 2008 Olympics were. For the first time in the history of the Westphalian system, Asian and other non-European heritage countries are not only ascending to central places in the global order, but are refashioning its structure.

Unprecedented in size and scope, China’s infrastructure project promises investments of around $1 trillion (though only $50 billion has been spent so far), covering countries accounting for 60 percent of the world’s population and one-third of global GDP (though this includes critic of the plan, India). All this occurs at a time when Western global leadership is hamstrung by internal rifts. If policymakers are to respond to China’s global thrust, they must understand the factors behind it and reflect on some of the conventional wisdom that has placed the West at a disadvantage in certain respects.

Factors at play

Economic

At its core, OBOR is an economic project that enables China to export its surplus productive capacity. Furthermore, many of the 68 countries involved in the project export the raw materials and energy that China requires. This is important domestically, given China’s cooling economy and increasing inequality. In recent years, the Communist Party’s claim to leadership has come to rest on economic growth. As long as prosperity continues to increase at a sufficient rate, the people will accept some getting richer faster than others.

Strategic interests

But OBOR is far more than a purely economic initiative. It also serves Beijing’s other overarching foreign policy goal: to reach strategic parity with the United States in Asia and reshape its security environment to ensure its rise is unrestrained. A central concern is China’s trade routes being cut off in the event of confrontation with the United States, given that it is surrounded by a string of American friends and allies. To this end, OBOR increases Beijing’s influence in states all along these trade routes, from East Asia, through the Indian Ocean and Central Asia, then the Middle East and on to Africa and Europe. Many of the projects can serve dual economic and strategic purposes, such as the ports in Gwador (Pakistan), Hambantota (Sri Lanka), and Djibouti. These have often spurred Washington to reach out to these countries as well.

China’s infrastructure investments are often such that its influence over the host state is difficult to dislodge without breaching global economic norms, even with radical changes in host-state governments. This was seen in strategically located Sri Lanka. Beijing heavily funded infrastructure and supported the war effort of the previous Rajapakse government, only for the administration to unexpectedly lose power to a new coalition promising to shift relations back towards India and the West. Over time, however, the new Sri Lankan government realized the long-term nature of Beijing’s presence and further Chinese investments were marked with celebratory ceremonies.

Image and culture

Cultural values also help drive OBOR. Prestige has long been a dominant value in hierarchical Chinese society, and continues to influence policymakers. This is infused with the concept of mianzi or face, which prioritizes recognition by others. Similarly, Confucian ideas surrounding benevolent leadership are clear in China’s “peaceful rise” rhetoric and President Xi Jinping’s pronouncements of new, cooperative methods of international relations, all of which sets the tone for OBOR. Beijing seems to wish to demonstrate how its civilizational experience of centralized power contrasts with Europe’s pre-modern history of small, warring statelets.

The Chinese public and policymakers see theirs as a great civilization that suffered colonial-era humiliation and now deserves global recognition. Many see OBOR as a major step in a historical course correction. In 1600, just prior to the colonial era, China was the world’s largest economy, accounting for 29 percent of world GDP. Along with India, it accounted for more than half the world’s economy. Two centuries earlier, Chinese admiral and explorer, Zheng He, traversed the maritime route of the current OBOR, establishing trade and diplomatic relationships.

Beijing’s labeling of this 21st century initiative “Silk Road” and the project’s geography hark back to a grand past, a past when European-heritage powers were not dominant and the New World was yet to be colonized. The imagery of the silk route conceives of an interlinked Eurasian landmass that does not include the United States.

Advantages and Risks

Certain advantages support China’s global thrust. Unlike Western-rooted institutions such as the International Monetary Fund (IMF), Beijing’s loans do not require states to alter their domestic economies along free-market lines. Similarly, China’s principle of non-interference allows it to deal with states regardless of regime type or their adherence to human rights. Compared to Western private corporations, Chinese state-backed enterprises enjoy flexibility to make deals where the returns do not necessarily have to be primarily cash profits, but can include strategic influence or soft power.

Some of these advantages correspond with significant risks faced by China and more so, by partner countries. States being unable to repay loans places pressure on Chinese banks. Partner countries risk major debt burdens and ceding key national assets to foreign control. And while China’s loans don’t include ideological conditionality, they often include commitments to accept Chinese workers and contractors. Critics have also highlighted problems with corruption.

One important critic and notable absentee at the Summit was a country that possibly constitutes the biggest future strategic chink in China’s armor, a civilization central to the ancient silk route and a fellow emerging giant: India. New Delhi warned of the debt burden from OBOR and complained about the China-Pakistan Economic Corridor project undertaken in Pakistani Kashmir.

The Silk Road project signals tectonic shifts in the global order toward not only a more multipolar world, but a more multicultural international system.


The West’s response

The Silk Road project signals tectonic shifts in the global order toward not only a more multipolar world, but a more multicultural international system. Western policymakers seeking to respond to China’s push must take a multifaceted approach that considers all factors driving and assisting Beijing. Traditional strategic tactics alone, like using other Asian countries to balance China, are inadequate. Appreciating the interplay, throughout the developing world, between factors like culture and policy preferences, on issues from privatization to human rights, is essential.

Open-minded and novel approaches should be taken to the roles played by the public and private sectors within economies. In terms of human rights, concern for civil and political rights could be matched with an appreciation of economic rights. Perhaps most difficult but most important, there must be introspection upon domestic factors within Western countries like inequality, which have led to the backlash against initiatives such as the Trans-Pacific Partnership, undermining the West’s global position

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