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China’s Belt and Road initiative is more than merely infrastructure

Siah Hwee Ang

One Chinese energy company plans to build hundreds of solar farms shaped like the bears along Beijing's Belt and Road initiative.

OPINION: China's Belt and Road initiative has been around since September 2013.

New Zealand became involved when in late 2015 the country joined the Asian Infrastructure Investment Bank – known to be one of the vehicles for funding the Belt and Road projects.

New Zealand also signed a memorandum of agreement with China in March 2017 to engage China in the initiative.

The five major goals of the initiative are: policy co-ordination, connectivity of facilities, unimpeded trade, financial integration, and people-to-people bonds.

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Despite this wide range of activities subsumed under the Belt and Road umbrella, the misconception is that the initiative relates only to infrastructure projects.

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Facilitating engagement across countries via major global infrastructural developments is an ambitious project.

Yet, the main focus when planning these developments has been on reviving the six economic corridors that link Asia-Pacific to Europe to Africa.

The only developments that are truly new are those that will link these economic corridors to connect the regions seamlessly.

As developing countries become more developed, their growth does slow down.

Meanwhile, China has its eye on the growing economies across the globe for co-operation.

But there are economies that have potential, but will not evolve as expected due to isolation from the rest of the world.

So naturally the initiative involves boosting linkages with developing countries, which starts with infrastructural developments.

For this reason, from afar the initiative appears as though it only involves infrastructure.

But the goals of Belt and Road say otherwise.

Infrastructure is just a tool for the initiative.

SUPPLIED

Siah Hwee Ang: "There are economies that have potential, but will not evolve as expected due to isolation from the rest of the world."

Belt and Road is also about policy, facilities, trade, financial integration, and connections between people.

Since the turn of the year, there has been more visibility around activities in these areas.

This is consistent with the fact that the initiative is now written into the Constitution of the People's Republic of China, and so reporting on the outcomes of the initiative becomes compulsory.

In this way China will have to answer the viability question that was raised when the initiative was first introduced.

In other words, China will have to show that it is working. This doesn't depend on infrastructural developments, but rather on what impacts come out of these developments.

For example, on policy co-ordination, China, Japan and South Korea have been negotiating their trilateral free trade agreement for a while.

Using the Belt and Road initiative as a framework, China is seeking to link to the Asean group of South East Asian nations on the ecommerce front.

In 2016, the value of mobile payments related to consumer spending in China amounted to US$790 billion (NZ$1.17b), 11 times that of the United States. The digital economy in Asean is expected to exceed US$200 billion in 2020.

MERCATOR INSTITUTE FOR CHINA STUDIES

The reviving of the Silk Road: These projects were being planned and undertaken as of December 2015 in China's Belt and Road initiative.

According to China's Ministry of Commerce, year-to-year trade with countries along the Belt and Road initiative has experienced a significant rise in exports (12.1 per cent) and imports (26.8 per cent). Overall trade rose by 17.8 per cent in 2017 from 2016.

Independent assessments made by consulting companies also suggest the (potential) upsides for many countries involved in the initiative.

There has also been a marked increase in the pickup of second languages in China (other than English), most notably Russian, Thai and Arabic. Traditionally these would be Japanese and French.

These are just some of the observations.

We should expect to see more activity related to the goals of the initiative over time.

A lack of awareness around the initiative is not exclusive to New Zealand. And China is aware of that.

The country has been holding information forums for journalists across the globe to generate more media and knowledge around the initiative.

A good starting point here is to think beyond infrastructural developments and also to acknowledge that China is not the only actor in this behemoth venture.

Siah Hwee Ang holds the BNZ chair in business in Asia and is the director of the Southeast Asia Centre of Asia-Pacific Excellence at Victoria University of Wellington.


https://www.stuff.co.nz/business/opinion-analysis/105131647/chinas-belt-and-road-initiative-is-more-than-merely-infrastructure

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