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How China Is Losing Support For Its Belt And Road Initiative

Forbes.com



China’s Belt and Road Initiative (BRI) is nothing if not vague. Is it a blanket term for all Chinese overseas economic, social and political activities? Is it a specific set of coordinated policy that’s exclusive to Beijing-led international endeavors? What projects are officially Belt and Road? Where do the corridors actually go? What countries are truly participating? Nearly seven years into the initiative, we are still asking these questions as Beijing attempts to wrangle back its message from private firms and enterprising governments that have unscrupulously been using the Belt and Road brand for their own gains, dragging its reputation through the proverbial mud and putting the future of the initiative in jeopardy.

The Belt and Road was announced in 2013 as an economic development initiative that would create new trade corridors across Asia, Europe and Africa, positioning China at the top of the geo-economic food chain, while providing mutual benefit to participants all the way down the line. Beyond that vague rendering, the rest was left to conjecture, with a large degree of meaning lost between China’s struggles to explain the initiative and the West’s inability to comprehend it.

“I think the difference among policy makers is one of the biggest challenges of the Belt and Road,” said Moritz Rudolf, a China researcher, lawyer, and founder of Eurasia Bridges. “For the Chinese side it’s unclear why the West doesn’t understand what they are doing and from the Western side it’s ‘this is nothing because it doesn’t follow our procedures that we know about.’”

As we previously covered on Forbes in 2017:

This is an initiative for which there are no publicly-stated KPI, no overarching institutionalization, no formal membership protocols, no founding charters, and a timeline for development that is not measured in mere years, but decades—or even centuries. While many news sites have published articles and pretty graphics which state things like, “The Belt and Road is a $900 million/$1 trillion/$5 trillion dollar initiative spanning 65 countries, 60% of the world’s population, 75% of energy resources, and 30% of GDP,” this is little more than grasping at journalistic handholds … When you find yourself looking for validation for any these above claims you suddenly discover yourself floating within the vacuum of Beijing-speak—a land of mirages where you either take the illusions at face value or descend into an empirical black hole.

In that 2017 article, I argued that the opaque, open nature of the Belt and Road was ultimately a boon for development. As there was wasn’t really any explicit definitions as to what the BRI was there weren’t many hard rules that had to be followed. The BRI was fully culturally, politically and economically amorphous: it could shape-shift to meet the form of whatever country it entered, blending smoothly into the existing economic and political landscape, serving whatever regime that welcomed it. The BRI was modular and it was flexible, and this versatility allowed the initiative to rack up dozens of major infrastructure deals all over the world worth hundreds of billions of dollars within a mere couple of years. There was a point around 2018, where we had to ask ourselves if China had pioneered a new model of international development which, while directly defying the precepts of the West, didn’t only work but worked faster and better than what had come before it.

But in 2020, we still struggle to discern what the BRI is from what it isn’t. If you look for an official map of where the corridors of the Belt and Road actually go, good luck. While Beijing boasts that the official list of Belt and Road participants is up to 137 countries and 30 major international organizations, in most cases the criteria for “signing up” is a vaguely worded, non-legally binding MOU. Over the first phase of the Belt and Road, we’ve also seen projects retroactively labeled BRI and we’ve seen projects start out waving the BRI flag just to see them yanked down and re-branded as “local” as soon as the tide of public sentiment turns against them.

“It is more of a loose set of projects designed and implemented on the basis of a scattershot approach, while Beijing has yet to offer a clear-cut definition of what constitutes a BRI project,” said Plamen Tonchev of Greece’s Institute of International Economic Relations.

The Belt and Road still seems to be everything that China does abroad and nothing at all, and this vagueness makes it difficult for other countries and international firms to fully invest in it. This fact was spotlighted in a report by the European Union Chamber of Commerce in China that was published last month which criticizes the lack of overall transparency, the opaque tender process (if any), and access to information for European firms looking to get involved in Belt and Road projects. Via Jens Bastian of the CSIS: “The lack of transparent bidding and procurement processes constitute a recurring obstacle to the participation of interested European companies.”

In the wide open, vaguely defined first stage of the Belt and Road the initiative had become an economic feeding frenzy. Torrents of Chinese firms, both state-owned and private, flowed out across Asia, Europe, and Africa recklessly spending hundreds of billions of dollars on development deals and acquiring hundreds of foreign companies for (often) bloated prices. It was a spending spree of unprecedented proportions and it was all in the name of President Xi Jinping’s signature foreign policy initiative … although lacking much, if any, oversight from the man in charge himself. As the public definition of what constituted the Belt and Road was left wide open, legions of Chinese firms were able to fill the vacuum with their own likenesses. The BRI became a brand that virtually any player could leverage to their own advantage, and there were even major infrastructure projects that had zero Chinese participation—such as Anaklia Port in Georgia—that were proudly proclaiming themselves to be Belt and Road.

As Yau Tsz Yan emphasized on Eurasianet.org:

“As confusion reigns, private companies, both Chinese and foreign, leverage the catchall phrase—whether to claim bragging rights or perpetrate outright scams: “One Belt One Road camel milk” produced with “German technology” in Kazakhstan; a Ponzi scheme appealing to Chinese tourists in Malaysia, disguised as part of the BRI; that Kyrgyz gold mine. Nowadays, for every project lumped into the BRI—just because it’s financed by a Chinese bank, or a Chinese contractor is providing the laborers, or a hack thought it sounds good—there must be a thousand confused people wondering what, exactly, is the Belt and Road Initiative.”

The lack of defining precisely what the Belt and Road is led to Beijing losing control of its own message. The BRI became a broad term to describe anything China abroad and, most problematically, many of the actors using the BRI brand left it tarnished.

How China’s Belt And Road Became A ‘Global Trail Of Trouble’
FORBES Wade Shepard

It soon became clear that the laissez-faire, undefined, wide open strategy that led to the appearance of big gains in the early days of the Belt and Road is now one of its biggest barriers holding it back from becoming the paradigm-shifting international endeavor it was meant to be. Tales of corruption along the BRI have become common, the debt-trap diplomacy theory has put populations across Eurasia on guard, and the fact that dozens of major China-driven development projects across Asia have become white elephants have rendered the BRI an unattractive proposition in many markets. In many ways, Beijing had become a victim of its own Belt and Road.

Worse yet, the numbers do indeed support some of the criticism. China’s overseas investment growth has been on a sharp decline over the past three years, with Moody’s claiming that this is due to an increased awareness of the risks inherent to major BRI projects. Malaysia, Myanmar, Pakistan, Sierra Leone, Kyrgyzstan, among other countries have canceled, downsized, or postponed key BRI projects, and the initiative seems to be going through a period of retreat to an extent that some researchers are suggesting that we may have already seen “peak” Belt and Road.

“There’s been pushback,” said Jonathan Hillman of DC’s Center for Strategic and International Studies’ Reconnecting Asia project, “and much of it is due to China’s decision to keep the BRI opaque and its willingness to start projects quickly without doing as much risk mitigation.”

Beijing has continued this push to establish a more definitive set of parameters as to what constitutes the “real” BRI. Last year, it was announced that a plan was in development which would prevent firms from using the Belt and Road label for unsanctioned endeavors. Perhaps more importantly, for the first time, the National Development and Reform Commission (NDRC) compiled an official list of participating BRI nations and approved projects. Finally.

“If I was deriving what a Belt and Road project is right now,” Rudolf said, “I would start with what the official side has called a pilot project through an official channel … On the other side you have someone just calling it part of the Belt and Road initiative but you cannot trace it back to an original document. In my view this would not constitute a Belt and Road project.”

The Belt and Road isn’t a trade pact, it’s not a free trade area, it isn’t a customs zone, it isn’t a treaty organization, it isn’t even anyone’s Marshall Plan. The Belt and Road is not Dalian Wanda buying up everything in sight in Europe, it’s not a catchall for everything Chinese overseas, and it’s definitely not One Belt One Road camel milk. However, when we whittle away all the things that the Belt and Road is not, there isn’t much left to see.

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