BIG EVENT! Can Belt and Road cooperation continue to thrive?
From the very first, there have been doubts, debates and nay-saying about the initiative. But to the surprise of some, countries and international organizations have gravitated to the initiative.
Written by Mike Meng, Robin Cheng
BIG EVENT IS COMING!
The Third Belt and Road Forum (BRF) for International Cooperation, themed “High-quality Belt and Road Cooperation: Together for Common Development and Prosperity”, will open in Beijing on Oct. 17-18. The high-profile forum, the most significant diplomatic event hosted by China this year, is not just to celebrate the initiative’s 10-year anniversary but to look beyond what it has gone through so as to take it further toward a sustainable future.
SCHEDULES UNDER SPOTLIGHT
Chinese President Xi Jinping is expected to deliver a keynote speech at the opening ceremony and meet visiting foreign dignitaries. Apart from the opening ceremony, three high-level forums will be held simultaneously for in-depth discussions on connectivity, green development and the digital economy, and six thematic forums will be conducted in parallel under the topics of trade connectivity, people-to-people bonds, think tank exchanges, clean silk road, subnational cooperation and maritime cooperation. A CEO Conference will also be held during the forum.
HIGHLY WORTH LOOKING FORWARD TO
A Chair's Statement will be issued to capture the consensus reached by participants and lay out the future direction and key areas of high-quality Belt and Road cooperation, according to China’s Foreign Ministry.
A List of Multilateral Cooperation Deliverables and a List of Practical Projects will be released to present the outcomes reached under the framework of the BRF.
During the CEO Conference, Chinese and foreign businesses are expected to negotiate and sign a series of cooperation projects.
HEADS-UP
Outcomes of the third BRF would be substantial, both in the forms of cooperation documents, initiatives and mechanisms, and in terms of projects, funds and measures. The total number of deliverables is likely to exceed those of the previous two forums. It’s likely that more new cooperation programs with Africa will be unveiled.
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From the very first, there have been doubts, questions, debates and nay-saying about the China-proposed initiative. But to the surprise of some, the initiative is not failing or losing steam. Rather, over 150 countries and 30 international organizations have gravitated to the initiative.
It’s fair to say the initiative has stood the test of time and displayed its resilience amid multiple challenges. How has the initiative come to where it is? What could be expected from the next decade? What are the risks and solutions ahead? With these questions on mind, PekingEnsight will try to take a deep dive into the forum, and here are some of our observations ahead of the event.
WHY BELT AND ROAD COOPERATION STAYS ROBUST?
Though deeply rooted in the ancient Silk Road dating back some 2,000 years, the initiative has been new and foreign to those hardwired to think that the world could only be run under a zero-sum mindset and thus have to follow the story line of geopolitical conflicts and rivalries among major powers. On the China side however, since day one, the initiative has been open to all. Now, an essential part of China’s foreign diplomacy, the belt and road cooperation has evolved into a key pillar of building a global community of shared future.
A CULTURAL RESONANCE
When it came to the discussions over the Belt and Road Initiative in the early years, China’s motivation was often a focal topic. Skeptics would rather take it as an instrument of China to satisfy its geopolitical ambition. They might think the concept of building a global community of shared future too lofty to be true. For the Chinese however, this perception has been deeply rooted in their culture and history.
For thousands of years the ancient silk routes served as major arteries of interaction, spanning the valleys of the Nile, the Tigris and Euphrates, the Indus and Ganges, and the Yellow and Yangtze rivers.
These routes increased connectivity among countries on the Eurasian continent, boosted regional development and prosperity and facilitated exchanges and mutual learning between Eastern and Western civilizations.
The concept of a global community of shared future is not unique to China. Rather it incorporates the best of the cultures of enduring appeal and impact that have transcended time, space, and national borders in human history.
All civilizations around the world have manifestations of the concept of a global community of shared future. Ancient Greek philosophers conducted primary research on this concept based on city-states, believing that humanity as one community should act in concert to pursue common interests and thus must live in harmony.
Ancient Indian literature records the motto of "Under Heaven – one family". The African philosophy of Ubuntu holds that “I am because we are,” emphasizing interdependence of humanity. A German proverb reads, “An individual’s effort is addition; a team’s effort is multiplication.” An African proverb states, “One single pillar is not sufficient to build a house.” An Arabian proverb asserts, “If you want to walk fast, walk alone; if you want to walk far, walk together.”
All the above narratives manifest a thrilling cultural resonance: the world is by nature a community of shared future. In this sense, the message from the Belt and Road Initiative is nothing new or foreign, it is just letting people know the world as it is. And that is an irresistible charm.
QUENCHING THIRST FOR DEVELOPMENT
A second important catalyst for the initiative is the tangible need for development from countries, big or small. Official figures show that from 2013 to 2022, the cumulative value of imports and exports between China and BRI partner countries reached 19.1 trillion U.S. dollars, with an average annual growth rate of 6.4 percent.
The cumulative two-way investment between China and partner countries reached 380 billion U.S. dollars, including 240 billion U.S. dollars from China. The value of newly signed construction contracts with partner countries reached 2 trillion U.S. dollars, and the actual turnover of Chinese contractors reached 1.3 trillion U.S. dollars.
The BRI dovetails with the U.N. 2030 Agenda for Sustainable Development in concept, measures and goals, and aligning with participating countries’ development strategies has been an important part of its operation.
When judging whether the initiative is good or not, participating countries and their people have the most say.
Solomon Islands journalist Dr. Luke Mani said that although Solomon Islands was a late comer to join the BRI cooperation in 2019, the cooperation between the Solomon Islands and China has achieved immediate results and brought huge benefits to the Solomon Islands.
The two countries launched the "Friendship National Stadium" project, the stadium of the 2023 Pacific Games. During the construction of the project, 888 local employees were recruited, which had "immense" economic impact on the country.
So in essence, the initiative is need-based and kept running under the market forces. China did get reciprocated in terms of trade, investment, deep integration with the rest of the world and opening-up.
For instance, for the western parts of China, opening up previously meant going from the west to the southeastern coast, then to the outside world. Now, thanks to the Belt and Road cooperation, China’s western interior is opening itself to both the east and west, that is, to the Atlantic Ocean and the Pacific Ocean at the same time, according to Zhao Lei, a professor at the Chinese Academy of Governance.
“DEBT TRAP” NARRATIVE NOT TRUE
Some critics belittle BRI as merely a funding program and narrate China’s finance commitment as a "debt trap" story. However, there is no participating country that has fallen into a debt crisis as a result of BRI cooperation. Moreover, what is the benefit to a creditor of setting a debt trap?
These days multiple factors could constrain the repayment capacity of debtors. The U.S. Federal Reserve's interest rate hikes, global commodity price cycles, economic structures of certain debtor countries, the COVID-19 economic slump and the Ukraine crisis could all lead to a liquidity shortage.
According to the National Treasury of Kenya, Kenya's external debt stock stood at 36.66 billion U.S. dollars at the end of March 2023. The debt is owed to multilateral lenders (46.3 percent) and bilateral sources (24.7 percent), among others. As of March 2023, Kenya owed Chinese entities, including Chinese banks and companies, 6.31 billion dollars, but the largest chunk of Kenya's debt -- 17 billion dollars -- is owed to the International Monetary Fund and the World Bank.
In Sri Lanka, data released by the country's Central Bank and Ministry of Finance, Economic Stabilization & National Policy showed that as of March 2023, Sri Lanka's existing external public debt is 27.6 billion dollars, with private creditors taking the lion's share at 14.8 billion dollars (53.6 percent), multilateral creditors 5.7 billion dollars (20.6 percent). Chinese entities' share is 3 billion dollars (10.8 percent).
A report from the Boston University Global Development Policy (GDP) Center shows that the BRI project’s outlays have not only boosted economic growth in many developing nations but also helped foster Global South–led institutions aimed at providing financing, opened energy access, and removed infrastructure bottlenecks.
Another positive thing, as Kevin P. Gallagher, director of the center, noted, is that the BRI has triggered the West to invest more in infrastructure recently.
A PUBLIC ROAD OPEN TO ALL
"China's super-large market provides important development opportunities for the BRI countries, and goods coming from those countries account for nearly half of China's overall imports," China's Vice Commerce Minister Guo Tingting said when speaking of the deepened trade and investment cooperation.
So far China is a major trading partner of more than 110 BRI countries. In 2022, the scale of goods trade with the BRI countries is close to 2.9 trillion U.S. dollars. China’s direct investment in the BRI countries exceeded 30 billion U.S. dollars, attracting more than 20 billion U.S. dollars of investment, covering R&D and design, manufacturing, trade and logistics, etc.
Foreign Minister Wang Yi once likened the BRI to “a public road open to all.” He said it is open to all kinds of systems and civilizations, and is not ideologically biased.
Along this road, there is no such arrogance as “Either my way or highway” or ” Winner-take-it-all.” But countries jumping on the bandwagon do have rules to follow: extensive consultation, joint contribution and shared benefits, known as the founding principle. By implementing such a principle, participating countries, especially developing ones, have found out a decent way for them to engage in cooperation. The equal say they have in project planning makes it possible for them to address local people’s pressing needs through Belt and Road cooperation.
The BRI, however, is not all perfect. It did have encountered challenges in the past decade. Companies having become more cautious about investing abroad is one. There is also a louder voice for pivoting to “small but beautiful” projects, for boosting digital and green transformation, for more effective risk prevention and for greater sustainability.
In a time fraught with tension and uncertainty, it couldn’t be better if people with different views could see each other and talk face to face. Look forward to the BRI forum and the collision of ideas and perspectives.