China's Belt and Road Initiative set to cope with fresh wave of hostility

China's Belt and Road Initiative set to cope with fresh wave of hostility

China's grand Belt and Road Initiative has been underway for a decade as part of Beijing's crusade to become the world's leading economic superpower at the centre of a new global trade network.

Another raft of projects was added to the campaign's to-do list at the weekend's China-Central Asia Summit, where Chinese President Xi Jinping promised to build more railway and other trade links with Central Asia

"We need to expand economic and trade ties," Mr Xi said in a speech to leaders from Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan on Friday.

The summit coincided with Prime Minister Anthony Albanese, US President Joe Biden and other leaders of the Group of Seven major economies coming together for a meeting in Japan.

So, what is the latest on Mr Xi's signature global trade policy, and can it challenge US influence as trade across Asia increases?

Needing multiple high-speed rail networks to reach western Europe, and massive ports across Asia and Africa for shipping, the Belt and Road Initiative (BRI) has required a lot of funding.

While it is difficult to put an exact figure on it, research suggests the BRI has so far cost more than $1 trillion.

Most of the eye-watering spend has been on energy and transport infrastructure, but also includes real estate, technology and tourism projects.

Professor Jane Golley, an economist at the Crawford School of Public Policy at the Australian National University, said 152 countries had signed onto the initiative.

Due to the nature of loan agreements and the structure of investments, it can be hard to determine firm figures, but analysts believe the most expensive project undertaken as part of the BRI is the $92.5 billion China-Pakistan Economic Corridor (CPEC).

Under the CPEC highways, a port, an airport, railways, oil pipelines, and fibre optic cable networks have been built or are under construction across Pakistan, but its focus has been power plants — some running on fossil fuels but also renewable (solar, hydro and wind) and nuclear plants too.

Ultimately, the CPEC projects will give China overland access to Pakistan's deepwater ports on the Arabian Sea, as well as to the domestic market of 231 million mostly younger people.

Other large undertakings of the BRI include gas pipelines into Central Asia, huge railway developments in Indonesia, Malaysia and Kenya, and investments in Greece's Piraeus port.

There are plenty of other deals inked and official memorandums of understanding exist with countries such as Italy, but details of actual projects are not always clear.

It's not all been to plan, however.

In 2021, the Australian government ended Victoria's BRI agreements with China.

Reuters has reported that $17.4 billion in projects in Malaysia have been cancelled between 2013-2021, with nearly $2.25 billion scrapped in Kazakhstan and more than $1.5 billion in Bolivia.

Because developing the BRI has been costly, China has had to fork out more as countries struggle to keep up with debt taken on to complete projects.

New research from the World Bank, Harvard Kennedy School, AidData and the Kiel Institute for the World Economy showed China has spent $359 billion bailing out 22 countries including Argentina, Mongolia and Pakistan, between 2008 and 2021.

While infrastructure projects still make up the bulk of spending, other areas are being increasingly prioritised, Professor Golley said.

"The roads and rails still dominate, but there's definitely growth in digital connectivity and the health sector," she said.

Beijing has listed five areas of focus for the BRI: policy coordination, infrastructure building, unimpeded trade, financial integration and people-to-people exchanges, Nadège Rolland, from the National Bureau of Asian Research, a US think tank, told the ABC.

As well as having written and edited several books on the BRI, she was also an analyst and senior advisor on Asian and Chinese strategic issues to the French Ministry of Defence for 20 years.

Since 2015, the BRI has expanded that to include "specific action plans" on a range of other areas including education, culture, agriculture, energy, maritime cooperation, health and scientific cooperation, Ms Rolland said.

Ms Rolland said the ultimate objective of the BRI was not to enhance connectivity, but, as Mr Xi mentioned, to "move toward a community of shared future".

"The BRI should be understood as the backbone of a new world order shaped according to China's preferences," she told the ABC.

"China may still be able to build the BRI it envisioned."

According to Elena Collinson, head of analysis at the Australia-China Relations Institute at the University of Technology Sydney, delivering the BRI has been, and would continue to be, a serious challenge for Beijing.

"It has been riddled with complications such as backlash in participating countries against opacity of project governance, massive delays and environmental issues, among other difficulties," she said.

Progress on the BRI slowed somewhat through the COVID pandemic, but Professor Golley said the BRI was not going to fizzle out.

"They are absolutely still advancing it," she said.

 La Trobe Asia director Bec Strating said she didn't expect the BRI to lose its priority.

"It's such an important part of how President Xi has pursued power and influence on the global stage," she said.

"Rather than China abandoning the BRI, it seems to be evolving into a different phase."

Dr Strating told the ABC the point of the BRI was to create a China-centric vision of global order — an alternative to a US-led vision of order.

The BRI was in 2017 written into the Communist Party's constitution as a sign of its importance, and Mr Xi described the BRI as "the project of the century".

Ms Collinson said while Beijing insisted the BRI was focused on accelerating infrastructure connectivity, its true aims were much wider.

"It is a multi-pronged and ambitious geostrategic framework for Chinese foreign policy, as well as a means to realise domestic economic objectives," she said.

"It is a means for Beijing to extend its sphere of influence and, potentially, its geopolitical leverage over participating nations."

There was also a potential defence element to the BRI, under which China has indicated it could deepen military cooperation with partners like countries in the South Pacific and Caribbean, she said.

Professor Golley said the BRI was, from the outset, an economic development strategy.

"I don't see the BRI primarily as a tool for influence," she told the ABC.

"I see it as a tool for expanding China's trade and investment links, particularly with its near neighbours."

The main goal for China was to create and access new markets for its goods.

"The influence that comes with trade integration is secondary — and of course, they want that as well," Professor Golley told the ABC.

"But I really don't think it was their driving force."

Since 2017, the emphasis of the BRI has not been as focused on hard infrastructure, Ms Rolland said.

Other aspects, like expanding ties to enable the sprawling network to shift goods and drive the investment links, "remain very much in place", she said.

One recent example of this was the China-Arab States summit last December, where diplomatic and trade opportunities were discussed.

At the forum, Mr Xi vowed to import more oil and natural gas from energy-rich Gulf Arab states and said China would work to buy energy resources in yuan, a move that would support Beijing's goal to establish its currency internationally and weaken the US dollar's grip on world trade.

Dr Strating said under Mr Xi, it seemed China would try to use the BRI to build relations with other states across Asia and the Pacific.

"This isn't just about countering the US, but also about improving China's global position and ability to exert influence within other states," she said.

"Partly its ability to maintain and grow that influence will be shaped by whether it can reframe the BRI to deal with the criticisms that have been levelled at it."

The US has not yet succeeded in offering an alternative to the BRI, Ms Collinson said.

"The Biden administration's 'Build Back Better World' initiative announced at the G-7 in June 2021, repackaged as the Partnership for Global Infrastructure and Investment in June 2022, still lacks the financing to seriously compete," she said.

Citing research from the IMF, Professor Golley said that in 2022, half of global trade took place in Asia.

"Is China going to succeed here? Absolutely," she said.

In Asia, China has become the most important power in the region, she said.

"It will be the biggest economic power and will be the most important trading and investment power," Professor Golley said.

"Any idea of containing them or of forcing countries to pick a side — it's a very risky game to play."

For Professor Golley, the key question to consider was: "Is the BRI going to sustain global engagement in the world's most dynamic region?"

Her view is that it would, but trying to put a time frame on changes to global power would be difficult.

By Toby Mann on June 28 2023 for ABC News (Australia).