It has been five years since China launched the “Belt and Road” initiative, a bold vision to link Europe, Asia and parts between. The project is the largest development program in history and aims to put China at the center of an emerging regional and global order. That grand ambition has also created great ambivalence, outside China at least. Yet for all its flaws — and they are significant — Beijing deserves praise for attempting to fill a yawning infrastructure gap that deprives many countries of the opportunity to develop. China should be encouraged to help less fortunate nations; other governments should partner with Beijing to ensure that the Belt and Road initiative solves more problems than it creates.
Chinese President Xi Jinping announced the first version in a Sept. 7, 2013, speech in Kazakhstan, where he touted a “Silk Road Economic Belt” that would spark development throughout Eurasia and bring Asia and Europe closer together. Soon the “Belt” was joined by a “Maritime Silk Road” — together they formed “One Belt, One Road” — and that evolved into the Belt and Road initiative that holds the world in its thrall.
Xi seeks to build “a community with a shared future for mankind.” To do that, the initiative aims to fill an estimated $26 trillion infrastructure gap. The construction of roads, bridges, ports and airports would allow recipient countries to overcome critical bottlenecks and grow their economies. China claims that 70 countries have agreed to join the initiative. If that number is correct, then the project includes more than two-thirds of the world’s population, could impact 33 percent of the global economy and could move a quarter of the world’s goods and services.
One analysis concludes that China has already invested more than $210 billion in thousands of Belt and Road projects and there is fear that such largesse will create outsize Chinese influence in recipient countries. Close scrutiny of projects has sparked a second concern — creation of a “debt trap” among many of those same nations, triggered by lending money at unsustainable rates. Christine Legard, head of the International Monetary Fund, has cautioned against mounting debt among recipient countries. The head of the U.S. Navy has charged Beijing with darker motives, warning that China is “weaponizing capital” to seize control of strategic assets — ports and airports it is building — along Belt and Road routes. Those critics point to the 99-year lease that Beijing was given at Sri Lanka’s Hambantota port when that government could not repay the loans.
There is also concern that these projects are really intended to help Chinese companies that are experiencing flagging demand at home. Most Belt and Road projects go to those businesses and the terms of tenders are opaque, which facilitates corruption and limits the positive impact on the recipient economy.
Blowback is mounting. Governments in the Maldives, Malaysia, Myanmar, Nepal and Pakistan are reconsidering or canceling projects. Xi has been forced on the defensive. After offering African leaders $60 billion in aid at this week’s Forum on China-Africa Cooperation in Beijing, he dismissed criticism of China’s generosity, noting that “only Chinese and African people have a say when judging if the cooperation is good or not between China and Africa. No one should malign it based on imagination or assumptions.”
Japan, like other regional governments, worries that China is using the initiative to unfairly advantage its own companies and consolidate its influence among recipient countries. In response, Prime Minister Shinzo Abe announced the “Partnership for Quality Infrastructure,” a $110 billion five-year partnership with the Asian Development Bank that seeks to promote projects that are easy to use, durable, environmentally friendly, disaster-resilient and cost-effective in the long run. This summer, the United States launched its $113 million Indo-Pacific infrastructure initiative, and has invited Japan, Australia and other like-minded countries to join.
While officials in Washington and Canberra insist that they are not competing with China, they are being disingenuous. They are responding to — and seeking to check — China’s efforts to grow its influence. Japanese officials are often more explicit — when off the record — about their competition with China, and the evidence is plain in the tenders submitted for projects throughout Southeast Asia.
The truth, however, is that Asia’s infrastructure needs greatly exceed that which any single government or country can provide. A cooperative, coordinated effort is the only practical response. Japan, the U.S. and Australia, along with European governments, should be working with China in various international financial institutions to fill local needs while promoting international best practices. As part of Tokyo’s efforts to rebuild its troubled ties with Beijing, Abe has indicated that Japan is ready to cooperate with the Belt and Road. These governments should focus on helping recipients boost regional economic growth, stability, interconnectivity and prosperity.