Beijing’s Desperate Push To Resurrect BRI

NewsAnalytics Bureau

(This article has also been featured by a National Defence Journal.)

a 3 mins read.

The BRI Forum

As the assortment of heads of states descended in Beijing to attend the 3^rd Belt & Road Initiative (BRI) forum from 17-18 Oct 23, China was desperately looking to consolidate it’s marquee project. It was President Xi’s pet project and his personal indulgence has given the push as soon as he took over the presidency in 2013. The BRI envisaged linking China with Europe through Central Asia by land and through Gulf by sea. President Xi has plans to turn the balance of influence in China’s favour and the project served a perfect alibi for it.

The initiative was well cloaked in a web of smart pitch for infrastructure development combining necessary financial assistance as a highly tempting package. World Bank in a May 2018 report on ‘Opportunities and Risks of BRI’ had termed it as having ‘Tremendous Size & Scope’. The BRI economies accounted for one-third of global GDP and trade, and close to two-thirds of world population. BRI projects included railway lines, highways, expressways, ports, airports, housing societies, tourism development and everything backed by the monetary muscles from Chinese financial institutions.

BRI saw Chinese romanticising this push model of infrastructure delivery across the globe. China’s mouthpiece People’s Daily in Jan 23 reported, the initiative has reached the staggering strength of 151 countries and 32 international organisations with more than 200 BRI cooperation agreements signed till date. By any means a stunning achievement by China and merits among few unbelievable things done by this country. The initial ‘successes’ of increasing acceptability was trumpeted by Chinese media as a landmark achievement for President Xi. At the face value BRI did appear an innocent endeavour for global good, but the missing part was the honesty of intent.

Crashing Hopes

China carries widespread question marks on it’s endeavour and it’s intents. There has been No dearth of instances where Chinese initiatives have fallen on the wrong side of global acceptability norms. China challenged the Western developmental modal with it’s own eye catching infrastructure build up, it ended up forcefully displacing millions from major cities and construction sector going bankrupt; it tom-tommed the prowess’s of it’s tech achievements and soon it’s mega companies were banned globally from rolling out 5G infrastructure on the fears of tech-espionage; accomplishments of China’s scientific R&D was muddled with the spread of global pandemic originating from Wuhan Institute of Virology.

The fine prints of BRI projects had provisions of construction materials, labours and technology from China only. It was also to be undertaken only by Chinese enterprises. So, a major part of investment on paper by China was routed back to mainland to benefit it’s own economy, while the burden of repaying interest and loan were left on the recipients. How smart that Chinese companies were getting billions of dollars’ worth contracts from foreign shores, pumping up their balance sheets without having to compete on any bidding, without having to prove their technology and without having to hold any liability with the local governments. Interestingly, the whitepaper on BRI published in Sep 23 by State Council Information Office of China hints at accusations of BRI exporting China’s climate liabilities by building coal-fired power plants overseas, by adding the word “Green” ahead of it’s decade old Silk Route initiative.

Countries have failed to adequately scrutinise the Chinese investment parameters and explain to their people why their economies have slide into a debt trap. Srilanka in it’s history has to go through worst economic meltdown, a large chunk was attributed to Chinese wanton investments that added burden to service huge loans. The Gwadar port in South Pakistan, after promising massive economic benefits resulted in sunk expectations when cargo handling continued below par. Similar was the fortune of Pokhara International Airport in Nepal, where only one international flight has landed till date that too a chartered flight carrying Chinese athletes.

Desperation

The BRI was as such labelled as a pure business module for profit with investments having No element of social welfare, education or community upliftment component in it. Many countries which China initially claimed to be part of BRI clarified they have just approved the concept in principle but have not given any approval for project. Britain once showed the interest but never joined, Italy wants to end the BRI agreements with China as soon possible. Still there are countries which have already burnt their hands with BRI, they want an exit model and limit their exposure in the immediate term. China is also wary of poor returns BRI investments, neither the companies who have taken huge loans are showing commensurate profit nor the interest on loan are easily forth coming.

The just concluded BRI summit has a contrasting narrative from what Chinese media would want the world to believe. They celebrated participation over 90 countries but the fact is very few heads of states actually landed in Beijing with majority of countries being represented by lower ranked ministers. The highest European leader to attend was the Hungarian President Orban and that tells the story. Chinese built euphoria around BRI forum to showcase great enthusiasm for it, fact is many participants were worried and wanted to understand if the investments already planned in their country can be re-worked, better aligning with global norms and improved terms of financial prudence.

It’s a whole circle that the BRI is fast completing, wherein the initiation was as euphoric as the sagging hopes it has now drowsed into. Decade gone by has exposed the hollowness of this venture. In the meantime much balanced alternatives have been created in the form of Global Gateway programme, Partnership for Global Infrastructure and Investment and India-Middle East-Europe Economic Corridor.

The lessons are there for many to learn; for those who just jumped in the melee – that there are No free lunches; for those who understood the plot and refrained from BRI for a variety of reasons including territorial concerns like India – that national concerns must always be prioritised, it may draw initial cost but it also ensures best long term returns; and ofcourse the lesson for China – you just cannot fool all the persons all the time! Surely China is not in a habit to comprehend such lessons but very soon poor economics of BRI, scandalous approach of it’s enterprises and the global retort over President Xi’s marquee project will dawn on it.