Reassessing China's Belt and Road Initiative (BRI): Motives, Pushbacks and Adjustments

INTRODUCTION

In the wake of the 18th Party Congress in 2012, there was a growing call in Chinese policymaking circles for the adoption of a "grand strategy" by the incoming leadership of Xi Jinping. While China at the time had no lack of five- and 10-year plans, many international analysts believed that the country was deficient in an overall plan which would reflect its rising international standing and expanding global interests. It is generally believed that the Chinese leadership's adoption of a grand strategy would be highly beneficial: On the domestic level, such a strategy would have a unifying effect, which is needed in an era when rapid growth has created considerable national stress. On the international level, a grand strategy could craft a more appealing image for China and alleviate the increasingly widespread notion of a "China threat".

First unveiled in 2013 by Chinese President Xi Jinping at the Nazarbayev University in Kazakhstan and then subsequently proposed by Xi during his state visit to Indonesia, China's "Belt and Road Initiative" (BRI), originally known as the "One Belt One Road" (OBOR) initiative, has become a crucial pillar of Xi's grand strategy conceptualised during his first term from 2012 to 2017.¹ The BRI is China's ambitious economic diplomacy initiative that comprises two components, one via the maritime route between Asia and Europe, and the other through the overland route from Asia to Europe. As of now, 129 countries and 29 organisations have signed to participate in the BRI.

Through the implementation of the BRI, China has gradually departed from Deng Xiaoping's low-profile diplomacy (taoguang yanghui) that cautions China against being a world leader (juebu dangtou), and moved to recalibrate itself towards the new vision of increasing China's engagement with other regions. Xi's overture has greatly reduced the lingering political influence of retired Party elders in key policy and personnel decisions. Xi has also attempted to export China's excessive capital, technology and industrial capacity to other countries that need them in order to elevate China's domestic economic activities and to align them with its emerging global strategy. It is evident that Xi has fundamentally shifted China's strategic gravity from domestic economic development, which was the country's focus for three decades, to an outward expansion of its influences.

The launch of the BRI, which is the Xi administration's one and only major foreign policy initiative, can be attributed to three factors. First, China's economy has shown signs of a slowdown, and the BRI is therefore deemed effective in consuming the overproduction, overcapacity, and excess products and commodities.² Second, the BRI dovetails with China's foreign policy which seeks to extend China's influence into other regions.³ For example, countries in Africa, Eastern Europe and even Central Asia, which are not on the receiving end of Western monetary aid, have been more receptive to the BRI. With the entry of Chinese investment into these regions, Chinese influence in those regions has also inevitably increased. Third, China has also recognised that the BRI presents an opportunity to create alternative funding agencies that reflect China's growing strengths.⁴ Financial institutions, such as the Asian Infrastructure Investment Bank (AIIB), Silk Road Fund and the BRICS Bank (set up by Brazil, Russia, India, China and South Africa), fund BRI projects and have enabled China to address the voting rights allocation inequality issue in the World Bank, International Monetary Fund and Asian Development Bank.

The BRI consists of two components, i.e. the overland Silk Road and the maritime Silk Road. The conceptual idea of the overland Silk Road is based on a historical narrative from the 1800s when a German traveller coined the word "Silk Road" to describe the overland route which camels plied across to bring goods from China to Europe through a series of intermediaries (Persians, Arabs, Central Asians).⁵ Today, this route is powered by high-speed railways transporting goods from Chinese cities to Western Europe, and vice versa. The maritime Silk Road also...