Introduction and first part of my final paper: present and future of the BRI.
1. INTRODUCTION: THE BELT AND ROAD INITIATIVE
First announced by Xi Jinping in Kazakhstan back in 2013, the Belt and Road Initiative is a conglomerate of contracts, plans and agreements that aim at connecting the unconnected world with the already connected. It is run by China and, most importantly, it is the signature policy of its current president, Xi Jinping.
The BRI is imperialism with Chinese characteristics. In abstract, is the model through which Xi Jinping has decided to put into operational mode the Chinese need to expand overseas. With this initiative, China exerts its natural imperialistic power to the modern world. There are two interesting concepts that factor in the development and expansion of the empire: the win-win approach and the soft power concept. The win-win approach relates to the idea that, while China will expand and dominate, it does not have to be at the expense of the wellbeing of other countries. All countries can benefit from the expansion of China’s economy.
Soft power is a military and strategic term (Albert, 2018). It talks to the way in which China conducts its actions abroad. If they want something, they will not act in a direct way by showing their force, but through a non-military and indirect way, showing the other country the benefits of that action. This two characteristics define the approach that takes to international relationships, at least on the public eye.
Rather unexpectedly, the part of this program that receives most of the attention, is its massive infrastructure and investment branch. They invest in underdeveloped and developing countries in Africa and south Asia, reaching as far as the Mediterranean and European countries of Italy and Greece. They are trying to bring economic growth through the facilitation of business with better roads, trains and ports.
They help building infrastructure that connects the country within as well as with the rest of the world. Through this mechanism, they hope to encourage commerce and trade with China, thereby creating opportunities and generating the environment where FDI can thrive.
The “Belt” refers to the interior connections, rails and roads, while the “Road” refers to the ports that connect the world through maritime routs. Their involvement in all those plans sets the stage for both success and failing stories. The initiative is young in its history and enormous in its scope, is always evolving and adapting to the needs of the rest of the world. Ten years from now, things will look very different.
But the BRI is much more than their infrastructure investments. Infrastructure alone won’t be able to achieve the full economic potential in these countries, and may even become a constraining factor for some. The right environment needs to be put in place. If they fail to do this, and constructions all over the world end up as stranded infrastructure to be paid by underdeveloped countries, China will lose its legitimacy. Countries that are growing to become the next producers of the world will suffer a serious backlash and will try to hold China accountable for it.
This work will cover analysis of the present state of the BRI, as well as the future steps needed to bring further success to this initiative. The first thing will be to go over the recent history of China, to understand where the country is coming from and what are its aims. Then I will talk about the BRI potential effects on growth, for China and for the world. Then I will go on to talk about a much-discussed issue, the high debt levels in some developing countries due to Chinese investment. Finally, I will speak to the solutions that need to be implemented, if the BRI wants to be successful in its economic programs.
2. HISTORY OF CHINA
This section will present a brief overview on the modern history of China, from the fall of the last empire, through the construction of the People’s Republic of China until the present times.
2.1. View of History
The history of China is somewhat peculiar. In order to better understand the evolution and development of the Chinese empire in the world, there are certain differences with our western vision that are worth emphasizing. This analysis will also provide a better perspective to analyze the BRI and its cultural and historical background.
Figure 2.1 could help explain this radically different view. The relative standing power of the Chinese empire and its geographical isolation has helped create the notion that the resurgence of China’s power is always just around the corner. It has been the new and radical appearance of the empires of the West (Netherlands and United Kingdom) that has hinder China’s everlasting power in their part of the world. It shows that China dominated for centuries, and entered a period of strong decline in the 1800s, with the increasing power of empires across Europe (Dalio, 2020). The Netherlands, though a small country, became one of the world’s greatest empire around the 1600s. The UK followed a very similar path, peaking in the 1800s. Finally, during the last era, the US became the world’s superpower and has remained so for the past 100 years, specially after the WWI. Now it is in relative decline as China catches up and grows at such unseen pace.
In the West, we understand history as a linear process in continuous progress, driven mainly by technological innovation and the believe that societies learn from their past. History is condemned to follow a straight and self-renovating path. It is a process in which changes prevail and the lessons learned by past generations are transformed into present knowledge.
Figure 2.1: Rough Estimates of Relative Standing of Great Empires
Source: Dalio, Ray (2020): The Changing World Order.
This process gives rise to different and better results in the future. Moreover, empires have risen in Europe one after another. The fall of an empire paves the way for a new one that replaces it in terms of power, influence and territory. The new empire has its time of glory, they educate the peoples that they govern and establish their culture, their language and their institutions, but sooner or later fade away and let place to the new contender.
In the end, empires in Europe always succumb to the arrival of a new and stronger force, better adapted to the new times. This has happened throughout history with the Spanish empire, the Belgian empire, and the British empire. The US is currently the leading force of culture, language, and technology. But their global power is in decline, as global influence becomes a more complicated and intricate matter, and they are unable or incapable of facing it. They have to deal with the rising power and influence coming from the growing power of China. Rules have changed and technology has reshaped the world into something so different from what history knows, that the battles for power of the future might look completely different from those we have seen in the past.
On the other side of the earth, Chinese culture does not understand history in the same way. For them, history is a circular process, expressed in the well-known phrase “The empire, long divided, must unite; long united, must divide. Thus, it has ever been.” These are the words from the book on China’s history Romance of the Three Kingdoms (around 14th-century). They understand history as a natural process of division and reunification of territories that lie under Chinese dominance. The division of the empire does not imply the end of an era or the disappearance of China. Rather, it means that China remains dormant, waiting for the next emperor worthy off governing the Chinese people. The dragon falls asleep, but it always wakes up again. A new emperor, a new dynasty, will assume the leadership and command united all the provinces of the empire.
With the arrival of communism and Mao to power, there also came a new interpretation of history, in line with the communist theory. Communism interprets history in a linear way, and the historical process was divided into different stages, the current one being the socialist stage, which precedes world communism in an imprecise future. The linear view of history has outgained the circular view of China’s history, due to the evident power of the regime and its state control over the education of its population.
2.2. The last days of the Qing dynasty and the civil war.
China’s modern history begins with the fall of the Qing Dynasty. The last years of the empire, at the end of the 19th century, were marked by the continuous defeat and capitulation to external forces. In Europe, the naval empires, first of Belgium and later of Great Britain, found behind the borders a great market for their products, in addition to a great number of relics and luxury objects that they could export back to their countries. More importantly, the British found in China an important market for the consumption of opium, and started trafficking with great impunity enormous quantities of this drug and introducing them into China.
In order to control trade with the outside world and stop the commercial abuses committed by Western countries, China limited trade with these countries. They only allowed the entry of products to the port of Canton. China’s exports to the rest of the world were given priority, while imports were almost forbidden. The entry of products, foreign traders and diplomats into its territory was severely limited.
The Qing dynasty was unable to overcome the British military and naval power and lost the war. After the First Opium War, in the Treaty of Nanking (1842), it was agreed that the Chinese give Hong Kong to the British, apart from opening several ports to trade with the West (Ward, 1975).
Some time passed and the debate reopened. Britain was again asking for further freedom in its trade with China. This was the root cause for the war that was about to occur. The trigger for the Second Opium War and the further opening of China’s foreign trade, was Arrow’s arrest, a ship that was boarded by Chinese authorities. Its crew was detained under suspicions of piracy and smuggling. After a series of political and diplomatic actions by British stakeholders, the Second Opium War with China was declared. The concessions they made in the face of defeat were much greater. They were written down in the Treaty of Tianjin (1858). Initially, they avoided signing it and then refused to honor to comply to its demands. Another war was necessary to reaffirm the absolute power of the West and the procurement of all its claims. The result was the Beijing Convention (1860), which extended and ratified the Treaty of Tianjin (Travis, 2002). Opium trade was legalized, Christians were granted rights to own private property and to evangelize, more ports were opened for foreign trade, and compensation for war expenses was impose to China.
As expected, the Qing dynasty was made responsible for these defeats. It was a shame for China handing over so much power to foreign barbarian countries. The Chinese people, although unable to modernize and acquire the technologies and methods of the West, still believed themselves to be spiritually, and therefore overall, superior. The outside countries were barbarians, the people furthest from China, and therefore the most vulgar, the furthest from God and virtue. China was the kingdom that enjoyed the central position in the world, through which they had the privilege of communicating with the Gods. It was inconceivable to them that they were been so easily defeated by barbarians on the other side of the world.
However convinced they were of their own greatness, the reality dose continued, as the Qing dynasty had to deal with yet another war for which they were not prepared, the Sino-Japanese War, between 1894 and 1895. It also arose due to trade conflicts, but this time with the neighboring country of Japan. It resulted in the loss of Taiwan to the Japanese, and the granting of independence to the province of Korea.
In the face of this defeat, the Qing dynasty was greatly discredited and revolutionary movements like the May Forth Movement began to emerge in the military and intellectual spheres, calling for the creation of the Republic of China (Keith, 2010). The continuous failures in defending the borders and the lack of sovereignty over their territories, planted the seeds for revolution, which became more and more inevitable as time and events went on.
After several attempts to seize power, the final rebellion and uprising took place. The military took control of the country and established the constitution of the Republic of China (1912). However, the debate over who was to be the ultimate ruler did not finish. The country was divided between different military leaders with control over armies in the different parts of China. At the same time, the communist party was trying to obtain power and rejected any attempt at agreements with the military in government. Amidst all this uncertainty, problems continued to arise with the outside world. In 1931, Japan began the conquest of Manchuria and the rest of China. These abuses will continue until the end of World War II, in 1945. After the war, Japan is force to abandon its conquests in Asia and loses control of the conquered territories in the mainland (Fairbank, 2006). Finally, it seems that order and peace can be re-established in China, after a long century of humiliations, defeats and concessions to foreign powers.
But tranquility and stability was still far away. The communist party organized and carried out a rebellion against the government. They had a very powerful army, with weapons that were handed over by the Soviet Union. The Civil War begun in 1947. Against all odds, the Communist Party won in 1949. The military and political powers of the Republic of China escaped and established in Taiwan (The Guardian, 1949). From there, they continued to claim legitimacy and power over mainland China, but with no practical effect. Meanwhile in China, Mao Zedong proclaims the People’s Republic of China, and gives birth to the system that governs China to this day.
2.3. Mao Zedong and the People’s Republic of China
Mao Zedong’s relations with other countries were sporadic and unfruitful (Kissinger, 2011). He had a great capacity to deal the external forces that threatened China on all sides. He was able to balance his lack of real power and his enemy’s greater advantages. He had great fear of the alliances that could arise between two enemy countries against him. During his years in office, few wars occurred in China’s surroundings. He had an important role as part of the entente of communist countries with the USSR, but his resentment and suspicions towards this country was evident. This fear resulted in both countries treating each other with distance and coldness. This confrontation became evident in the last years of his mandate, when both countries became practically enemies.
However, Mao’s greatest enemy was the United States. They gave support to the Republican army during the war. The United States had always been protective of the republic formed on the island of Taiwan, despite China’s attempts to conquer it. Mao also felt surrounded as he watched Japan and the United States develop a friendly and collaborative relationship. His task was difficult, to appear crazy and strong enough to enter a war if necessary, while knowing that he had nothing to do against the full force of his enemies.
The Korean War (1950) greatly eroded his power and legitimacy. It was encouraged by the USSR, which promised support and resources to China, but who left the Chinese army alone in the last moment. Japan, with the support of the United States, managed to advance and resist. The conflict ended in the same place where it began, in the 38th parallel.
During his mandate, Mao balanced all the forces he could not fight, and prevented them from uniting against him. He achieved this by maintaining a utilitarian friendship with all of them. Nevertheless, all the treaties and agreements that were signed ended up disappearing, because of China’s inability to understand the needs of the other countries and follow through with their part of the treaty. It sought agreements with everyone, but never bothered to fulfil what they had agreed upon. Zhou Enlai, the Prime Minister and Mao Zedong’s right-hand man, was always trying to fix this and rebuilding China’s image abroad. This task became increasingly difficult in the face of the policies and consequent suffering that Mao was imposing on its people.
At home, Mao’s time was marked by hunger and communism. He was unable to create wealth and he submerged human beings into poverty and fear. Corruption took over the Communist Party and its outstretched arms. Living conditions did not improve, and in some cases even got worse. In an attempt to solve all these problems, Mao carried out two brutal shock policies, The Great Leap Forward (1958) and the Cultural Revolution (1966–1976).
The Great Leap Forward was a failed attempt to modernize the country and industrialize the economy through communist methods. In short, the state was to take charge of the modernization process (Jung, 2019). It ended up being just another burden for the already hungry farmers.
The Cultural Revolution was a political movement initiated by Mao, in which he instigated and encouraged the youth revolts that had begun to emerge in the country (WPF, 2016). He gave them a mission, to cleanse the country of the remaining bourgeois mentality and restore Maoism. He wanted to eliminate the remnants of capitalist and traditional elements that still lurked Chinese society, and preserve communism through class struggle. The youth responded by forming Red Guard groups throughout the country. No one escaped persecution, chaos reigned, and anyone who did not belong to the Red Guard was eligible to be killed or sent to prison camps. A purge was also carried out within the party, to which Deng Xiaoping succumbed. He was sent to a prison camp in Siberia, only to return a few years later. The character of Mao Zedong ended up deified after all this process. However, the movement created by him ran amok, causing fights between different factions of the Red Guard and total chaos in general, with the danger of reaching Mao Zedong himself. In 1969 he declared the purge to be over, but the group’s activities continued in the shadows for years.
The end of Mao’s rule was marked by contradictions and the obvious need for change and modernization. Zhou Enlai, a figure very dear to the Chinese people, was banished and ostracized. In his last speeches, he proclaimed the need to copy and learn from some of the modern western methods. They were the only ones that could give China a way out of poverty and misery. He spoke of the four modernizations, which focused on making the changes needed to modernize and strengthen the agricultural, industrial, technological and defense sectors. These speeches caused a lot of fuss, people believed in his message. In the power spheres, there was still a strong and quasi-religious defense of Maoism and against any other discourse. With the death of Mao and the need for a successor, these two perspectives debated power. The so-called Gang of Four represented the Maoist perspective, which sought to continue Mao’s methods of pure communist rule. Deng Xiaoping, representative of the opposing views in government, finally came to power in 1978. Deng was in favor of Zhou Enlai’s proposals, and saw the regime’s development as the only chance for a prosperous future.
2.4. Deng Xiaoping and Xi Jinping.
Deng Xiaoping had the genius and political intelligence to promote the transition from a society of deeply held communist convictions, to the China we know of today. He knew how to patiently and carefully transform Chinese society and set it on a course towards a modern, industrialized society. He envisioned a society that learned from the methods that have brought prosperity to other countries, not taking democracy among them. Around this time, the integration of the PRC into international institutions began, and with it, the open relationships with the United States and the rest of the Western countries.
However, Deng Xiaoping’s era was not free of controversy. The effusive welcome of new methods in university and education, or the permission for free enterprise and the reform of the institutions and the economy, created some confusion. Contrary to Deng’s profoundly undemocratic beliefs, expectations were created that the development that was taking place in the country would inevitably lead towards democracy.
Economic reform led to the idea of political reform, which never materialized. All these democratic inclinations culminated in the Tiananmen Square protests in 1989. It coincided with the historic visit of Gorbachev, and all international journalists were there. Gorbachev spent three days in his hotel, while the media covered the darkest moments of China’s recent history since the war. Hundreds of people were killed by the police and the army, and China entered a period of international silence. To this day, the number of deaths is unknown.
The following leaders continued the industrial and technological revolution that was already underway. In the international arena, silence reigned and the modernization of China continued its way into capitalism and its adaptation to the world order established by the strongest power at the time, the United States.
The dragon was asleep, but with one eye half open and watching, learning, understanding the weaknesses and strengths of the world in which they had to operate. China’s development followed the course set by Deng, and the state and the people devoted all their capacities to the development of the industry, technology, education and the government systems, without intervening aggressively in international matters. China was growing at rates of 14% in 1992. During this time, the construction of the so-called Great Firewall began, preventing its population from having free access to Internet content.
Around 2005, the dragon woke up, and the stage of silence and peaceful learning came to an end. The Chinese economy is now too big to hide in the international system, too big to limit itself to the confinements of its own borders. They need to grow at high rates just to maintain the current state of affairs, so the world will have to adapt to China’s economic and development needs. The moment that marked the paradigm shift, is consider by many scholars to be the 2008 Olympic Games (NY, 2020). The Olympic Games were overseeing by Xi Jinping himself. In hindsight, this moment is considered to be the prelude to what was to come, a country with an unfolding capacity to change the future, as well as its unwavering willingness to take the necessary steps to provide themselves with a prosperous future. The man in charge of leading the country through these transformations will be Xi Jinping.
To get an approximate idea of who Xi Jinping is, we will review some of the policies he has carried out as China’s paramount leader. Xi Jinping was, from the beginning in his administration, known for his deep convictions against corruption within the Communist Party (Yuen, 2014). When he came to power, he set up an anti-corruption system, the so-called anti-corruption campaign. More than 1 million people have been indicted for corruption, and the numbers are still going up every year. Another one of his emblematic campaigns was the increased control over the internet, restricting people’s freedom of expression and their connection to the outside world and culture. He has also extended his mandate indefinitely, becoming China’s supreme leader for the years to come (Babones, 2017). The last and probably the most important measure, yet to be fully explored, is the Belt and Road Initiative (BRI), which is at the center of this study. The BRI is the mechanism through which this new vision on China and its role in the world will become fully operational. It is the way Xi Jinping has chosen to extend his influence over the world, as well as his contribution to international relationships and economic development.
China is now the second largest economic measured by total GDP, only surpassed by the US. The country also a surplus trade balance of 421.93 in billion U.S dollars. In the remaining pages of this work, we will study this initiative and what it will mean for China and the world in greater detail.
