The Belt and Road Initiative: Is it a threat to the US-Centric Trade ?

Ali Hacıaliefendioğlu

 

In 2013, People’s Republic of China’s (PRC) president Xi Jinping announced the most biggest infrastructure initiative of the history.1 The Belt and Road Initiative (BRI) also known as One Belt One Road (OBOR) or the Silk Road Economic Belt and the 21st century Mari- time Silk Road, is trade and energy initiative that will be financed by Asian Infrastructure In- vestment Bank (AIIB) and PRC. The main aims of this investment are developing trade and energy relations among the countries of Southern Asia, Central Asia, Middle East, Australia, Africa and Europe countries which became member of AIIB.2 BRI includes two different ro- utes which will lead from solid ground and sea. Belt refers to roads and rail transportation or the 21st Century Maritime Silk Road, and road refers to sea routes.3

When we look at the BRI, it is ‘obviously’ the most effective initiative of human history. BRI will cost an estimated 4-8 trillion dollars4, and initiative has been contrasted to Trans-Pa- cific Partnership and the Transatlantic Trade Investment Partnership which are a part of the

U.S centric trade. Due to these comparisons, there are too many good or bad ideas and ex- pectations about BRI, and many questions have emerged on its future. In this article, I will discuss BRI in the basis of the U.S centric opinions.

The Opposite Sides

Approaches to BRI from the scope of the US draw into different directions. Some of the re- marks show that BRI is creating an opportunity for the US to improve relationship with Cent- ral Asian countries through Chinese investments. The main aim of this approach is relations between China and the US. In the other hand, many observer see the initiative as a threat to the US-centric trade and liberal-democratic values of the West. Firstly, I will mention about ‘bad sides’ of these initiatives.

As is known, China is an authoritarian country, and the Communist Party is one and only or- ganization running the government. Although China is a great power, its non-democratic sta- te structure raises questions on many issues, and the most important of these are the poor re- cord on human rights. Furthermore, Beijing based AIIB is very similar to the Bretton Woods system institutes in terms of its operating mechanism.5 AIIB works like the World Bank or IMF and the number of members that it has gives an idea for the current sphere of influence. The institutions which are funded under the authoritarian regime and AIIB during the pro- cess of BRI is seen as a major threat to the western-centric liberal democratic understanding.6 Looking at the other US concerns, it is said that China is trying to establish a Sino-centric world order. With the understanding of ‘All roads will lead to Beijing’, China is emulating to the Roman Empire which is the soul of the ancient west, to providing its imperial expansion. Most of these judgments are based on Xi Jinping’s statements on the initiative. Xi’s discourses include that initiative is ‘community of common destiny’, and Central Asian countries will be reshaped with the wisdom of China.7

Apart from the US-based concerns, the BRI is expected to the lead to good relations between China and the US.  Through the stability that might be achieved in Central Asia with the  BRI, companies from the US are likely to find new areas of investment in the region. In case BRI will end successfully, it is likely that the US will lose its influence in the region.8 However, the interdependence between the two countries is likely to lead to new partnerships.

Is BRI a mistake for China ?

Apart from these discussions, there is doubt that BRI will not succeed. According to some of the US-based views, China’s infrastructure investments which will take place in unstable regi- ons will face many problems. Terrorist activities in Afghanistan, Pakistan, and India constitute the biggest obstacle for the healthy conduct of BRI. If a solution cannot be developed on the border problems and terrorist groups in these countries, it is thought that the infrastructure works will face major economic problems. According to the World Pension Council, for the success of BRI, nearly 900bn dollars must be spent every year for the next decades.9 As long as social stability is not provided in the mentioned countries, it is obvious that infrastructure investments will face great difficulties. Hence, doubts are current about whether BRI will be successful or not.10

As a result, BRI stands out as the largest investment ever seen in history. The chain of invest- ments that will develop trade relations will also be the scene of great socio-cultural changes in the region. If these investments are successful, China will undoubtedly become a highly influ- ential actor in Africa, the Middle East, Central Asia, and Europe, and for these regions, Chi- na may become an alternative to the US. If China will be unsuccessful, the economic efforts will devoted to investment will be a waste, and China might face serious economic difficulties.

 

1. “Chronology of China’s Belt and Road Initiative”. China’s State Council. Retrieved 2018-09-23.
2. Asian Infrastructure and Investment Bank; https://www.aiib.org/en/about-aiib/governance/members-of-bank/inde- x.html
3. BRI Instead of OBOR – China Edits the English Name of its Most Ambitious International Project”. liia.lv. July 28, 2016. Archived from the original on February 6, 2017. Retrieved August 15, 2017.
4. Ejinsight “Getting lost in ‘One Belt, One Road'”. 12 April 2016.
5. American Perspectives on the Belt and Road Initiative Sources of Concern, Possibilities for the US- China Cooperation, Alek Chance November 2016
6. What Does China’s Belt and Road Initiative Mean for US Grand Strategy? Thomas Tavana, The Diplomat June 2018
7. One Belt, One Road, One Big Mistake by Tanner Greer, Foreign Policy, December 2018
8. Trump’s Support For China’s One Belt, One Road Initiative Is Bad for the US, Good For World, Sara Hsu May 2017
9. WPC) Firzli, Nicolas (February 2017). “World Pensions Council: Pension Investment in Infrastructure Debt: A New Source of Capital”. World Bank blog. Retrieved 13 May
10. One Belt, One Road, One Big Mistake by Tanner Greer, Foreign Policy, December 2018