Will Donald Trump make China great again?

Patrick Mendis says the new president will soon realise that an America-first agenda won’t work without a global supply chain – and China will figure in the deals he needs to strike.

Wednesday, 14 December, 2016

 

Unpredictability is the new governing principle in the United States, and not only in domestic policies. President-elect Donald Trump’s often changing foreign policy positions and unorthodox diplomatic exchanges have made the traditionally reliable US an unpredictable partner in global affairs, especially in the Indo-Pacific region.

Unpredictability may well be the new normal as “the indispensable nation” appears to be isolating itself from international trade relations. Trump has vowed to terminate the Trans-Pacific Partnership (TPP) on his first day in the White House. He has, however, been conspicuously silent on his other campaign promise to withdraw from the North American Free Trade Agreement (Nafta). Nonetheless, he has been clear about his intention to renegotiate the treaty with Mexico and Canada.

By ending the TPP trade pact, China would happily expand its domain of influence in the Pacific Rim while other American allies and friends inevitably look for a more reliable partner in the neighbourhood. As these geopolitical realities set in, will his campaign promises to “Make America Great Again” eventually default to “Making China Great Again”?

An assertive China is taking note that a “declining” America is giving up on its founding trade vision and empowering it with China’s commercial mission through the “One Belt, One Road” strategy. At the Asia-Pacific Economic Cooperation forum in Peru last month, President Xi Jinping (習近平) suggested that China would be open to TPP member nations joining the Regional Comprehensive Economic Partnership supported by Beijing, along with the Association of Southeast Asian Nations.

Watch: China eyes Apec trade leadership

Cancelling the colossal 12-nation trade pact and even renegotiating Nafta is no panacea for America’s domestic social decay, racial tensions and economic problems, which are largely attributed to technological advancements, demographic changes, corporate strategies and taxation structures.

It is likely that, once in office, Trump may realise that the checks and balances in US government make governing a country different from running a private enterprise. Wall Street, US multinationals and the US chambers of commerce would certainly challenge Trump on his trade and foreign policy positions.

Trump lacks the brains to reshape the world, even if he thinks he can

Nevertheless, Trump will have greater flexibility in the White House.

The Trump administration will certainly change course, especially in dealing with China.

Once Congress gets involved, the president may change his mind again. Thus, a potential renegotiation and rebranding of the TPP into a “Trump-Pacific Power” might be possible with bilateral trade agreements with each partner. He seems to believe bilaterally negotiated pacts will “bring jobs and industry back onto American shores” by using the techniques and insights expounded in his 1987 book, The Art of the Deal.

As the self-professed titan of deal-making, Trump could “Make America Great Again” by simply embracing, for political reasons, the founding vision: “Commerce with all nations, alliance with none, should be our motto. Money, not morality, is the principle commerce of civilised nations. Peace, commerce and honest friendship with all nations; entangling alliances with none.”

Acting more like a Jeffersonian Republican, he may trade with everybody, like the Chinese do.

Although during the presidential campaign, Trump accused Beijing of “raping” the US with its trade policies, once he realises the mutually beneficial trade relationship is more complicated than his contradictory comments, he will have no choice but to strengthen the Sino-US bond.

An assertive China is taking note that America is giving up on its founding trade vision

To implement his “America First” agenda in “producing steel, building cars, or curing disease” in “our great homeland”, Trump must depend on the global supply chain. When the Trump White House begins to deal with other countries, the elephant in the room during every trade negotiation will be China.

Ignoring China is a mistake. The Sino-US relationship has been mutually beneficial.

With Trump’s business acumen as a dealmaker, the Trump presidency is generally viewed as being better for China than having Hillary Clinton in the White House.

With Wall Street billionaires and millionaires in the cabinet, Trump could reconsider joining the Asian Infrastructure Investment Bank. Investment opportunities in gigantic belt and road projects would be a bonanza for his circle of friends and financiers.

China can unlock Trump’s trillion-dollar infrastructure plan

Trump has already signalled that he may use alternative leverage to win over the Pacific Rim nations which would otherwise lose to China. In addition to meeting Japanese Prime Minister Shinzo Abe and speaking to President Xi, his other so-called cavalier phone conversations with leaders of Australia, the Philippines, Pakistan and most recently Taiwan were strategic messages – as he exemplified during his unorthodox presidential campaign and continued tweeting on China.

Trump’s tweets show his lack of diplomatic skills and economic common sense, say Chinese analyst

The Trump White House may use these countries tactically through bilateral engagements to hedge against China. For some conservative Republicans, the Obama foreign policy towards China – and its assertive behaviour in the East and South China seas, the Korean peninsula, and relations with Taiwan – was an utter failure, like the policies in Afghanistan, Libya, Syria and elsewhere. Unlike Barack Obama’s multilateral approach to these conflicts, the Trump administration may choose a bilateral approach, as China does in the South China Sea over territorial tussles with the Philippines and Vietnam.

Trump packs trade team with veterans of steel wars with China

While signalling these leverage points, the Trump White House is more likely to simultaneously accelerate the ongoing US-China bilateral investment treaty. With all this unconventional diplomatic manoeuvring in progress, Trump’s strategy may also force Beijing to give up support for inefficient state-owned enterprises that the Obama administration failed to address.

Given all this, the Trump presidency can hardly “Make America Great Again” without “Making China Great Again”. Just as Xi’s belt and road initiative is designed to revive Chinese history and culture, which was once admired by the US founding fathers, President-elect Trump needs to revisit Sino-American history before seeking to pressure an increasingly assertive China.

Prosperity for the US and China is connected. No matter what the effects of a Trump White House on China and the rest of the world, one thing is predictable: the US will have to accept China’s rise.

Patrick Mendis is an associate-in-research at the Fairbank Centre for Chinese Studies, Harvard University. The views expressed here are those of the author. He will give a public lecture on “The Future of President Xi’s Belt and Road Initiative: Challenges and Opportunities under US President Trump” on Friday, December 16, at the University of Hong Kong.

Ref: https://www.scmp.com/comment/insight-opinion/article/2054209/will-donald-trump-make-china-great-again

Will Trump make China great again? The belt and road initiative and international order

Astrid H. M. Nordin Mikael Weissmann:  15 February 2018

Abstract

Under President Xi Jinping's leadership, Chinese foreign relations have moved from keeping a low profile, to a more assertive bid for international leadership that is beginning to take form in the ‘belt and road initiative’ (BRI). This initiative focuses on connectivity in policy coordination, facilities, trade, finance and people-to-people relations, in order to connect China to key parts of Asia, the south Pacific, east Africa and Europe. Networked capitalism and the national unit, which are often seen as spatial opposites in the global political economy, are both exercised through the BRI in mutually supporting ways. Networked capitalism is not challenging the national spatial unit, nor vice versa. Rather, they conglomerate to reinforce Chinese government narratives which portray China as the new trailblazer of global capitalism—thus illustrating and justifying a new Sinocentric order in east Asia. Likely winners of this constellation, if it is successful, are megalopolises in Eurasia, and most of all the Chinese Communist Party. Likely losers are countries that are not included in the BRI, most notably the United States. In a context where President Donald Trump is signalling a more protectionist stance and the United States is withdrawing from free trade pacts like the Trans-Pacific Partnership, Trump may ironically enable Xi's dream of making China great again.

Subject

International Relations Theory East Asia and Pacific

Issue Section:

Articles

In 2013 the direction of future Chinese international leadership was set out with Chinese President Xi Jinping's launch of what is now known as the ‘belt and road initiative’ (BRI), formerly ‘one belt, one road’ (OBOR). The ‘belt’ refers to the Silk Road Economic Belt, which focuses on bringing together China, central Asia, Russia and Europe, linking China and the Indian Ocean with the Persian Gulf and the Mediterranean Sea through central Asia. It consists of a network of overland routes and railways, oil and natural gas pipelines, and power grids. The ‘road’ refers to the Twenty-first Century Maritime Silk Road, which is designed to go from China's coast to Europe through the South China Sea and the Indian Ocean in one route, and from China's coast through the South China Sea to the south Pacific in the other. It consists of a network of ports and other coastal infrastructure projects. In the years since its official launch, some 60 countries across its Eurasian area have expressed their interest in partnering with this BRI programme. To date, it is unclear what exactly such ‘partnering’ involves, but it is clear that expressions of interest in projects are welcomed and that Chinese investments are expected.¹ A strategic initiative launched from the highest level of government, the BRI is backed by substantial financial as well as political firepower. The initiative is understood as the concrete manifestation of previous visions such as ‘harmonious world’ and ‘peaceful development’, as well as of Xi's ‘Chinese dream’ of rejuvenation from national humiliation.² As such, many expect that it will be a key determinant of the direction not only of China's future, but of the world's future as it negotiates the anticipated rise of China to growing levels of wealth and power.

This article focuses on what may appear to be contradictory directions of development expressed through the BRI, namely the push towards networked capitalism on the one hand, and the focus on the Chinese national unit on the other. It argues that both the networked capitalism and the national unit are imagined, and by extension potentially exercised, through the BRI in mutually supporting ways. Networked capitalism is not challenging the national spatial unit, or vice versa. Rather, they fuse in ways that reinforce Chinese government narratives that portray China as the new trailblazer of global capitalism, which it will lead better than the United States, specifically illustrating and justifying a new Sinocentric order in and beyond east Asia. The likely winners in this constellation, if it is successful, are megalopolises in Eurasia and, most of all, the Chinese Communist Party (CCP). The likely losers are countries that are not included in the BRI, most notably the United States.

In making this argument, the article draws on a range of official and unofficial sources to understand how the BRI is expressed, and how it is not, in contemporary Chinese elite discourse. Official documents and elite interviews enable us to examine how Chinese elites are interpreting and elaborating on official Chinese government narratives, and how they seek to portray such narratives to foreign audiences in particular. The article therefore provides an account of how Chinese elites are imagining and communicating the BRI, how this portrayal chimes with academic analyses of the BRI both inside and outside China, and what the effects of such imaginaries may be, if successful. Of course, these imaginaries are not representative of what all Chinese people think about the BRI—the ‘Silk Road’ imaginary has long historical roots and expressions in popular culture, art and various social strata, some of which align well with government and elite narratives, and some which challenge these more or less directly. Nor should these imaginaries be understood as necessarily corresponding exactly with empirical realities and activities that have taken place under the BRI heading to date—though they are important in shaping what happens ‘on the ground’, and are in turn shaped by the success or otherwise of concrete activities. Finally, the article discusses two dominant imaginaries of the BRI, as defined by networked capitalism or by the national unit, but does not suggest that these two imaginaries cover all elite discourse or all academic debate. The BRI is attracting a lot of commentary from both academics and pundits and will continue to do so for the foreseeable future; accordingly, this article represents a part of a larger analytical jigsaw puzzle that will go on being assembled for some time.

Following Norman Fairclough's critical discourse analysis, we use the term ‘imaginaries’ here to denote the elements of discourses or narratives that ‘not only represent the world as it is (or rather is seen to be)’, but are also projective, ‘representing possible worlds which are different from the actual world, and tied in to projects to change the world in particular directions’.³ These imaginaries are thus elements of wider discourses, which we in turn understand as ‘ways of representing aspects of the world—the processes, relations and structures of the material world, the “mental world” of thoughts, feelings, beliefs and so forth, and the social world’.⁴ These imaginaries, and the broader discourses of which they are part, constitute some of the resources that people deploy in relating to one another and in seeking to change the ways in which they relate to one another.

Although we cannot cover fully the richness of competing discourses among and beyond Chinese elites in our discussion here, the dominant elements we do discuss are important because of their predominance both in academic and in Chinese elite discourses. They are key determinants of how Chinese elites are imagining China's present and future relations with the world, and of the way academics are interpreting those relations. Our argument is therefore relevant to scholars interested in China's relations with the world, in world order, or in the geopolitical imagination of global networks and national units. Such networks and national units have been commonly understood to contradict one another, especially in debates on China.⁵ This article provides a concrete example of where Chinese elite imaginaries (and potentially associated practices) do not conform to the idea of such contradiction. Our argument should also be of interest to policy-makers and others seeking to make sense of Chinese elite imaginaries of the BRI in order to adjust their own activities in response to their likely or possible ramifications.

One important source for understanding this elite discourse comprises the official speeches and documents in which the Chinese government has outlined its policy. A full chronology of what the party state considers to be key events in the development of the BRI is provided on the website of the State Council; we have chosen here to focus on the more well-developed documents presented through this channel.⁶ Most presentations of this framework, including those in Chinese government documents, begin with reference to a proposal for the creation of an overland ‘Silk Road economic belt’ stretching from China to Europe made by Xi in a speech in Kazakhstan in September 2013, during a visit to central Asia that included the summit of the Shanghai Cooperation Organization (SCO). At the summit of the Asia–Pacific Economic Cooperation (APEC) in Indonesia the following month, Xi followed up this launch by also proposing a ‘twenty-first-century maritime Silk Road’ from China to Africa and Europe, a proposal reiterated at the subsequent east Asia summit that same month. Both ideas were prominent at the high-level party-state work forum on ‘neighbourhood’ or ‘periphery’ diplomacy (zhoubian waijiao gongzuo zuotanhui) held later the same month. These initially vague statements were more systematically laid out in the Vision and actions on jointly building Silk Road economic belt and 21st century maritime Silk Road (hereafter the ‘vision document’) issued by the National Development and Reform Commission, Ministry of Foreign Affairs and Ministry of Commerce, with State Council authorization.⁷ Chinese government representatives continue to make regular speeches and publish official documents about the development of the BRI, further communicated through the dedicated BRI section of the State Council website.⁸ The BRI also features in China's 13th five-year plan, which outlines the country's key priorities for 2016–20 and dedicates a chapter to the aim to ‘move forward with the belt and road initiative’.⁹ Finally, more recent articulations of the BRI can be seen in official speeches at high-level forums, including the World Economic Forum in Davos where Xi gave the keynote address in January 2017, and the Belt and Road Forum in Beijing that he inaugurated in May 2017. These official articulations of the BRI are important, because they show us how the party state would like us to perceive this initiative.

We complement our reading of these key official documents by also considering Chinese academic and wider elite discourse on the subject, accessed through journal articles, books, blogs, news articles, and ethnographic fieldwork and interviews with scholars in China. Much of our analysis draws on elite interviews conducted in China, in person or on line, between 2014 and 2017. Our interviewees were selected through a strategic sampling method. All are individuals with deep knowledge about Chinese foreign policy development since the BRI announcement in 2013. They were chosen on the basis of their likely level of intimate knowledge of BRI proceedings, their willingness to speak openly on the topic, and their accessibility.¹⁰ Interviews were semi-structured, and were conducted face to face, via video link and by email correspondence.

The article is divided into four sections. The first section shows how existing literatures have understood the BRI primarily either as an expression of capitalist drives for economic gain or as the attempted discursive construction of a Sinocentric order. The second section argues instead that the two are mutually reinforcing, and productive of a narrative that portrays China as the new leader of global capitalism. The third section argues that such leadership implies a displacement of American leadership, illustrating and justifying a new Sinocentric order in and beyond east Asia. The final section concludes with comments on who is likely and who is unlikely to benefit if the BRI as currently envisaged is successful.

Capitalist network or national unit?

A majority of existing literature on the BRI falls into two broad categories. The first of these understands it as primarily or exclusively a capitalist undertaking, pursued in order to enrich Chinese stakeholders and contribute to continued GDP growth for China. This primarily economic logic is unsurprisingly emphasized by many scholars who draw on Marxist theory or on liberal arguments about economic interdependence. The second strand understands it instead as primarily a discursive strategy that seeks to rhetorically position China as the leader of a Sinocentric Asian order, and ultimately of a new and better world order led by China. As one might expect, this primarily geostrategic logic is emphasized by many scholars who draw on constructivist notions of national identity as well as by realists who think about a balance of power in national zero-sum terms. Both strands of literature have significant bases in official Chinese documents, and both echo previous academic debates on China's role in the world.

The strand that sees the BRI as primarily a capitalist endeavour includes a range of work that focuses on material gains, the export of Chinese overcapacity, and the need for economic development of China's western regions.¹¹ This strand of thinking has been particularly well developed by Tim Summers, who draws on Manuel Castells's understanding of the global political economy through the metaphor of a ‘network society’.¹² In this conceptualization, the global political economy is increasingly dominated by global networks connecting metropolitan regions. Capital, information, technology and elites flow easily through the nodes of these networks, but labour does not. This spatial configuration of nodes in global networks is understood in terms of a shift away from a previously dominant allocation of resources on the basis of national spaces or ‘surfaces’.¹³ A key reason for adopting this understanding in the context of the BRI is that the five ‘connections’ or ‘connectivities’ that are to be prioritized according to the 2015 vision document amount to a platform for enhancing the flows of capital, goods and consumers (as tourists or students) across Eurasia. These five priorities are: policy coordination, facilities connectivity (infrastructure, logistics, communications, and energy infrastructure), unimpeded trade (free trade areas, customs cooperation, balancing trade flows and protecting the rights of investors), financial integration (linking internationalization of the renminbi with the establishment of new development banks) and, finally, a ‘people-to-people bond’ (to be forged through, for example, tourism and student exchanges).¹⁴ The understanding of these flows in terms of a network of metropolitan nodes is regularly made visible in reports on the associated investments featuring stylized maps, including those published by the official news agency Xinhua, that proliferate in other news and social media, as well as in academic texts. Such maps typically depict the BRI by showing dotted lines connecting larger dots representing major cities such as Guangzhou, Kuala Lumpur, Nairobi, Moscow, Tehran, Istanbul and Rotterdam.¹⁵

The strand that sees the BRI primarily in terms of the discursive construction of a Sinocentric order, on the other hand, tends to deploy geostrategic language,¹⁶ focus on the ‘China dream’ and Chinese government calls to develop a ‘Silk Road spirit’ (silu jingshen),¹⁷ or draw comparisons with the US Marshall Plan for Europe after the Second World War.¹⁸ William A. Callahan's contribution to this strand of literature has been particularly strong in articulating how the BRI contributes to a planned reconstitution of regional, and eventually global, order with new governance ideas, norms and rules.¹⁹ He understands the BRI as contributing to a redirection of Chinese foreign policy under way since Xi became leader of the Chinese party state in 2012, which combines new ideas (such as the ‘Chinese dream’ and the ‘Asia dream’), new policies (such as ‘comprehensive diplomacy and security’) and new institutions (such as the Asia Infrastructure Investment Bank: AIIB) to build what Xi calls a ‘community of shared destiny’ (gongtong mingyunti), and which Callahan shows to be Sinocentric.²⁰ Xi has explicitly stated that Asian cooperation must expand from the mutual benefit that has long been promoted by Beijing to encompass in addition ‘shared beliefs and norms of conduct for the whole region’.²¹ Such shared beliefs include commonly repeated principles such as mutual respect, mutual trust, reciprocity, equality and win–win, but also traditional Chinese ideas of a hierarchical regional structure with parallels in the historical ‘tributary system’. Notably, the very term ‘peripheral diplomacy’ (zhoubian waijiao) assumes that China is at the centre and other countries are at the margins. Such a view has also been underlined by official comments, as for example when Foreign Minister Yang Jiechi told south-east Asian leaders in 2010 that ‘China is a big country and other countries are small countries, and that's just a fact’.²² Callahan, moreover, points out that economic activities such as those outlined above are leveraged to build a ‘community of shared destiny’ in Asia, which in turn will enable China to set normative agendas and rules of the game for global governance.²³

Narratives of capitalist networks and a nationalist Chinese unit converge to portray China as the leader and protector of capitalism

Both these strands in the literature make valid and important points about China's changing role in the current world order; typically, work that falls into one of the strands acknowledges the relevance of the other. Here, we build on both strands together, to emphasize and further reflect on the interlocking of the two logics they put forward.

In the broader literatures on geography and space, the two types of logic described above are sometimes seen as contradictory, the spatialization of networked nodes being understood to conflict with or supersede the nationalist imaginary of the modern state system as consisting of integral and mutually exclusive units or surfaces. This used to be a commonly held view in early commentary on globalization, for example, and still underpins many popular and media narratives today. Such a tendency can also be seen in literature on the BRI, much of which understands it as either an economic or a geopolitical project. Along similar lines, Summers recognizes that the need to maintain autonomy is an essential underpinning of China's joining global capitalism, but nonetheless insists that ‘it is primarily the economic and commercial drivers—the logic of China's role in reproducing a global capitalist economy—which lie behind the elevation of building infrastructure across the Eurasian continent into a strategic belt and road initiative’.²⁴ Recent work on spatial imaginaries in China has provided an alternative or corrective to analyses that see the two imaginaries as opposed, showing instead how spatial ideas of bounded units and unbounded networks are deployed in mutually supportive ways in Chinese official and academic discourse.²⁵ Here, we argue that the BRI perpetuates such a mutual reinforcement of unitary nationalist and networked capitalist logics.

The collocation of the networked and unit-based imaginaries of space is immediately visible from the kinds of maps discussed above. Notably, the maps that depict the BRI by illustrating metropolitan dots connected by lines do so not against a plain white background, but typically by superimposing that illustration of networks on a standard Mercator map of national territories. Visually, the two imaginaries clearly coexist.

In rhetorical and practical terms, both Xi's policy and much of the academic commentary on the BRI are highly nationalistic and take ‘China’ as their main point of reference. In such commentary, China will be able to maintain its territorial integrity if it is powerful enough to deter others from ‘interfering’ in its ‘internal affairs’, which in Beijing's view include the management of what the regime terms ‘splittist’ movements in regions such as Taiwan, Tibet and Xinjiang. A central way of building such imagined power, and maintaining territorial integrity, is to continue the remarkable (but slowing) economic growth that China has enjoyed since the beginning of reform and opening up in the early 1980s. It is precisely the expectation of China's continued economic growth that attracts others to its world-view and development model. At the same time, the Chinese state and its discourse of greatness also function as a key driver of the capital investment that enables the BRI infrastructure and other forms of ‘connectivity’ to be built. As Summers also emphasizes, the BRI has been accompanied by institutional innovations that will make possible the investment required to implement the infrastructure connectivity outlined in the vision document, particularly in the form of a Silk Road Fund, to be capitalized to US$40 billion, and the AIIB, for which US$100 billion will be raised.²⁶ The Belt and Road Forum in Beijing in May 2017 was Xi's flagship event to bring the BRI forward, and involved the announcement of further Chinese funding for the project: an additional RMB 100 billion (US$14.5 billion) into the Silk Road Fund; new lending schemes of RMB 250 billion (US$36.2 billion) and RMB 130 billion (US$18.8 billion), set up by the China Development Bank and Export-Import Bank respectively, for BRI projects; and RMB 60 billion (US$8.7 billion) provided by China for humanitarian efforts focused on food, housing, health care and poverty alleviation.²⁷ These are state-led initiatives that are motivated by Xi's Chinese dream of ‘national rejuvenation’, which, as Callahan shows, involves the BRI in visions of China's rise to leadership of a Sinocentric world order. Simply put, the discourse of China's national power and territorial integrity relies on simultaneous discourses about its role as the key driver of capitalism, and vice versa. Others go along with that narrative because Xi invites them to board ‘the express train of China's development’.²⁸

There are of course questions to be asked about the ‘express train’ narrative, as the successful implementation of the BRI is in no way a done deal. One major issue is whether there are enough profitable projects to go around to make the BRI a long-term success, as it is clear from the outset that political demands conflict with profitability. A good example here is the BRI railway routes, most of which need government subsidies (an average of US$3,500–4,000 per trip for a 20-foot container).²⁹ Chinese state and state-backed funding is extensive, but not unlimited.³⁰ This problem is further exacerbated by the fact that many countries covered by the BRI are unstable with poor sovereign credit ratings, almost by default getting China involved in complex geopolitics. Two good examples here are problems related to Ukraine and central Asia, both of which are important areas in the building of the Silk Road economic belt outside Russian control. China had put great effort into developing good relations with Ukraine by the time of Russian annexation of Crimea in 2011, and now finds itself at the epicentre of geopolitical struggle.³¹ Central Asia is an unstable region with complex geopolitics involving a large number of external actors, which makes it an area of high risk for investment. Our interviews indicated a sense among Chinese elites that while Chinese leaders are aware of risks related to the BRI, in particular in the security area, it may be less well prepared for bad loans.³²

Xi made the ‘express train’ comment as part of a speech to the World Economic Forum in Davos in January 2017. In his speech to the Forum—the first ever attended by any Chinese president—Xi called for world leaders to ‘keep to the goal of building a community of shared future for mankind’ and argued that ‘while developing itself, China also shares more of its development outcomes with other countries and peoples’. He argued that ‘rapid growth in China has been a sustained, powerful engine for global economic stability and expansion … And China's continuous progress in reform and opening-up has lent much momentum to an open world economy.’ Xi promised that China would:

strive to enhance the performance of economic growth … boost market vitality to add new impetus to growth … and enable the market to play a decisive role in resources allocation … foster an enabling and orderly environment for investment … expand market access for foreign investors, build high-standard pilot free trade zones, strengthen protection of property rights, and level the playing field to make China's market more transparent and better regulated … foster an external environment of opening-up for common development … advance the building of the Free Trade Area of the Asia Pacific and negotiations of the Regional Comprehensive Economic Partnership to form a global network of free trade arrangements.

In other words, the President of China stood among other world leaders and promised that China would be a defender, promoter and leader of global capitalism and free trade. He concluded his list of promises with a discussion of the BRI as an example and promise of such leadership: ‘The “Belt and Road” initiative originated in China, but it has delivered benefits well beyond its borders.’³³ This speech thus repeated the language of capitalism and economic growth rolled out in the vision document, which states that the BRI is ‘designed to uphold the global free trade regime and the open world economy … It is aimed at promoting orderly and free flow of economic factors, highly efficient allocation of resources and deep integration of markets.’³⁴ This narrative is repeated in the 13th five-year plan, according to which: ‘We [the CCP or China] will actively engage in negotiations with countries and regions along the routes of the Belt and Road Initiative on the building of free trade areas’ as part of speeding up its free trade area strategy.³⁵ In both the vision document and the five-year plan, the emphasis is on regional ‘hubs’ as the focus for the envisaged connecting pipelines and corridors.³⁶ The same rhetoric was again key to Xi's narrative at the May 2017 Belt and Road Forum, where he pledged that the initiative would ‘uphold the multilateral trading regime, advance the building of free trade areas and promote liberalization and facilitation of trade and investment’.³⁷ It is not yet entirely clear to what extent the BRI offers a different version of capitalism. Xi's Davos speech, the vision document and the five-year plan jointly indicate that, on a rhetorical level at least, Xi is trying to reassure world leaders that he wants to maintain the existing free trade system, ironing out some of its problems and continuing to open up markets. One of our interviewees accordingly summed up the BRI as an economic cooperation model that is government-led and market-driven.³⁸ Others, however, see it as a new economic model that will come into its own after the global economic system has moved beyond both mercantilism and the free market.³⁹ The BRI, on such a view, is part of a third model, which moves beyond the US-led free market model but remains capitalist. While there was no consensus among our interviewees on whether or not the BRI does represent a new model, a number of features were emphasized throughout, with all describing the BRI as market-driven, government-led, non-legalistic and investment-focused.⁴⁰ To quote one interviewee: ‘China gives a choice between rules-first projects and an investment-first approach … It is an offer of engagement, without [the same] rules [as are often preferred in the West].’⁴¹ And of course, the BRI is not detached from domestic politics. BRI is a geo-economic plan, a continuation of the national development plan, and a new version of ‘opening up’ which requires reform of the Chinese economic structure to reduce dependence on foreign direct investment.⁴²

This Chinese economic leadership of the capitalist order will furthermore be supported by others adopting a set of values referred to in the BRI narratives and the vision document as the ‘Silk Road spirit’ of ‘peace and cooperation, openness and inclusiveness, mutual learning and mutual benefit’. Though defined by the Chinese party state, this set of values is said to be ‘shared by all countries around the world’.⁴³ These comments may appear innocuous enough—indeed, who could disagree with the pursuit of peace and mutual benefit? Yet such rhetoric closely follows the underpinning narrative of ‘harmony’, which has been part and parcel of Chinese foreign relations since the period of Hu Jintao's leadership in the early years of the century, and which has been shown to imagine harmony as an ideal to which, while it is said to be shared by everybody in the world, Chinese elites have privileged access.⁴⁴ As our interviews for this article have made clear, Chinese elites understand the BRI as providing a clear direction beyond purely economic interests.⁴⁵ Through such narratives, a ‘rhetorical trap’ is arguably set up, whereby the ‘representational force’ of Chinese party-state rhetoric pushes the audience to either agree with the stipulated understandings of China and of capitalism, or declare itself as belonging on the ‘wrong’ side of the divide between peaceful and unpeaceful, harmonious and disharmonious, joiners and outsiders.⁴⁶ The audience at risk of getting caught in such a ‘rhetorical trap’ comprises in this instance primarily foreign government and business representatives who do not wish to see themselves presented as unpeaceful, disharmonious, or excluded from this imagined insider community. However, as a similar rhetoric is aimed at wider populations as well as elites within China and speaking Chinese language, this ‘trap’ has a direct domestic parallel.

Unsurprisingly, a certain scepticism towards the BRI has emerged among a number of other regional powers. Not least among these is India, which has been a vocal opponent of the BRI as it includes close cooperation with its arch-rival Pakistan, in particular in the form of the China–Pakistan Economic Corridor, which passes through Kashmir—a region that the Indian government understands to be occupied by Pakistan. It also undermines the Indian vision of itself as the ‘big man’ in south Asia. Needless to say, Chinese commentators argue that Indians are overreacting.⁴⁷ Japan, too, has shown some concerns. The initiative may imply a new and potentially expansionist vision for its historical opponent China, which, if successful, is likely to contribute to a power shift from Japan and the United States to China. The BRI also intrudes into markets where Japan has an interest and presence, thereby creating competition.⁴⁸ In Australia, defence hawks argue that liberal commentators who embrace the networking logic of economic interdependence are naive about Beijing's geopolitical intentions.⁴⁹ These concerns have at least some validity, given that Chinese foreign policy, including the BRI, is embedded in domestic concerns with regime survival and political stability. The BRI here facilitates two key factors of regime legitimization: continuing economic growth and nationalism.⁵⁰ When it comes to the survival of the one-party state, there is no value in the BRI unless it contributes to at least one of these.

It is important to emphasize that the BRI is neither simply a government project, nor purely a business endeavour, but an initiative whose success depends on both government and business pushing it forward. As one of our interviewees described it, the ‘government builds platforms for the companies to perform what they would like to’, and what businesses want to do is make a profit.⁵¹ And yet, although the enterprise is a joint endeavour, the Chinese government plays a crucial role, both because BRI projects are heavily dependent on government-to-government cooperation and because Beijing is a direct or indirect source of finance. This said, what counts as a BRI project is not set in stone, and what is in the end labelled ‘BRI’ in official statistics is a subjective and ultimately political question. For example, several Chinese real estate companies put the BRI label on anything they build.⁵² The same pattern occurs outside China, for example in Sweden, where researchers document a tendency to routinely label infrastructure projects ‘BRI’.⁵³ There is also an emerging practice among private investors of working with the Chinese government to bid for projects, in particular in Africa and in developing countries with less than rigorous relevant rules and regulations.⁵⁴ When it comes to financing, the Chinese government has expressed a clear desire for risk-sharing with international financial markets, but to date the BRI remains heavily dependent on loans from state-owned banks and other forms of Chinese seed money.⁵⁵

Narratives of capitalist networks and a nationalist Chinese unit converge to portray China as the better alternative to American leadership

The vision document is articulated in terms of the repeated imperative ‘we should’; and although China is clearly behind the ‘vision’ and the subsequent ‘plan’, the ‘we’ to which such calls refer is somewhat ambiguous. In comparison to previous generations of Chinese leadership, and the recommendations of some Chinese academics, Xi's administration is uncharacteristically open about China's and Xi's own bid for regional and world leadership. The vision document makes clear that, ‘in advancing the Belt and Road Initiative, China will fully leverage the comparative advantages of its various regions’, and that President Xi and Premier Li Keqiang are providing ‘high-level guidance and facilitation’ for the initiative.⁵⁶ In his 2017 speeches to the World Economic Forum and the Belt and Road Forum, Xi made it clear that it was he who had launched the BRI.⁵⁷ As such, the BRI is a step up from previous leadership slogans, such as Hu's ‘harmonious world,’ that remained very much rhetorical outside China's own borders. Where previous slogans were more ambivalent about Chinese leadership, and regularly harked back to Deng Xiaoping's suggestion that China should hide its strength and bide its time, the BRI shows Xi's readiness to take on new levels of leadership, in both word and deed. As one of our academic interviewees put it, the BRI is best understood as ‘the essence of the realisation of the Chinese dream and the rejuvenation of our nation … It is the framework for foreign policy in the decades to come.’⁵⁸

Under such Chinese leadership, BRI narratives claim to be open to all countries, but the vision document specifically refers to the connectivity of the ‘Asian, European and African continents’, simply tacking on a reference to ‘the rest of the world’ in one instance.⁵⁹ At the Belt and Road Forum, these three continents were said to be the focus of the BRI, but Xi stated that the initiative was also open to cooperation partners from the Americas.⁶⁰ Nonetheless, the most notable absence from such official BRI narratives remains the United States. And yet, while the official plans for the BRI rarely mention the United States, as Callahan notes, the western superpower ‘haunts China's aspirations as a ghost that is both attractive (China likewise wants to be the global hegemonic power) and repellent (China insists that it will be a benevolently superior global power)’.⁶¹ Notably, Xi's Davos speech came not long after Donald Trump's inauguration as president of the United States, and Trump himself was not present at either the World Economic Forum or the Belt and Road Forum. Though the Trump administration has been perceived by many as unpredictable, many spotted a clear contrast between Xi's keen leadership of capitalist development and a United States perceived as pursuing a new inward-looking and protectionist direction, more keen to demand than to lead.⁶² This understanding was reinforced from within the Trump administration, where the then senior political adviser Steve Bannon, a lead author of Trump's inaugural speech, was among those who cited the contrast: ‘I think it'd be good if people compare Xi's speech at Davos and President Trump's speech in his inaugural. You'll see two different world views.’⁶³ In the run-up to this new development, both Chinese official documents and our interviewees stuck to the script that the BRI will lead to ‘a new type of major power relations’ (xinxing daguo guanxi) and that it will contribute to rather than challenge the existing international order.⁶⁴ The relatively new concept of ‘a new type of major power relations’ focuses on mutual respect and the management of differences to ensure mutually beneficial cooperation—what China calls ‘win–win cooperation’—and an avoidance of conflicts and confrontation.⁶⁵ The concept tends to focus on Sino-US relations, although, as argued by Pang, it is possible to extend it to encompass other ‘new types’ of Great Powers such as Russia, the EU, India and Brazil, and possibly all G20 countries.⁶⁶ The BRI is important here, as the clearest manifestation to date of China's attempts to present itself as a major global actor. If the BRI is successful, new Great Power relations will be needed or will emerge by default; and indeed, the initiative itself, with the new leadership role it implies for China, requires such facilitating relations to be developed. It is therefore not far-fetched for commentators to understand Xi's speech at Davos as a proposition to world leaders that, if they wish to continue and improve the existing capitalist and free market order, China should enter the leadership vacuum left by Trump's expected isolationism and Europe's continuing internal problems. Even though the Trump administration will be limited to four or at most eight years, and even if Europe's internal problems are resolved (though this seems unlikely at the moment), the current vacuum is nevertheless a window of opportunity that Xi Jinping and the Chinese government have been quick to exploit. Even if we see a new US foreign policy and a revival of Europe in the relatively near future, China's position of power will still be stronger than before as a result of recent developments.

This putative displacement of the United States is apparent not only in America's absence from official BRI documents and from the maps that illustrate it. It is also underlined by the repetition in the vision document of the frequently aired statement that ‘China is committed to shouldering more responsibilities and obligations within its capabilities’ by embracing an alleged ‘trend towards a multipolar world’.⁶⁷ Chinese officials and academics are typically careful to note that China opposes hegemonism (on the sometimes unspoken understanding that the United States promotes it), but scholars have noted that the alternatives offered often look surprisingly like the hegemonism they claim to reject.⁶⁸ Most notably, the Sinocentric world-view espoused in both official and academic rhetoric in China operates by setting up a dichotomy between China and the United States, in which China's goodness is contrasted to American badness.⁶⁹ Another prime example of this rhetorical strategy in BRI narratives is the tendency for English-language commentary on the BRI coming from China to emphasize that it is different from the Marshall Plan because, as Shan Wenhua, editor-in-chief of the Chinese Journal of Comparative Law, puts it:

Unlike the Marshall Plan, it does not exclude any countries, nor is it intended to serve any purposes of international power struggle. Rather it intends to explore a new model of international cooperation and global governance on the basis of the ‘Silk Road Spirit’, i.e., the spirit of peace and cooperation, openness and inclusiveness, mutual learning and mutual benefits.⁷⁰

It is interesting that such comments are now so commonplace,⁷¹ given that the Marshall Plan was also formally open to all, but states in the Soviet bloc chose not to join, but to form Comecon instead. Most significantly, these comments contribute to a rhetoric in which China provides the open, equal and mutually beneficial alternative to an American-led world order that is by contrast portrayed as exclusionary, unequal and power-grabbing.

The attempted replacement or displacement of the United States in BRI rhetoric plays out in particularly significant ways in relation to the Asian region, in respect of which the narration and implementation of Chinese leadership become particularly significant and controversial. The idea for BRI was originally put forward by the prominent academic Wang Jisi, in a 2012 article for the Global Times, at the same time that Xi was making his transition into the leadership of the party state.⁷² Wang argued that China should react to America's ‘pivot to Asia’ under President Obama by ‘marching west’ to expand economic and security ties with its western neighbours. The idea was that this would enable China and the United States to avoid entering into direct competition, and instead to cooperate around shared interests in continental Eurasia. Xi took up the suggestion to expand westwards, but chose at the same time to focus on east Asia too.

As Callahan points out in his article on the BRI and the new regional order, the BRI is part of a new Chinese ‘peripheral diplomacy’ (zhoubian waijiao) in operation since 2013: this is variously presented by others as reflecting either a shift to Asia that displaces a previous focus on Europe and the United States, or a new direction that (re)balances China's relations with Asia, Africa and Europe more appropriately.⁷³ The vision document and the rhetoric surrounding it go to considerable lengths to emphasize that although this is a Chinese initiative, it represents ‘a common aspiration of all countries along their routes’.⁷⁴ Over the period in which Xi has developed the BRI, he has criticized the existing security architecture in Asia, which is built around bilateral security treaties between the United States and its allies. In what Callahan terms an ‘Asia-for-Asians’ doctrine, Xi has argued that:

In the final analysis, it is for the people of Asia to run the affairs of Asia, solve the problems of Asia and uphold the security of Asia. The people of Asia have the capacity and wisdom to achieve peace and stability in the region through enhanced cooperation.⁷⁵

Who are the likely winners and losers from the BRI?

In this article, we have suggested that the BRI is important both as a driver of networked capitalism and as an expression of a grand narrative of China as a national and nationalist unit. We have argued that these two forms of spatialization are not mutually exclusive, but rather come together in BRI narratives. The effect is a joint narrative that portrays China as the leader and protector of capitalism, and as a better alternative to American world leadership. Who, then, is most likely to gain from such an arrangement, and who is more likely to lose out?

The winners and losers of the BRI will of course depend on the continued development of the initiative, on the state of the global economy as a whole, and on the success or otherwise of its various components. It is by no means a foregone conclusion that the BRI will be a success. If the BRI does succeed in developing in the way envisaged by the Chinese government, however, the clear capitalist drive identified by Summers means that we can expect megalopolises across Eurasia in particular—the key nodes of the network—to experience an economic upturn. Other places connected to the key network, in areas including east Africa and the south Pacific, may also stand to benefit economically by access to the envisaged lines of connectivity. Such economic strength may of course benefit some specific locations and not others, depending on how new and existing wealth is distributed and on how other things of value, such as local cultures or the environment, are negotiated in relation to this capitalist drive. As Summer also notes, where money, goods and certain communications may flow relatively freely in network capitalism, labour does not. This will no doubt cause tensions along the belt and road, as growth is unevenly spread and capital migrates away from locales where it has hitherto been focused.

One major issue with networked capitalism in the context of BRI is the possible impact of large-scale movements of populations. There are legitimate worries that BRI projects will result in an outward flow of Chinese migrants who will not return to China. On the basis of extant data and literature on Chinese migration flows, it is to be expected that the BRI will bring with it a movement of Chinese people, including workers, state employees, entrepreneurs and accompanying families, to countries along both belt and road, though it is still too early to assess the extent of such a movement.⁷⁶ It is also difficult to assess how these migrants are likely to affect, and be received in, host countries. On the one hand, skilled migration may contribute to employment, capital accumulation and income in destination countries; on the other hand, there is a risk that Chinese labourers may be seen as competing for low-wage jobs and thereby cause tensions and negative responses.⁷⁷ There is an additional risk of tension arising out of a certain suspicion towards the intentions of China and Chinese populations in some areas, for example Russia, central Asia and India. There have already been sporadic clashes along the path of the BRI, for example in Kyrgyzstan and Uzbekistan. Some long-term settlement, even if it is not the purpose of migration, is likely to happen. While migration can bring benefits in human resource terms, as can be seen in parts of Africa where Chinese investment has helped to build the capacity of local enterprises, ‘whole industry chain export’ is a common form of Chinese export in Africa and elsewhere.⁷⁸ It is clear that the question of the migration that will undoubtedly follow the BRI needs to be addressed, and so far there seems to have been little preparation in China for dealing with the associated issues and the inevitable repercussions.

This said, the biggest winner from BRI success would no doubt be the CCP. It is commonly understood that the legitimacy of party-state rule, or at least consent to it, relies on the combination of economic growth and nationalism.⁷⁹ The party state has been relatively successful at convincing Chinese citizens that only the CCP has the will, strength and ability that are necessary to deliver improved living standards for the Chinese people and a territorially unified and culturally great Chinese nation. The election of Donald Trump as US president and the British decision to leave the EU on the basis of a popular referendum have both boosted the Chinese government's claim that liberal democracy leads to self-harm and bad outcomes. If the BRI enables the Chinese party state to position itself as the leader of a more stable, open and mutually beneficial international development than these western systems are perceived to offer, the CCP will further secure its rule through increased legitimacy or consent in the eyes of the domestic Chinese audience.

So far as other countries and peoples are concerned, the vision document follows the established line on the trope of ‘win–win’ cooperation, declaring China's values and desires to be everybody's values and desires.⁸⁰ For example, the vision document begins its conclusion by proclaiming: ‘Though proposed by China, the Belt and Road Initiative is a common aspiration of all countries along their routes.’⁸¹ As we have seen, the ‘Silk Road spirit’ is said to be shared by ‘all countries in the world’. However, even if this claim is valid, the BRI focuses on benefiting Asia, and to some extent Europe and Africa, with an emphasis in the belt and road on ‘countries along their routes’.⁸² This indicates that even if everybody wins, some are likely to win more than others. Neither the United States nor the other countries of North and South America are included along the routes, though they may be able to cooperate with the initiative, for example as investors. As the lofty initiative materializes into more concrete plans and actions, it will become clearer who is likely to gain less—or lose more—from this new amalgam of Chinese nationalism and capitalist expansion.

Even at the high-profile Belt and Road Forum organized by Xi in May 2017 signs of division began to appear between those countries that see themselves as benefiting from the BRI, in both economic and geostrategic terms, and those that do not. The event was attended by representatives from 66 countries and organizations, with participants including state leaders such as Russia's Vladimir Putin and Turkey's Recep Tayyip Erdogan, and many delegations took great pains to publicly praise the initiative. However, state leaders from the United States and its G7 allies were notably absent, though an American delegation did end up participating (reportedly as the result of a last-minute decision). The difficulties of maintaining China's all-inclusive approach also became visible, for example when it welcomed a North Korean delegation at the same time as Pyongyang launched its latest missile test, to widespread and outspoken international criticism. In a different setback, several EU countries stated their general support for the initiative, but declined to sign a key trade statement that the Chinese leadership had hoped to produce from the forum. This reluctance was said to stem from concerns over transparency of public procurement and social and environmental standards.⁸³ India decided to boycott the event completely, citing similar concerns, but more importantly its displeasure at the China–Pakistan Economic Corridor—which, as noted above, is planned to run through Kashmiri areas that India considers to be illegitimately occupied by Pakistan. In an ironic twist, India came out in open criticism of the BRI, stating that no country could join a project that disregards its core concerns of sovereignty and territorial integrity.⁸⁴ These are principles that Chinese government actors regularly claim to defend, and much of the Chinese claim to better global leadership relies on the portrayal of China respecting other countries' sovereignty in claimed or implied contrast to the United States or a more general ‘West’. Despite these difficulties, Xi and his party state have now invested so much money and prestige in the BRI that backing down or scaling back seems unlikely. Unexpectedly, Chinese media hailed the Forum as a great success; and Xi announced that a second Forum would be held in 2019.

Despite the fact that support for the BRI is likely to be tempered as the initiative takes more concrete forms, its ability to rally support to date stands in stark contrast to the United States' ‘America First’ policy stance under President Trump. In line with this slogan, Trump has denounced several free trade agreements as unfair to American workers, and has pledged to withdraw the United States from the Trans-Pacific Partnership (TPP) agreement. The most likely replacement for TPP as the Asia–Pacific trade agreement is the Beijing-backed Regional Comprehensive Economic Partnership (RCEP) agreement.⁸⁵ This agreement would allow China to ‘claim to be setting the rules of trade for Asia’, while American firms would be locked out of preferential benefits and access to Asian markets that would accrue instead to their regional rival.⁸⁶ President Xi has also suggested that it would be possible for the TPP's expected members to join the RCEP. In the end, the other eleven TPP countries—Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam—did reach an agreement to go ahead without the US, at a meeting in Tokyo on 23 January 2018.⁸⁷ While of course being a temporary setback for Xi, this ‘new’ TPP without the US is a very different kind competitor from TPP with the US. Ironically, Trump's reluctance to collaborate might ultimately enable Xi to realize the dream of making China great again. At the point of publication, it looks as though a possible US withdrawal from NAFTA may add to this global repositioning in a not too distant future.

Of course, Xi's success does not depend on Trump alone, in particular given that the US President's time in power is limited to eight years at most, while the BRI vision is set up for the long term. However, it is clear that Trump's approach to foreign policy has presented a window of opportunity for China, which Beijing has used skilfully to promote its claim to international leadership. Possible obstacles to the BRI include delicate relationships with other major powers in the region: given its focus on connectedness, it is bound to suffer if some countries do not want to be part of the project. However, as a vision rather than a clear plan, the BRI has a good deal of flexibility when it comes to possible implementation and the creation of space to bypass non-partners. That being the case, an even bigger problem might be countries defaulting on or misappropriating Chinese loans—a problem which is more difficult to get around. One more problem would be how to go about inducing cooperation from both governments and dissident minorities that might disrupt transport flows or the success of investments, not least as China traditionally takes a strong position against dissident minorities. These challenges all mark areas in need of more research, as solid data are essential if policy-makers inside and outside China are to be able to predict and handle these problems.

Ref:https://academic.oup.com/ia/article/94/2/231/4851910