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.
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
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
Abstract
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.
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