Since President Xi’s announcement of the Belt and Road Initiative (BRI) in 2013, many projects have already been completed and taking form as we speak. Billions of dollars poured into infrastructure thirsty countries with a strong need for development. China is physically connecting the world through its network at an unprecedented pace, while providing countries along its way with an offer they can’t refuse. Economic growth. And most importantly, The U.S. and the West can’t and won’t offer a better alternative. There is no way to know for sure if the Chinese model for BRI is attainable and sustainable in the long run, but it surely puts an end to the Washington consensus (WC) as we knew it until now.
China’s strategy to achieve its vision is smart, and it’s working. BRI offers developing countries infrastructure, without interfering in their politics, with relatively preferable interest conditions similar in style to the Bretton Woods institutions. But The IMF, the World Bank and others work with strict demands of economic principles of liberalization and political demands of democratization as a condition for receiving the aid and development. But as opposed to the Western style World Bank following the WC, Beijing and its new domestic and international funds (AIIB, NBDB, SRF, CIC, etc.) does not require specific economic or political initiatives to be taken by host countries. China is much less concerned about the political and economic risk these projects might include, and it has its reasons to believe so. First, China believes deeply in the economic growth it will ensure both for the host country and for the Chinese firms established along BRI. And second, BRI helps China’s pressing need to export Chinese companies in order to obtain its own desired economic growth. This fundamental difference between both notions has pushed many developing countries to accept Chinese infrastructure projects and to welcome the Beijing consensus (BC) instead of the WC.
The U.S. has recently started to consider BRI as a threat, and calling targeted states to refuse the projects. VP Mike pence called to “Beware China’s Debt Diplomacy”, claiming the projects will cause enormous debt to many countries which will then make them dependent on China. Also recently, Congress passed the Better Utilization of Investments Leading to Development Act of 2018, better known as the BUILD Act. By establishing the U.S. International Development Finance Corporation (IDFC), the bipartisan legislation will probably help boost U.S. development in low and middle-income countries, but it’s hard to know to what extent. Still, the U.S. enters in the development race late in the process. Most of the 64 countries covering BRI are keen to pursue the projects and stated it openly. In addition, Trump’s international economic strategy is busy faced inwards, leaving China the space to go around the world, convincing hearts and minds to work with Mother China and so secure a place in China’s worldview.
Yet, except the U.S., China faces a number of important challenges in their ambitions. Domestically: corruption, an aging population, wealth gaps and political turmoil are to be solved or at least managed. But more importantly the concentration of funds that BRI requires, demands a steady economic growth for China to sustain. And finally many BRI projects pass through areas where security is impossible to ensure, at least today. North of Pakistan, Kashmir, and Myanmar are just examples of these areas.
However, regardless of the challenges, which China understand and intend to face, the effects of BRI are being felt already. This truly gigantic and ambitious project will mean immense changes for many regions in Asia and beyond. Further, it has the potential of reshaping the region’s economic situation as a whole, and change the Asian balance of power towards China. And to an even further extent, reshape the leadership and the landscape of the international economy towards a more Sino-Centric position.