While warning the west and European Union against their concerted efforts of decoupling some nations from China to reduce their dependence on Chinese economy through Belt and Road (BRI) initiative, Xi Jinping embarked upon mapping out the way forward policy to ensure the success of the gigantic project involving 3 Trillion USD investment in more than 150 countries in the world.
Xi made his intent crystal clear during two day conference on Oct 17 and 18 in Beijing which also witnessed the appearance of Russian President Vladimir Putin ,fist time after the outbreak of Ukraine War besides Sri Lankan President, Ranil Wickremasinghe, Pakistan acting PM, Anwar-Hul-Haq-Kakar and representatives of over 140 countries , 30 international organizations including state leaders, ministerial officials and representatives of the business sector, academia and nongovernmental organizations.
India Boycotted BRI Owing To Serious Security Concern
India, boycotted BRI citing the security reason h pertaining to Chinese flagship 60 billion USD project, China-Pakistan Economic Corridor (CPEC) which is being laid through Pakistan occupied Kashmir (POK) in violation of sovereignty. China does not miss an opportunity to push its ambitious project of BRI hence a paragraph was inserted in the final draft of New Delhi declaration issued at the end of Shanghai Cooperation Organization (SCO)leaders’ summit held on July 4,2023 which was duly rejected by India. An identical formulation was used by China during the Samarkand declaration in 2022 and India did not budge from its stand to oppose Xi’s pet project of BRI. India has been cautious to exclude such an initiative of BRI in the G20 draft and achieved unanimity in a shrewd diplomatic manner. India is averse to Pakistan’s blind support to BRI which may pose security threat to Kashmir as BRI passes through POK which technically means Indian territory and adjacent to Kashmir valley.
Crisis Due To Hidden Debts
Experts say that President XI has presented an ambitious plan to ally the fear of “Hidden Debts” of BRI and an attempt of China to allure low middle-income nations into ‘Debt Trap Policy’ which is being exploited by the West and EU. According to a study undertaken by Aid Data, more than a third of the projects face such problems. A growing backlash has prompted some countries like Malaysia and Tanzania to cancel BRI deals. But observers have also raised concerns of possible economic coercion, where foreign governments feel pressured to follow Beijing's agenda or risk China pulling out investment. Another study by Aid Data found that f Chinese state-owned entities' loans to foreign governments found contract clauses that "potentially allow the lenders to influence debtors' domestic and foreign policies".
Main Agenda Pertained To Re-Thinking About BRI Strategy
Economists opine that owing to a slide in the domestic economy and an increase in default in repayment of the huge loans by several nations due to several factors including continuing impact of Covid19 , there seems to be a shift in the approach of Chinese strategists . China’s influence may further slide unless external loans and assistance poured in the kitty’s various nations attain its peak level in times to come. Junya Sano, analyst at the Japan Research Institute, China had announced debt forgiveness for African countries in August,2022 led to an identical demand of extending similar support to cover medical expenses and home mortgages for Chinese citizens within the country.
China Recklessly Disbursed The Funds Under BRI
Between 2020 and 2022, loans involving Chinese lenders having worth of $76.8 billion essentially became non-performing assets which is 4.5 times more than the corresponding period between 2017 and 2019, according to the US-based Rhodium Group. While China has increased its financial assistance to Belt and Road countries including currency swaps, there has been a decline in new investments. Until 2019, approximately $100 billion was annually invested through the initiative but recent data from the American Enterprise Institute indicates that this figure has hovered around $60 billion to $70 billion. Furthermore, China's economic deceleration has played a role in this decline, as its foreign reserves, which support new investments, have remained relatively stagnant at just over $3 trillion.
Economists say that President Xi's Expansion Policy of developing infrastructure through BRI spreading over 150 nations is intended to the fulfilment of the ambition to replace the United States as a Superpower. A huge investment of $ 1.4 trillion through BRI aims at creating a modern-day-silk road connecting Asia, Africa and Europe. It has brightened the chances of walking into the Debt Trap Policy of China and countries like Pakistan have already become victims of this dangerous strategy. As per reports, South Asian Countries have been pushed into debt trap policy and the fallout has been serious vis- a -vis accumulation of loans which have burdened their economies. Except India and Bhutan, several nations have walked into debt policy of China through BRI and signed a 25.4 billion USD agreement in 2013 which has slowed down and the same dilemma is being faced by Nepal also.
XI Presented Eight Point Future Policy Document To Overcome Shortcomings And Lacunae In BRI
On the occasion of the 10 year existence of BRI, a brain child of Xi launched in 2013, President remarked that the loans provided by Beijing for the infrastructure projects are neither a “windfall” nor “alms-giving and charity.” hence China will continue to focus on its profitability and relevance to participating nations in future. Unveiling eight-point strategy, Xi said “I wish to announce eight major steps China will take to support our joint pursuit of high-quality Belt and Road cooperation.” China will vigorously integrate ports, shipping and trading services under the "Silk Road Maritime," and accelerate the building of the New International Land-Sea Trade Corridor and the Air Silk Road.2nd, China aims at promoting integrity-based Belt and Road cooperation. It will release the achievements and Prospects of Belt and Road Integrity Building and the High-Level Principles besides establishing the Integrity and Compliance Evaluation System for Companies Involved in Belt and Road Cooperation.3rd, while carrying out practical cooperation, China will promote both signature projects and "small yet smart" livelihood programs.4th,China will lay emphasis on establishing the dialogue and exchange mechanism for the solar industry .A network of experts will work on green and low-carbon development project and it will also implement the Green Investment Principles for the Belt and Road.5th, In pursuit of advancing scientific and technological innovation, China will continue to implement the Belt and Road Science, Technology and Innovation Cooperation Action Plan.it will organize first Belt and Road Conference on Science and Technology Exchange and increase the number of joint laboratories built with other parties to 100 in the next five years. China will support young scientists from other countries to work on short-term programs in this country. At this Forum, China will put forward the Global Initiative for Artificial Intelligence (AI) Governance.6th, priority will be given to the strengthening of institutional building for international Belt and Road cooperation. China will work with its BRI partner nations to cement the building of multilateral cooperation platforms covering energy, taxation, finance, green development, disaster reduction, anti-corruption, think tank, media, culture and other fields.7th, In key area of supporting an open world economy, China will establish pilot zones for Silk Road e-commerce cooperation, enter into free trade agreements and investment protection treaties with more countries. In the next five years (2024-2028), China's total trade in goods and services is expected to exceed USD 32 trillion and USD 5 trillion respectively. Final, the Silk Road spirit will have multifaceted objectives like global connectivity, build platforms for international economic cooperation, and add momentum to world economic growth. The BRI cooperation will create a brighter future for humanity with the concerted efforts of all participating countries.
Amidst the negative reports of Belt and Road initiative (BRI) gradually losing its steam coupled with the economic slowdown in the country, China organized a mega show of 140 nations associated with the ambitious project to reaffirm its faith about its investment of over 1 trillion USD in ten years which was aimed at enhancing the economic cooperation besides generating momentum for new economic growth in the world. The critics visualized that plan was aimed at recreating the ancient Silk road to boost global trade infrastructure thereby helping China to spread its economic and geopolitical influence besides inspiring it to become super power in the world.
Third Belt and Road Forum for international cooperation was held in Beijing on October 17 and 18 to celebrate the completion of ten-year existence of the project and action plan has already been finalized by China. Interestingly, Chinese officials have claimed that if all transport-related projects under the BRI become operational then it will increase global income from 0.7 % to 2.9 % by 2030 and lift 7.6 million people out of extreme poverty.
America And European Union Do Not Favour BRI
In view of the fallout of BRI in South Asian countries, the European Union and United States are exerting pressure on Italy’s prime minister Meloni to save her country from the debt trap policy of China which is implementing its plan through BRI. Italy PM has, however, denied any pressure from US president, Joe Biden but she is treading the path cautiously as withdrawal from BRI may spoil ties between two countries as Italy’s businessmen support the investment through China’s initiative .Owing to domestic pressure and negative opinion about BRI, Italy’s exit from BRI is on cards which may happen anytime in future.
Some Experts opine that BRI is truly global endeavor and 39 countries in Sub-Saharan Africa have joined it besides 34 in Europe and central Asia and 25 in east Asia and pacific,18 in Latin America and caribbean,17 in Middle East and North Africa and six in South Asia which will make it difficult for America and EU to neutralize Chinese influence. Economists say that the United States normally helps poor nations through hundred percent grant but China’s debt Trap Policy is in contrast of such magnanimity hence loans keep on piling up thereby destroying the economies of such nations and Pakistan is the biggest victim of the Dragon.
India And United States Counter BRI Through IMEC
Keeping in view the sweet ties of India with signatories of India-Middle east-Europe Economic Corridor (IMEC)during G20 summit including United States , the EU, Italy, Germany ,Saudi Arabia, the UAE, and France as a connectivity scheme which is aimed at boosting the economic integration of the nations like the Middle East (West Asia) ,South Asia, and Europe. The corridor’s areas of operations will be the ports, rail lines, shipping network and roads. Experts say that it will have Geo-political implications and the main aim is to counter the impact of BRI which is advancing despite its negative fallout on the economics of some countries. Experts say it may take time to materialize the initiative but vision has got logic which can counter BRI though benefits to the partner states cannot be underestimated. The corridor has potential stimulating the existing political dynamics thereby emphasizing the rising significance and relevance of the Middle East for Asia, USA and Europe.
Analysts opine that China’s well planned BRI is being considered by several nations as a threat to their economies in long term which may act as an eye opener to them but China is advancing with a speed to implement its strategy which is focused on cornering the United States and European Nations. Italy was the first nation in the G7 group which became part of BRI but it may not be possible for PM Meloni to ignore the United States and EU hence its departure from BRI seems to be imminent in future.
(Writer is political analyst and senior journalist having six-year foreign posting experience in a neighboring country)