Why Do Countries Sign Up with China’s Belt and Road Initiative?
Malaysia's East Coast Rail Link, part of the BRI, is back on track after re-negotiating with China. (Photo: Straits Times)
By Tai Wei Lim

Why Do Countries Sign Up with China’s Belt and Road Initiative?

Aug. 06, 2019  |     |  0 comments


What are the methods the Chinese use to attract participants to the Belt and Road Initiative (BRI)?


A premium and perhaps positively forward-thrusting source of news about the attractiveness of the BRI comes from state-owned media in China. From the Chinese perspective, openness and inclusiveness are perhaps the most attractive points about the BRI. For the Chinese government, the BRI is a multilateral vehicle designed for those who want it for developmental purposes based on market forces. In other words, in theory, the projects have to be economically viable for qualification for funding. Chinese state-owned media have also placed an emphasis on friendship as an element to link other countries requiring developmental projects with this initiative.


Another element highlighted in Beijing’s mind-set and worldview when it comes to the BRI is a long term view of the BRI projects. The Chinese state-owned media also couched it as a healthy reflection of competition to build better economies. Unleashing the growth potential is another rallying call for the BRI, allowing BRI funding and infrastructure to release inherent growth advantages of various countries to reach their full potential. This is a cherished dream for many emerging and developing economies, some of them may even turn to the Chinese developmental model as a possible candidate for their own developmental growth, especially those countries with similar illiberal political systems.


Why does hardly any country seem to say no to begin with? Do they make no demands or impose conditions on the Chinese?


All countries need developmental funding. Global demand for infrastructure construction cannot be satiated, even with a large macroeconomic initiative like the BRI. In other words, the pie is much larger than what BRI, Asian Infrastructure Investment Bank (AIIB), World Bank (WB) and Asian Development Bank (ADB) can offer. Thus, due to the magnitude of demand, countries are positive about working with possible funding sources that do not clash with their national interests. Compared to funding from the ADB or WB, BRI conditionalities for funding and loans is not as high or rigidly structured. In terms of perceived and real obstacles, the barriers for developing economies borrowing funds appear to be lower in the BRI funding sources. This itself is a point of attraction for borrowing economies.


The biggest differentiating factor is probably good governance. China’s BRI is a new vehicle, and China is learning from previous lessons, both successes and challenges, to sharpen its funding procedure and format. The initiative itself is less than 5 years old, and needs continual refinement, adaptations and enhancements/upgrades to make it even more effective. This is where China needs to learn from experienced players like the WB, ADB and Japan which have built up extensive successes and case studies of projects that can be improved on hindsight. In other words, there is still a learning curve. China probably needs a few iconic or high profile projects to plan and implement before their demonstrable capabilities can be used as marketing or advertising for fostering greater awareness of the BRI. Successful high profile cases will then become a showcase for future BRI projects.


What are the problems and challenges, such as BRI projects being too expensive (case studies of Malaysia or Sri Lanka)?


While the good intentions are there, sometimes the recipient countries are not yet prepared to manage, digest or handle such investments. Nascent credit markets, underdeveloped infrastructures to handle logistics, regulations that changes with the rise and fall of political regimes, unenforceable or poorly-enforced rules and regulations, corruption and other developmental pains of young emerging economies make complementarity with BRI funding and investments challenging. Due to such underdeveloped capacities and the newness of BRI, some major project constructs had to be revised. Some of the original provisions or intentions were also deemed unrealistic and out of sync with local conditions. Some projects were found to be underutilized.



The naysayers analogize it as a Trojan Horse that can stealthily slip Chinese political and geopolitical influence into the recipient countries.



In the case of Sri Lanka, regime change overturned initial Sri Lankan thinking on BRI projects from whole hearted positive support to more cautious assessment of possible white elephants and also allegation of undue influence over the use of a port (Hambantota). Within the regime change, different political factions started to emerge with accusations of neo-colonialism and unequal treaties to agitation for return to favourable relations with China. In the case of Malaysia, it was also a case study of regime change affecting the destiny of BRI projects, from a Beijing-friendly regime who found political-economic support from Chinese funders to a veteran politician well-versed in the ways of dealing with major powers in the world system. The latter used his clout, wits, international standing, nationalistic rally calls and political mileage with local political elites to successfully negotiate for cost reduction in BRI projects and reshaped his country’s bilateral relations with China.


From a more macro perspective, there are also fears of undue influence (both perceived and real) arising from dependence or overdependence on BRI funding by vulnerable developing economies. Such undue influence, it is feared, will exacerbate Beijing’s ability to leverage and build regional trading systems with their own normative rules and regulations and even displace the de facto global trading and financial regime. Critics fear that China will also dominate trade routes in areas and locations where they have extensive financial investments and funding. The hard-core critics believe it is a plan that is coordinated. Middle roaders, moderates and centrists believe that Beijing is seeking a larger and more prominent role for itself in the global international trade system.


Why did countries accept it in the first place?


There appears to be some progressive green projects that seem to attract certain developing/emerging economies like Indonesia. Within the large insatiable demand for infrastructure construction highlighted above, there is an additional attractiveness of green infrastructure construction. These green infrastructures meet many needs in one shot. They satisfy the need for infrastructure construction, enhance the idea of sustainability and benefits for the local communities and deal with no-detriments projects like water, food supply and environmental clean-ups. All of which are universally accepted no-detriments items. They also tend to have low carbon emissions for all users, making them highly attractive for fund recipients.


The battles between supporters and naysayers of the BRI will always be there. The optimists hope that individual BRI projects will strengthen the respective economic corridors and eventually link up to form a trading hub. This can then promote free trade, and jump start their economies. Supporters argue that it can be beneficial to them as long as they have clearly ascertained their goals and objectives and have done the sufficient homework to prepare themselves for incoming BRI and/or AIIB funding. Sympathizers, supporters and optimists of the BRI argue that critics should tamper their criticisms with their own alternatives to counter the Chinese initiative. For this group, it is not so much the attractiveness of the BRI that is at the center of the discussion but the lack of alternatives that draws countries and economies to the BRI. They argue for concrete and tangible alternatives instead of merely criticizing the Chinese BRI.


The naysayers analogize it as a Trojan Horse that can stealthily slip Chinese political and geopolitical influence into the recipient countries. The latter group of critics have a trust deficit with China and worried about the true intentions of the BRI. Based on such worries, bidding for Australian projects was cancelled and blocked. Because of the persuasiveness of the BRI, some scholars describe it as a form of soft power. Thus, persuasiveness may not only be restricted to funding opportunities but also fashioning itself as a champion of free trade in an era of anti-globalization forces. The naysayers fear that the BRI may link up other soft power features like study institutes, developmental aid funding, educational exchanges, media-related initiatives and cultural tools to influence international imageries of China.


The debate goes on.



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