The Motives or Purposes for China Government to Initiate The BRI

Objective: Students will learn how to identify the globalization issue in the case study; analyze the situations; and make suggestions or recommendations to solve the globalization problems. Creative suggestions or recommendations are especially encouraged!
Instructions:
Please read the case study and answer the 4 questions below.
Case study 1 should be turned in on Canvas with an attached word file (see the “assignments”)
Please note the deadline. If you miss the deadline, but turn in the assignment within 3 days, 5 points will be deducted for the delay. After 3 days passed the deadline, no late work will be accepted. Please submit the late turn-in to Dr. Rebecca Tang through the email on Canvas.
The turn-in should be single-spaced with 1-inch margins in 12 point Times New Roman font. APA style is preferred if reference is needed. Please limit your answer between 2 and 4 pages for each assignment (excluding references, appendices, or visuals). In your turn-in, please include the specific questions and your corresponding answers. Don’t include the text body of the case study in the instruction.
Background Study: Students are advised to conduct background research of Belt and Road Initiative before answering the questions. (Background study does NOT need to be shown in the answer sheet students turn in). There are several potential approaches of background research:
Go to Wikipedia to read more about the definition of the belt and road: https://en(dot)wikipedia(dot)org/wiki/One_Belt_One_Road_Initiative (Links to an external site.)
Take advantage of the short videos on youtube. The keywords are “belt and road”. You could find many videos from different voices relevant this project.
China’s Massive Belt and Road Initiative
(Source: https://www(dot)cfr(dot)org/backgrounder/chinas-massive-belt-and-road-initiative)
China’s Belt and Road Initiative (BRI), sometimes referred to as the New Silk Road, is one of the most ambitious infrastructure projects ever conceived. Launched in 2013 by President Xi Jinping, the vast collection of development and investment initiatives would stretch from East Asia to Europe, significantly expanding China’s economic and political influence.
Some analysts see the project as an unsettling extension of China’s rising power, and as the costs of many of the projects have skyrocketed, opposition has grown in some countries. Meanwhile, the United States shares the concern of some in Asia that the BRI could be a Trojan horse for China-led regional development and military expansion. Under President Donald J. Trump, Washington has raised alarm over Beijing’s actions, but it has struggled to offer governments in the region a more appealing economic vision.
What was the original Silk Road?
The original Silk Road arose during the westward expansion of China’s Han Dynasty (206 BCE–220 CE), which forged trade networks throughout what are today the Central Asian countries of Afghanistan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, as well as modern-day India and Pakistan to the south. Those routes extended more than four thousand miles to Europe.
Central Asia was thus the epicenter of one of the first waves of globalization, connecting eastern and western markets, spurring immense wealth, and intermixing cultural and religious traditions. Valuable Chinese silk, spices, jade, and other goods moved west while China received gold and other precious metals, ivory, and glass products. Use of the route peaked during the first millennium, under the leadership of first the Roman and then Byzantine Empires, and the Tang Dynasty (618–907 CE) in China.
But the Crusades, as well as advances by the Mongols in Central Asia, dampened trade, and today Central Asian countries are economically isolated from each other, with intra-regional trade making up just 6.2 percent (Links to an external site.) of all cross-border commerce. They are also heavily dependent on Russia, particularly for remittances—they make up one-third of the gross domestic product (GDP) of Kyrgyzstan and Tajikistan. By 2018, remittances had dipped from their 2013 highs (Links to an external site.) due to Russia’s economic woes.
What are China’s plans for its New Silk Road?
President Xi announced the initiative during official visits to Kazakhstan and Indonesia in 2013. The plan was two-pronged: the overland Silk Road Economic Belt and the Maritime Silk Road. The two were collectively referred to first as the One Belt, One Road initiative but eventually became the Belt and Road Initiative.
Xi’s vision included creating a vast network of railways, energy pipelines, highways, and streamlined border crossings, both westward—through the mountainous former Soviet republics—and southward, to Pakistan, India, and the rest of Southeast Asia. Such a network would expand the international use (Links to an external site.) of Chinese currency, the renminbi, and “break the bottleneck in Asian connectivity (Links to an external site.),” according to Xi. (The Asian Development Bank estimated that the region faces a yearly infrastructure financing shortfall of nearly $800 billion.) In addition to physical infrastructure, China plans to build fifty special economic zones (Links to an external site.), modeled after the Shenzhen Special Economic Zone, which China launched in 1980 during its economic reforms under leader Deng Xiaoping.
Xi subsequently announced plans for the 21st Century Maritime Silk Road at the 2013 summit of the Association of Southeast Asian Nations (ASEAN) in Indonesia. To accommodate expanding maritime trade traffic, China would invest in port development along the Indian Ocean, from Southeast Asia all the way to East Africa and parts of Europe.
China’s overall ambition for the BRI is staggering. To date, more than sixty countries—accounting for two-thirds of the world’s population—have signed on to projects or indicated an interest in doing so. Analysts estimate the largest so far to be the $68 billion China-Pakistan Economic Corridor, a collection of projects connecting China to Pakistan’s Gwadar Port on the Arabian Sea. In total, China has already spent an estimated $200 billion on such efforts. Morgan Stanley has predicted China’s overall expenses over the life of the BRI could reach $1.2–1.3 trillion (Links to an external site.) by 2027, though estimates on total investments vary.
What does China hope to achieve?
China has both geopolitical and economic motivations behind the initiative. Xi has promoted a vision of a more assertive China (Links to an external site.), while slowing growth and rocky trade relations with the United States have pressure (Links to an external site.)d the country’s leadership to open new markets for its goods.
Experts see the BRI as one of the main planks of a bolder Chinese statecraft under Xi, alongside the Made in China 2025 (Links to an external site.) economic development strategy. For Xi, the BRI serves as pushback against the much-touted U.S. “pivot to Asia (Links to an external site.),” as well as a way for China to develop new investment opportunities, cultivate export markets, and boost Chinese incomes and domestic consumption. “Under Xi, China now actively seeks to shape international norms and institutions and forcefully asserts its presence (Links to an external site.) on the global stage,” writes CFR’s Elizabeth C. Economy.
At the same time, China is motivated to boost global economic links to its western regions, which historically have been neglected. Promoting economic development in the western province of Xinjiang (Links to an external site.), where separatist violence has been on the upswing, is a major priority, as is securing long-term energy supplies from Central Asia and the Middle East (Links to an external site.), especially via routes the U.S. military cannot disrupt (Links to an external site.).
More broadly, Chinese leaders are determined to restructure the economy to avoid the so-called middle-income trap. In this scenario, which has plagued close to 90 percent (Links to an external site.) of middle-income countries since 1960, wages go up and quality of life improves as low-skilled manufacturing rises, but countries struggle to then shift to producing higher-value goods and services.
What are the potential roadblocks?
The Belt and Road Initiative has also stoked opposition. For some countries that take on large amounts of debt to fund infrastructure upgrades, BRI money is seen as a potential poisoned chalice. BRI projects are built using low-interest loans (Links to an external site.) as opposed to aid grants. Some BRI investments have involved opaque bidding processes and required the use of Chinese firms. As a result, contractors have inflated costs, leading to canceled projects and political backlash.
Examples of such criticisms abound. In Malaysia, Mahathir bin Mohamad, elected prime minister in 2018, campaigned against overpriced BRI initiatives, which he claimed were partially redirected to funds controlled by his predecessor. Once in office, he canceled $22 billion worth of BRI projects, although he later announced his “full support (Links to an external site.)” for the initiative in 2019. In Kazakhstan, mass protests against the construction of Chinese factories swept the country in 2019 (Links to an external site.), driven by concerns about costs as well as anger over the Chinese government’s treatment of Uighurs in Xinjiang Province (Links to an external site.).
More such stories are likely, according to a 2018 report (Links to an external site.) by the Center for Global Development, which notes that eight BRI countries are vulnerable to debt crises. CFR’s Belt and Road Tracker (Links to an external site.) shows overall debt to China has soared since 2013, surpassing 20 percent of GDP in some countries.
Some governments, in places such as Kenya and Zambia, are carefully studying BRI investments before they sign up, and candidates in Malaysia have run—and won—campaigns on anti-BRI platforms. Chinese leaders were reportedly surprised by such pushback, and BRI investment began to slow in late 2018. Yet by the end of 2019, BRI contracts again saw a significant uptick (Links to an external site.).
How has the United States responded to China-led regional integration?
The United States has shared other countries’ concerns (Links to an external site.) about China’s intentions. Developing the economies of South and Central Asia is a long-standing U.S. goal that intensified after the start of the U.S.-led war in Afghanistan and President Barack Obama’s pivot to Asia. The Obama administration frequently referenced the need for the Afghan economy to move past foreign assistance, and in 2014 then-Deputy Secretary of State William Burns committed the United States (Links to an external site.) to returning Central and South Asia “to its historic role as a vital hub of global commerce, ideas, and culture.” In this spirit, the Obama administration supported a $10 billion gas pipeline (Links to an external site.) through Turkmenistan, Afghanistan, Pakistan, and India. It also spent billions of dollars on roads and energy projects in Afghanistan and used its diplomatic muscle to help craft new regional cooperation frameworks to foster Central Asian economic links.
Some analysts have called on (Links to an external site.) the United States to deepen its ties with Asian partners, as the Obama administration tried to do with the Trans-Pacific Partnership (Links to an external site.) (TPP), a deal rejected by Trump. The Trump administration has instead tried to counter the BRI with the BUILD Act (Links to an external site.). This consolidated (Links to an external site.) the Overseas Private Investment Corporation (OPIC), a U.S. government agency for development finance, with components of the U.S. Agency for International Development (USAID) into a separate agency with a $60 billion investment portfolio. Although this pales in comparison to the more than $1 trillion China is expected to spend on the BRI, advocates say it seeks to crowd in a larger pool of private investment by underwriting risk.
Some have argued that the United States might find a silver lining in the BRI. Jonathan E. Hillman, of the Center for Strategic and International Studies, says the United States could use BRI projects as a way to have China pay for infrastructure initiatives (Links to an external site.) in Central Asia that are also in the U.S. interest.
What is the role for third countries?
Other countries have sought to balance their concerns about China’s ambitions against the BRI’s potential benefits.
India. India has tried to convince countries that the BRI is a plan to dominate Asia, warning of what some analysts have called a “String of Pearls (Links to an external site.)” geoeconomic strategy whereby China creates unsustainable debt burdens for its Indian Ocean neighbors in order to seize control of regional choke points. In particular, New Delhi has long been unsettled by China’s decades-long embrace of its traditional rival, Pakistan. Meanwhile, India has provided its own development assistance to neighbors, most notably Afghanistan, where it has spent $3 billion (Links to an external site.) on infrastructure projects.
The United States views India as a counterweight to a China-dominated Asia and has sought to knit together its strategic relationships in the region via the 2017 Indo-Pacific Strategy (Links to an external site.). Yet, despite U.S. misgivings, India was a founding member of China’s Asian Infrastructure Investment Bank (AIIB), and Indian and Chinese leaders have invested in developing closer diplomatic ties. “India does a lot with China in the multilateral arena for its own reasons,” says CFR’s Alyssa Ayres.
Japan. Tokyo has a similar strategy, balancing its interest in regional infrastructure development with long-standing suspicions about China. In 2016, Japan committed to spending $110 billion on infrastructure projects throughout Asia. Japan has, with India, also agreed to develop the Asia-Africa Growth Corridor (AAGC), a plan to develop and connect ports from Myanmar to East Africa.
Europe. Several countries in Central and Eastern Europe have accepted BRI financing, and Western European states such as Italy (Links to an external site.), Luxembourg, and Portugal have signed provisional agreements to cooperate on BRI projects. Their leaders frame cooperation as a way to invite Chinese investment and potentially improve the quality of competitive construction bids from European and U.S. firms.
Others disagree. French President Emmanuel Macron has urged prudence, suggesting during a 2018 trip to China (Links to an external site.) that the BRI could make partner countries “vassal states.” Other skeptics connect the BRI with climate change. The Institute of International Finance, a research group that analyzes risk for large Western banks, has reported that 85 percent of BRI projects can be linked to high levels of greenhouse gas emissions. Others claim that China is using BRI funds to gain influence in Balkan countries, thereby providing Chinese access to the heart of the European Union’s common market.
Russia. Moscow has become one of the BRI’s most enthusiastic partners, though it responded to Xi’s announcement at first with reticence, worried that Beijing’s plans would outshine Moscow’s vision for a “Eurasian Economic Union” and impinge on its traditional sphere of influence.
As Russia’s relationship with the West has deteriorated, however, President Vladimir Putin has pledged to link (Links to an external site.) his Eurasian vision with the BRI. Some experts are skeptical of such an alliance, which they argue would be economically asymmetrical. Russia’s economy and its total trade volume are both roughly one-eighth the size of China’s—a gulf that the BRI could widen in the coming years.
You Make the Call
What are the motives or purposes for China government to initiate BRI? (10 points)
What are the potential opportunities that China would face for the initiation of BRI? (10 points)
What are the potential challenges that China would face for the initiation of BRI? (10 points)
Do you think it is a wise political decision for the initiation of BRI? Why? (10 points)