On December 8, Australia passed a law allowing the prime minister to scrap previously signed agreements with overseas governments—specifically targeted toward China’s Belt and Road Initiative, a series of development projects funded through China’s investment. Recently, tensions between Australia and their largest trading partner, China, have been getting frostier. But it also comes at a time when China’s Belt and Road Initiative is also facing renewed scrutiny.
But what exactly is this Belt and Road initiative?
It’s been over ten years since the US “pivot[ed] to Asia” and Western countries turned their eyes toward the rapid development of Eastern Asia—specifically, China. And while the country has had its hands full with international scrutiny of Hong Kong democracy protests and the detainment of Uyghur people, it has also been building branches into the international community, some of which are raising eyebrows years later.
In 2013, President Xi Jinping established the Belt & Road Initiative (BRI), a strategy for infrastructure development around the world, funded by China. Through the BRI, China expects to invest $4 trillion in more than 110 foreign countries. In a call back to the famous Silk Road that dominated trade during the country’s imperial era, the modern-day BRI was intended to create a network of investments for infrastructure development in foreign countries. It has since become, China’s “signature foreign policy venture.”
If it sounds a little vague, that’s alright. It’s intended to be. The BRI is extremely flexible, allowing it to shift to the different needs and interests of its partner countries. According to Wade Shepard, a columnist at Forbes, this was a strength of the policy, allowing it to have a very wide reach.
Although the BRI includes other Asian and Eurasian countries, its main destination has always been Europe. But as a result, it has become a challenge to European interests as it establishes China’s growing influence over the global market.
Eastern Europe has primarily been the BRI’s foothold for moving West. Both Hungary and Slovakia are part of the BRI and act as “a gateway to the European Union.” Poland is also considered a “de facto BRI country” as, in 2018, they received 1 billion euros in foreign direct investment from China. It is important to recognize that these countries—which are part of the European Union—face a large trade deficit with China. For example, Poland has a 21 billion euro deficit, importing “12 times more from China than it exports.” However, it is interesting that these Eastern European countries, which are also in the EU, only account for 2 percent of China’s 2017 investment into Europe, considering the BRI’s role in the region.
Europe has been a large area of investment for China—regardless of BRI involvement. Between 2008 and 2016, China’s foreign direct investment in Europe has grown from less than 1 billion to 35 billion euros. In 2017, there was a drop in investment in the EU by 17 percent, due to a 29 percent drop in global Chinese investment.
Still, this appeal of business with China has become a concern due to the country’s growing influence in the EU. Germany’s Prime Minister Angela Merkle noted the importance of maintaining the bloc’s shared foreign policy, stating that “otherwise the EU would be allowing itself to be divided against itself.” In fact, Italian Prime Minister Di Maio has already indicated that his country’s partnership with China would be a priority, as he acknowledged “there are indeed EU restrictions. But … [Italy] would be able to accept an [Chinese] investment as long as it is mutually beneficial.”
There was some attempt for cohesive agreement in the EU. In 2018, EU High Representative for Foreign Affairs and Security Policy Federica Mogherini released a strategy that aimed to address some aspects of engagement with China—specifically through transportation and energy. However, other than extending plans to improve connectivity, the EU lacked specific areas to address the economic power and challenge that China posed to the bloc.
Despite early laudations of success, the BRI has started hitting some roadblocks this past year. Not only has a fifth of the projects under the BRI have had to come to a halt due to the COVID-19 pandemic, but China faced international criticism for the start of the pandemic. Make no mistake, China’s economy continues to grow despite the pandemic. However, international trust seems to be waning.
Moreover, the development projects that the BRI has invested in have had varying results of success. The South China Morning Post shared a comparison of two Belt and Road Initiative projects in Malaysia, one of them succeeding due to the support of local politicians and economic leaders within Malaysia, and the other project struggling despite the vast amount of funding poured into it by the BRI. The latter is just one of many projects across Asia and that have faced roadblocks and delays, leading to decreasing interest. It has also raised the eyebrows of critics, focused on the environmental impact of these ongoing development projects.
This is not to say that the BRI is going away anytime soon. Foreign policy plans of this size are not simply given up on. However, we might expect to see a more wary and cautious international reception to China’s projects, or a more redefined BRI policy in the coming years. In the post-pandemic global economy, it will continue to face off with the EU as well. Ultimately, any changes we might see in the BRI may serve as a weathervane for China’s approach to further foreign policy.
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