26Apr

The Belt and Road Initiative and what does it mean for the international system

Janetzy Viviana Altamirano Mariscal | 26 Apr 2021

The Belt and Road Initiative is intended to bring back to life the historical Silk Road, investing in the construction of railways, highways, and other types of port constructions, which will connect Asia and Europe. Ever since President Xi Jinping proposed a new Silk Road, the international scene has turned its heads to the intentions behind this massive economic plan. The perceptions of this initiative are divided; there is not a general consensus to address it as something positive or negative. It has been argued that it is an offensive move from China to establish itself in the center of the world’s economic activities, but it has also been referred to as a project that can improve international trade. The United States has had a strained relationship with China for several years; an ambitious plan that could potentiate the Chinese growing  influence in the international arena has not helped to stabilize this relationship.

A New Silk Road Project

Human history has witnessed many roads made to connect old civilizations, with the main goal being to trade and be able to obtain natural resources foreign to their region.  One of the most known roads, and from which there are records, is the Silk Road. This road was a trade network that connected China to South and Central Asia, some parts of Africa and Europe, allowing the Asian country to transport its treasures, especially  silk. This substantial structure allowed many products from China to spread around the world; besides, it helped to expand international trade in historical decades.

In September of 2013, President Xi Jinping proposed to build a Silk Road Economic Belt with Central Asian countries, aiming to promote economic cooperation and development all over Asia, the Middle East, Africa, and Europe. To do so, Jinping attempts to upgrade the old routes, in order to bring them to modernity by signing several agreements with various countries. Just like its predecessor, this network will aid trade and investment for the large and emerging economies, while putting China at the center of this economic circuit.

The new Silk Road, better known as the Belt and Road Initiative (BRI), should not be considered as just an infrastructure business plan, it is a new chapter in the international trade scenario, wherefrom, the whole world could  benefit. The land based Silk Road Economic Belt extends throughout Eurasia in six corridors, these follow two principal paths; one that connects Asia with Europe and the other one that connects the Asian countries with Africa. These corridors will also go through the Arabic Sea, the Gulf of Bengal, the Indian Ocean, the Red Sea, and the Mediterranean Sea. According to several declarations by President Xi and some reports, the BRI is intended to reach $1 trillion in projects all throughout its extension. It is no secret then that this project not only involves China, but it also enables several other countries to immerse themselves in a bigger scale of trade negotiations, with new open paths.

Thus far, there are 139 countries that endorse and are affiliated with the Chinese initiative, from Africa, Europe, Central and South Asia, the Middle East, Latin America, and the Caribbean; this shows that the BRIC has become a global project. These 139 members of BRI, including China, account for 40 percent of global GDP, enlightening the importance and impact that these corridors will have on the world’s economy. Although the BRI connects with a various number of countries established as economic powers, to date, the vast majority of funds have been allocated toward traditional infrastructure in mainly developing countries. Besides the agenda that the Chinese government has for the road, some BRI members are not interested, so far, to host projects, they’re just cooperating as promoters of the initiative.

As mentioned before, this project is in the light of the controversy. Several countries have expressed their mistrust of the core intentions of China, arguing that this project seems more like geostrategy, meant to benefit China’s domestic policy, rather than it being a foreign policy move. The U.S has not been an exception to this negative response, in fact, next to India, it has been one of the most outspoken countries about its view of this project. One reason that the U.S uses to discredit the BRI, are the loans. China is giving out a big amount of loans to finance the infrastructure remodeling and constructions in some participant countries. This has led to speculations about a debt trap to the developing countries, which could struggle to repay the loan and, therefore, stay under the ‘domain’ of China. As for India, it conceives the BRI as a political and strategic plan, which will favor the goals of China. An example of this, the Indian government has enlightened that the promotions of projects in Sri Lanka, with the ongoing problems in the country, are unsustainable and opportunistic.

The question that rises over these stipulations is why are more and more countries joining this project? Perhaps, these countries concluded that the price of the agreements is reasonable enough, and the game of relative wins is stronger than the fear of a possible economic depression. It cannot be denied that BRI can expand trade and increase the foreign investment in its partnering countries, although the costs of new infrastructure could outweigh the gains. Notwithstanding that the economic benefits are clearly most favorable for China, as it will be in the center of the trade network; the BRI will enable new paths to establish economic alliance and agreements, which will have a global impact.

No doubts are left about the critical geopolitical gain that the BRI will mean for China; it shortens the breach with the U.S dominance in the global trade scene. This project could potentially be a significant risk to the economic interest of the U.S. For instance, some key allies of the U.S are, to some extent, participants of the BRI, which drafts a new era of the ongoing hegemony battle between the two global powers. This is something that the Trump’s administration was very aware of; in fact, in 2019 Congress passed a historic seven-year authorization for U.S. EXIM. Congress directed it to establish a “Program on China and Transformational Exports,” which gives the U.S a possibility to offer better and more flexible loans than the Chinese ones. These new conditions will allow the U.S to compete with the rates and conditions that China established, leading off to a new channel of their unremitting battle.

The Belt and Road Initiative has the potential to improve international trade by developing opportunities for new commercial routes and better infrastructure, opening channels for global negotiations, and establishing a platform for the growing economies to participate in bigger economic activities.  If the BRI successfully achieves its projects, not only will it refurbish the greatness of the old Silk Road, but it would inevitably position China as the center of economic and political global activities. Therefore, the balance of power in the international system will face change, and, arguably, a new polarization, dethroning the U.S influence. In other words, China is on its way to establishing itself as the new world’s hegemony.

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