Monday, December 18, 2017, 17:54 (GMT+7)

Tuesday, November 21, 2017, 11:42 (GMT+7)
On China’s Belt and Road Initiative

In recent times, China’s “Belt and Road” Initiative (Initiative for short) is emerging as a strategy of this country and could reshape geopolitical and economic future both inside and outside Asia, which is drawing attention from many countries worldwide.

Leaders of 29 countries at the Belt and Road Forum held in Beijing
May 2017 (photo: VNA)

1. Brief outline of the Initiative

The idea of the Initiative is derived from a land-based silk road and a maritime silk road in the past connecting China with other countries in Asia, Africa and Europe. The Initiative consists of two parts, namely the Silk Road Economic Belt, built along Eurasian corridor ranging from Pacific Ocean to Baltic Sea, and the 21st Century Maritime Silk Road. It was officially proposed at the 22nd APEC Economic Leaders’ Meeting held in Beijing, November 2014, by Chinese  President Xi Jinping. 

According to Beijing, the “Belt and Road” will encompass three continents, namely Asia, Europe and Africa, and connect lively economic circles, particularly European developed economies. More specifically, the Belt will focus on connecting China with Central Asia, Russia with Europe (Baltic region), China with Persian Gulf and Mediterranean Sea via Central Asia and West Asia, China with Southeast Asia, South Asia and Indian Ocean. Meanwhile, the “Road” will foster China’s maritime connectivity with Europe via East Sea and Indian Ocean, and with South Pacific Ocean via East Sea. As regards land-based connectivity, the Initiative will concentrate on connecting Asia and Europe in a new fashion and developing economic corridors, namely China - Mongolia - Russia, China - Central Asia - West Asia, and China - Indochina Peninsula. Concerning maritime connectivity, the Initiative will focus on developing sea ports and logistics bases in the countries along Pacific Ocean and Indian Ocean. The Initiative contains 5 areas of connectivity, namely policy, infrastructure, trade, financial  and people-to-people exchange. Chinese Government has also provided specific gateways connecting China’s mainland with economies of Uyghur Autonomous Region, Heilongjiang, Guangxi, Yunnan provinces and Tibet Autonomous Region. Due to scale and sphere of this connectivity, provision of finance for the Initiative is the key matter. In the short run, China will set up a fund worth about 40 billion USD, and the Asian Infrastructure Investment Bank (AIIB) will provide about 100 billion USD for the Silk Road.

2. Significance and stature of the Initiative

This Initiative is of global, trans-century significance. It is estimated that once the “Belt and Road” comes into being, it will establish an economic, commercial network covering a large area with a population of 4.4 billion people across 20 countries with 21,000 billion USD worth of GDP (accounting for 30% of the world’s GDP), potentially bringing about the trade value of more than 2,500 billion USD within a decade and connecting with emerging markets of robust growth. In addition, regions along the Road all possess important geoeconomic, political position, being rich in natural resources and acting as security centres of the world.

As for China, the “Belt and Road” assumes great strategic significance to its both home and external affairs. Concerning home affairs, it is of strategic significance to realizing the “Chinese Dream” with the two goals set by Chinese leaders: (1). Building a moderately prosperous society by 2021 on the 100th founding anniversary of the Chinese Communist Party; (2). Building China into a modern socialist, prosperous, strong, democratic, civilized, and harmonious country by the centenary of the People’s Republic of China in 2049. Revival of the “Chinese Dream” is now of utmost importance to arouse China’s national self-respect and unity as it is faced with growing threats both at home and abroad. Moreover, China’s economic growth is slowing down and confronted with internal difficulties. After 3 decades of reform, as a net importer of energy, industrial commodities and food, China needs to secure access to new resources, while facing the overproduction, particularly in steel and construction materials production. All the above-mentioned issues could be solved by the Initiative when foreign markets allow Chinese enterprises to enter. Due to the increased labour costs, China will move labour-intensive and low-end manufacturers to abroad. China will also foster the economic development of its poor land border provinces as well as its deeply inland and Western provinces which have been the backward part of the country since the inception of its open-door policy. Regarding external affairs, after China’s firm disposal of the strategy “hide capabilities and await the opportunity”, which has caused concern among countries, the “Belt and Road” Initiative aims to bring prosperity to each country and appease the international community.

What is more, it is of more strategic significance as it includes traditional security at regional and inter-regional levels. In recent years, China has sought to increase its influence upon South Asia, Southeast Asia and Indian Ocean by means of “String of Pearls” Strategy to improve its maritime capability and accessibility. Practically, there are not many differences between the “Maritime Silk Road” and the “String of Pearls” when both of them aim to take the strategic initiative. Once the “Belt and Road” Initiative is realized, China will perform the role as the world’s geopolitical, economic centre.

3. The future of the Initiative and its impacts on the region and the world

According to analysts, China has advantages in implementing the Initiative. To begin with, its availability of finance and foreign-exchange reserves is quite great at the present time. Its system of banks and international financial currents is still under the State’s control, and the national savings rate is about 40% of its GDP. China’s current account surplus is about 2% of its GDP; its foreign reserves increase to 3,900 billion USD. It is contemplating a maximum investment of 800 billion USD in the two Silk Roads within 10 years to come, which seems to be feasible. Moreover, by dint of the two resources of finance, namely the Silk Road Fund under China’s control and the AIIB in which China is the biggest shareholder, the Initiative will be funded very flexibly.

China’s current status is also beneficial to the realization of the Initiative. Economically, China is the second largest economy of the world and much likely to replace the U.S. as the world’s largest one in the near future. Politically, China is one of the Standing Member of the UN Security Council, playing a decisive role in various important security issues of the world, such as Iran’s nuclear program and Korean peninsula. It has attained moderately solid points d'appui in the countries covered by the two Silk Roads. In recent years, Beijing has made a huge investment in those countries in the realms of economics, trade, infrastructure and even politics. Generally speaking, China’s Initiative is supported by many countries, particularly those with poor infrastructure. Meanwhile, several major powers are wrestling with thorny issues, which facilitates Beijing’s gradual fulfilment of its ambition at the present time.

However, the Initiative is also facing many difficulties. This is a really grand, ambitious plan of China. On the one hand, its two Silk Road are just sketch maps and even cause concern among a number of countries having maritime territorial disputes with China. On the other hand, most of the countries encompassed by the two Silk Roads are rich in natural resources but poor and politically unstable. Many of those countries are located in the post-Soviet space where Russia and the West compete against each other for influence, and terrorist attacks and racist conflicts are on the rise, thereby posing risks to China’s investment. There is fact that many countries thirst for China’s investment but worry about its maritime moves, particularly in the East Sea, as well as its true purpose behind the Initiative. Besides, major powers, especially the U.S., Russia and India, will not allow China to easily implement the Initiative and wield influence on the region. In the time ahead, strategic competition will take place very severely whereby the U.S. and the West, possibly including Russia and India, will take measure in a bid to respond to China’s ambition.

It is believed that Southeast Asian countries will gain benefits from the Initiative when China invests in the region’s infrastructure and sea ports for connecting this region with the world. Trade among those countries will be also more convenient, providing the basis for boosting trade, investment and competitiveness of each country with others both inside and outside the region. However, the issues of national security and the maintenance of geostrategic balance among major powers will bring about concern among many Southeast Asian countries. There are clear reasons for that concern as those countries become too dependent on China and will have to employ standpoint and policy in favour of China’s regional and global diplomacy. In addition, Southeast Asia countries are extremely doubtful about China’s real motive and strategic thinking behind its Initiative. In spite of Beijing’s claim that the “Belt and Road” Initiative will bring mutual benefits to all parties, Southeast Asian countries can’t help worrying that there will be geopolitical impacts in terms of China’s increased military capability in general and naval strength in particular. To conclude, due to the variations of attraction and benefits from the Initiative to each country, it is possible that the “Belt and Road” will be a new challenge to ASEAN’s future centrality and intra-bloc unity.

Le Duc Cuong - Bui Van Manh

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