Why China’s belt and road must be a pathway to sustainable development
Michel Camdessus says Beijing’s ambitious campaign to promote its infrastructure-driven development model will profoundly change economies in the region and beyond, and China must honour its pledge of keeping growth sustainable
Economic globalisation is under assault as never before, and its proponents must redouble their efforts, in words and deeds, to demonstrate the benefits international cooperation can bring. It is encouraging, therefore, to see China press ahead with its massive “One Belt, One Road” project, potentially the world’s largest overseas infrastructure investment drive by a single country.
However, over the past 15 years, models of development have evolved. Given the increasingly pressing challenges presented by climate change and related environmental pressures, only a sustainability-led approach to investment can ensure the long-term “common prosperity” that China is seeking along the New Silk Road.
First unveiled by President Xi Jinping ( 習近平 ) in 2013, the belt and road project is expected to see US$1 trillion of investment in 64 countries, with one leg following the ancient Silk Road route from China to Europe, and another stretching from China to Southeast Asia and East Africa by sea.
It will see China exporting its infrastructure-driven development model across Asia into East Africa and even Europe. Chinese finance will support Chinese developers, partnering local and international enterprises, undertaking transport and energy projects. The initiative’s geographic scope takes in more than 50 per cent of the world’s population, 75 per cent of its energy resources and 40 per cent of global gross domestic product.
The initiative will profoundly influence the economic development of the countries involved. It will more fully integrate their markets into the global economy, allowing them to better exploit their natural resources and ensure that their demographic dividends are invested rather than squandered.
But the scale of the initiative means that it will also have a significant impact on whether we meet international objectives to protect the climate and promote sustainable development. Investments made in infrastructure over the next 15 years will dictate whether we can avert the worst effects of global warming while generating sustainable growth.
China was instrumental in setting these objectives. Xi played a pivotal role in forging international consensus to secure the Paris climate change agreement in December 2015. Just over two months earlier, he attended the UN Sustainable Development Summit, which drew up the 2030 Sustainable Development Goals.
China’s role in continuing the work towards these goals has never been more important. The United States, under President Donald Trump, seems to be stepping back from its traditional function as the leading advocate of a norms-based global order. China is showing it is prepared to step forward.
In February, Xi told a Communist Party conference on national security in Beijing that China should “guide international society” towards a “more just and rational new world order”. He described the Paris agreement as “a milestone in the history of climate governance”, adding that “we must ensure this endeavour is not derailed”.
China is investing huge amounts in renewable energy, promising to commit an additional US$361 billion to clean energy by 2020, and is significantly curtailing new investments in coal-fired power plants. Its pursuit of an “ecological civilisation” has guided domestic policymaking since 2012, supporting the extraordinary efforts it is making to protect its own citizens and economy from climate change and air pollution.
The same strategy would also ensure the economic viability of its belt and road investments. The global economy is rapidly decarbonising as the cost of clean energy technologies continues to plummet. High-carbon infrastructure is likely to become “stranded”, leaving investors nursing heavy losses. Meanwhile, investments that take into account the social and environmental context in which they are made are likely to be welcomed, rather than opposed, by the local people they directly affect.
More and more, it has become clear that only a sustainable investment-led development model can deliver “high-quality growth”, and in particular reduce poverty and protect the environment.
Such an approach is particularly important in Africa. The Africa Progress Panel shares a vision with many African countries that their full economic potential and electricity-access goals can only be reached through clean energy and sustainable development.
China has, over recent decades, pioneered its own development model – and is now aligning that model with social and ecological imperatives. Following this week’s Belt and Road Forum for International Cooperation, where it discussed how best to further roll out its initiative, Beijing has the opportunity to support new development models overseas that ensure economic growth that is aligned with climate and sustainability objectives – for the good of its partners, as well as its own.
Michel Camdessus was managing director of the International Monetary Fund from 1987 to 2000 and is a former governor of the Bank of France. He is a member of the Africa Progress Panel