Risks mean ‘Belt and Road Initiative’ needs firm leadership
Wars, terrorism, diplomatic rows and the vagaries of democracy are all casting a shadow over President Xi Jinping’s grand trade plan
Political and security risks were barely mentioned during a summit last month in Beijing promoting the “Belt and Road Initiative”, China’s ambitious global trade expansion project. President Xi Jinping merely referred in his keynote speech to financial hazards while the chairman of the state-owned Assets Supervision and Administration Commission contended that threats were “completely controllable”. Yet a string of events in recent weeks, from Britain’s election result to a row between Gulf states and Qatar and the killing of two Chinese in Pakistan, highlight the potential for uncertainty along the planned trade routes that encompass 65 countries, and are a much-needed reality check for policymakers and companies.
The plan to link Asia with Africa and Europe is undeniably ambitious. It involves the construction of billions of dollars of infrastructure including rail lines, ports and power plants. From the connectivity and trade will come growth and development and a leadership role for China in the world. But success requires peace and stability in the countries involved.
Civil war in Afghanistan, Syria and Yemen and the threats of militant groups like Islamic State (IS) are long-standing impediments. The killing of two Chinese teachers in the Pakistani city of Quetta, claimed by IS, and the group’s bombing of Iran’s two most symbolic sites were unexpected. Equally troubling was the decision by Saudi Arabia and several allies to impose sanctions on Qatar; China has good relations with both Riyadh and Doha and Qatari ally Tehran, putting it in a bind over how to respond to the crisis.
Britain’s election, called by Prime Minister Theresa May to strengthen her hand in negotiations over the country’s exit of the European Union, had the unexpected result of her government losing its parliamentary majority.The nation was to be the one of the end points of the belt and road trade routes and a vital component of Chinese ambitions in Europe. The decision by Britons to leave the EU had already upset that and had made uncertain the strategic worth of billions of dollars of investments. The British government’s weakened negotiating position with the EU now makes predicting the eventual result of the exit talks more difficult.
Democracy makes for uncertain outcomes that can take time to resolve, a frustrating matter for cash-rich Chinese firms. But geopolitics, particularly in volatile regions, can make for as much uncertainty. US President Donald Trump’s isolationist foreign policy means his country can no longer be counted on to be a world leader. The belt and road plan is a global vision and needs firm leadership and coordination. Given the risks involved, China needs to think carefully about what form its role will take.