From growth opportunity to threat: how the world has changed its mind on China’s belt and road

  • Andreea Brînză says concern over exploitative terms has, in many cases, turned sentiment against China’s ambitious infrastructure plan for developing countries, and alternative programmes have been launched. How will China respond?
PUBLISHED : Thursday, 06 December, 2018, 12:04pm
UPDATED : Thursday, 06 December, 2018, 12:49pm

The benign depiction of the Belt and Road Initiative as a New Silk Road or a Marshall Plan, or even as a project aiming to aid developing countries, seems to be a thing of the past. A negative narrative has taken over, depicting the belt and road as a risky initiative that may burden the participating countries with debt, throwing them into a “debt trap”.  

In the past two years, antipathy has steadily grown in the US, Europe, India, Pakistan and elsewhere towards the initiative, now seen around the world as an expression of Chinese ambition.

The European Union was among the first to act on its concerns as it tries to limit the Chinese presence on its turf and counter its influence. Last year, the EU launched an investigation into a Chinese-backed project to build a high-speed railway between the Serbian capital Belgrade and Budapest in Hungary. EU officials said the project, aimed at extending the belt and road into the heart of Europe, may have violated EU rules on public tenders for major transport projects.

Then in April this year, 27 of the 28 EU ambassadors in Beijing signed a document that criticised the belt and road for hampering free trade and favouring Chinese companies, which China subsidises.

China’s belt and road plan: a lesson for the West in giving

Fears over the Chinese encroachment were heightened by the Chinese acquisition of important German companies, such as robot maker Kuka in late 2016. Europe shudders at the idea that Chinese companies may steal their know-how, dismantle the factories and move the production to China.

To deal with China’s forays into the European market, the region’s leading politicians, including German Chancellor Angela Merkel, French President Emmanuel Macron, British Prime Minister Theresa May and Dutch Prime Minister Mark Rutte, all paid official visits to China in the first half of 2018, where they talked to Chinese leaders about the Belt and Road Initiative and China’s involvement in Europe.

In October, the EU formally unveiled a plan to compete with the belt and road and limit Chinese influence. The Europe-Asia connectivity strategy aims to enhance links between the two regions, while focusing on compliance with environmental and social norms and taking care not to burden the participating countries with loans they could not repay. The EU does not want any of its member countries to go the way of Sri Lanka, where the government had to hand over the running of the strategically important Hambantota port to a Chinese company after it failed to repay its debt.

Such fears have been amplified by the Chinese spree in acquiring European ports, including in Greece, Belgium and the Netherlands. Some of these acquisitions may well come with moral strings attached. For example, both Hungary and Greece have vetoed or blocked resolutions criticising China’s human rights record or its actions in the South China Sea. Chances are, they did not want to hurt their ties with China and hence future investment prospects.

Like the EU, the US has also been pushing back against the belt and road, dialling up its criticism of the Chinese initiative of late. Just last month, at the Asia-Pacific Economic Cooperation summit, US Vice-President Mike Pence launched a veiled attack on the belt and road, saying the US would not offer its partners a “constricting belt or a one-way road”.

The US, too, is launching an infrastructure programme that directly competes with the belt and road. In October, President Donald Trump signed into law the Better Utilisation of Investment Leading to Development (Build) Act that would create an agency to hand out loans to developing countries in Asia and Africa. The US agency will have capital totalling US$60 billion, which is far less than the combined belt and road investments so far, but it will act as a catalyst to entice other countries to work with the US rather than China.

Build and destroy: US tightens noose on China’s belt and road

India, too, is drawing up strategies to deter the development of the belt and road. The Asia-Africa Growth Corridor is a cooperation framework led by India and Japan to combat China’s influence in the Indian Ocean and Africa.

In Pakistan, the government is also trying to redefine some of the terms of the China-Pakistan Economic Corridor, a main project of the belt and road. Its new prime minister, Imran Khan, has indicated that he will seek out other partners other than China for Pakistan’s development, which would involve not just infrastructure improvements but also in sectors like agriculture.

Beware the infrastructure wars as nations compete for prominence

Not all countries are hardening their stance, however. Japan, once a vehement critic of the belt and road, has recently softened its tone and even appears open to the possibility of joining the initiative.

But overall, the trend over the past year has been clear: from America to Europe, the belt and road has lost its shine and is being attacked as a “debt trap” and a self-serving project. While there is still some awe at the grandeur of the initiative, it has lost some of the soft power that attracted more than a dozen European leaders, including those of Italy and Spain, to the first Belt and Road Summit in Beijing, in 2017.

The belt and road is no longer seen as an opportunity, but as a threat. It remains to be seen how China will respond to these negative perceptions.

Andreea Brînză is vice-president of the Romanian Institute for the Study of the Asia-Pacific (RISAP). Her research focuses on the geopolitics and geoeconomics of China and especially on the Belt and Road Initiative