White elephant? China’s Belt and Road Initiative deserves more credit in pandemic-ruined economy
- China’s infrastructure initiative, which has been unfairly singled out for criticism, has made more progress than similar projects proposed by the US and others. It should be seen as an exercise in positive thinking and innovation
Some of the scheme’s critics appear to believe so, although such scepticism is likely to prove misplaced. The prevailing view in certain Western capitals that China is busily building bridges, railways and highways to nowhere will probably be confounded by an increase in demand for infrastructure.
It will take the form of digital and smart infrastructure (likely incorporating China’s 5G and similar systems) as well as more conventional types of structures. It will be “multi-modal” infrastructure combining land, sea and air links, as envisaged in the initiative.
The Economist recently devoted a lengthy article not to exploring such future developments but to looking instead at how the “pandemic is hurting China's Belt and Road Initiative” and to asking: “How will Xi Jinping's biggest project survive?”
It is obvious that infrastructure projects everywhere will be affected by an event as dramatic and widespread in its impact as Covid-19, and equally obvious that many developing nations have run into debt problems with creditors well beyond those in China.
The Belt and Road Initiative has become a symbol of a negative attitude manifested in myriad other ways such as the repeated predictions that China is about to suffer economic collapse, a financial crisis, a bubble bursting, a property market disaster – and so on.
These projects have been more a matter of talk rather than action up to now, and even The Economist admitted in its latest report that “the financial muscle” [behind such schemes] looks “puny” compared to the financial resources backing the Belt and Road Initiative.
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Yet, Blue Dot and other schemes attract little criticism as white elephants and their (modest) progress is not subject to the kind of critical appraisal scrutiny that many Western publications (including also The Banker magazine of London among others) seem to delight in applying in the case of the Belt and Road Initiative.
I argue in a forthcoming book on infrastructure that even as attacks on the Belt and Road Initiative mount, the physical foundations of many Western nations are decaying and in some cases collapsing from failure to marshal sufficient public and private funds behind infrastructure building and maintenance.
As Allard Nooy, chief executive officer of private infrastructure development firm Infraco Asia suggested during a webinar organised in Hong Kong last week by the Inframation business intelligence group, there is a direct link between infrastructure development and economic recovery.
Don-ik Lee, director general for investment operations at the AIIB, noted, too, during the recent Hong Kong event, that the Covid-19 pandemic is likely to spur demand for social infrastructure, including medical facilities.
Whatever its shortcomings (and China seems to be correcting some of them as it goes along), the Belt and Road Initiative represents an exercise in positive thinking and innovation that is badly needed when there are so many negative economic developments. In Thailand, a white elephant is regarded as a symbol of luck. We need to see the Belt and Road Initiative herd in that light.
Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs