According to narrative economists, the stories we tell ourselves about the world can even propel major economic events. Considering narratives can thus help us answer “big questions” in international business and economics, such as why some countries and firms succeed while others fail on the global stage. 

Such narratives do not emerge from thin air. They are carefully nurtured by firms, institutions, and governments that seek to change the course of history. Successful narratives, such as globalization, act as drivers of institutional change.

At the level of nation-states, narratives are shaped by powerful internal forces (such as national security concerns) and equally powerful external drivers (such as technological development). Such narratives are far from fixed. They may respond flexibly to economic, political, and socio-cultural pressure or break under the strain. 

Nor are narratives always logical. The present swing toward deglobalization is counterintuitive, given its overall negative impact on welfare and economic activity. Yet the power of narratives can be intoxicating. Projects such as Brexit and Donald Trump’s introduction of a punishing 25 percent tariff on steel from overseas show how potent populist narratives can override economic interests. 

To compete with such narratives, the globalizing narrative of the BRI must win hearts and minds worldwide. It must be perceived to serve both Chinese and foreign interests—through free trade and shared economic benefits, for example—or risk being derailed by de-globalizing efforts. In short, to use a timely metaphor, it needs to “go viral.”

Going viral

For a narrative to go viral, it must be perceived as a force for the common good. Viral narratives have four key characteristics. They are based on common values, they invite participation, they are open-ended, and they deliver shared prosperity. Using this framework, we can determine whether and how the narrative of the BRI can drive institutional change in favor of globalization.

Values are the first condition for narrative virality. The values espoused by a narrative must be meaningful, legitimate, and substantial. Most importantly, they must be shared by all stakeholders. The BRI narrative must represent a set of consistent values that ring true to firms, governments, and citizens both in China and overseas. Unfortunately, the BRI-promoted values of “community” and “shared interests” are still perceived as hollow by many.
 
Second, narratives that go viral are those that invite participation and offer stakeholders the opportunity to change the world. Encouragingly, China’s partners in the BRI already include national governments, international institutions, firms from the signatory countries, and, increasingly, parties from third countries, including multinational enterprises. Attracting even more partners and deepening the involvement of both Chinese and non-Chinese stakeholders will be crucial to the success of the narrative.

Third, viral narratives are open-ended and influenced by their environments and participants. If the globalizing narrative of the BRI is allowed to freely evolve, it will be able to adapt flexibly to disruptions such as technological innovation and even global shocks such as the COVID-19 pandemic.

Finally, if the globalizing narrative of the BRI is to go viral, it must offer clear economic benefits for all potential partner countries—not just China. This will be especially important in the wake of the COVID-19 pandemic, which has ravaged economies worldwide. So far, however, only about 11 percent of China’s funding for transportation projects has been won by non-Chinese companies. This may not be enough to encourage overseas firms to buy in to the BRI narrative.

Combating counter-narratives

Narratives can be perceived as forces for good or as weapons. Globalizing and deglobalizing narratives are no exception to this binary thinking, as they create distinct sets of winners and losers. 

The BRI is one of the most significant capital projects ever undertaken, with trillions of dollars of investment benefiting 68 countries to date. The promised financing has won the initiative political support from many nations. However, countries threatened by China’s rapidly growing influence on the world stage have established counter-narratives that may endanger the success of the BRI.

The biggest threat comes from the US, which regards the BRI as a “weaponized narrative,” a form of economic warfare that imperils the US’s global pre-eminence. It is attempting to recast the BRI as an aggressive strategy to subvert the global balance of trade and destabilize domestic markets. As direct military conflict becomes less likely, such competing narratives could prove the battleground of the future.

Industrial impact

The BRI’s fate will play out in the realm of geopolitics but will affect almost all domestic and international businesses. In theory, competitive value-creating firms in both China and the West should support the narratives and institutions of globalization. However, the world of narratives is neither linear nor logical.

Narratives are strategically nurtured by their creators and carefully selected by those who adopt them. Strategically aligning with narratives enables firms to build “narrative capital.” However, narratives are created and chosen based on imperfect information and with unknown consequences. When faced with competing narratives, businesses must make a bet on the future. Those who choose the right ones can prosper; those who do not may find themselves dangerously exposed.

The success of the BRI’s globalizing efforts will be influenced by how effectively firms align their own narratives with that of the BRI (or with counter-BRI narratives). Firms that operate in different markets must choose carefully between narratives. It will be vital, for example, for companies operating in China, Russia, the US, and Europe to develop institutional narratives that are acceptable to all parties. The alternative is to retreat from international expansion and focus on domestic markets, damaging the interests of the BRI.

During times of rapid change, business leaders must make narrative development a strategic priority. Firms that proactively and creatively manage their narrative assets in close alignment with the BRI narrative will help to swing the pendulum back toward globalization.

Can the BRI cut through?

The success of the BRI narrative in going viral and realizing China’s vision of globalization will depend on its pull with Chinese political and economic coalitions and with international businesses and broader social interests. While the BRI may be presented domestically as a positive force for globalization, we must recognize that China offers this narrative from a position of strength. In almost every relationship, it will be the dominant partner. 

A narrative that benefits China alone will fail. Instead, by embracing shared values, delivering mutual economic gain, and offering stakeholders opportunities to shape the future, the narrative of the BRI can emerge as a powerful driver of globalization. It must fashion a future that is open, accessible, and participative; one in which benefits are shared, not hoarded.

Currently, however, the future is radically uncertain. As we emerge from the COVID-19 pandemic and embark on recovery efforts, we may witness greater international integration and cooperation. Alternatively, divisions may be further entrenched as populist and protectionist narratives take hold. The BRI and its narrative will be instrumental in determining which path we take at this historic crossroads between globalization and deglobalization.

Reference 

This article is based on the author’s joint work with Dr Casas-Klett.
Casas-Klett, T., & Li, J. 2021. “Assessing the Belt and Road Initiative as a Narrative: Implications for Institutional Change and International Firm Strategy," Asia Pacific Journal of Management, in press.