The China Laos railway is one of hundreds of projects under Beijing’s Belt and Road Initiative across Asia, Africa and the Pacific. Photo: Xinhua via AP
Asian Angle
by Lucio Blanco Pitlo III
Asian Angle
by Lucio Blanco Pitlo III

What Xi Jinping’s third term means for belt and road, China-Asean ties

  • Belt and road investments suffered contractions due to disruptions brought on by the pandemic, but funding for projects in Southeast Asia rose in 2020
  • China has been Asean’s largest trade partner since 2009, and the bloc became China’s largest trade partner in 2020
President Xi Jinping, poised for a third term, is set to become China’s most powerful leader since Mao Zedong. A fresh mandate from the 20th Communist Party Congress signals continuity and institutionalisation for his signature policies, including the Belt and Road Initiative.
Belt and road projects have continued to roll even at the height of Covid-19, most notably in Southeast Asia. While investments elsewhere suffered contractions due to disruptions brought on by the pandemic, funding for belt and road projects in the region rose in 2020.
Beijing’s relations with the regional bloc, the Association of Southeast Asian Nations ( Asean) are vital, and expected to grow. China has been the bloc’s largest trade partner since 2009, and Asean became China’s largest trade partner in 2020.

Xi’s term extension may help portray China as a more stable international actor, especially in the eyes of belt and road participating countries. This is in contrast to rivals that are more susceptible to policy disruptions or swings after periodic elections or abrupt leadership changes. At a time when geopolitics are in flux, Beijing’s stability may have far more appeal.


Xi Jinping charts China’s future course at 20th party congress

Xi Jinping charts China’s future course at 20th party congress

But the belt and road, now in its ninth year, is also likely to be calibrated. Growing scrutiny of China’s overseas loans and its own ballooning debt may inject more prudence in the country’s lending binge. But while China is closing the taps on impractical proposals, sunk costs tie its hands to sustain support for current commitments. Beijing does not want to be seen as an inconsiderate partner who walks away when the going gets tough.

The lifeline extended to borrowers, especially debt-distressed countries, will keep belt and road projects going, and discourage debtors from shunning Chinese finance in favour of other underwriters. China funding more efficient and cleaner coal power plants, and growing its renewable energy portfolio abroad, may also contribute to climate change mitigation, raising the country’s environmental profile.

Helping with that image could be Xi’s new pitches – the Global Development Initiative (GDI) and Global Security Initiative (GSI). Expect China to put great effort in implementing these projects. The GDI’s support for the attainment of the UN 2030 Sustainable Development Goals may help it score international backing.
Chinese President Xi Jinping speaks during the opening ceremony of the 20th National Congress of the Chinese Communist Party on October 16 at the Great Hall of the People in Beijing. Photo: Kyodo
China is also likely to double down on regional and international organisations it helped found and staunchly champions, notably the Shanghai Cooperation Organization (SCO) and the BRICS grouping of five nations. As relations with the United States become more strained, China may invest more in neighbourhood diplomacy.

China will also likely support the expansion of BRICS. The 16-year-old club of emerging economies helps promote a more multipolar world order, undercutting US primacy and taking the spotlight off the US-China duopoly.

In May, a BRICS-Plus consultation meeting was attended by foreign ministers and representatives from South America, Africa, the Middle East and Asia, showing the global range of possible candidate countries. Beijing, which holds this year’s rotating chair and which hosted a virtual leaders’ summit in June, received Iran’s and Argentina’s expressions of interest to join.
The politicisation of the G20, especially in light of the Russia-Ukraine war, and stalled negotiations for a global trade regime since the 2001 Doha Round, may raise the organisation’s importance. For China, the rise of BRICS may help erode Washington’s long-standing position in shaping the international economic architecture.
As great power competition intensifies, China’s neighbourhood diplomacy may get a boost. Wrangling over trade, supply chain decoupling, a rift with the West over its position on the war in Ukraine, and setbacks on its investments in the West may convince China to put a greater premium on emerging and developing economies, including neighbours throughout Asia. Peripheral diplomacy is also crucial for Beijing to manage unresolved disputes with neighbours in the South China Sea, and avoid inviting the involvement of extra-regional powers. Such flashpoints can be potential powder kegs if not handled well.

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To this end, two regional organisations, the SCO and Asean, will get more attention. President Xi’s visit to Samarkand, Uzbekistan, last month to attend the 22nd SCO Leaders’ Summit was his first foreign trip since the pandemic.
What started as a grouping made up of China, Russia, and four Central Asian republics in 2001 expanded with the inclusion of India and Pakistan in 2017. Iran became the latest to join last month. What was originally a security-focused group, SCO has now ventured into economics and cultural cooperation.
Meanwhile, Xi hosted Indonesian President Joko Widodo in July, becoming the first foreign leader to visit China since the Beijing Winter Olympics in February. The meeting of the leaders had other significance, as it came just before the first batch of bullet trains for the Beijing-funded Jakarta-Bandung high-speed railway, Southeast Asia’s first, arrived in the Indonesian capital last month. The line is likely to be opened next year as Indonesia hosts the rotating Asean chairmanship.
Xi attaches high importance to neighbourhood diplomacy, outlining the two components of the belt and road plan in his 2013 trips to Kazakhstan and Indonesia. In September of that year, he laid out his vision for the trans-Eurasian Silk Road Economic Belt in remarks he made in the Kazakh capital of Nur-Sultan.

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The month after, in a speech before the Indonesian Parliament – a first for a foreign leader – he proposed the establishment of the Asian Infrastructure Investment Bank and the 21st Century Maritime Silk Road.
Aside from the completed China- Laos railway and the ongoing Jakarta-Bandung high-speed rail line, Beijing is also building the East Coast Rail Link in Malaysia and renewed negotiations with the Philippines for three railway projects.

Indeed, countries who signed on to China’s initiatives expect to benefit from Xi’s third term. Continuity and institutionalisation will define Chinese foreign policy schemes in the next five years, while organisations wherein China plays a foundational and outsized role are seen to grow.

Lucio Blanco Pitlo III is a research fellow at the Asia-Pacific Pathways to Progress Foundation