IAN HALL |
Nick Bisley is right to call for a clearer – and I would add more confident – Australian strategy towards China. But should this involve signing up to President Xi Jinping’s Belt and Road Initiative (BRI)? I am not convinced.
BRI is long on rhetoric and unclear in design. According to Xi, speaking at the Belt and Road Forum back in May, BRI is intended to build ‘peace and cooperation, openness and inclusiveness, mutual learning and mutual benefit’, rekindling the supposed spirit of the old Silk Road. It is meant to help realise the ‘China Dream’ (one of Xi’s signature concepts) at home and to export China’s economic wisdom abroad.
Yet as Peter Cai recently argued in perhaps the best short account of BRI, the initiative is also an attempt to address chronic security and economic challenges. It is intended to strengthen Beijing’s hold over Tibet and Xinjiang by accelerating economic development with a westward flow of capital and improved connectivity into Central Asia. It is also intended to address overcapacity in the cement and steel industries, and diminishing returns on domestically invested capital.
Internationally, BRI is supposed to enhance China’s security by making its neighbourhood more prosperous, especially by constructing infrastructure that Chinese firms can use for trade and investment (and that China’s military might use to project power, if required). And it is a vehicle by which China can internationalise its currency and impose its regulatory standards on its trading partners.
Just how Beijing wants to realise BRI and whether the initiative will generate the benefits it trumpets is less obvious. So far, the view of most informed observers is that Xi’s government has not performed well on economic reform, which in turn raises serious questions about its capacity to deliver on BRI. In any event, persuading Chinese firms (even state-owned enterprises) to invest in environments they don’t know well in China’s west or beyond will be hard despite the manifest coercive capacity of the Chinese state.
Please click here to read the full “Belt and Road: The case for ‘wait and see’” article in the Lowy Interpreter by Griffith Asia Institute Member, Professor Ian Hall.
