Belt and Road Read online

  First, China needs to diversify its energy imports, establishing trade links with all important energy producers. In some cases, this depends on building new gas pipelines or expanding the network of ports and oil terminals sustaining the global oil market. Developing new technology in renewables will also benefit from the Belt and Road. In some cases renewable energy can be more profitably produced abroad through Chinese investment, in others Chinese-produced technology will be exported worldwide. To make the transition to a low-carbon energy system economically viable, China needs to find new markets for its renewables technology and expand markets for civil nuclear technology. Finally, the Belt and Road can be used to develop new trade and energy routes along historically disadvantaged regions, thereby reducing China’s vulnerability to an American naval blockade of the Malacca strait in case of conflict.

  In 2016 80 per cent of China’s imported oil passed through the Indian Ocean and Malacca Strait into the South China Sea. If a maritime crisis or a war were to happen, these routes could be cut off. In 2003 President Hu Jintao noted that “some large countries are continually interfering in and attempting to control shipping through the Malacca Strait.” This critical vulnerability has since become known as China’s “Malacca Dilemma.”10 It is revealing that those Chinese who criticize the dilemma end up preserving it or even expanding its scope. Mei Xinyu, a researcher at an internal Ministry of Commerce think tank, dismisses the notion of a “Malacca Dilemma” only to replace it with an “Indian Dilemma.” He notes that China’s vulnerability extends much beyond the Malacca Strait. In that respect its position is much worse than that of Japan in relation to its quasi-enemy during the Cold War, the Soviet Union, which indeed had its eyes on the Strait. Now China’s quasi-enemies are the navies of America and its allies. “In order to cut off oil and gas supplies from the gulf to China, they just need to advise Gulf countries to close oil wells, they don’t need the Malacca Strait.”11

  In just a few years China will need to import 600 million tons of crude oil and 300 billion cubic meters of natural gas annually. According to some estimates, the different continental corridors envisaged by the Belt and Road—extending to Central Asia, Russia, Iran and the Bay of Bengal—will provide up to 143 million tons of crude oil and 206 billion cubic meters of natural gas—a significant portion of China’s projected energy needs. “The priority given by the top leadership to enhanced energy cooperation is underpinned by the assumption that such cooperation is a textbook win-win situation: energy-producing countries are happy to export to the promising Chinese market, while China secures access to diversified sources of supply.”12 At a time when energy producers such as Russia are raising their geopolitical game in the Middle East—hoping to acquire greater control over global energy prices—China cannot be left behind.13

  The internationalization of the renminbi is another case in point. States are traditionally faced with a dilemma when they have the option to promote their currency’s internationalization. In neither West Germany nor Japan was internationalization deliberately pursued. Both countries were happy with their status as economic powerhouses with limited geopolitical ambitions. International use of a currency makes it correspondingly more difficult for national monetary authorities to exert a high level of control over economic variables. At the same time it offers important levers of geopolitical influence: a currency’s international status gives the country holding the keys to the printing press an exorbitant power to manipulate the exchange rate, force painful adjustment on other countries, extend financial lifelines or apply financial sanctions. Whether China prefers to maintain full control over domestic economic variables or develop a new tool of geopolitical influence is the question behind the internationalization of the renminbi.

  Predictably, the Belt and Road is offered as a means to further develop the renminbi as a global trade and investment currency by creating opportunities for its greater use in international transactions, especially those related to energy development and investment in infrastructure. Through the initiative, Chinese companies will make increasing amounts of overseas investment, some of which will be denominated in renminbi, as will most of the fundraising required for the Belt and Road initiative, while encouraging companies to use the currency for cross-border trade and cash management. Moreover the Chinese authorities are actively planning to start paying for imported crude oil in yuan rather than the dollar. Oil is the world’s most traded commodity and China the largest importer of crude oil, so the measure will flood international markets with yuan and create spillover effects in other product payments. Exporters such as Russia will likely support the move, as they share the same desire to break the dollar’s global dominance.

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  The Belt and Road represents the transformation of China from a regional into a global power. Announcing the initiative in two separate speeches in September and October 2013, President Xi Jinping appealed to the spirit of the ancient Silk Road, the maze of trade routes connecting major civilizations across Europe, Asia and Africa one or two thousand years ago. Referring to a world before European hegemony, the Silk Road could be held up as symbolizing a model of global politics based on cooperation and mutual learning. Less obviously, it contained the seeds of a return to a time when China was the center of the global economy and a technological powerhouse, holding the secrets of silk production and sharp-head, flat-rear high speed junks. By embracing the spirit of the ancient Silk Road, the international community was asked to enter a new age. And thus, from the very start, the Belt and Road was defined as a combination of the old and the new.

  The initiative has land and sea components, known respectively as the Silk Road Economic Belt and the Twenty-First-Century Maritime Silk Road. The preferred abbreviation in China for the combined initiative is One Belt, One Road. The preferred English translation is now—simply—Belt and Road, a way to recapture the metaphorical and evocative meaning of the Chinese expression. Even the word “Initiative”—once commonly added to the official name for the Belt and Road—is increasingly seen as redundant. The Belt and Road is certainly not one project. It is an idea, a concept, a process, better captured through a metaphor, not an exact description. It is no coincidence that the initiative had, from the outset, both land and sea components. For centuries China has debated whether it is predominantly a land or a sea power, whether it should become a continental or a maritime nation. The Belt and Road affirms both strategies as equally valid. It could perhaps more appropriately be named—were it not to convey an expansionist slogan—Land and Sea.

  The geographic scope of the initiative remains vague and indeterminate. A number of countries have on occasion been included within its central perimeter, but the list was never final or exclusive, and nor was it even confirmed as coming from an official source. The maps circulating today are no less tentative and unofficial. The most commonly used was drafted by Xinhua, a news agency, and its meaning was left rather opaque and confusing: a line undulates from Xian to Istanbul, but no one knows if it is meant to represent a road, a railway or something less material, such as influence or power. By crossing the troubled states of Syria and Iraq, it raises more questions than it answers.14

  Recapturing the metaphorical meaning of the original Chinese may help prevent some misunderstandings. It is obvious, for example, that the Belt and Road is meant to include Latin America, the Caribbean and Australia, something that would have sounded very odd if the name of the initiative were—as it once was in the English translation—One Belt, One Road. Chinese decision-makers have no need of being reminded that the world has changed since the days of Genghis Khan and that limiting the Belt and Road to territories along the ancient land and sea Silk Road would be to overlook vital economic regions such as North and South America and most of the African continent. In the first of the two speeches launching the Belt and Road—delivered in Astana, Kazakhstan—Xi Jinping showed no hesitation in attributing the establishment of the ancient Silk Road to China. As he t
ells the story, during the Han dynasty a Chinese envoy named Zhang Qian was twice sent to Central Asia on missions of peace and friendship. “His journeys opened the door to friendly contacts between China and Central Asian countries, and started the Silk Road linking East and West, Asia and Europe.” Standing on the stage of the main auditorium in Nazarbayev University, Xi added: “Today, as I stand here and look back at history, I can almost hear the camel bells echoing in the mountains and see the wisps of smoke rising from the desert, and this gives me a specially good feeling.”

  Significantly, Xi never describes the initiative he is announcing as a “new Silk Road.” That is because the initiative is wholly new—as the scholar Wang Yiwei puts it, China used a very Chinese concept and name “to demonstrate its intellectual property.”15 It is not a trade route but an economic belt: “We should take an innovative approach and jointly build an economic belt along the Silk Road,” Xi explained. In Beijing’s eyes a Belt is a space of deep economic integration. It may well depend on the development of the necessary transport integration, but it goes much beyond that. In the description presented in Astana, the Belt looks like an extremely ambitious trade agreement organized along five separate dimensions. First, policy coordination, by which Xi means the attempt to find common ground for different national development policies. Second, transport infrastructure. Third, trade, the removal of trade barriers in the countries along the ancient Silk Road. Fourth, currency integration. Fifth, encouraging more intense exchanges and contacts between people.

  If the first speech was delivered at the very center of the Eurasian landmass in Kazakhstan, for the second Xi travelled south to the meeting point of the Pacific and Indian Oceans. Nevertheless, the logic of what was proposed was the same. Speaking at the People’s Representative Council of Indonesia, Xi argued that Southeast Asia has since ancient times been an important hub along the ancient Maritime Silk Road connecting China to South Asia, the Middle East, Africa and Europe. That should be used as inspiration for the great task of building a Maritime Silk Road fit for the twenty-first century.

  The two projects announced in 2013 embraced China’s immediate neighborhood and were in that sense a natural starting point. The state of China’s relations with the rest of the world finds expression, first and foremost, in the changing relations between China and its neighbors, but one’s neighbors have neighbors of their own, so these relations will have to be extended. The Belt and Road is global in nature. Its ruling principle is interdependence, a close network of common interests by which every country’s development is affected by the development path in other countries. In his Jakarta speech, Xi called it a “community of shared destiny.” The expression featured in Chinese official pronouncements since at least 2007, when it was used to describe relations between Taiwan and the Mainland. Applied to relations outside China’s borders, it was a reformulation—a modern version—of the traditional concept of Tianxia (天下), which scholars such as Zhao Tingyang had been popularizing with extraordinary success. Zhao argued that the most important fact about the world today is that it has not become a zone of political unity, but remains a Hobbesian stage of chaos, conflict, noncooperation and anarchy.16 Looking for a way to frame new political concepts distinct from Western ideas of world order, the Chinese authorities quickly appropriated Tianxia—a notion that originated about three thousand years ago—and made it the cornerstone of their most ambitious geopolitical initiative. The idea of a community of shared destiny and the Belt and Road develop the two sides of every human action. Both have their own emphasis: the former belongs to the idea, the concept or type, the latter is aimed at practice. Together they form the “dialectical unity of theory and practice, goals and paths, value rationality and instrumental rationality.”17

  The general principle of Tianxia—which literally means All-under-Heaven or World—is that relations between units or actors determine the obligations corresponding to their network ties. Relations are based on mutual benefit—or win-win in common parlance—and once established they should take precedence over individual choices. The Western mode of association, which presumes the autonomy of individual units and consists of clear boundaries between the Self and the Other, is excluded. No entity can think of itself in isolation. They exist in Xi’s community of shared destiny, from which—and contrary to the dreams of Western political thought—it is impossible to escape. The Belt and Road takes this notion on board by defending that China’s problems and challenges cannot be addressed in isolation but only in mutually beneficial relations with other countries. As Xi put it in his speech at the Boao Forum for Asia in 2015, “only through win-win cooperation can we make big and sustainable achievements that are beneficial to all. The old mindset of zero-sum game should give way to a new approach of win-win and all-win cooperation. The interests of others must be accommodated while pursuing one’s own interests, and common development must be promoted while seeking one’s own development.”

  It is a remarkable, even a stunning development in Chinese foreign policy. Beijing had recognized the benefits of economic globalization for some time, but until Xi it remained consistently suspicious of its political and cultural dimensions. Now China has started to see interdependence as an opportunity. Rather than advocating the creation of new barriers, it welcomes a vision of the world where political and cultural influence is allowed to flow outside national borders. The Belt and Road goes so far as to advocate innovative forms of economic policy coordination, an area where, for example, the European Union has made limited progress. China also plans to set up a new international court for settling disputes among companies participating in the Belt and Road. The new Belt and Road dispute settlement mechanism is aimed at protecting both Chinese and foreign parties’ legal rights and interests, and creating a stable, fair, transparent business environment governed by the rule of law. It will be comprised of three international commercial courts. The court in Xian will deal with commercial disputes along the Silk Road Economic Belt. The Shenzhen court will cover cases arising along the 21st Maritime Silk Road. The headquarters of the Belt and Road court will be based in Beijing.18

  A new political confidence inspires dreams of infusing the global order with Chinese values, simultaneously reducing fears of Western cultural imperialism. Tentatively, China has started to experiment with its new role, that of a global superpower. It is much less afraid of political and cultural globalization because it now believes they can be shaped according to a Chinese model.19 The report to the 18th National Congress of the CPC in November 2012 argued: “In promoting mutually beneficial cooperation, we should raise awareness about human beings sharing a community of common destiny. A country should accommodate the legitimate concerns of others when pursuing its own interests; and it should promote common development of all countries when advancing its own development.” Since then the concept has become increasingly central to Chinese foreign policy, culminating in the report to the 19th National Congress delivered by Xi Jinping on October 18, 2017, where it became an important part of the Thought on Socialism with Chinese Characteristics for a New Era. On February 10, 2017, the proposition to build a Community of Shared Future for Mankind was first made part of a United Nations resolution. On March 11, 2017, the same proposition was included in a UN Security Council resolution; and on September 11, 2017, the proposition’s underlying principle of achieving shared growth through discussion and collaboration was incorporated in the UN General Assembly resolution on global governance.

  If we compare the Belt and Road to the most significant contemporary example of cooperation between states—the European Union—it appears as simultaneously less and more ambitious. It is less ambitious because no body of supranational institutions has been envisioned, but it is more ambitious because it touches the core of national sovereignty by propounding a model of state relations where every decision is in principle open to external influence. National sovereignty is never renounced, but neither is it affirmed or consecrated. T
ianxia is neither national nor supranational.

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  So what is the Belt and Road? It is a name and little more than a name, but one whose most obvious advantage is that it brings together a number of new, highly significant developments: China’s growing international clout, its need to reshape the international economic system in its image and the growing reactions and responses to that project. Past equivalents to the Belt and Road would have to be just as shapeless and ambitious. Perhaps concepts such as “the West” come the closest—even in the manner that a metaphor came to acquire epochal significance. As the scholar Ming Hao dramatically writes, the world does not move from harmony to conflict but from conflict to harmony—from the West to the Belt and Road.20

  The Chinese authorities are sanguine about the idea of a world system articulating the relations of economic power and dependence at the heart of the global economy. Patterns of specialization and comparative advantage determine the place each country assumes in the global economy and, as a result, the levels of absolute and relative prosperity it may hope to achieve. The global economy is less a level playing field than an organized system in which some countries occupy privileged positions and others, such as China, try to rise to these commanding heights.