The Calculus Behind China's Belt and Road Initiative

The Calculus Behind China's Belt and Road Initiative

This is the first installment in a multi-part series by Justin Du, an analyst of geopolitics and economics focused on China. The series aims to increase understanding of the Belt and Road Initiative by contrasting Chinese and non-Chinese perspectives.

Justin Du

Editor's note:  This is the first installment in a multi-part series by Justin Du, an analyst of geopolitics and economics focused on China.  The series aims to increase understanding of the Belt and Road Initiative by contrasting Chinese and non-Chinese perspectives.

In September 2013, Xi Jinping, the President of the People's Republic of China, announced the One Belt One Road program (also known as the Belt and Road Initiative).  It is a project that seeks to connect the commercial routes between Asia, Africa, and Europe via land and maritime networks. The goal is to improve regional integration, foster strategic cooperation, and stimulate economic growth. The project takes its name from the ancient Silk Road, which was built during China's Han Dynasty and connected China to the Mediterranean via the Taklamakan desert. The Belt and Road Initiative (BRI) is a project worth over trillions of dollars and affecting the lives of the billions. BRI is currently expanding its global reach by signing hundreds of additional contracts, including investments in infrastructure development of ports, roads, railways, airports, electric plants, and telecommunication networks.

There are multiple motivations behind the initiative. Economically, the growing volatility of the trading relationship between China and the United States has pushed China to explore new alternatives to stabilize its economy.  

The BRI comprises six strategic routes that connect mainland China to the rest of the world. The two ends of the BRI, East Asia and Europe, are major developed global economies that enjoy prosperity and technological advancements. In between the endpoints, Southeast Asia, the Middle East, Inland China, and Africa encompass developing markets with substantial economic potentials. From China's perspective, it desires to foster multilateral cooperation of these areas that circumvent the Malacca Strait to satisfy its economic goals, resolve internal political problems, and expand international influence.

Belt And Road Transportation Routes
Belt And Road Transportation Routes

Finding Strategic Partners And Preparing For The Future

First, since China's Reform and Opening in 1978, China has focused on expanding its production power and accumulating capital. While this strategy has helped China to hit the stride in terms of economic growth and global influence, over the years, it has caused China to face problems such as overwhelming power of production and excessive foreign currency reserve. In the long run, the immoderate output is expected to cause political instability once the significant infrastructure developments in mainland China are completed; and the excessive foreign reserve is likely to cause inflated risk of financial disruption. One of the crucial responsibilities placed on the BRI is fostering cooperation with foreign partners to spend its excess production power and capital in exchange for future strategic benefits promised by those countries.

Exploring Alternative Sources Of Strategic Natural Resources

Second, in terms of natural gas, crude oil, and rare materials, China is highly dependent on imports. Currently, China relies on 70% of its crude oil and 80% of minerals such as copper and steel to be imported from other countries. As such, China puts great hope on BRI to seek out new partners to import strategic resources to avoid possible overdependence.  

In April 2019, Beijing launched the "Belt and Road Energy Partnership Cooperation Network (BREP Cooperation Network)" with 29 other countries that hold an abundance reserve of strategic natural resources. The partners include Afghanistan, Algeria, Azerbaijan, Bolivia, Nepal, Iraq, Mongolia, Sudan, Venezuela, and Pakistan. China has initiated numerous energy projects, including pipeline and power plant developments worth tens of billions of dollars, through the BREP Cooperation Network. For example, China has constructed ten international ultra-high voltage electricity networks that connect itself with countries like Russia and Mongolia. China may be cementing itself as an irreplaceable electricity supplier to these countries to exchange a stable supply of strategic resources such as natural gas and crude oil. Such integration of energy partnership will alleviate China's pressure when advancing its economic, political, and military growth.

Balancing The East And The West

Third, China's economic growth has been dramatically imbalanced. Its development of coastal cities such as Beijing, Shanghai, and Shenzhen have significantly outweighed the interior provinces. According to the 2021 first-quarter GDP report of all 31 provinces in China, the GDP of Guangdong, the top-ranking province and one of the coastal provinces, is eight times more than Xingjian, the 24th ranking province. In the long run, such imbalance will cause dissatisfaction and anger, leading to internal political instability.

Another grave concern that Beijing has regarding the disparity of the development between the coastal provinces and the interior provinces is the overreliance on the infrastructures in the coastal areas. According to China's simulation, the coastal provinces that harbor China's major manufacturing and financial power will become the prioritized target in case of war. China will suffer irreparable losses if the infrastructure in these areas is destroyed. China is planning to turn interior provinces like Xingjian into commercial and geopolitical hubs to address these concerns. Take, for example, the BRI's "Central Asia West Asia Corridor," in which Xingjian plays a critical role in connecting China to the Middle East and Europe. While it is unlikely for Xingjian to one day surpass the coastal areas in terms of prosperity, it is evolving into another pivotal connector that holds great geopolitical importance.

China Admits That Now Is The Best Time To Execute BRI

Currently, more than a hundred countries and international organizations are involved in the BRI program.  The information cascade caused by China's successful economic development has made the border countries of China more willing to accept its BRI proposal.  On the other hand, China also admits that its well-rounded economic power makes Now the ideal time to execute BRI. In conclusion, China's central strategy is to trade what it has in abundance that caters to what other countries need in exchange for long-term strategic benefits.

In the next installment of this series, we'll look at some of the most iconic infrastructure projects built as part of the BRI and their strategic importance to China and the rest of the world.

Justin Du is an analyst interested in the nexus of geopolitics and economics, focusing on China.

TIPP Takes

Taiwan And US Restart Trade Talks Despite China Opposition

The United States and Taiwan yesterday restarted trade talks after five years as Washington moves to boost its ties with the island despite China's objections.

Taiwan-U.S. restart trade talks
Taiwan-U.S. restart trade talks

Yesterday's talks "focused on enhancing the longstanding trade and investment relationship between the United States and Taiwan," the Office of the United States Trade Representative statement said. Held virtually, they were co-led by top trade officials from Washington and Taipei.

At a press briefing in Taipei, Taiwan's Cabinet spokesman Lo Ping-cheng described the talks as "very fruitful" and "a very critical step for Taiwan's foreign trade." He added issues discussed included supply chains, trade facilitation, digital trade, and environment and labor.

Taipei also urged Washington to expand supplies of Covid-19 vaccines and medicines by sharing technical know-how or authorizing manufacturing on a contract basis, said Taiwan's deputy trade representative Yang Jen-ni, who co-led the talks. Taipei officials said both sides agreed to set up working groups for discussion on issues like vaccine production.

North Korean leader Kim Jong Un said an unspecified "great crisis" related to the coronavirus pandemic that may jeopardize the safety of the country and its citizens has occurred, the state-run Korean Central News Agency reported Wednesday.

North Korea's leader Kim Jong Un
North Korea's leader Kim Jong Un

The news agency quoted Kim as saying at the gathering that a major factor "hindering the implementation" is "the lack of ability and irresponsibility of cadres."

Senior party officials faced "sharp criticism" at the meeting, KCNA said, but it did not report those who were removed.

North Korea's ruling party discussed how to "overcome the present food crisis" at its four-day plenary meeting of the Central Committee through June 18, Korean Central Television reported.

It is rare for Pyongyang to use the expression "food crisis" when describing the state of the nation, sparking concern that its citizens have been encountering severe difficulties in obtaining daily necessities.

Afghans Who Worked For France Get A Chance At Asylum – And Spark An Exodus

A French foreign ministry initiative to grant asylum to Afghans working for French governmental and non-governmental organizations has sparked a mass exodus – as well as criticism for sending the wrong signal at a critical juncture.

Afghans who worked for France get a chance at asylum.
Afghans who worked for France get a chance at asylum.

In a few weeks, the NGO (Afrane) has lost almost all of its 23 Afghan employees, who are about to leave the country under a French foreign ministry operation that enables Afghans who have worked for France and their families to obtain asylum.

The vast operation, launched in early May, concerns around 600 Afghans. Afrane's employees and their families account for about 80 of the overall figure.

If the project is completed by mid-July, only French staff will remain at the embassy in Kabul. Its satellites across the country will be virtually closed as they will not be able to function, according to a report in the French daily Le Monde.

The French initiative has also drawn criticism from NGOs on the ground.

In early June, an umbrella group of French NGOs, COFA (Collective of French NGOs in Afghanistan) –Afrane is a member – wrote a letter to French Foreign Minister Jean-Yves Le Drian denouncing a "unilateral decision that is contrary to Afghanistan's interests."

The Tree Cutting Emissions From Brazilian Beef

With the help of the fast-growing eucalyptus tree, Brazil has created its first carbon-neutral beef.

When cattle graze alongside eucalyptus trees, there are benefits for the cows' nutrition and wellbeing, as well as potential carbon savings.
When cattle graze alongside eucalyptus trees, there are benefits for the cows' nutrition and wellbeing, as well as potential carbon savings.

The world's largest exporter of beef, providing almost 20% of the world's exports. Researchers at the state-owned Brazilian Agricultural Research Corporation (Embrapa) have been searching for a way to counteract the emissions from the country's massive cattle herd – culminating in 2020 with a certified brand of Carbon Neutral Beef.

Embrapa's Carbon Neutral Beef involves planting eucalyptus trees in the same area where cattle graze, turning a featureless grassland into one dotted with trees.

Around 250-350 trees per hectare is the optimal number to keep Brazilian farms financially viable, producing 25 cubic meters of wood per hectare per year.

Also, when the trees shadow the pasture, the grass in its shade gets less sunlight. The grass reacts by investing more in photosynthesis, making more of the organelle where photosynthesis takes place: chloroplasts.

Chloroplasts have higher nitrogen content needed to make protein, and so it becomes more nutritious for the cows.


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