10 Apr China’s Belt and Road Initiative: Towards a British Response Strategy – Student Ambassador Series
Since its inception in 2013, China’s Belt and Road Initiative (BRI) has seen enormous expansion over 2018 and the first quarter of 2019. It has become President Xi Jinping’s foreign policy ‘brand’. At present, the BRI aims to connect 71 economies through Europe, Asia and Africa, with a vast ‘belt’ of overland economic corridors and a corresponding maritime ‘road,’ ostensibly promoting trans-continental cooperation whilst maximising Chinese prosperity. Estimates for cost differ as the BRI expands, although the Asia Development Bank has estimated it will cost around $8 trillion. It already involves 65 countries to varying extents, around 63% of the world’s population and 29% of global GDP.
Most significantly for Britain, the official opening in October 2018 of the ‘silk motorway’ presaged its tangible appearance on the fringes of Europe. The increasing impact the BRI will have on global geopolitics makes it a priority for British foreign policy; Britain needs a coherent, forward-thinking strategy to engage with the BRI. Currently, British policy is an inconsistent one of economic support combined with a non-committal political stance. However, determining what approach should be taken instead remains complex.
What opportunities and challenges does the BRI present for Britain?
On one hand, the BRI presents a wealth of opportunities. British expertise in project management, technology, legal services and finance is enormously valued by China; this creates economic benefits for the UK. Currently, DfID actively encourages British businesses to invest, and in June 2018 freed £25bn of funds to support British exports. The China-Britain Business Council has estimated that the UK could gain £1.8bn a year from participation in BRI projects. After Theresa May’s trade delegation visit to Beijing a year ago, UK-China deals worth £9.3bn were signed, with the Chinese Ministry of Commerce pledging to use this as a ‘platform for deepening cooperation between China and UK under the Belt and Road initiative framework.’ These figures are likely to grow as the BRI expands not just in economic terms (China’s GDP is forecast to grow at an average of 6.3% over the remainder of 2019), but in geographical terms too. These arguments are more compelling in a post-Brexit world. There is the additional advantage of not just enhancing Britain’s trade and economic prospects after leaving the European Union, but Britain’s international status too. Maintaining support for the BRI is a channel to achieve the vision of ‘global Britain,’ especially given the current uncertainty surrounding Brexit’s direction. The BRI could, in theory, provide a strong bilateral relationship with one of the world’s biggest economies.
However, British cooperation with the BRI (even if it is not backed by overt political support) is potentially short-sighted. The challenges and long-term implications of the BRI need to be recognised. Whilst President Xi places emphasis on the BRI’s capacity for mutual advantage, this is ambiguous in many instances. The creation of ‘debt colonies’ as a result of BRI loans to economically less developed countries – for example, Sri Lanka and Tonga – has led to accusations of a Chinese ‘debt trap diplomacy’ as an implementation strategy. Instead of creating strong, bilateral, co-dependent relationships, the BRI may be creating unequal dependencies.
The question is whether this ‘debt-trap diplomacy’ is economic mismanagement or part of broader Chinese geopolitical manoeuvring. The BRI is not just an economic project: it is a ‘smart power initiative’ designed to maximise Chinese cultural and strategic influence. For example, it includes building deep water ports along the East African coast; the continuing reclamation and militarisation of the Spratly Islands; and expansion of China’s Indo-Pacific military footprint. With continued success, it could radically change the global geopolitical landscape; a successfully integrated BRI Asia would effectively be a sphere of Chinese influence. At a time when the US is increasingly distancing itself from China, the geopolitical landscape looks set to be increasingly polarised. These geopolitical challenges are compounded by China’s human rights record and its security breaches. Whilst Britain has been taking an increasingly strong stance on China’s activities in recent months, Britain needs to question whether moving towards a policy of increasing economic support for the BRI is a good strategy.
What could Britain’s approach be?
The BRI is undoubtedly here to stay. However, increasing economic investment, even when only used for projects with high ethical standards, may contribute to the wider political and economic problems the BRI presents. Therefore, Britain should work towards coordinating a coherent, comprehensive strategy which encompasses a number of policies to engage with the challenges it presents.
Firstly, Britain could work to explore and promote BRI alternatives. The EU has already begun to prepare such a response, with its ‘Asian Connectivity Strategy’ which could be a model for Britain. Creating and investing in British financed and British led medium and small-scale infrastructure projects across the BRI region would be one way of emulating this model and promoting alternatives. It would provide similar mutual benefits, increase global status, strengthen bilateral and multilateral ties, allow the export of British expertise and best practice, and provide long term British influence and investment in some of the fastest growing regions and economies in the world. Where this is not feasible, Britain could promote and invest in projects run multilaterally; working with, for example, the EU, Japan, and the US. Similarly, given the expansion of China’s security reach, Britain could explore multilateral cooperation agreements with countries in the Indo-Pacific region.
Secondly, Britain should advocate and promote more organic regional integration by supporting multilateral intra-regional economic and trade cooperation and initiatives. For example, providing expertise, research and support for developing organisations such as the Indian Ocean Regional Association (IORA) and the African Economic Community would promote supranational and collaborative initiatives within BRI regions.
Thirdly, Britain should limit and downgrade its investment in the BRI over time, instead of actively encouraging it. Whilst private investment will inevitably continue to some extent it should no longer be promoted. Where Britain does have economic interests they need to be fully utilised as leverage for human rights, ethical implementation strategies, and best practice. This is already the case to a large extent. However, this leverage may only minimally influence China’s long term geopolitical and strategic aims. Therefore, investment in BRI specific projects should be minimised where possible.
Finally, Britain should retain, to the best of its ability, a good relationship with China and President Xi, especially given the level of Chinese investment into Britain’s domestic economy. Soft power initiatives, such as city twinning programmes, educational ties and cultural exchanges should be maximised. UK-China initiatives outside of the BRI within China and Britain’s domestic economies should continue to be developed and invested in. This policy could be flexible in the event of worsening America-Chinese relations, however; ultimately, whilst Britain should avoid ‘taking sides,’ this should not be at the expense of America’s support in other areas of foreign policy (MENA and Russia, for instance).
As the UK’s role in the world changes post-Brexit, and the BRI continues to grow, British policymakers need to prioritise a coherent response to China which is both pragmatic and principled. Utilising the nascent EU strategy as a model, promoting small-scale BRI infrastructure and security alternatives, supporting multilateral regional integration and downgrading investment in BRI specific projects whilst still maintaining strong links with China are policies which are politically and economically consistent. This strategy places long term geopolitical and economic challenges above short term expediency, yet recognises the importance of China’s place in Britain’s economy and the wider world.