The One Belt One Road Narratives

Abstract

Four years after Chinese President Xi Jinping’s 2013 launch of the One Belt One Road (OBOR) economic policy in Kazakhstan (for the overland component) and Indonesia (for the maritime component), the One Belt One Road policy was renamed Belt and Road Initiative (BRI) in 2017. In both countries, BRI project work is progressing along with some operational features. For example, in October 2017, Kazakhstan started transporting natural gas through pipelines to China worth approximately US$1 billion annually (Shepard, 2017). Indonesia has also given its high speed rail (HSR) project (between Jakarta and Bandung) to China. In other words, by 2017, BRI was no longer just paper designs, public announcements/declarations and verbalizations of intent but physical work and infrastructure were beginning to be in place on the ground. The BRI has gone through several cycles of evolution since its inception. It all began in 2013 when the incoming President Xi Jinping outlined the plan to link up world regions with railways, ports and trains in his talk at a Kazakhstani university. It was a verbal utterance at this point of time, in line with a new incoming administration keen to show its grand ideas to both domestic and foreign audiences. President Xi began a long process of consolidation of power (including an anti-corruption campaign) and so having a major foreign policy initiative gave him the leeway to focus Chinese political and economic support for a singular purpose and channel all resources to realize Chinese foreign policy goals. When the announcement was made in 2014 (origins of BRI’s predecessor OBOR are examined below), OBOR was characterized by the international media as an amorphous blueprint with vague details and confusing announcements. It was also resisted by the West and seen as a challenge to the Bretton Woods institutions or the Washington consensus. Many in the West also resisted joining the Asian Infrastructure Investment Bank (AIIB), a multilateral financing organization initiated by the Chinese and viewed by its detractors as a challenge to the Asian Development Bank (ADB). To back up rhetoric with financial muscles, China established the US$40 billion Silk Road Fund to finance infrastructure projects. In 2015, OBOR was seen as a Chinese strategy to manage its transition from an export-led economy to dependence on domestic consumption as an engine of sustainable growth. The goal was to tackle Chinese economic slowdown by fostering connectivity between China’s less-developed inland Western regions with other less developed economies in Central Asia through high speed and medium speed railway systems; and in the process create new markets in the less developed economies along OBOR. It was also seen as a strategy to expend surplus resources resulting from China’s slowing economic growth. The middle income economies in central and eastern Europe, the land-locked former Central Asian Soviet republics, the commodities-based economies in Southeast Asia, and the underdeveloped South Asian regions are all seen as potential markets for China’s affordable products. Perhaps the groundbreaking event in 2015 was London’s decision to join the AIIB, catching all major players in the world economy by surprise and opening the floodgates for nearly all major Western economies to eventually join the AIIB, a multilateral funding agency dispensing loans to underdeveloped economies for their infrastructure development. It was a milestone for Beijing’s economic multilateralism. The other significant development was China’s winning bid for the train project connecting Jakarta with Bandung, worth US$5.5 billion. By 2016, the world began to form a tangible idea of OBOR. Initial talks between governments, state-owned enterprises (SOEs) and the private sector were initiated for the Sino-Thai and Sino-Laotian railways, the two routes seen as relatively unproblematic for jump-starting the pan-Asian railway system. In Central Asia, China also starting talking with their Iranian counterparts on the Sino-Iranian railway system, the first cargo train from China to Iran successfully made its journey in Feb 2016. Connectivity through pipelines and train tracks with Central Asian countries were signed and concluded contractually in 2016. There appears to be growing international interest in OBOR and China appears to have assured the some stakeholders that it was putting money where the projects were located. If 2013–2014 were known as the years of blueprint articulation, and 2015 was the establishment of multilateral funding agencies for financing OBOR projects, then 2016 could be seen as the year of finalizing deals through contracts and agreements, initiating the long process of groundwork, environmental assessments, training of workers and technicians and funding details. The nuts and bolts of the first phase of OBOR projects were set in motion in 2016 and BRI work continued into 2017. In 2017, supporters and detractors began to evaluate the achievements of OBOR, whose official name was changed to BRI to reflect the presence of disparate numbers of economic corridors and transportation/ logistics route that the scheme represented rather than a single maritime and overland route. For all stakeholders, there was a growing realization that the original conceptualization of OBOR in 2015 as an entity having an amorphous identity turned out to be accurate. OBOR now known as BRI turned out to be pragmatic and flexible bilateral arrangements between China with a single partner or a group. BRI is situationally contextual and not bogged down by ideological issues, ethical concerns or prescriptions on how to run the economy. The idea is to maximize self-interests for all players involved and minimize detriments and the projects under consideration are often assessed from the perspective of national security, market forces and benefits for the local communities affected. In 2017, after Brexit and the Trump administration’s ‘America First’ policy, Beijing was characterized as the global defender of free trade and the BRI was hyped up as a possible framework for a neoliberal economic order. According to optimistic accounts, China intends to insert US$150 billion into BRI projects annually while Fitch reported that US$900 billion worth of infrastructure projects were in progress (Philips, 2017). But criticisms also arose that the BRI was a catchall shell for state-owned enterprises and Chinese conglomerates to park their existing projects under a political umbrella. The vagueness of the scheme also attracted criticisms for being bereft of a grand strategy (like the Marshall Plan), absence of morality and ethical behaviour, and concerns about the lack of transparency resurfaced against the geopolitical backdrop of growing antagonisms between Beijing and the West. There are also criticisms that many projects conceptualized during the heady nascent phase of OBOR are still in the planning stages and not yet actualized. Despite these challenges, BRI continued unabated, especially between China and its traditionally closest allies like Pakistan. In 2017, the Belt and Road Initiative took off with energy-generating facilities set up along the China-Pakistan Economic Corridor (CPEC), including wind, solar, hydro and coal power infrastructure established in this region and funding for the CPEC went up from US$55 to US$62 billion (Shepard, 2017). In reality, all four stages of BRI are applicable even today. Because BRI and its predecessor OBOR are so ambitious and extensive, the four stages of BRI (2013–2014’s blueprint articulation stage); 2015’s funding institutionalization; 2016’s projects initiation phase and 2017’s rationalization exercises) will co-exist for different projects and in different stages for various world regions. To examine BRI development synchronically and diachronically, the following sections will examine the origins of OBOR and its latest developments in 2017 in the BRI carnation.