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The Belt and Road Initiative

The Belt and Road Initiative Discussion with Prof. Jean-Pierre Lehmann

Amid an accelerated economic growth, China has become one of the most important players on the global scene in the 21st century and a central element of the regional and world economy. China has experienced a rapid economic development, which has propelled it among the strongest economies in the world, and this trend was due to both economic reforms implemented since the 1980s and a change of perspective in its relations with other states

China is in the middle of a transition to a new strategy for development, whose centerpiece in external affair was Beijing's decision, in 2013, to launch The Belt and Road Initiative (generally referred to as OBOR – One Belt, One Road), which it then started to implement in the following years generating a new wave of investments abroad. In 2015, it was estimated that China had invested over 14.8 billion dollars in countries crossed by the Silk Road

The initiative seeks to improve cooperation in the economic, political, and social fields, and to develop a reliable infrastructure on both land and sea, that would link dozens of countries along the ancient trade route known as the Silk Road.

As Romania commands a potentially strategic position on the map of the New Silk Road, on January 27th, 2017, The Romanian Institute for the Study of the Asia-Pacific (RISAP) organized the conference Along the New Silk Road: New Perspectives and New Challenges for the 21st Century World Economy, held by Prof. Dr. Jean-Pierre Lehmann, Director and Founder of The Evian Group and Professor Emeritus at IMD, Lausanne, and Visiting Professor at Hong Kong University

The Conference took place over a period of two hours, commencing with a presentation by Dr. Jean-Pierre Lehmann, followed by a session of questions and comments from the audience. The conference was attended by guests from different academic and professional backgrounds, professors, journalists, as well as young researchers, graduate students and students, interested in the recent economic developments of the Asia-Pacific in general and in China’s economic prospects in particular. 

The Belt and Road Initiative was proposed in 2013 by Chinese President Xi Jinping in Astana. Overall, the initiative seeks to improve cooperation in the economic, political, and social fields, and to develop a reliable infrastructure on both land and sea, that would link dozens of countries along the ancient trade route known as the Silk Road. The whole idea was to create an open and inclusive economic space, which would facilitate economic exchanges and stimulate the development of the Eurasian area. At the same time, this initiative could be seen as an attempt to:

However, the project's success cannot rely on China alone, but will require the collective willpower of all states which lie on the routes (main and branching) of the New Silk Road and the Maritime Belt.

  • divert capital and surplus from China's industrial overcapacity;
  • contribute to the restructuring of the Chinese economy;
  • enable more Chinese companies to “go global” in local parlance;
  • enhance Chinese “soft power”;
  • enable Chinese firms to move up the ladder in terms of value added;
  • foster innovation and make China an exporter of innovation and capital;
  • develop China’s restive and impoverished Western regions, thus contributing to the social harmony that China’s leadership value above all else for historic reasons;
  • create new avenues of growth that would veer China’s labor force from the primary sector to more profitable secondary and tertiary sectors;
  • continue to build a complementary financial and institutional framework to address its needs and those of its partners, while also ameliorating perceived shortcoming in the current, Western dominated, one. 

With more than 65 countries involved, comprising together approximately 4.4 billion people and about 40% of the world’s GDP, OBOR is not only an ambitious regional project, but also an attempt to create a new international system, separated from the one dominated by the United States. 

The topics addressed by professor Lehmann during the conference included: the origins of the Silk Road and the newly launched OBOR initiative, China’s emergence as a global economic power, the strategic “logic” of OBOR, opportunities and risks for the international community. Last, but not least, the professor put forward several question marks regarding the strategic and cultural implications for Romania

OBOR can be seen as an invitation to build up a new economic community, based on cooperation between a number of states that are politically and culturally different, but with common interests and needs.

If successful, this initiative is expected to contribute to relaunching the image and role of China at both global and regional levels. However, the project's success cannot rely on China alone, but will require the collective willpower of all states which lie on the routes (main and branching) of the New Silk Road and the Maritime Belt. More than an initiative, as my colleague, Georgiana Boboc observes, OBOR is a foreign policy strategy that will perform a number of functions and objectives, regionally and globally. 

First of all, through its principles and objectives, OBOR represents

“China's contribution as a UN Member State to promote regional development, to maintain peace, to create a framework for inclusive and open economic integration”.

The project will have a positive impact on the Chinese economy through the implementation of economic reforms and an opening up of the economy to other states. Also, by engaging in such a demanding project, China will gradually improve its image abroad, recommending itself as a responsible, generous and trustworthy state in relation to its neighbors, as a means to increase their mutual confidence and economic and political cooperation. 

There are signs that even the United States, which has historically sought to prevent a Eurasian power from advancing enough to become a competitor, is considering the benefits of not opposing or undermining OBOR, but profiting from it as much as possible, especially with regards to burden sharing for creating stable and increasingly wealthy markets in Central Asia, the Middle East and Africa, in addition to ameliorating the challenging security environment. James Woolsey, former CIA Director and briefly an Adviser to the Trump Transition Team, has gone on record criticizing the Obama Administration for its attitude towards OBOR, calling it a strategic mistake. 

The influential magazine Foreign Affairs published an article in 2016 called China’s Infrastructure play - Why Washington Should Accept the New Silk Road, where it wrote that: 

Nowhere is this underappreciation more apparent than in Washington. Congress has not held a single hearing dedicated to the B&R; neither has the U.S.-China Economic and Security Review Commission, a body that Congress created in 2000 to monitor bilateral trade and security issues. At both the 2015 and the 2016 meetings of the U.S.-China Strategic and Economic Dialogue, the highest-level annual summit held between the two countries, U.S. and Chinese officials detailed more than 100 areas of potential cooperation without mention­ing the B&R once, and in their public statements, U.S. officials tend to refer to the initiative in vague terms. Washington has not only refused to acknowledge the importance of the B&R; in some cases, the Americans have attempted to undermine it, as when the United States futilely opposed the creation of the AIIB.

This passive-aggressive approach is misguided: it allows China to shape Eurasia’s economic and political future without U.S. input
; it denies American investors opportunities to profit from major infra­structure projects; and, insofar as it seeks to weaken the initiative, it could stifle a source of much-needed growth for Asia’s developing economies and Europe’s stagnating ones. As the failed U.S. attempt to prevent its allies from joining the AIIB shows, resisting China’s regional economic initiatives puts Washington in an uncomfortable position with some of its closest partners, many of which see the B&R as a useful tool for pulling the global economy out of the doldrums. U.S. officials should also be mindful of history: transnational infrastructure projects have often bred hostility among great powers when not managed collaboratively, as the grandiose rail projects of France, Germany, and the United Kingdom did in the years leading up to World War I.

Instead, Washington should approach the B&R with an open mind. U.S. officials should publicly acknowledge China’s initiative and the potential benefits it offers, provided that Beijing leads the effort trans­parently and ensures that it works largely in the service of inter­national development rather than China’s own gain. The two countries should then find a bilateral forum—the Strategic and Economic Dialogue is just one option—in which to discuss a joint economic development agenda and come up with a role for the United States that plays to its strengths. American defense contractors, for example, could provide physical security and cybersecurity services to B&R projects, and the U.S. military could help secure some of the more volatile regions where Washington already has military assets, such as the Horn of Africa. That would spare China the need to increase its overseas military presence and bolster the legitimacy of the U.S. forces working in those areas. The United States should reassure some of its allies, particularly those in Southeast Asia, where anxiety about China’s ascendance runs deep, that the B&R is largely a force for economic development rather than Chinese expansionism. And U.S. officials should seek a role for Washington in the AIIB, either as a member of the bank or as an observer.

Such a course would have a number of benefits. By cautiously embracing the B&R, the United States could ensure that American firms and investors are not excluded from the opportunities offered by what might become the biggest economic development project in history. Washington’s engagement could also encourage some of the European, Japanese, and South Korean investors who have been reluctant to fund Chinese-led infrastructure projects to change their tune—which would have a broadly positive impact on global growth and, by extension, on the U.S. economy. And by becoming a more active participant in the B&R’s various related institutions, the United States would be better positioned to ensure that China’s projects adhere to international labor and environmental standards.

The article then concluded that “The Belt and Road Initiative could become either a source of great-power competition or a force for stability and collaboration”. 

Whether or not Romania will grasp the opportunity to become a partner in OBOR remains an open question. While Romanian specialists and Think Tanks have been active in exchanges with Chinese counterparts and in cooperation on OBOR research and publishing topics, as well as discussions for the 16+1 Initiative of cooperation between China and its Central and Eastern European partners, true results are possible through a sustained political will to access opportunities and engage in competition with other countries to highlight Romania’s comparative advantages. 

True results are possible through a sustained political will to access opportunities and engage in competition with other countries to highlight Romania’s comparative advantages.

So far, Romania has not made any significant steps to reveal its interest to actively engage in the implementation of this project, although the land route of the New Silk Road would cross our country from south to north through one of the proposed infrastructure projects (the Southern route bypassing Russia in favor of Iran, as well as the Black Sea maritime spur of the Belt) which, if implemented, could bring significant benefits to our economy on the long run. Romania's formal candidacy for accession to the Asian Infrastructure Investment Bank (AIIB), in 2016, after first declining to be a Founding Member such as Poland, suggests that Romania does not wish to remain outside projects of such magnitude any longer. However, other Eastern European countries, such as Bulgaria, Poland, Serbia, the Czech Republic and Slovakia are several steps ahead, having returned home with memoranda of understanding on OBOR since as early as the 16+1 Suzhou Summit in 2015 despite Romania having hosted the 2014 Summit in Bucharest. Thus, Romania’s role and its true potential on the New Silk Road is yet to be uncovered.



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