A “China club” or a “club of equals?”
Later this week, President Xi Jinping will try to pave over the potholes in his signature foreign policy program, the Belt and Road Initiative, during his keynote address in Beijing.
When he stands up to speak at the annual BRI Forum in the National Convention Center, Xi will outline his vision to a host of foreign dignitaries.
In a dress rehearsal for the main event, he hinted of the shape of things to come.
“The Belt and Road is an initiative for economic cooperation, instead of a geopolitical alliance or military league, and it is an open and inclusive process rather than an exclusive bloc or ‘China club’,” he said.
Xi’s thoughts were echoed on Thursday when China’s foreign policy pageant kicked off.
Finance Minister Liu Kun made it clear that Beijing will establish a framework to “prevent and resolve debt risks.”
Yi Gang, the governor of the People’s Bank of China, rammed home the message.
“We should strengthen debt and risk management. We should objectively and fully understand the debt problems of developing countries,” he said.
“Investment decisions should … effectively control risks and fully consider a country’s overall debt capacity and ensure the debt is sustainable,” Yi added.
Launched in a fanfare of state-media hype by Xi in 2013, the BRI is epic in scale and has become an extension of China’s global ambitions.
Crucial to the program are strands of ‘New Silk Road’ superhighways connecting China with 70 countries and 4.4 billion people across Asia, Africa, the Middle East and Europe in a maze of multi-billion-dollar infrastructure projects, including a web of digital links.
Yet in the past 18 months, this US$1 trillion venture has become highly controversial after being branded a “debt trap” by the United States and its key Western allies.
Even the International Monetary Fund and World Bank have called for more transparency about loan arrangements after highlighting the risks of excessive borrowing.
“China is gaining experience in working abroad, having made many mistakes along the way. It has made over-commitments in the past. It has gone into some politically and economically risky projects,” David Lampton, of the Asia-Pacific Research Center at Stanford University, told Asia Times in an email.
“It has not been as good at working with the firms of other countries as it needs to be. It has paid insufficient attention to the impacts of its projects on citizens and societies abroad. Non-transparent, corrupt practices have been all too frequent,” he continued.
“There are many in China who realize these challenges and wish to improve performance, and some progress is being made. If China can use the BRI forum to project a learning and cooperative attitude, this may be the most important contribution the meeting can make,” Lampton added.
Already a key buzzword at the summit has been “sustainability” in a move to silence the critics.
Xi’s administration has also constantly pointed out that the ‘New Silk Road’ project is working with nations neglected by the United States and the European Union after being starved of investment.
In response, Washington has taken an aggressive stand with Vice-President Mike Pence cautioning countries last year that the US did not plunge its partners into debt or offer “a constricting belt or a one-way road.”
“I think this second forum will play [a] role in improving the image of the BRI,” Wang Yong, of the Center for International Political Economy at Peking University, told Asia Times.
“The US and Western media might continue to perceive the BRI in more negative ways [but these] perceptions [are] driven by biased ideas and ideology, and the conflicts of interests of geopolitics,” he added. “China’s investment has been very strong compared to most countries.”
Still, a report released last year by the Center for Global Development, a Washington-based think tank, singled out 23 countries prone to “debt distress.”
Of the group, Pakistan, Djibouti, the Maldives, Laos, Mongolia, Montenegro, Tajikistan and Kyrgyzstan were rated in the “high risk” category.
Sri Lanka was another when it handed over control of the Hambantota Port to China’s state-owned Merchants Port Holdings at the end of 2017 after struggling with massive loans.
Stung by phrases such as “debt book diplomacy,” Beijing has pledged to increase transparency and boost commercial funds.
“China is certainly making [the] Belt and Road more receptive and [a] more multilateral project. [The] EU is getting interested [through countries such as] Italy,” Wang Huiyao, the president of the Center for China and Globalization, an independent Chinese think tank, told Asia Times.
Indeed, these are themes that Xi is expected to address during his high-profile speech on Friday.