By: Aman Zahra
China’s economy is moving away from investment and toward growth driven by domestic demand. What part is China’s opening-up policy projected to play in a new phase of domestically focused development? It is no longer only a way for China, an economic powerhouse, to acquire technology and foreign currency; it is also a way for it to strengthen its position in international governance. The leadership of General Secretary Xi Jinping was founded amid the “new normal,” which is a shifting economic environment that aims for stability rather than just rapid growth. Xi Jinping introduced the Belt and Road Initiative (BRI) in 2013 with the proposed “China Dream of Grand Rejuvenation.” The BRI is now considered a grand strategy of China’s opening-up policy since it was included in the 13th Five-Year Plan (2016–20) and added to the Party Constitution at the 19th party.
The BRI was seen as an alternative to the United States’ “rebalancing strategy. “The presidents of Kazakhstan and Indonesia announced the main components of the BRI in two speeches in 2013. He suggested creating a new Silk Road Economic Belt in Kazakhstan that would connect China, and (re)establish transport links between China and Europe via Central Asia in order to lower production and transportation costs and promote greater trade in goods and services, and an overland Silk Road Economic Bel. He unveiled his vision for a 21st-century Maritime Silk Road in Indonesia, which would connect China with South-East Asia, South Asia, the South Pacific, the Middle East, and East Africa via the water. These projects came together in 2014 under the name “One Belt, One Road” (OBOR), which was later renamed the Belt and Road Initiative (BRI). The Belt and Road Initiative Action Plan was introduced by the Chinese government in 2015. The “Five Cooperation Priorities” of the BRI are: unhindered trade; facilities connectivity; policy coordination; financial integration and people to people bond.
China, the second-largest economy in the world, is undoubtedly looking to protect its own interests and establish a new environment in which it may easily engage in economic activities, as seen by the diversification of its foreign commerce and the rise in foreign investment. Forming a China led economic region where it could scarcely compete with other economic powers must be the fundamental goal of the Belt and Road Initiative. The BRI’s first tangible initiatives include ports, railroads, and roads.
The first is the sector of the economy that deals with infrastructure (building materials, equipment manufacturing, construction). The majority of BRI nations are developing or transitioning economies with enormous potential for infrastructure development. Energy and natural resources come in second. The BRI nations have abundant natural resources. A key strategic objective for China is to diversify its energy sources and transportation methods while ensuring steady energy supplies. Also, the BRI nations are potential markets for pipelines carrying natural gas and oil, power plants, refineries, related equipment manufacture, and other projects. The third category consists of foreign contracts that Chinese civil engineering businesses and contractors execute. They are extremely actively expanding into new markets worldwide and have exceptional
international competitiveness. They have already completed numerous contracted projects in the BRI nations.Industrial parks and international economic and trade cooperation zones must be established in order to welcome Chinese companies and offer them infrastructure and public services so that their plants can move across the border without incident.
To extend its strategic presence in Southeast Asia and to develop relations with the area, China has worked extremely hard. Throughout the majority of the 1990s, China engaged in a number of regional multilateral organizations led by ASEAN and deepened its relations with other nations.
Beijing’s “charm offensive”—a proactive economic strategy—in Southeast Asia grew more intense in the. China became a major strategic player in Southeast Asia in the late 2000s. China maintained strong economic, political, and societal ties with the region during a large portion of the 2010s. China’s political and strategic clout in the region was somewhat undermined at the same time by its growing assertiveness in the South China Sea.
China has always sought to make Southeast Asia its strategic backyard, according to many analysts. The first free trade agreement (FTA) in the region was signed by China and ASEAN nations in the early 2000s. China’s strategic objectives in the region include: preserving friendly and stable relations with the region; fostering trust among regional nations so that they view China as a true partner rather than a threat; and assisting China economically by providing dependable resources to support China’s economic expansion, The region (including individual states) does not join or support any strategic alignment or encirclement at the instigation of another or a group of other external powers against China. China can use the region as a strategic springboard for other international strategic objectives, such as the promotion of world multi-polarization and the development of Chinese soft power to improve China’s international image. China has such strong political influence in the region that it can play a leading role in setting regional agendas.
With a trade volume of USD 587.87 billion in 2018, the relationship between China and ASEAN nations is strong. For ten years running, China has been ASEAN’s biggest trading partner, and for eight years running, ASEAN has been China’s third-largest trading partner. By the end of 2018, ASEAN had invested USD 116.7 billion in China, while China had invested USD 89.01 billion in ASEAN overall. In ASEAN nations, Chinese companies have set up more than 4,000 companies in industries including manufacturing, mining, retail, electric power, water supply, and telecommunications.
In the ASEAN energy industry, China has made notable progress. Malaysia, Indonesia, Myanmar, Laos, Cambodia, Vietnam, and the Philippines are among the countries where State Power Investment Corporation Limited (SPIC) conducts business. China has effectively connected Myanmar’s hydroelectric power to Yunnan’s system and transferred electricity from Yunnan province to Vietnam and Laos. Furthermore, through the China-ASEAN Technology Transfer Center (CATTC), China and ASEAN nations have inked a number of agreements on the transfer of solar power technology.1. 3. Projects related to infrastructure
As part of the BRI, ASEAN has launched a number of significant infrastructure projects. These consist of: Indonesia’s Jakarta-Bandung High-Speed Railway is a 142-kilometer high-speed rail project that will link Bandung and Jakarta. The China-Laos Railway a significant infrastructural
project between Vientiane, Laos, and Kunming, China. In addition to boosting trade and tourism in Laos, the 414-kilometer railway route will increase transportation between China and Southeast Asia. The China-Thailand Railway is a rail project that connects Thailand and southern China. A significant BRI project outside of ASEAN, the Mombasa-Nairobi Railway shows China’s worldwide reach through alliances and critical trade channels that affect ASEAN markets. Platforms for finance such as the Silk Road Fund and the Asian Infrastructure Investment Bank help these initiatives by offering long term, low cost funding for connectivity projects. Additionally, Chinese businesses are investing more in ASEAN nations’ renewable energy initiatives. This covers both brownfield and greenfield renewable energy investments, with an emphasis on reducing environmental damage and adhering to local laws.
BRI projects have been criticized for environmental destruction, social displacement, and falling in debt traps, among others. Such projects critics say, prioritize Chinese interests leaving little to show for them for the locals and when things don’t work out, leave nations holding a big fat debt bill for Chinese expansion. Additionally, critics highlight issues such as opacity in project agreements and growing worry over China’s strategic penetration in important sectors.
The example of the East Coast Rail Link (ECRL) in Malaysia, for example, also comes to mind, where the mega-infrastructure project was brought back into the fray during renegotiation after the deal had initially been shelved over fears excessive debt and costs. In the same manner, when Sri Lanka could not repay Chinese loans, China acquired the Hambantota Port for 99 years. RI projects are often criticized for their opaque decision-making and financing processes. Many critics contend deals are hammered behind closed doors without public accountability.
For instance, the conditions of Chinese loans and investments are sometimes not fully disclosed in nations like Laos and Myanmar, making it challenging for the general public or opposition parties to examine the agreements. RI projects raise concerns about China’s strategic influence, with critics viewing investments in ports like Kyaukpyu and projects like the Sihanoukville Special Economic Zone and the China-Laos Railway as attempts to control key trade routes. These projects also face criticism for environmental damage, social displacement, and limited local benefits. For example, the China-Laos Railway has raised concerns about deforestation, while the Sihanoukville Economic Zone has been linked to land grabs. Furthermore, projects like the East Coast Rail Link in Malaysia have raised concerns about limited job opportunities for local workers and the potential for profits to flow primarily back to China.
The BRI has a wide range of complex consequences on ASEAN. Even though the program offers significant potential for infrastructure development and economic growth, it also raises severe concerns about the sustainability of the debt, lack of transparency, geopolitical influence, environmental damage, and potential detrimental effects on local economies and cultures. Many ASEAN countries find it difficult to balance these risks with the benefits of BRI initiatives. The success of the BRI will depend on how well these problems are addressed, including ensuring long-term benefits for host countries, local involvement, and sustainable funding.