Mr Xi draws a crowd

By: Salman Rafi Sheikh     21 October 2023

While the ongoing conflict between Israel and Hamas (and the people of Gaza) has had no impact on China’s celebrations of the completed decade of the Belt & Road Initiative (BRI), it has left the US in a dilemma with its politically obligatory support of all things Israeli. With a global representation from 130 countries and “458 outcomes” secured in the gala event, according to China’s Foreign Minister Wang Yi, the event has already become a striking contrast with the disruption being caused by the military conflict in Ukraine and the Middle East.

The question that this event immediately raises is: can the world any longer afford to resolve its major issues without Beijing? Doing that is becoming more and more costly, even as it is becoming apparent that Washington’s strategy to maintain peace in the Middle East via the much-celebrated Abraham Accords has already squarely fallen flat. Saudi Arabia is now calling Israel, supported by Washington, an “occupying force.” The Organization of Islamic Conference’s extraordinary meeting in Jeddah has accused Israel of “war crimes,” with US President Joe Biden’s visit to Israel and Washington’s unwavering support for Jerusalem tying the US to Israel’s planned land invasion of Gaza.

Saudi Arabia, at the same time, participated in the BRI forum, a forum that resonates more closely with the kingdom’s 2030 vision of a modern, diversified economy than does the ongoing conflict. If people believed that BRI, after the first decade, was in decay; the forum has effectively proven that perception wrong. The ongoing conflicts have cast yet another spotlight on it as the most viable alternative to conflict and the most suitable avenue for development. This is further reinforced by the sheer inability of the US-led economic programs, such as the Partnership for Global Infrastructure and Investment, to take off and challenge Beijing.

But it is not just geopolitics that will help China’s BRI revive itself. China has also made some crucial modifications to avoid the pitfalls that almost one-third of its projects faced in the first decade of its operation. This is most clearly evident in the BRI’s emphasis shifting away from big rail and road projects towards services and the digital world. For instance, there is a clear emphasis on “Silk-Road e-commerce,” more investment protection treaties, more standardized trade and economic rules, expanding market access for digital products, deepening reforms for digital economy, holding global digital trade expo, engaging in green development (green infrastructure, energy, and transportation), holding BRI Green innovation Conference, providing training for at least 100,000 people in BRI countries by 2030, supporting people-to-people exchanges, and last but not the least strengthening institution building for an international Belt and Road Initiative.

This is a major shift away from the original BRI that primarily aimed to finance the logistics and transportation infrastructure development needed to better connect Asia, Europe, and everywhere in between. The new goals are creating an economic system in itself, which, while it will have China as the major player, will also have a lot more to offer, the attractiveness of which is enhanced by the Global North’s poor management of global geopolitics and its continuing inability to offer a credible alternative matching the BRI’s scale, which led China to sign hundreds of different agreements with 150 countries in the first decade of its operation. Reinventing BRI aims to just enhance its scope and bring more and more economies within its ambit in previously half-tapped ways i.e., IT, e-commerce. But this reinvention has global geopolitics all over it.

For instance, the emphasis on “standardization of rules” is also an outcome of Beijing’s efforts to minimize Western criticism of the secrecy that China is known to have maintained around its projects. It is this secrecy that has been at the heart of major criticism on BRI being a “debt trap” for the member countries. China, therefore, is very clearly – and cleverly – rebranding not only its own project but it also its own image as a responsible economic player willing to follow the rules. This message seems especially targeted towards countries in the Global South.

A recent White Paper issued by Beijing says a lot. To quote it “… the economic globalization dominated by a few countries [the Global North] has not contributed to the common development that delivers benefits to all [the Global South]. Instead, it has widened the wealth gap between rich and poor, between developed and developing countries, and within developed countries. Many developing countries have benefited little from economic globalization and even lost their capacity for independent development, making it hard for them to access the track of modernization. Certain countries have practiced unilateralism, protectionism, and hegemonism, hampering economic globalization and threatening a global economic recession”.

Therefore, the paper asserts, “The BRI targets development not only for China but for the world at large.” Pursuing this vision and seeking to restrict the extent to which the West can castigate China as a troublemaker, Beijing has announced it would remove all restrictions on foreign investment in China. This is a very clear break with the past, and one motivated by the desire to counter Washington.

If Washington was looking for ways and means to “de-couple” from China, Beijing has just turned itself into a country that most global corporations – and governments – would want to engage with, or invest in. While this openness will counter possibilities of “de-coupling,” it will also help China reach its crucial economic goals, which is to make sure that its total trade in goods and services exceeds US$32 trillion and US$5 trillion respectively in 2024 and 2028.

Facing these tactics, the Washington-supported plans, such as the India-Middle East-Europe Economic Corridor (IMEC), fade in comparison. Even if these plans are to offer any competition, China’s renewal of its BRI has made it extremely difficult – not only in terms of the level of investment – which does not exist at this stage – that might be needed to make such plans operational and attractive but ongoing conflicts might have an adverse impact on them as well. If Saudi Arabia is forced to move away from Washington’s offer of a security deal in exchange for recognizing Israel due to Washington’s uncritical support for Israel in the conflict inflicted on the region by Hamas on October 4, Riyadh’s support for the US-backed, anti-China IMEC will become a moot question, forcing Washington back to square one.

China, therefore, has revived its BRI in an extremely uncertain time. For Beijing, the timing, although coincidental, could not have been better. For Washington, it could not have been worse.

Dr. Salman Rafi Sheikh teaches politics at the Lahore University of Management Sciences (LUMS) and has contributed to Asia Sentinel for over a decade. He can be reached at [email protected]