Wade Shepard: I Spent Two Years On China's Belt And Road, And This Is What I Found | Forum

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https://www.forbes.com/sites/wadeshepard/2017/05/13/i-spent-two-years-on-chinas-belt-and-road-and-this-is-what-i-found-part-1/#4b68762d4b68


People walk past a billboard for the Belt and Road Forum for International Cooperation, at the venue for the forum in Beijing on May 11, 2017. AFP PHOTO / Greg Baker

Sunday marked the start of the Belt and Road Forum (BARF) in Beijing, a first-of-its-kind conference about China's Belt and Road initiative. Despite the repulsive acronym, 28 heads of state, 100 lower-level government officials, dozens of major international organizations and 1,200 delegates from various countries were scheduled to attend. This event was expected to be a kind of coming-out party for an initiative that commenced in 2013 but has yet to define what it actually is.

In the spring of 2015, I began traveling the various overland and maritime routes of the New Silk Road, an array of five new overland and maritime trade routes that are rising up between China and Europe, to see what was happening on the ground for a new book and a series of articles. What follows is the first installment of my main takeaways from these travels.

1. The New Silk Road is a multinational network, not one country’s initiative

If you ask me to show you the New Silk Road I can break out a map and show you five wavy lines that go between China and Europe, dozens of emerging mega-projects, and an array of places that are being economically energizes via its infrastructure development and investment. But if you ask me to show you the Belt and Road outside of China, my response is not going to be so robust.

After spending two years visiting "Silk Road" projects I can conclude that for all the pomp and soft power, formal BRI developments are a rare sight on the ground — can we count pre-2013 projects? Can we count projects started by other countries but funded by Beijing? Can we count as-yet-unrequited MOUs?

While China’s BRI has without doubt injected a large amount of energy and relevance into New Silk Road development, the network was conceived and put into practice by an array of countries long before Xi Jinping began talking about it in 2013. Kazakhstan’s President Nursultan Nazarbayev has been musing about Silk Road revival for a good chunk of his 26-year reign; Azerbaijan held a New Silk Road conference in 1999; Belarus now claims that this whole New Silk Road thing was actually their idea; the mayor of Terespol municipality in the east of Poland, an essential Silk Road link, has been printing maps showing his town connected by a bold red line to Beijing for the past 20 years; the first China-Europe rail service was started by an American electronics company; Russia's Trans-Siberian Express is one of the New Silk Road's corridors; the EU's TRACECA route was dubbed "The Silk Road of the 21st Century" back in 1993; and the Kazakh portion of the Western Europe-Western China Highway, which stretches from the Yellow Sea coast of China to the Baltic Sea coast of Russia, was funded by the World Bank and built by an Italian construction company with a Turkish workforce.

While China and Kazakhstan’s joint cross-border free trade zone was started two years before the BRI, Gwadar Port in Pakistan got underway in 2002, construction on Sri Lanka’s Chinese-funded Hambantota deep sea port began in 2008, and Colombo Financial City was in planning back when the words "belt" and "road" appeared to be unrelated to each other.

If you extract the efforts of what other countries are doing along the New Silk Road and just look at China’s contributions during the Xi Jinping-BRI era, you’re going to be left with neither a belt nor a road — you don’t have much of anything, really.

This isn’t meant to detract from China’s current and future Silk Road efforts, but to make the point that this is a fully multinational endeavor with a much longer history than is often credited to it. When we talk about the New Silk Road we are talking about an array of interconnected and interdependent trade routes and infrastructure and economic development projects, not a singular initiative cooked up in some back room on Tiananmen Square. Ultimately, this is what gives this project its versatility and power to shape the future.

2. The AIIB is China’s way of showing they are willing and able to work within an international framework

While the AIIB and the BRI are two separate initiatives that merely overlap at unavoidable intersections, the way that China has approached their upstart development bank provides an indication as to how the country may conduct itself in the international arena via the BRI.

When the AIIB was first announced, it was commonly feared that it would become China’s way of countering the big development banks of the west and Japan — the World Bank, ERDB and the ADB — and would ultimately undercut their humanitarian and ecological principles in the unchecked pursuit of progress.

But what actually transpired was the exact opposite: The AIIB became a powerful complement to the old guard of development banks, providing a much-needed source of additional funding to help set essential infrastructure projects into motion while maintaining and promoting their established ethical standards.

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4. The BRI spearheads a new type of foreign policy

Declaring the ‘buddy-buddy’ type of foreign relations which consists of countries forming strategic bonds with select other countries as “outdated geopolitical maneuvering,” China instead pursues diplomatic and economic relations with pretty much any taker — aiming to “forge partnerships of dialogue with no confrontation and of friendship rather than alliance,” as put by Xi Jinping himself.

The hallmark of China’s 21st century foreign policy so far has been its brash disregard for the established geopolitical divisions of the world. Concurrently, China is building political and economic partnerships with Israel and Iran, India and Pakistan, Azerbaijan and Armenia, the US and North Korea, the EU and Russia. China doesn’t flaunt its morals or embargo countries for diverging from its ethical standards. Politically indiscriminate, China seemingly doesn’t not care if you’re a democracy, a dictatorship, a monarchy, a theocracy, or even a borderline failed state: if you’re willing to step up to the table and do business, China is your friend — well, just so you don’t meddle in what China posits as its “internal affairs.”

With the Belt and Road we’re not looking at a dimetric partitioning of global power that will see China leading a contingent of allies against the United States; we’re not looking at any type of Orwellian, east vs. west showdown. We’re looking at China solidifying ties with every player possible as a way of gaining the leverage necessary to enhance its own autonomy, economic prowess, supply chains, and security. As what amounts to the BRI extends around the world, we’re going to see a geopolitical makeup where nearly all countries have one thing in common: a deeply intertwined partnership with China, a common link which Chinese leaders tout as a recipe for peace.

5. The BRI will pave the way for China’s economic transition

China is in a state of mass transition: the country no longer wishes to merely be the world’s factory, the wellspring of cheap, “Made in China” junk. Rather, the country is opting — meaning, investing billions of dollars and the political will of the central government — to become one of the world’s epicenters for high-tech R&D and high-end, high-value manufacturing.

While many critics have posited that the BRI is just a more streamlined way for China to dump its perceived excess of commodities, such as steel, and cheap consumer goods upon the markets of the world, the view from the ground is a little different. While certainly large amounts of building materials and low-quality consumables will pour out from China along the five emerging routes of the BRI, what will more than likely be far more significant is the off-shoring of Chinese companies and manufacturing operations. Low-end manufacturing and dirty energy production are becoming less and less viable in China: large swaths of the country are maturing beyond their industrial adolescents, the wage advantage in the east and central regions is dwindling, and the public is no longer uninformed and passive about pollution. China sees the writing on the wall, and the BRI is one of the mechanism that the country is employing to keep the tether tied to its enterprises as they inevitably go off-shore.

Meanwhile, China is going all-in on building up its high-tech sector. The country is moving up the manufacturing value chain, is buying up western technology in droves, has companies designing some of the most high-tech products available today, and legions of factories starting their own brands.

In some ways, China and the west are switching positions: the low-level manufacturing operations that the rise of China was built upon are now being dispersed around the world — even being re-shored to the US and Europe — while the high-tech, high-end manufacturing that was once the forte of the west is being gobbled up by China. So China is now making iPhones, drones, and green energy technologies, while the west is going back to making t-shirts.

6. The BRI makes Europe relevant again

Every road has a beginning and an end. When looking at the BRI we must not only look at China but also at Europe: the place where all of these enhanced Silk Road trade routes ultimately lead to.