Why America Must Participate in China's Belt and Road Initiative
Chinese president Xi Jinping wrapped up the first-ever Belt and Road Forum in Beijing on May 15. Its main purpose was to promote cooperation under the Belt and Road Initiative (BRI)—a Chinese development project of nearly $1 trillion concentrated on the Eurasian continent. China had worked hard to elevate the status of the economic summit, which ultimately drew twenty-nine heads of state and government.
Although participants from over one hundred states were present, among them Russia’s Vladimir Putin and Turkey’s Recep Tayyip Erdoğan, observers did not fail to take note of the absence of top-level officials from developed nations. Japan and major European powers Germany, France and the United Kingdom all refrained from sending a head of state or government. The United States sent only a representative from its National Security Council.
For now, most developed countries seem to regard the BRI either as economically irrelevant or as a geostrategic tool for China to expand its sphere of influence. Both considerations are well founded. But as President Xi’s favorite project gains speed, there are a few reasons to reconsider this wait-and-see approach.
The first concerns risks of ceding power to China to set rules and define norms for global economic flows.
Most countries along the BRI route, including Pakistan, Myanmar and the Central Asian states, suffer from great capital shortages and a lack of market access due to the absence of physical and financial infrastructure. Through loans, investment and aid, China is offering these countries a solution to their problems and, in many ways, entry into global financial markets. The price that these countries pay, however, is becoming heavily indebted to—and dependent on—China, with their economies growing to fit and support the Chinese economic structure. This promises Beijing influence in many regards, but most importantly it grants China the necessary leverage to define rules and norms for future financial transactions and trade.
Being involved at the nascent stage of the Belt and Road Initiative is crucial because this type of rules, norms and structures of organizations and networks tend to persist in their original forms. The founder’s imprint is long lasting, and outsiders seeking to influence developments at a later stage often fail. The sheer size of the BRI makes this worthwhile consideration: The project may become the world’s largest platform for international economic cooperation, serving over 65 percent of the world’s population and covering a quarter of global flows of goods and services.
In sum, China is determined to leave an impressive footprint of norms, rules and values in Eurasia that could eclipse Western equivalents and fundamentally change the normative basis of future transactions and new markets. Whether this will lead to the development of a fair system in which multilateral institutions dominate remains to be seen. But evidence suggests that China will try to shape the initiative to mainly benefit itself—sometimes to the detriment of others. Without Western engagement, there will be little to counteract and bring to light such developments.
The second reason why the West should consider engaging in and shaping the BRI concerns economic interdependence and the risk of conflict in the Pacific Ocean.
China is staging a military buildup and acting more assertively toward its neighbors, particularly in the South China Sea, where Beijing is increasingly enforcing its territorial claims. Taiwan also remains a tense issue, and China has made clear that it will use military force if Taipei decides to push for independence. Over the long term, it is clear that China would like to reclaim Taiwan as well as islands in the East and South China Sea. Nationalist forces are pushing China to take further steps toward this goal.
The main constraint on China’s recuperating these islands is economic vulnerability. China depends greatly on competitors such as the United States, Japan and European countries for economic growth. Sanctions following a decisive Chinese move to reclaim Taiwan or other islands would hurt the Chinese economy in a way that the Communist Party is unwilling to risk. The same is true for maritime trade. China is highly dependent on energy imports crossing the South China Sea, and its economy would not last long in the case of a U.S. naval blockade.