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1 May 2019

With guest contributor Rowan Callick

One road, many questions

Even after last week’s intricately choreographed second global forum of the Belt and Road Initiative (BRI) – to which Australia’s relationship remains unsettled – many questions are still unanswered. How is a project badged “BRI”? How might companies join the Chinese consortia that finance and build BRI infrastructure? With countries as dispersed as Chile and South Africa signing up, does the design retain any geographical logic? What arrangements will mediate disagreements over project financing or implementation? What precisely are the new BRI deals, worth US$64 billion, that China’s leader Xi Jinping announced were signed during the forum?

It was also proclaimed at the forum that BRI projects would now pay more attention to local economic development, regional benefits and environmental protection – but how will these be implemented, and who will monitor them? How will Beijing counter concerns that BRI comprises “debt-trap diplomacy”?

So many questions. There is, however, no ambiguity about the importance of BRI to China’s party-state – especially to Xi, for whom the Initiative has become the critical KPI of his second five-year term in office. His first term focused on governance: purging and purifying the party as he centralised and personalised power.

The three-day BRI forum was attended by thirty-seven heads of government or state. A single page of the People’s Daily on 26 April featured thirteen photos of Xi greeting other leaders. Nine of the ten ASEAN leaders were there, as were four of the five from the Central Asian republics, and ten from Europe, mostly from smaller nations. South Asia, North Asia and the Middle East were less well represented. The only Pacific participant was Peter O’Neill, Papua New Guinea’s prime minister.

The original BRI goal was widely perceived to be an opportunity for China to deploy surplus capital and labour as its economy matures and slows, and to develop fresh markets. The secondary benefit was that all roads, railways, telco connections and other infrastructure would lead not to Rome, but to Beijing, and that Chinese standards would become adopted globally. The Initiative’s Chinese title encapsulates this vision: Yi Dai Yi Lu – One Belt, One Road. At the first BRI forum, Xi, sensing the extent of the opportunity, declared the concept “the project of the century”, which would “add splendour to human civilisation”. It became enmeshed with his “Chinese Dream”. 

Following the election of Donald Trump and the rapturous reception of Xi at Davos, BRI’s remit was amplified to seize the hour: the program would become a tool to propel China to the front rank of great powers. China would use it to move into the space vacated by Washington – a can-do, big-picture, global-scale economic mover and shaker, albeit with geopolitical strings attached. In the ensuing years, BRI has evolved into a means of weaponising Beijing’s economic heft.

So far, 105 countries have signed BRI MOUs with China. Australia is not among them. When the initiative was cranking up, Beijing proposed applying it to Canberra’s then pet project to open up northern Australia for large-scale agriculture, but the federal government was reluctant to invite Beijing to co-badge an Australian development. New Zealand has signed up, and so – in a constitutional oddity – has the state of Victoria, whose premier, Daniel Andrews, attended both BRI forums. Neither has yet registered any significant resulting economic benefits.

The Australia–China Belt and Road Initiative, chaired by BHP director Malcolm Broomhead, has worked hard and networked intelligently to find ways for Australia to benefit economically, but there have been slim (if any) pickings to date. Corporations such as Germany’s Siemens and America’s General Electric have gained significant BRI business, but they were already huge investors in China; Australia has invested very little there, thus limiting our business elite’s understanding of the country.

Should Australia go with the flow, as it did in the end with the multilateral Asian Infrastructure Investment Bank (AIIB), also developed by Beijing? Those who posit that Australia and other liberal democracies face a binary choice between China and the US are urging Canberra to sign the BRI MOU or risk economic marginalisation. Beijing is starting to indicate that signatories will be treated differently from abstainers, placing Australia in a tenuous category, despite it being a “comprehensive strategic partner” with which China has its most wide-ranging free trade agreement. Other pro-BRI voices suggest more pragmatically that MOUs aren’t fixed commitments and can be sidelined when it suits, so best to get on board and enjoy any potential benefits.

Before Malaysia’s revitalised prime minister, Mohamad Mahathir, negotiated down a third of the cost of his country’s biggest BRI deal, a fast rail route, he branded the project an “unequal treaty”, wickedly referencing China’s Opium Wars pact. Unlike the AIIB, which is successfully evolving as a multilateral body, BRI remains a serial bilateral project. Having held our own in building a vast multi-layered relationship with China, Australia should test whether we can join the BRI by drawing up our own MOU.

Some of those leaders who have signed are content to become “tribute states”, like many of China’s neighbours during the glory days of the High Qing era four centuries ago, deferring to Beijing as their geopolitical guiding light in return for promised access to China’s economic bounty. But that’s not where Australia is at. Not yet, anyway.


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Singapore’s online falsehoods bill will deepen a culture of self-censorship

“The proposed Protection from Online Falsehoods and Manipulation Act . . . gives government ministers wide latitude to intervene in online communications. The authorities will end up with the kind of discretionary powers their counterparts in liberal democracies can only dream of.” Cherian George, New Mandala

After Sri Lanka blasts, government targets the niqab veil

“The ban, which took effect Monday, has been touted as a security measure. However, it criminalises a practice more associated with an ultraconservative form of Islam previously unknown on the island.” Jon Gambrell & Gemunu Amarsinghe, The State

Can India’s media shield the election from fake news?

“Despite two decades of success, there is a sense of pessimism about the future of India’s mainstream media . . . the speed of social media in distributing news, misinformation and ‘fake news’ cannot be matched by the mainstream newspapers.” Usha M. Rodrigues, East Asia Forum

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A crisis is brewing, as discontent and restlessness swirl in Bangladesh

“Instead of going after defaulters, the government is pouring money into the banking sector, repeatedly offering bail-outs and allowing banks to reschedule loans at lower interest rates. The government’s lenient attitude is due to many defaulters being well connected.” Ali Riaz, Channel News Asia

Culture cringe – laughter links Australia and Asia

“For a country like Australia, it may seem that the easy route in the short term is to be silent on repression in order to build relationships with governments that wish to restrict their peoples’ freedom of expression. In the long term, it’s Australia’s support of freedom that is one of its greatest assets.” Melissa Conley Tyler, The Interpreter (Lowy Institute)

Free from Australian Foreign Affairs

Next Voices winner – Foreign policy with an Australian accent

“If schools, the media and politicians repeatedly tell the parts of our history that clash most with our geography, understanding and trust between ourselves and our neighbours must suffer. We also won’t feel very secure in our region.” Isabella Ostini, HERE

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BELT AND ROAD
INITIATIVE

We can surely deliver benefits to all.

Xi Jinping, president (China)

It fits perfectly into our plans.

Vladimir Putin, president (Russia)

We are working diligently to make sure everyone in the world understands [the] threat.

Mike Pompeo, secretary of state (United States)

Sources: The New York Times, AP News, US Department of State



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