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Chinese President Xi Jinping gathered world leaders at a high-level summit in Beijing to usher in the next phase of his signature Belt and Road Initiative. the project has drawn $1 trillion in its first decade, according to estimates from the think tank Green Finance & Development Center, the momentum has tapered off in recent years. Russian leader Vladimir Putin was given the red carpet treatment at a global summit in Beijing, as China and Russia deepen their solidarity. Hosted by China’s President Xi Jinping, the meeting celebrated 10 years of his signature foreign and economic policy, the Belt and Road Initiative (BRI). The summit in Beijing has attracted countries mostly from Africa, South East Asia, and South America. Other attendees include Hungarian Prime Minister Viktor Orban and representatives from Afghanistan’s Taliban government. Pakistan PM Anwaar ul Haq Kakar, Indonesian President Joko Widodo, Argentina’s President Alberto Fernandez, and Thai Premier Srettha Thavisin also attended the summit. In Xi’s remarks, he denounced “ideological confrontation, geopolitical rivalry, and bloc politics”, and further said, “What we stand against are unilateral sanctions, economic coercion and decoupling, and supply chain disruption.” As other nations including Ethiopia, Sri Lanka, and Pakistan fell into debt crises, annual engagement under the BRI plummeted to $63.7 billion in the first year of the global health crisis, and the average BRI investment deal decreased by 48% from the 2018 peak to about $392 million in the first half of this year —down from a peak of more than $120 billion in 2018, according to the Fudan report. To underscore this, Xi announced nearly $100 billion in new financing would be available from China’s two main policy banks and nearly $11 billion from the Silk Road Fund, which invests in Belt and Road projects. The strategy’s geographical focus has also evolved in step with Xi’s foreign policy. Saudi Arabia was a top three recipient of BRI lending this year, as the Chinese leader seeks to expand his influence in the Middle East. Although, Italy has questioned whether Xi’s flagship initiative brings economic benefits at all. Italy signed an agreement to cooperate on the BRI in 2019, its imports from China accelerated but that bump wasn’t reciprocated. Last year, Italian exports to China only rose 5%, lagging behind those of Germany and France—two countries that aren’t in the BRI. Hungary’s Orban said after a meeting with Chinese Premier Li Qiang that his country is looking to boost cooperation with China. China is the biggest source of Hungary’s foreign direct investment this year. For Global South nations, Xi’s efforts to pitch his country as a leader of the developing world have been a vital source of funding. China extended $114 billion in development financing to Africa alone from 2013 to 2021. The BRI has seen China pouring an estimated trillion dollars into investment and infrastructure projects around the world. Russia and China and the majority of states in the world share aspirations for cooperation and economic progress. Both countries have publicly denounced the US-led global hegemony and have called for a multipolar world with more centers of power. In the lead-up to the BRI’s anniversary, China released two white papers positioning the BRI as the bedrock of a new world order, one that it casts as more just and inclusive. Mr Xi stressed his point and said the BRI is the right path forward on the right side of history. Beijing has often criticized Washington for leading what it sees as an unfair form of globalization. In contrast, the BRI has encouraged win-win cooperation, where the flame runs higher when everyone adds wood. Mr Xi also laid out an eight-point plan for taking the BRI forward, including promoting smaller projects, green development and integrity building. The BRI has been widely lauded for spurring development in many countries but has also been criticized for saddling borrowers with mountains of debt, damaging the environment, and fuelling corruption and wasteful projects. Even with the slower pace of investment, Xi’s imprint means BRI won’t fade away. That spending spurred the U.S. and European governments to expand engagement with some developing nations to counter China’s influence. But while Western rivals have pledged billions of dollars, many of their projects have been slow to get off the ground. As Xi being associated with it so closely, means it’s going to stay an important and relevant thing for as long as he stays in power. These new funds show that China is returning to international financing after the worst of the COVID-19 years.
Indeed, BRI Summit denounced ideological confrontation, geopolitical rivalry and bloc politics, by standing against the unilateral sanctions, economic coercion and decoupling, and supply chain disruption.
Despite all the challenges, the ravages of the pandemic, the continuing fallout of the global debt crisis, and domestic economic troubles, Xi sent a strong signal that China remains committed to the BRI. Over the last decade, the BRI has brought some clear benefits for China and the countries it has invested in. Estimates of BRI spending vary, but if we count any Chinese private or public lending and investment in countries that have signed a BRI memorandum of understanding—150-odd countries—as BRI projects. BRI activity has surpassed $1 trillion, from the Laos-China Railway to a giant coal power plant in Turkey, since 2013. For recipient countries, China has filled a gap by building and investing in hard infrastructure projects, complementing the World Bank, which has been more focused on public administration lending. Compared to other countries and institutions in the development arena, Chinese lenders and companies have the upper hand when it comes to efficiency. These roads, bridges, ports, and power plants have brought new economic opportunities. China’s overseas infrastructure projects have helped boost trade and economic growth in developing countries. The initiative has also benefited China, even if the projects aren’t always lucrative. China’s lending has allowed it to secure critical resources; for instance, the China Development Bank has disbursed loans in exchange for oil in Venezuela and bauxite in Ghana. Chinese loans have also served up business opportunities for Chinese state-owned companies that have seen business dry up at home—such as in the steel and coal industries. Less tangible, but equally important, the BRI has been a major marketing feat for China. By creating the all-encompassing Belt and Road label, China has brought overseas development, lending, and business under one umbrella, drawing attention from scholars and foreign governments to the scale of China’s presence globally. That image, and the on-the-ground reality of massive projects, have paid dividends diplomatically. In one recent example, Honduras decided to cut its ties with Taiwan this year in favor of China after Taipei failed to deliver the development loans that Honduras had requested. While the BRI has been a boon to China in many ways, the original model wasn’t without problems, the summit reflected China’s efforts to adapt. China is still dealing with the aftermath of that era. Aggravated by COVID-19, inflation, and the war in Ukraine, the global debt crisis has mired China in extended negotiations with debt-ridden countries at a time when it is also facing a significant economic downturn domestically. China has become more careful about its lending and much more risk-averse. The original BRI was very much driven by government projects, but that’s changed. Now it is in many ways much more commercially oriented. In the first half of this year, equity investments dominated BRI activity for the first time, rather than state-backed construction contracts. This commercial turn was reflected in Xi’s speech when he referred to projects that are “small yet smart”, to describe the BRI’s new focus on smaller, higher-quality deals. The other evolution underway along the Belt and Road is the turn toward greener projects. Originally, energy projects dominated China’s overseas lending, and the vast majority were fossil fuel projects. China came under pressure to export its coal-heavy growth model abroad even as scientists were sending dire warnings about the climate consequences of new fossil fuel projects. But since Xi announced a ban on overseas coal projects in 2021, and made his 2021 coal announcement that China would step up support for other developing countries in developing green and low-carbon energy. China needs to coordinate with other countries and financial institutions investing in green energy projects to give developing countries the technical expertise they need to prepare such green projects. At the summit, China clearly promoted its interest in taking the BRI in a greener direction.
No doubt, the countries taking the lead in economic development should give a hand to their partners who are yet to catch up. That message has helped China win friends and influence countries around the world over the past decade; whether the magnanimity lasts another decade remains to be seen. The rise of China, India and Russia as civilization-states is setting up a new clash of civilizations, this time against their so-called modern nation-states. However, major civilization-states do not directly clash with one another; their geopolitical priorities are focused on regions they historically dominated or influenced. The rise of China, India and Russia proved that they have utilized historical writings, cultural performances, and cartography to make their state more civilization-like than nation-like. The implication is that these supposedly less-civilized Western nation-states have no rights or legitimacy to apply their rules and laws or their democratic ideologies, to ancient civilization-states. A parallel cultural movement is also being carried out in China, India and Russia. All this occurs at a time when China and Russia are being treated as authoritarian, rival superpowers and India as a crucial counterweight and democratic ally. But China, Russia and India are not ordinary nation-states, they are fashioning themselves as civilization-states, striving to return to a prior period of historical glory and territorial largess by relying on their rich and ancient cultures and promoting populism. President Xi as Hu Jintao’s successor in 2012, Xi believed that the people are the creators of the nation’s history and the fundamental forces that determine its future and the destiny of the Chinese Communist Party. Re-envisioning the new world order — and recognizing that these nation-states are civilization-states — may help us understand past wars, present tensions, and possible future conflicts between civilization-states and their nation-state neighbors as well as with their Western allies. To promote the influence of traditional Chinese civilization globally, Xi initiated a global civilization dialogue, suggesting a new world order that is centered on civilizations, with China being a major one along with Greece, Egypt, Persia and India. From the civilization-state’s perspective, one could conclude that the rest of the world’s countries, especially modern nation-states, are comparably young and therefore culturally lacking. The implication, among these civilization-states, is that these supposedly less-civilized Western nation-states have no rights or legitimacy to apply their rules and laws, or their democratic ideologies, to ancient civilization-states. Indeed, the BRI Summit denounced ideological confrontation, geopolitical rivalry, and bloc politics, by standing against unilateral sanctions, economic coercion and decoupling, and supply chain disruption. It’s clear that the East is rising and the West declining, all reflecting its ambition and efforts to revive the renown of its ancient civilization and recover territories it lost to modern nation-states.