The role of China’s
One Belt One Road in International Development Cooperation
January 20th, 2018
Elena Herrera
Merino
Along the years, the Chinese government has had a long path in providing
aid to International Development Cooperation. However, it wasn’t until
September 2013, when the focus of attention went to China. At that moment, the
Chinese president, Xi Jinping, announced in Kazakhstan the rebirth of The Silk
Road. This new and huge project is called the
New Silk Road, One Belt One Road (OBOR) or Yidai yilu一带一路in Chinese. The One Belt One Road initiative was born as an innovative plan towards
international cooperation to open China to the world and to provide the same
opportunities to all the participating countries, based on a shared objective of international development [1].
To make it a reality, it is designed with two major roads, the Silk Road
Economic Belt and the 21st Century Maritime Silk Road. As it was
expected, it is having a great impact: it already includes 71 countries from
Asia, Africa and Europe (recently Latin America), which represent 67% of world
population and 34% of global GDP[2].
However, not many years ago, the aid seemed to
have an endless North-South direction, but with the rise of developing
countries, such as China, India or Brazil, a shifting wealth[3]
has taken place, known as the South-South cooperation[4].
But, is it something new?
Surprisingly, for China, it isn’t. In fact, the
Chinese assistance to undeveloped places already took place when its GDP was
much lower than the one from Western countries. As a curious fact, by 1985, it
was the country which provided most aid among the developed countries[5].
However, what has changed is its engagement.
And a clear example of this new engagement is
OBOR. This project can be seen as a reaction of the lack of a common
orientation of traditional donors or as an innovative strategy[6] to
face both the American hegemony in all the institutions and the exclusion of
China from the Trans-Pacific Partnership TPP.
Furthermore, the so-called international hybrid
system[7]
(defined as the implementation of programs between traditional donors and
multilateral negotiations that determine the financing) has led China to
elaborate a new development plan that focuses all the aid on a questioned “win-win
development”. Therefore, a project with these dimensions entails a new
multilateral approach that “enables a collective response to solve a particular
problem that is more effective than individual country responses[8]”,
said Bruce Jenks and Homi Kharas.
In this way, this new approach serves as a
platform for cooperation to build a community of responsibility to all the
countries and to work together to overcome the global development challenges
for the millennium, using Chinese funds, which are addressed to the
construction of infrastructures and international development. A key fact that
China wants to highlight is its fairer commitment. That is to say, “to have
common, but differentiated responsibilities”[9],
between the participating countries as Xi Jinping said at the UN Development
Summit in 2015.
OBOR was created with five main objectives to
improve the trade and, therefore, to promote international development. The
five principles[10]
are: to strengthen policy communication; to improve road connectivity; to
promote trade facilitation; to enhance monetary circulation and to strengthen
people to-people exchanges.
And it all adds up to an estimated amount of
money of USD 1,3 trillion[11].
Talking about money… from where?
Here is where the new Multilateral Development
Banks are playing a fundamental role for the financing of projects. Their
apolitical nature and their priority of international development, before their
own benefit, is providing a reliable amount of money. In this way, The Asian
Infrastructure Development Bank, the New Development Bank and the Silk Road
Found (which were established in 2014), as well as, the China Development Bank,
the Export-Import Bank of China, the World Bank and the public sector are contributing
with hefty loans.
What’s next?
In May 2017, it took place the first One Belt
One Road Forum in Beijing, which was attended by, at least, 28 head of states
and 1,200 delegates. Its main task was to “build a more open and efficient
international cooperation platform; a closer, stronger partnership network; and
to push for a more just, reasonable and balanced international governance
system[12]”,
said Wang Xiaotao, the current chairman
of the China International Development Cooperation Agency (CIDCA). The next
summit is set up for September 2019 in Hong Kong.
Since 2013, with the use of the aforementioned
corridors, there are already some projects that are being built. To cite some
examples: a gas pipeline in Pakistan, a high-speed rail in Thailand or a port
in Sri Lanka that has been handed over to China because of the incapacity of payment
from its government.
Conclusion
In brief, The New Silk Road is the first time
that non-Western countries are implementing their own development strategy.
China is in charge of a new model of international development with the
rebuilding of the Silk Road, based on a common development objective to all the
participating countries. With OBOR, China is not only maintaining its culture
of trade, but also is modernizing the country, building better infrastructures
for international trade and, ultimately, increasing its global influence.
On the other hand, China is profiting from the
financing and construction of projects and the recipient countries have the
task to consider whether the debt is worth it or not, because OBOR is project
based on investments or loans and not on donations.
Elena: this is an interesting piece which provides information about OBOR which is not well known and about China's international development cooperation efforts. However, I wonder whether, as you claim, the new multilateral banks promoted by China are really apolitical and do not seek to benefit China. Could you explain why you think this is so? Thank you. Prof. C. Freres
ResponderEliminarThank you so much for your comment.
ResponderEliminarAccording to the Cambridge Dictionary, apolitical means: “not interested in or connected with politics, or not connected to any political party”. Therefore, when I wrote “apolitical” I was referring to the fact that they do not have anything to do with Chinese politics, they are not like a ministry. For example, in the New Development Bank (NDB), there are four vice-presidents (among them, the Chinese Xian Zhu) and the president is the Indian K. V. Kamath and the five countries have the same voting power. So, the benefits will be in the place of the investments (Brazil, Russia, India, China or South Africa).
Another example, according to the Financial Times (2018), The China Development Bank (CDB) and the Export-Import Bank of China (Ex-Im Bank) want to fund international projects, without giving Chinese companies the biggest part of the work. Therefore, the benefits of these Chinese financial institutions are not only for China, but for the places or companies where they consider they can get the best profit.
Hope this answers your question. If you have further questions, please do not hesitate to ask me.
Elena