China’s Belt And Road Initiative: The Risks For Democracy And Implications For International Development

In 2013, China introduced the Belt and Road initiative (BRI); an intercontinental infrastructure project to provide long-term economic prosperity and interconnectedness by linking nations’ economies from East Asia, Africa, Eurasia and Europe. The states that are part of this international economic arrangement account for the majority of the world population and over 40% of world GDP. The project planned to improve economic relations between China and much of the developing world by negotiating trade agreements and providing more unrestricted cross-border flows of capital investment while forging diplomatic relations. The BRI was instigated to answer China’s growing demand for resources as a result of the country’s growing population, urban migration and industry development. On paper, this project seems to promote economic interconnectedness and hence, more peaceful relations between states. Yet, there remains a relevant debate about China’s genuine intentions and objectives behind the project, as well as the possible socioeconomic repercussions the project might incur, specifically among developing nations.

Some would argue that the multilateral project looks to achieve mutually advantageous trade and diplomatic relations between regional partners. The BRI would allow for an effective shift of labour-intensive manufacturing jobs from China to other labour-endowed developing countries, many of which are located in Southeast Asia and Africa. Note that it is often the case that these countries also tend to have some of the poorest working conditions (low wages, no worker unions) and lack basic worker rights. 

This argument subscribes to the view that the BRI project is the product of the inevitable effect of a free market, where the Chinese government looks to promote trade and transnational investment and policy coordination in the region. Although some believe the BRI is a legitimate plan to promote trade and cooperation, others would argue that this project aims to advance China’s regional dominance and alter power relations in the region. In their view, the project threatens to exacerbate China’s geopolitical power over underdeveloped nations. Similarly, while some may emphasize the project’s peacekeeping effect of increased economic interconnectedness, others argue that China’s military expansion may exacerbate security concerns in the region and internationally.

One strategy used by China to deepen their influence and control over critical areas is to induce capital-scarce countries into a debt trap as a part of the BRI project. In fact, over the last decade or so, China has provided poorer already debt-driven BRI states with large interest-free loans to finance essential infrastructure projects. Although the credit offered might disguise itself under the form of foreign aid, realists denounce that these loans’ real intention is the strategic takeover of key areas of the BRI. Victims of this predatory strategy include Pakistan, Sri Lanka and Madagascar. Chinese loans are given out with a clause that essentially gives China the right to take control of an infrastructure project funded by their loans if the host country is unable to pay back their loans. An example of this debt trap took place at the Hambantota port in Sri Lanka, where a Chinese loan of 1.5$B was given to the host country. Being unable to reimburse the loan, Sri Lanka had to give away control of the port to China as a part of a 99-year lease. China’s plan to fund such infrastructure projects also fit into the Chinese “Marshall Plan,” where money is loaned to poorer BRI countries to stimulate their economy, subsequently creating a new source of demand for Chinese goods.

It is important to note that much of China’s loans are given out without any preconditions or restrictions, meaning credit can be given out to countries with poor democracy and human rights records (Myanmar, Kazakhstan, Thailand). Hence, the credit that is offered as a part of the BRI is unlikely to bring any democratic or institutional progress within these states, which is why it has piqued the interest of many authoritarian regimes looking to buy their time in power. The deals cut by China with leaders of underdeveloped countries have often been self-centered and fail to contribute to solving issues of human or civil rights within those states because they have the same issues domestically and hence can’t really lead by example. This means that China isn’t actually looking to improve the situation of citizens of underdeveloped countries but is rather only looking to maximize its own economic interest.

Moreover, China disproportionately benefits from the Belt and Road initiative, meaning the gains from cooperation within the BRI aren’t equally distributed. This means that the economic benefits might be unequally redistributed, exacerbating financial and social inequality within underdeveloped states. Likewise, we can question the extent to which debtor states are better off with Chinese credit than without it. For example, Pakistan saw a 1% increase in GDP growth the year following the reception of Chinese stimulus in domestic BRI infrastructure projects. Yet, the country is now further burdened by debt and is on the verge of seeking an IMF bailout, which hampers on the country’s developmental path.

Yet, China has reiterated its unwillingness to replace U.S. hegemony and rather justifies its approach to global governance to develop harmonious relations in the region to represent and further the interests of developing countries. Not only that, economic ties and alliances with a more significant amount of states increases China’s legitimacy as a regional power by allowing it to exert dominance more easily over regions and territories of contested authority such as Taiwan, Hong Kong, the South China sea, or the Ladakh region (Galwan valley, China-India border).

In that light, I believe that the international community should encourage preconditions for democracy to any credit given as part of the BRI. These regulations may encourage authoritarian countries to make some democratic concessions in exchange for valuable investments. Moreover, there needs to be more strict regulation to prevent the occurrence of debt traps or any other form of predatory behaviour in the context of important flows of transnational investment.

To conclude, financing such an immense infrastructure project will allow China to strengthen its grip on many geopolitical areas of contested authority and its controlling influence over geostrategic trade routes of the Eurasian continent. Although the BRI might help poorer Asian states to reduce poverty to a certain extent, the Chinese approach seems to completely discredit issues of environmental degradation, working conditions, civil/human rights and economic inequality (Liu & Dunford, 2016). Countries adopting the BRI might see improvements in their economies overall, but the extent to which states can see development will depend on the way in which resources are redistributed and reinvested in society, as well as the willingness of leaders to address societal issues. Ultimately, it would be ill-advised to assume that the BRI itself could solve deep-rooted issues that these states possess.

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