[Feature: How to Perceive China] Miwa Hirono: China's Position in the International Community—How to Think About the Belt and Road Initiative

2021/08/05

China's position in the international community is being questioned. US-China relations have grown increasingly tense even after President Biden's inauguration, alongside the Taiwan issue, human rights issues surrounding Hong Kong and the Xinjiang Uyghur Autonomous Region, Chinese military activities in the South and East China Seas, mask and vaccine diplomacy regarding COVID-19, and China's international activities including the Belt and Road Initiative (hereafter, BRI). Are China's actions, which we see almost daily, intended to weaken the "liberal international order" based on open economies, multilateral organizations, security cooperation, emphasis on human rights, and democracy, and to attempt a shift toward a China-centric international order?

This question is discussed particularly frequently in debates surrounding the BRI. Does the investment and aid provided by China within the BRI framework cause democracy in recipient countries to regress? Does Chinese investment lead to an expansion of hegemony surpassing the United States by establishing overwhelming dominance in developing countries based on "debt traps" or "neo-colonialism"? Are Chinese investment projects insufficient in their consideration of human rights and the environment?

Against the backdrop of these concerns, specific policy formation is taking place in Western countries and Japan. One example is the G7 summit held in Cornwall, UK, this June, where the G7 leaders expressed support for the "Clean Green Initiative" as a countermeasure to the BRI.

However, is China truly trying to change the international order from a liberal one to a China-centric one? Is the authoritarian system within China being "exported" to recipient countries through the BRI? In addition to these concerns, anti-Chinese sentiment is rising, particularly in Japan, the United States, Europe, Australia, and India, combined with territorial disputes and various issues including Xinjiang, Hong Kong, and Taiwan. As a result, the diverse international issues surrounding China are increasingly being discussed from a specific perspective: "revision of the international order by China through human rights violations and disregard for international rules."

While it is important to examine the validity of this perspective, we must also be wary of discussions that start with a "predetermined conclusion." Research and policymaking not based on empirical evidence are extremely dangerous. When analyzing China, what researchers and policymakers must return to is a sincere attitude of clarifying the overall picture by accumulating empirical evidence. Furthermore, regardless of whether China intends to revise the order, the revision of an order requires not only leadership but also the cultivation of followership. How many countries will support an international order led by China? A leader cannot exist without followers. It is required that we pay sufficient attention not only to discussions centered on major powers but also to the voices of developing countries.

After Xi Jinping became Party Chairman in 2012 and launched the "Chinese Dream" as the governing philosophy of the Communist Party, the BRI has been promoted as a major plan in China's foreign relations since 2013. In addition to the "Silk Road Economic Belt" (the Belt) passing through land routes in Asia and Eurasia and the "21st Century Maritime Silk Road" (the Road) proceeding via sea routes through Southeast Asia and the Indian Ocean, China has also proposed the "Polar Silk Road" (jointly proposed by China and Russia) connecting China to Europe via the Arctic Ocean, as well as the "Digital Silk Road," "Space Silk Road," and "Health Silk Road." The Chinese government states that all of these constitute the "Belt and Road Initiative," and through them, the aim is to promote investment in and construction of public facilities, lower global trade costs, revitalize the economy, and increase mutual understanding among people.

However, this grand vision actually has many unclear points. The Chinese government has not mentioned basic operational aspects such as the costs invested in the BRI, the duration, or the relationship with existing foreign investment policies, and these remain academically unclear. Furthermore, the positioning of the BRI within China's international strategy has not been clearly defined (in fact, China has not made its international strategy itself clear). At the 2019 Belt and Road Forum, Xi Jinping stated that the BRI is not an exclusive "club" but adheres to the principles of being "open, green, and clean," but this does not indicate a specific positioning either.

Why does China promote the BRI? Existing research points to the following. First, it is noted that the BRI can be expected to improve various problems in the Chinese economy. By deploying saturated domestic capital and massive foreign exchange reserves overseas to develop new investment destinations, China can escape excessive dependence on exports while simultaneously alleviating domestic overcapacity and resolving production surplus issues. Second, there is the argument that the BRI is a strategy for China to establish itself as a central leader of the international economy. Indeed, as organizations supporting the BRI, China has concurrently established international financial institutions of its own making, such as the Asian Infrastructure Investment Bank (AIIB), the Silk Road Fund, and the New Development Bank. Third, as mentioned above, there is the argument that China is trying to create its own international order through the BRI.

Is China truly trying to revise the international order through the BRI? In an international joint study conducted last year with international political scientists, China scholars, and researchers familiar with the Asian region (published this February), a reality of the BRI emerged that is quite different from the "revision of the international order" debate.

First, looking at the current status of various actors promoting the BRI—such as the Chinese government, the Party, state-owned enterprises, private enterprises, and Chinese networks—it was found that the global expansion of the BRI is progressing in a form where centralization and decentralization coexist. Under the Xi Jinping administration, centralization toward the Party has progressed, and top-down decision-making has been strengthened. However, at the same time, it is also a fact that governance is decentralized within China and within Chinese actors, and the execution of the BRI is being carried out in a bottom-up manner. In other words, the BRI is expanding globally with bidirectional vectors moving simultaneously. To put it another way, while it is true that the Chinese government and the Communist Party are pushing it forward strategically and plannedly, it is also true that various Chinese actors are acting independently, sometimes following that strategy and sometimes not. In short, the reality of contradictory dynamics coexisting has come to light.

Specific aspects of centralization include BRI investment projects by local governments positioned as part of national strategy under "planned diplomacy," the progress of legislation for aid in a form that formally positions foreign aid within the context of the BRI, large-scale mergers for large state-owned enterprise groups to survive global competition, attempts by the State-owned Assets Supervision and Administration Commission of the State Council to strengthen supervisory functions over state capital, and the progress of the Chinese government's strengthened cooperation with ethnic Chinese enterprises.

At the same time, however, aspects of decentralization can also be glimpsed. Local governments that have been excluded from the national strategy by the central government but seek to pursue economic interests through overseas investment, private enterprises that actually handle more investment projects than state-owned enterprises, and Chinese networks based outside China (such as in Southeast Asia) with profit concepts different from those of the Chinese government are all central to the execution of the BRI, but the actions of these actors decentralize the decision-making and current status of the BRI. The decentralization of policymaking in China has long been called "fragmented authoritarianism." This is one of the characteristics of Chinese policymaking that has been discussed in various fields of Chinese policy, not just the BRI. Within fragmented authoritarianism, various voices and dynamics exist, and they may or may not fall within the plans of the central government or the Communist Party.

This coexistence of centralization and decentralization is the reality of the BRI. Regarding the purpose of the BRI, as mentioned above, there are arguments regarding its aspect as a Chinese economic policy, the enhancement of its presence in the international economy, and the revision of the international order. Even assuming all of these were the intended purposes of the Chinese government, as long as various Chinese actors with their own intentions are developing their respective activities, the intentions of the Chinese government are not necessarily reflected directly in the global expansion of the BRI. It can be said that the situation of the BRI is greatly influenced by the actions of these actors.

Another thing clarified by the international joint research is the current state of followership in the international order. How do various actors in investment destinations view the BRI? While there are many arguments that China is expanding its influence in countries along the routes through the BRI, looking at the current situation in these countries reveals that it is not so simple. In the joint research, it was observed in various countries along the BRI that Chinese actors trying to promote the BRI are being incorporated, swallowed, and utilized by local political dynamics and economic policies.

For example, in Thailand and Indonesia, because ethnic Chinese and actors active in Chinese projects are closely involved with the core of the administration, BRI projects proceed relatively smoothly. However, when resentment toward the elite grows among opposition parties or civil society organizations in those countries, it can turn from "anti-elite" to "anti-China." In Myanmar and Uzbekistan, the BRI is being utilized for domestic agendas such as measures to resolve internal conflicts or the formulation of national economic policies. In Pakistan, which hosts the representative BRI project "China-Pakistan Economic Corridor (CPEC)," a change in government forced the nature of the BRI project itself to change from the pursuit of economic profit to the pursuit of social welfare, and the content of the project had to be modified. In the Middle East, while the BRI contributes to regional economic development, it was also pointed out that imbalances in the volume of investment from China to various countries could further worsen hostile relations in the region.

Furthermore, views on the BRI are quite diverse in each investment destination. For elites who utilize the BRI for their own benefit—namely government officials, economic organizations, and local residents—the BRI is something to be welcomed. Conversely, when socially vulnerable groups become even more vulnerable through environmental destruction or corruption issues caused by BRI investment, the civil society organizations and researchers who support them view the BRI as a serious problem.

This might lead to the argument that, in the end, the BRI supports elites and authoritarian systems that do not rescue the vulnerable, thereby strengthening a China-centric order. Indeed, in countries where pro-China administrations won general elections, such as Sri Lanka and the Solomon Islands, Chinese investment has increased. In the case of the Solomons, this has even seen phenomena such as the breaking of diplomatic ties with Taiwan and support for the recognition of Chinese sovereignty.

However, the opposite phenomenon, so-called backlash, is also occurring in Pakistan, Malaysia, and the Maldives. Authoritarian regimes with deep ties to Chinese investment have been defeated in general elections, and conversely, leaders critical of Chinese investment have come to power, moving to re-examine Chinese investment, rebuild relations with traditional major powers (such as India and the US), and hedge risks against China. In other words, the followers' views of China and their support for the BRI are diverse.

Considering China's position in the international community using the BRI as an example, it becomes clear that the argument that it is trying to revise the international order is too simplistic. At the very least, it is not the case that China has been executing the BRI from the beginning in order to destroy the current international order and create a China-centric one. It is reasonable to think that what China seeks in the BRI is the pursuit of its own economic interests, the cultivation of good relations with developing countries by a China that has no "allies," and the expansion of its influence. Furthermore, realistically, the expansion of influence does not necessarily succeed if it is absorbed into local political dynamics.

However, this is China's position regarding the BRI and does not necessarily apply to all the various international issues surrounding China, such as territorial disputes, human rights issues, UN politics, and cyber issues. China's international position differs considerably depending on the field of the problem. In areas involving sovereignty that China defines as core interests—such as territory, Taiwan, Xinjiang, and Hong Kong—it shows a very defiant stance toward the multilateral cooperation and liberal democracy that are the premises of the liberal international order. Conversely, in UN peacekeeping operations, for example, it is the most active among the permanent members of the UN Security Council, and the number of soldiers it provides is the highest among the permanent members, showing a stance of trying to support the current international order. While this article focused on the BRI among various fields within the international order, it will be necessary to conduct individual and calm discussions on China's actions and their impact on the international order in other fields in the future. Discussing all fields together could lead to ideology-centered debates and distort reality.

(Part of this manuscript is based on the description in the book edited and authored by me, "What Has the Belt and Road Initiative Brought? The China Problem and the Investment Dilemma" (Keiso Shobo, published February 2021).)