China expects to sign BRI agreements with nearly 20 countries and more than 20 international organisations at the forum.
Conversation on China's expanding influence, leverage, and hegemony must necessarily be padded with processes, rules, and power shifts Chinese actions set into motion or implicate. Thus, as the date of the Belt and Road Forum for International Cooperation draws near (May 14-15), it is worth exploring why the event is being called China's flagship diplomatic event of the year.
First, the forum could redefine globalisation. With the theme of "boosting cooperation and realising win-win development," the forum seeks to cement consensus on globalisation as the continuing norm of development. It is yet another platform where Chinese leadership will advance the message of growth through trade, investment, and integration in this period of uncertainty, slowing trade and rising protectionism. This version of opening up, however, is to be inclusive and equitable, and the Belt and Road Initiative (BRI) is Xi Jinping's answer to "Globalisation 2.0": bringing on board the immediate and wider region to coordinate development strategies that see mutual benefit. The trade and infrastructure network connecting Asia to Europe and Africa will, for instance, allow China to course-correct by expending its excess industrial capacity. As it builds infrastructure in partner countries, this construction will bridge, to some extent, domestic infrastructure gaps in the Asia Pacific region (currently estimated at $1.7 trillion per year). It will also allow China to restructure its economy from manufacturing-led to one dominated by technology, consumption, and services by reorganising regional supply chains: it will play lead goose by migrating labour-intensive, export-oriented industries to countries becoming increasingly competitive in manufacturing and investing in sectors such as agriculture, energy, logistics, and industry in partner countries. Southeast Asia has been in particular marked as a key destination to transfer Chinese industries.
China is the second biggest economy in the world, the world's workshop, the biggest exporter, the largest trading nation, and the second-largest cross-border investor. It contributed to over 30 percent of the world's growth last year. As it seeks to move up the value chain, it is exporting what Xinhua called the “China solution” to the global economic slowdown. This leads to the second significance of the forum: it could cement China as a rule-maker in another potentially multilateral context. The forum is another international platform bringing together multiple stakeholders for political and economic consultation being led by China. In this case, the discussion is possible because of China's economic weight and capacity, and its avowed willingness to shape change and lead if necessary.
Over 1,200 representatives from 60 organisations and 110 countries and regions, including leaders of 28 countries (at last count), <1> will participate. Observers have noted the lack of participation from heads of states of key Western countries, China's immediate neighbourhood, and its fellow BRICS save one. But a deeper look into the guest list reveals attendance of leaders from key regions — Central Asia, South Asia, Southeast Asia, Eastern and Central Europe, Africa. Putin and Erdogan will also be present, representing countries that straddle both east and west Eurasia. UK, France, and Germany are sending senior officials, Japan is sending its second-highest ruling party representative, and Xi has invited Egypt's Sisi. In terms of the belt and road, heads of both land and maritime nations will be present. Importantly, leaders of seven out of 10 ASEAN countries are showing up. (Surprisingly, leaders of two South American countries are also attending). Heads of the United Nations, World Bank, and IMF — the holy trinity of international organisations — will also be present. If not universal endorsement, there is clearly willingness to buy in.
Already, China has signed BRI cooperation agreements with over 40 countries. Beijing has also signed MoUs on facilitating BRI projects with both the UNDP and WHO. What is more, a UN resolution in March called on countries to strengthen regional economic cooperation including through initiatives such as the BRI. Further, China is cultivating the integration of the BRI with other regional initiatives or connectivity projects, such as with the Eurasian Economic Union and EU's Juncker Plan.
The healthy participation from around the world reflects the political and economic influence China wields. The forum offers Beijing another opportunity to build global economic policy, especially since the BRI combines both hardware (connectivity infrastructure) and software (policies and processes). What is more, repeated calls from Beijing of "extensive consultation" and "joint contribution" were rendered hollow given the bilateral implementation of the BRI thus far; this forum — the highest-level platform since the launch of the initiative — is the first attempt at introducing multilateralism as the method of work. If the forum succeeds in beginning the institutionalisation of the BRI, then Beijing will be the maestro that conducts the "symphony performed by an orchestra composed of all participating countries."
The potential institutionalisation of the BRI is itself the third key reason why the forum matters: it could lay the foundation for a concerted redirection of flows and realignment of partnerships. On the one hand, it is clear that countries that already receive or expect to obtain financial support from China are the ones sending their heads. The event may simply end up being a large exhibition where China signs BRI bilateral cooperation agreements. On the other hand, the forum could yield clarity on what the BRI is, and its roadmap, as potential/new projects, finance mechanisms, and policies that facilitate cross-border flows are agreed upon.
It is interesting to note that European countries are eager to jointly discuss the scope of the BRI and become equal partners. The advisor to the Czech president would like to see the high-level political forum meet every three years, but in the meantime, suggests that every participating country select a coordinator, and all coordinators meet every year. There may be calls to establish a permanent secretariat of a BRI forum that oversees, coordinates, evaluates progress and implementation, and to rotate the presidency of a BRI forum every time it happens.
It remains to be seen what the forum actually yields. Will consensus emerge on the BRI as the path to Globalisation 2.0? Will the Chinese leadership encourage and present viable — and reciprocal — opportunities to invest in China? Will the BRI forum become another platform where China uses its status as the predominant buoy in un-calm economic waters to cultivate Chinese advantage? Will clarity on practical issues, such as debt repayment, be offered? Will the forum lead to integration of concerns and ideas into the implementation of BRI projects?
Big-ticket investments and projects are likely to be announced to project a successful BRI forum. As India sends a representative to the summit, it behooves New Delhi to gain insight into how other players around the world understand BRI, their concerns, and their expectations; what mechanisms, financing and otherwise, are agreed upon; and the rules and norms the forum paves the way for. This will allow India to monitor progress on the BRI as it decides on its own formal response and level of engagement. More importantly, it will allow New Delhi to better gauge and address resultant economic, political, and strategic implications.
A successful BRI forum will be another nod to China-centred global economic order — a role it is cultivating not as a disruptor, but as a part of the international regime.
<1> Leaders will be present from: Russia, Mongolia, Myanmar, Pakistan, Indonesia, Laos, Philippines, Vietnam, Cambodia, Malaysia, Sri Lanka, Fiji, Kazakhstan, Uzbekistan, Turkey, Belarus, Serbia, Czechia, Poland, Hungary, Spain, Switzerland, Italy, Greece, Argentina, and Chile.
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Ritika Passi works at the intersection of economics and security. Her research focuses on regional connectivity initiatives and power shifts in global economic governance. She ...Read More +