China’s flagship BRI has raised questions on the feasibility of the Chinese development partnership model
The last few years have brought global development imperatives to a defining point. This is more so because of the “polycrisis” witnessed by a world deeply wounded by the compounding impacts of the China-United States (US) trade war, the COVID-19 pandemic, uncertain and uneven post-pandemic recovery, global supply-chain problems created the Ukraine crisis, and, of course, the aggravating impacts of global warming and climate change.
While global development cooperation has been looked at as one of the critical goals of Agenda 2030, such partnerships are now being deeply impacted by geopolitical fault lines and the prevailing global uncertainties. Ever since the announcement of the Belt and Road Initiative (BRI) in 2014, China has emerged as one of the major drivers of global development partnerships. The Chinese development agenda has also undergone a paradigm shift, making it a major player in international development cooperation. Exhibiting an explicit alignment with Agenda 2030 and a sense of internationalism, Beijing has begun to utilise its development cooperation model as a geostrategic-cum-foreign policy tool with an end to secure its interests.
By raising almost 700 million people out of poverty since the country’s reform and open door policy began in the late 1970s, China has transformed itself into a critical development provider for the Global South. China’s drastic expansion of development cooperation in terms of volume and nations served has altered the development paradigms. In the new millennium, one of its attempts to gain the international spotlight was hosting the first Forum on China-Africa Cooperation, leveraging its presence in the African market. In fact, Beijing holds a special position in the international aid architecture, considering how it has unnerved the traditional western-led model through its popular infrastructural programme, the BRI.
However, its model has also been attracting attention for several other reasons. The motivations for China’s development partnership framework, which is symbolised primarily by the BRI, originated from a “consumption-led-growth” strategy. The strategy entails providing fillip to investment and production within the economy by boosting consumption expenditure. Promoting “consumption-led-growth” through increases in domestic purchasing power has been explicitly acknowledged by China in its 14th Five-Year Plan.
In the aftermath of the global recession of 2008, which impacted major economies including the European Union (EU), Beijing realised that its philosophy of “export-driven-growth” would fail. This recession also negatively affected the global consumption demand. Hence, with an unreliable external sector, contingent upon the vagaries of international trade and finance, there was a need to create a reliable growth force within the domestic economy. This would act as an economic cushion. This entailed manifold increases in wages and salaries and consequent labour costs in China in the last decade. Chinese policymakers rightly apprehended that this would make their exports less competitive in external markets. This literally made them think of offloading components of the production-chain to destinations where cheap and abundant human and natural capital is available.
This shift is directed towards fulfilling the priorities of economic development, improving governance, responding to emergencies, and eco-environmental protection. In fact, there is also an underlying reference to creating a ‘global community of shared future’ under the aegis of South-South Cooperation (SSC) for promoting joint efforts towards common development.
In one sense, the BRI turned out to be an exploration to capture the “factor” markets of Africa and South Asia, and the product markets of the EU, Middle-Eastern regions and the US. Therefore, a Chinese footprint can largely be observed in those spaces that have cheap and rich human capital, and easily accessible fundamental natural capital that is often classified as “land” in Classical Political Economy. That is precisely why the BRI finds its presence across the underdeveloped and developing regions of Africa, South Asia, Southeast Asia, and also parts of Europe.
Explicitly promoting Beijing’s strategic intent, the BRI’s massive scale has become ‘a magnet of controversy and criticism’. Establishing unsound projects for securing and expanding Chinese access to resources or local markets, the BRI has also been termed Beijing’s ‘debt-trap diplomacy’ tool. Under this umbrella infrastructure project, the Chinese model of development cooperation exhibits its eagerness to internationalise by levying heavy debt burdens for several vulnerable economies—Sri Lanka’s Hambantota Port is an oft repeated example and so is the severe financially distressed conditions faced by almost 22 African countries.
Although the recent launch of its twin concepts, Global Development Initiative (GDI) and Global Security Initiative (GSI) might indicate an effort to move towards a ‘new development paradigm’, China’s development cooperation model reeks of ‘market imperialist designs’ through the BRI by capturing the factor and product markets. Both GDI and GSI must be viewed as a strategic move—a tool that Beijing intends to utilise for gaining recognition in the area of global governance. The China-Pakistan Economic Corridor (CPEC) is another prominent example of furthering Beijing’s strategic model of development. CPEC was launched in April 2015 with an aim to provide a facelift to the feeble public infrastructure sector in Pakistan. China also deemed CPEC as a necessary strategic commitment for maintaining the stability of its ‘all-weather’ ally. However, the recent debt crisis encircling Islamabad has raised a question mark on the overall economic viability of development projects under CPEC, resulting in volumes of unproductive debt. Will this result in another “land grab”? The question looms large!
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Dr Nilanjan Ghosh is a Director at the Observer Research Foundation (ORF) in India, where he leads the Centre for New Economic Diplomacy (CNED) and ...
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Dr Swati Prabhu is Associate Fellow with the Centre for New Economic Diplomacy at the Observer Research Foundation. Her research explores the interlinkages between development ...
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