Why Transparency is Key for China’s One Belt, One Road

Beijing, Oct-2017Hutong during the Party Congress Beijing October-2017
Mitch Altman

Of the myriad of questions, opportunities, and challenges that China’s rise presents – the fundamental bedrock rests on Beijing’s ability to adapt itself to responsible leadership globally. But what does this mean? 

This past October, China held its 19th Party Congress – a key event that gave indications on how the Communist Party of China (CPC) will look to evolve as its economy continues to grow and, consequentially, its influence in Asia and, indeed globally, grows apace. For one, the blue skies in Beijing during the event only masked a harsher reality – forced mandatory shutdowns of surrounding industries in the week leading up to the event.

Government in building in Beijing, China.
A rare blue sky during the 19th Party Congress of the Communist Party of China (CPC), which took place at the Great Hall of the People in Beijing.

The more troubling mask, however, is the one worn by Chinese leader Xi Jinping and his group of allies, which have strengthened their grip on the country. Xi, who was endorsed for another five-year term as CPC Secretary General, has now already surpassed the influence and power of his near-term predecessors such as Hu Jintao and Jiang Zemin. Xi appears now to be on pace to be rivaled only by titans such as Deng Xiaoping or even Mao Zedong.

While Xi’s entrenched position is unquestionable, there remain concerns about his desire to make crucial reforms and act as a responsible leader of an emerging superpower that could set an example for others to follow. This concern has been magnified even more as a result of the Trump administration’s abdication from global leadership on a range of issues, including climate change and liberal free trade.

Xi Jinping is currently serving as General Secretary of the Communist Party of China, President of the People's Republic of China, and Chairman of the Central Military Commission.
Xi Jinping is currently serving as the General Secretary of the Communist Party of China and as the President of the People's Republic of China. Thierry Ehrmann

This point brings us to China’s signature foreign policy initiative – the Belt and Road Initiative (BRI) – which has served as a focal point for Xi’s vision of China’s role in increasing connectivity, transport links, and trade routes across the Eurasian land mass and to Africa.

Stadtansicht von Shanghai, 2013 | City view of Shanghai, 2013Übersicht von Shanghai mit Straßen im Vordergrund und der Skyline im Hintergrund. | View on Shanghai with streets and the skyline in the background., 26.01.2010

The Belt and Road Initiative (BRI)

The Belt and Road Initiative (BRI) is a development strategy proposed by China’s President Xi Jinping. The BRI is the modern equivalent to the ancient Silk Road that was established more than 2,000 years ago. In 2013, the Chinese government revived the trade route by investing in infrastructure projects to link China to Central Asia, the Arab world, and Europe. The BRI consist of two major trade routes: the Silk Road Economic Belt and the 21st Century Maritime Silk Road. However, the BRI aims to go beyond physical connections, creating a transnational platform that includes policy coordination, financing collaboration, and social as well as cultural exchange. 

Regional geopolitics also continue to shape the strategic shifts in thinking as many states in the region – such as Japan, India, and the United States – remain concerned about China’s growth and push outside its borders, evidenced by initiatives such as One Belt, One Road and the Asian Infrastructure Investment Bank. But, in addition to geopolitical concerns about Chinese motivations for expansion and its desire to use the BRI and the bank as a cloak to support its serious issues of overcapacity in sectors such as steel production, there are also real concerns about the transparency and governance of these initiatives.

In other words, infrastructure development in the region should be done for an “inclusive good” for the broader region rather than an “exclusive good” that disproportionally benefits Chinese state-owned enterprises at great social and environmental cost to countries in South and Central Asia.

Some of the promise of BRI – such as enhancing rail and road links and creating connectivity on energy supplies and digital supply chains – is appealing and should not be dismissed outright because of geopolitical suspicion. That said, Beijing has yet to articulate this vision into a real tangible strategy with measurable benchmarks and, most importantly, critical project oversights and promise of good governance.

"Any projects done in Central Asia must not skirt around international standards on environmental protection and should be in accordance with the Paris Agreement and the 2030 Agenda and its Sustainable Development Goals."

Jonathan Berkshire Miller

In order to achieve sustainable growth and development, the BRI will need to prioritize transparency of its practices and also open the development contract process, potentially alongside the Asian Infrastructure Investment Bank and the Asian Development Bank, in a fair and open manner. The activities and long-term planning of Chinese stakeholders involved in the BRI must not be shrouded in the larger initiative. Moreover, it will be critical to ensure that there is a fair and regulated process for tenders and reciprocal market access to all states across the spectrum of the BRI – not just Chinese state-owned enterprises.

Booklet at the Asisa Europe meeting organized by the Friends of Europe and the Friedrich Ebert Stiftung.
With Europe envisioned as an end point for the BRI, Beijing should sustain and enrich its work with the EU. Glamlight Photography

In order to ensure greater transparency and adopt international best practices and regional representation, the BRI should embrace and work closely with international institutions – such as the Asia-Europe Meeting, the Central Asian Economic Regional Cooperation, and the South Asian Association for Regional Cooperation. Similarly, Beijing should sustain and enrich its work with the European Union and also its member states – seeing as Europe is envisioned as an end point for the BRI – in order to facilitate their contribution to the shaping and integrity of the project. 

In addition, there needs to be great attention and transparency towards sound financial stewardship regarding the procurement of infrastructure and also the structure of loans and assistance. In order to counter corruption and the potential for the misappropriation of funds, there needs to be strict oversight and strong international lending standards applied to BRI projects to ensure that states on “belt and road” routes do not suffer from any unmitigated graft. While infrastructure is needed, it would come at a crippling price if the regions on China’s periphery became trapped in an unpayable public debt crisis. Therefore, loans must be structured in a way that ensures fair and sustainable development without ensnaring the region as economic vassals of Beijing.

Construction workers in China.
Construction workers are a common sight in a fast-growing country like China.
The increasing consumption in China poses major challenges for the environment.

Finally, it is important that BRI projects do not come at the cost of the environment in these regions. There are already significant concerns about the threat to biodiversity and fish stocks in the South China Sea and Indian Ocean. Moreover, any projects done in Central Asia must not skirt around international standards on environmental protection and should be in accordance with the Paris Agreement and the 2030 Agenda and its Sustainable Development Goals. Specifically, infrastructure investments should be in line with the SDG climate goals and allow developing states in the region to transition to clean-energy and low-carbon pathways.

Grafik Seidenstraße
merics - Mercator Institute for China Studies

In conclusion, the BRI, if engineered properly and done in a collaborative and open way, can bring much prosperity and sustainable development to a region which badly needs new infrastructure and would benefit from greater connectivity. But in order to be beneficial for countries on the BRI spectrums, this development must be governed through international rules and best practice and promote sustainable development in an inclusive manner.

Through responsible leadership, and involvement of key responsible stakeholders in Europe and elsewhere, Beijing can ensure that its signature foreign policy project benefits the region and puts it on a positive course for future connectivity.

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