Considered as the most ambitious foreign policy initiative undertaken by China since 1949, its detractors believe China is aiming at building a multi-polar world conducive to its national interests. To achieve this objective Beijing, they suspect, is using its economic prosperity to create more political and strategic space for itself, internationally.
While China describes OBOR initiative as being based on the principles of mutual benefit and win-win, many European countries seem continue to remain skeptical.
Some of the objections to the OBOR initiative that have been articulated by its detractors include: 1. It has no formal institutional structure; 2. China prefers to negotiate through bilateral arrangements with individual states rather than multilaterally; 3. There is a lack of transparency in decision-making, leading to corruption and; 4. China prefers negotiating with the national elite in the countries concerned, to the exclusion of local actors, leading to resistance from within.
Some European leaders see in OBOR initiative long-term geo-political and strategic implications for Europe, creating political and economic dependencies, accompanied by the real threat of poorer EU states succumbing to the political leverage exercised by China, through massive infrastructure investments.
These detractors have cautioned European countries not to take at face value, Chinese claims that OBOR would result in a win-win situation for all partners. They draw specific attention to the CPEC, the flagship OBOR project being implemented on the ground, which, according to them had run into deep opposition from locals, who see it as a means of further exploiting their resources, in keeping with the Chinese alleged track record in Africa.
Referring to the Belgrade-Budapest railway project, they stated that the "unscrupulous" methods adopted by China only further confirmed suspicions about the long-term objectives of OBOR and opined that through OBOR, China would not only try to acquire companies in Europe, it would also try and impose Chinese regulations, standards and gradually increase its influence over countries in the region, making their economic growth dependent on China.
Few, however, doubt some of the obvious benefits that would accrue from the initiative to the developing countries south of China via the proposed Trans-Eurasian trade infrastructure and of course its positive impact on global trade is also not disputed. Domestic regions are also expected to benefit - especially the less-developed border regions in the west of the country, such as Xinjiang.
The project is vast, expensive but at the same time continues to remain controversial.
The economic benefits, both domestically and abroad, are decidedly many and in the process China would certainly get access to new markets helping keep China's national economy on the go.
Among domestic markets set to gain from future trade are Chinese companies - such as those in transport and telecoms - which now look poised to grow into global brands.
Chinese manufacturing also stands to gain. The country's vast industrial over capacity - mainly in the creation of steel and heavy equipment - could find lucrative outlets along the New Silk Road, and this could allow Chinese manufacturing to swing towards higher-end industrial goods.
But some Western countries as well as China's immediate neighbour, India, seem to be wary in their reaction to the proposed OBOR initiative, suspecting it be a design to grab land to promote China's influence globally. Nobody doubts that China is growing into a geopolitical heavyweight and is stepping into the breach that is being seen to be created by the seeming withdrawal of United States in matters of free trade and climate change. "As some Western countries move backwards by erecting 'walls', China is contriving to build bridges, both literal and metaphorical," ran a recent commentary by Xinhua, a Chinese state-run media agency.
The superpower status the US has achieved to a great extent is said to be grounded on the security blanket it offered to its allies. China, on the other hand, is offering instead connectivity because it had realized early on that it could not afford to match the US in the security area -funds-wise as well as weapon systems-wise. If combined with enhanced global connectivity, China's enormous gravity could become an even more meaningful engine for the global economy. Sixty-two countries could see investments of up to US$500 billion over the next five years, according to Credit Suisse, with most of that channeled to India, Russia, Indonesia, Iran, Egypt, the Philippines and Pakistan.
Chinese companies are already behind several energy projects, including oil and gas pipelines between China and Russia, Kazakhstan and Myanmar. Roads and infrastructure projects are also underway in Ethiopia, Kenya, Laos and Thailand. Pakistan is one of the New Silk Road's foremost supporters. The China-Pakistan Economic Corridor (CPEC) marks the dawn of a truly new era of synergetic intercontinental cooperation. Pakistan stands at one end of CPEC, where it is poised to benefit from $52 billion in new roads, bridges, wind farms and other China-backed infrastructure projects.
Perhaps the route's most vocal critic so far has been India's Prime Minister Narendra Modi. Vehemently opposed to CPEC which runs through a part of Kashmir claimed by India, he has called the route a "colonial enterprise" that threatens to strew "debt and broken communities in its wake". He even boycotted the May 15, 2017 OBOR summit in Beijing. Modi wasn't the only leader notably absent from the gathering. No officials from Japan, South Korea or North Korea made an appearance, and of the Group of Seven (G7) industrialized nations, the only representative to attend was Italian Prime Minister Paolo Gentiloni.
"While countries welcome Beijing's generosity, they are simultaneously wary of its largesse. China's growing influence is a concern for nations whose political interests do not always align with Beijing's," Paul Haenle, director of the Carnegie-Tsinghua Centre for Global Policy has been quoted to have explained. While China's growing influence is a concern for nations whose political interests aren't aligned with Beijing's, Chinese spokespeople have repeatedly denied charges of a play for global dominance. The New Silk Road is "not and will never be neocolonialism by stealth," China has repeated said.
The OBOR project already has $1 trillion of projects underway, including major infrastructure works in Africa and Central Asia. The China Development Bank has already set aside almost $900 billion alone for more than 900 projects. China's Big Four state-owned banks have also extended an estimated $90 billion in loans to the economies related to the initiative last year alone. The Asian Infrastructure Investment Bank, which was set up in 2014 to help fund the trade route, has $40 billion in capital from China's foreign exchange reserves and policy banks.
Despite this largesse, though, the AIIB has provided less than $2 billion until May this year. The bank's president, Jin Liquin, told the World Economic Forum summit in China last year: "We will support the One Belt, One Road project. But before we spend shareholders' money, which is really the taxpayers' money, we have three requirements." What were these? The new trade route would have to promote growth, be socially acceptable and abide by environmental laws, Jin said. How well the project fares against these three criteria has yet to be seen.
Copyright Business Recorder, 2017