At the opening of the so-called Silk Road Summit, China’s state and party leader warned against a decoupling of the global economy. Without naming the US directly, Xi said: “We oppose unilateral sanctions, economic coercion and the decoupling and disruption of supply chains.” Ideological confrontation, geopolitical rivalry and bloc politics are not an option for China.
At the two-day conference, Beijing will celebrate the tenth anniversary of its so-called Belt and Road Initiative, or, more briefly, the Silk Road Initiative. During a trip to Kazakhstan in 2013, China’s president announced the new “project of the century”, which is now one of the most controversial foreign policy offensives of the People’s Republic.
Even though Xi Jinping spoke in his speech of his initiative bringing together “the greatest common denominators for the development of humanity,” the guest list in Beijing on Wednesday showed that interest in China’s mega-project has waned significantly. Overall, the participation of foreign heads of state and government was lower than at the last two conferences in 2017 and 2019. Western representatives hardly attended at all; most of the 140 representatives came from Africa and South America.
The highest-ranking EU representative was Viktor Orbán, who was isolated in foreign policy
To mark the milestone birthday, the highest-ranking EU representative at the two-day conference on Wednesday was Viktor Orbán, Hungary’s Prime Minister, who is isolated in terms of foreign policy. Xi Jinping invited his Russian counterpart Vladimir Putin as a guest of honor, who gave a speech immediately after him.
In the past few days, every state guest has been reported in detail in the state media, and state and party leader Xi Jinping greeted many personally. Guests included Chilean President Gabriel Boric, Papua New Guinea Prime Minister James Marape and Kazakhstan’s President Kassym-Schomart Tokayev. A representative of the Taliban also traveled to Beijing.
In the first decade, China estimates that infrastructure and energy projects under the Belt and Road Initiative totaled more than $1 trillion worldwide: including ports, dams, train lines and gas pipelines. Many of the projects were initially set up primarily at the state level; in his speech on Wednesday, Xi Jinping called them the “bone structure” of the initiative to promote the exchange of goods, technology and people. The model was similar to the large-scale investments in infrastructure that Beijing uses to keep its economy going at home.
The huge loans have given China a reputation for luring smaller countries into debt
But there is much to suggest that the initiative has lost momentum. Overall, activity in countries that are part of the initiative is around 40 percent lower compared to 2018. Repeated criticisms of the grand strategy include a lack of transparency and sustainability as well as corruption. In ten years it has never been clear which investments exactly belong to the initiative and which do not.
The huge loans have also given the country a reputation for luring smaller countries into a debt trap. Critics cite the example of Sri Lanka, which slipped into insolvency last year. China is the Southeast Asian country’s largest creditor, and many of the loans were invested in projects that were never profitable. In 2017, Sri Lanka had to hand over its largest port to its creditor for 99 years, in return for which Beijing forgave the country part of its debt.
Xi Jinping, however, drew a positive conclusion in his speech. The Chinese market is now more closely linked to international markets than ever before. “China’s investments in foreign countries and direct investment in China show self-confidence and hope,” Xi said. “Things can only be achieved through win-win cooperation.”
In a paper published by Beijing a few days before the conference, China criticized “economic globalization” that was dominated by “a few countries.” “Certain countries,” it says, behaved as hegemonic powers and practiced protectionism. A criticism that Beijing repeatedly raises against the USA.
While in 2013 Beijing was still promoting closer connections to Western countries in Europe, especially through new train routes, roads and gas pipelines, Beijing is now trying harder to position the Silk Road Initiative as a counter-model to the “Western growth model”. Without naming the United States, Xi criticized in his speech the attitude of “seeing other people’s development as a danger and economic integration as a risk.” Countries should instead respect each other.
Fewer large projects, more “small and beautiful” projects
This makes the Belt and Road Initiative another area in which the country aggressively portrays Western states as negative forces in the world. And himself as a counterpoint: “China’s development is not just about the country itself,” says Xi, but about “mutually beneficial cooperation and shared prosperity.” President Xi has just managed to expand the size of the Brics group and strengthen its anti-Western orientation. Among other things, with the inclusion of the US arch-enemy Iran.
In its paper, China says it is willing to “increase the resources” going into the project. However, the leadership itself admits in the document that the initiative has changed in recent years from large projects to “small and beautiful” projects.
China was forced to change course. In the past ten years, the geopolitical environment has changed massively. The trade dispute with the USA has turned into open rivalry. The Ukraine war has been weighing on the global economy for two years, and China is firmly on Russia’s side in the conflict. Added to this were the pandemic, rising goods prices and interest rates. At home, the country itself is struggling with an impending economic crisis.