China undoubtedly needs others’ cooperation and the US and India have the capability to play a critical role
In 2013 China introduced a vast intercontinental connectivity plan called “One Belt One Road” initiative,” later renamed “Belt and Road Initiative” (BnR), that connects Asia with Europe and Africa by land and sea. Under BnR, the Silk Road Economic Belt contains land connectivity as its core area—road, railway, fiber optics, energy— between Asia and Europe, and China and the Indian Ocean. Then the 21st -Century Maritime Silk Road Initiative connects South China Sea with Mediterranean via Indian Ocean. By some estimates, BnR will cover more than 65 countries, and stimulate about US $ 4 trillion in investment in the next three decades.
BnR has come at a time when Western economies have struggled to come out of the 2008 financial crisis, and, there are serious threats to international peace and stability. In the face of these considerable challenges, it is in the interest of the international community to join efforts in making good use of the opportunities BnR may generate and carry out projects transparently, inclusively and effectively. BnR has a great potential for cooperation given the region’s need for massive infrastructure development that would in turn boost economic growth, development and foster security and stability.
However, as China prioritizes infrastructure investment towards the west, in regions such as Central Asia and South Asia, regional power rivalry and territorial dispute might well get into BnR’s way. In Central Asia, Russia has not ceased to see those former Soviet states as its backyard, US has already introduced its own infrastructure plans –New Silk Road –in the region as it drew down its forces in Afghanistan, and India for its growing economic clout also eyes influence in the region. Similarly, regarding the beneficiary countries, there are apprehensions and concerns about Chinese-led projects, primarily in terms of the advantages for the host countries. Therefore, China undoubtedly needs cooperation from other partners.
Importantly, India has of late given the signal that there is room for India and China to work together. Despite concerns and mistrust in some areas, India’s and China’s interests have overlapped in other areas, for instance, Bangladesh-China-India-Myanmar corridor (though slow in progress), China-led Asian Infrastructure Investment Bank (AIIB) and so on; in fact, China already has significant investment in India on infrastructure. In fact, India has become the largest recipient of AIIB financing.
For its part, the United States has the capability to play a critical role to help overcome the aforementioned challenges, but it would act only if it has sufficient incentives from BnR to do so, and if BnR is truly meant for the service of international development ; or perhaps if China cooperates with US on security matters. Despite the bumps on the road in US-China engagement, as the former US Vice president Joe Biden put it, “cooperation and competition with China will coexist.” And there is room for these powers to engage constructively because China is willing to invest massively, is encouraging co-investment with Chinese contractors, and the US is not discarding the possibility of putting its expertise into play.
According to some US experts, BnR projects create opportunities for US firms especially in their areas of strength — telecommunications and clean energy. In addition, there are areas where both China and the US need security on the ground. They can have mutually reinforcing roles in ensuring it; China through its investments and the US through its already established role in the area of security, whether it is Afghanistan or Horn of Africa, among others.
In terms of funding, China plans to finance BnR through AIIB, Silk Road Fund, New Development Bank, Chinese government funds, and the BRICS Development Bank. By some estimates the existing international banks’ capacity to finance Asia’s infrastructure building only covers about 10 percent of the needs, and that together with China’s funding sources will not generate enough funds either. Hence, if US is involved, that is going to draw the IMF, World Bank, and other Asian and European investors into BnR.
Finally, all stakeholders should work together in terms of needs assessment and sustainability of projects, establishing working relationships between different companies, transparency, inclusiveness, social, political and environmental considerations, and not repeating past failures.
Nepal Matters for America; June 29, 2018