Economic and Political Studies Vol. 6 No. 3, 2018

Geoeconomics with Chinese characteristics: the BRI and China’s evolving grand strategy, Mark Beeson

Abstract: China has become the second largest economy in the world in a historically unprecedented space of time. Subsequently, China has begun to exert a form of geoeconomic influence that is changing the way we think about both the nature of international relations in the twenty-first century and about the precise uses China’s policymakers will put their growing power into. This paper explores these debates and China’s evolving approach to foreign and strategic

policies through the prism of the Belt and Road Initiative (BRI). If the BRI becomes a reality it will quite literally cement China’s place at the centre of a regional network of production processes that will inevitability enhance China’s overall economic and geopolitical importance. At the very least, China’s ascent is forcing a reassessment about the nature of power and influence in the contemporary international system. Not only is the nature of economic organisation currently raising important theoretical and practical questions about the basis of international competition, but it is also becoming increasingly clear that the power and influence of national governments are largely determined by relative shifts in the balance of economic power, as much as it is by more traditional strategic factors.

The Belt and Road Initiative and the influence of Islamic economies, W. Travis Selmier II

Abstract: While the name ‘Silk Road’ connotes significant Chinese influence, in fact since the eighth century the old land route ran mostly through Islamic countries and areas, from present-day Xinjiang to Istanbul, and the old sea route passed through Islamic trading principalities for centuries. Modern Islamic economies, and concepts of Islamic economics, will exert considerable impact on the Belt and Road Initiative (BRI, also known as OBOR) development programmes. Although a non-Muslim majority country, China has a longer, deeper and more influential history of cultural interaction with Islam than any other large country or major culture, save perhaps India and Indian culture. The new ‘West’ for China consists of countries with great variety of Islamic economies, and so Iargue that China has certain unique advantages to engage with Islamic economies and utilise Islamic banking and finance. Using Kazakhstan, Pakistan and Iran as examples, this paper argues that variation across modern views of ‘Islamic economics’ not only results in challenges but also holds promise for BRI development strategies in countries with Muslim majorities.

Synergies between the Belt and Road Initiative and the 2030 SDGs: from the perspective of development, Ling Jin

Abstract: The Belt and Road Initiative (BRI) has its own development logic, which draws mainly from China’s development and cooperation experiences. In addition to aid, the BRI prioritises ownership, infrastructure connectivity and comprehensive approaches to development. The 2030 Sustainable Development Goals (SDGs), drawing many lessons from the implementation of the Millennium Development Goals (MDGs), mark a visible shift from the past donor–recipient relationship to an equal development partnership in the international development narrative. Comparing the two initiatives, this paper identifies synergies between the BRI and the SDGs from the perspective of development and concludes that an emphasis on ownership is the basis for docking the two development visions. The docking process should begin at the stage of strategic dialogue and policy planning between China and its development partners, and infrastructure connectivity is an area of special importance when seeking synergies and developing differentiated approaches to working in different contexts.

The silk road economic belt: balance of interests, Yakov Silin, Larisa Kapustina, Italo Trevisan and Andrei Drevalev

Abstract: The article makes an analogy between the Great Silk Road and the modern Belt and Road Initiative (BRI, also known as ‘One Belt, One Road’ [OBOR]) of China in the context of their significance for the development of international trade, as well as the Central Asian region. The historical role of the Silk Road is considered from the viewpoint of mutual benefit of states along the trade route. The authors consider the concept as the co-development of states, suggested by China within the framework of the BRI, which involves international cooperation on the basis of mutual benefits for all participants, promotion of economic growth and welfare, development of modern infrastructure through joint investments. An attempt is made to assess the interests of Central Asian countries in the Silk Road Economic Belt (SREB) projects. Common interests include construction of modern road infrastructure, exploration and extraction of mineral deposits, transportation of energy resources, establishment of logistics and industrial zones. There is an increase in the transit role of the Central Asian countries within the framework of the BRI, as well an increase in

investments from China. The countries along SREB are concerned about potential threats of the inflow of Chinese labour, the use of technologies that can cause environmental problems, the loss of control over strategic assets, and general growth of financial dependence on China. The article analyses Russia’s perception of the Chinese initiative. It is concluded that the main mutual interest of the two countries is opposing the US’s attempts to establish

a dominating role in the region and thus ensuring the security of the transport system through the institutions of the Eurasian Economic Union (EAEU) and the Shanghai Cooperation Organisation (SCO). The authors reveal a trend of changing the role of Russia as the main transit corridor for Chinese goods exported to Europe and European ones imported to China. The key long-term economic interests of China implementing the BRI have been identified: expansion of foreign markets, access to critical resources in the countries of Central Asia, export of capital, transfer of production abroad, increased exports of high-tech products and services, expansion of the RMB currency area and initiation of structural changes in the global management system. The assessment of China’s initiative by the US and Europe is given as a claim to economic leadership and the struggle to balance the country’s geopolitical position with its economic strength. The authors identify the areas of mutual and opposing interests of some European countries and China. It is concluded that, despite high risks and existing threats, the projects of the BRI can be implemented successfully that achieve the balance of interests and long-term mutual benefits of the countries involved.

Risk assessment of China’s Belt and Road Initiative’s sustainable investing: a data envelopment analysis approach, Qinhua Xu and William Chung

Abstract: China’s Belt and Road Initiative (BRI) aims to promote greater development and connectivity between 64 Eurasian countries. To accomplish this, China must increase its investments in the countries involved as well. The BRI’s investments are expected to positively influence the development and connectivity of countries along the BRI, but a low return of investment cannot reflect investment risks. This study proposes the assessment of the BRI’s investments through the lens of sustainable investing risk. Sustainable investing is an investment discipline that considers environmental, social and governance (ESG) dimensions to generate long-term competitive financial returns and positive societal impact. A data envelopment analysis (DEA) model is used to calculate the composite indicators for each ESG dimension and country, and the average of the three indicators represents the sustainable investing risk score of each country. Results of the DEA reveal that Afghanistan has the lowest environmental rating (i.e. highest risk), Syria has the lowest social and governance ratings, Yemen has the lowest average rating, and Singapore has the highest rating. Moreover, no significant relationship is found between the BRI’s investment efforts and a country’s risk ratings, and an adequate risk ratio reflects the investments of the BRI.

The BRI and RCEP: ensuring cooperation in the liberalisation of trade in Asia, David Vines

Abstract: The Belt and Road Initiative (BRI) offers the prospect of trade integration between Asia and Europe. But it is subject to a number of risks, some of them are similar to those associated with the Trans-Pacific Partnership (TPP). East Asian trade liberalisation in the 1990s involved collaborative autonomy – a cooperative process of outward-looking unilateral liberalisation on a ‘most favoured nation’ (MFN) basis – rather than the creation of a regional free trade area. By contrast, the TPP has sought to create a free trade area, which would have led to trade diversion and have had other unsatisfactory features. The combination of BRI with the Regional Cooperation Economic Partnership (RCEP) might offer the possibility of outward-looking liberalisation, one which is neither dominated by China nor subject to the trade diversion of the TPP. This combination would bring strength and legitimacy to the BRI.