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By: Anish Beeram
For the past decade, Xi Jinping, Chinese president and leader of the Chinese Communist Party, has consistently attempted to push forward his One Belt, One Road Initiative. The mission is to revitalize the Silk Road from ancient times, by economically linking Asian, African, and European countries through trade and infrastructure. However, the initiative was poorly received, with the European block fearing debt-trap diplomacy and the greater Asian sphere wary of Chinese interaction, constricting the Chinese ability to promote strong infrastructure and building projects. For the past year, COVID-19 has further weakened the Belt and Road Initiative, pushing countries away from China and its plan.
How has the pandemic changed countries' attitudes towards the BRI?
Internationally, the greatest drawback of the Belt and Road Initiative is the sheer amount of funding it requires. Economists have approximated a net cost of 6 trillion dollars for the BRI to be completed. As a result, the project had been stalled due to the pandemic imposing global economic shutdowns, uprooting markets, and cutting off producers. In China, a lack of supply chain viability made it challenging to combat the spread of the pandemic, while the country was forced to incur large debts in order to reroute production and development of goods. In the short term, that prohibited the CCP from advancing the BRI, as long as they were hemorrhaging money on pandemic-related issues. However, COVID also economically weakened Europe as well. The European bloc was already under heavy financial pressure as countries like Greece and Italy were languishing through heavy austerity measures. As a result, the pandemic placed a burden on the European bloc to support their own internal financing, shortening investment in global trade and the BRI. Consequently, Xi Jinping has been shifting the focus of the BRI in order to appeal to the future of economic recovery from the COVID-19 pandemic on a global scale.
What changes has the pandemic caused to the BRI specifically?
First, it prompted a strong shift towards green technology, which is a blossoming global industry. The CCP felt that a focus on green technology would attract Europe, Africa, and the majority of the Pacific Countries, as it has a three-fold effect.
Green technology is a long-term project with inevitable returns. This is because combating climate change is a global imperative, which therefore makes the technology extremely valuable in the international market. By investing in green technology, it ensures that countries can diversify their economies by entering the green market early, especially after the pandemic decimated already existing industries.
Due to the profitability of green technology, there would be a boom of high-paying jobs in the green sector. These range from manufacturing solar panels to researching carbon-capture technologies. For developing countries, as well as countries burdened with massive debt, this lucrative investment would pay massive dividends for the job market by allowing workers to escape generational poverty and poor labor conditions.
In Asia and Africa especially, climate change has already begun harming existing industries, so investing in green technology supports currently damaged sectors by combating climate change. For example, the Vietnamese agricultural industry is predicted to lose about 2 million hectares of rice land, due to sea level rises, which is uniquely devastating since over 70% of the Vietnamese population works in agricultural, rural areas. As such, the green shift of the BRI is the perfect incentive for Asian countries to revitalize their own economies.
Thus, the Chinese Communist Party has transitioned to market the BRI as a green revolution, in which they expand the production and placement of solar panels across Asia and Africa, both countering climate change and reviving damaged economies.
Second, the pandemic catalyzed a shift towards BRI-facilitated healthcare along with transportation networks. There are 6 key lines of connection through the BRI:
A Eurasia Land Bridge, connecting Europe to Russia, Poland, and Belarus through railway.
China, Mongolia, and Russia Economic Corridor, which interconnects with existing land bridges.
China, Bangladesh, Myanmar, and India Economic Corridor, linking China to South Asia through railway,
China, Central Asia, West Asia Economic Corridor, involving railways between Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Iran, and Turkey.
China-Pakistan Economic Corridor (CPEC), linking the Chinese Xinjiang province to the Pakistani port, Gwadar.
China-Indochina Peninsula Economic Corridor, connecting Vietnam, Thailand, Cambodia, Laos, Malaysia, and Myanmar.
China intentionally engineered the transportation lines to interconnect and weave into each other. They mechanized this during the pandemic to specifically move healthcare equipment, PPE (personal protective equipment), and COVID vaccinations through Sinovac, Covishield, and Sinopharm. Essentially, the CCP used the scope of transportation in the BRI to promote the movement of pandemic relief products, in order to incentivize Europe, Asia, Africa, and the developing world to join the BRI.
Third, the COVID-19 pandemic caused the CCP to promote a new “Digital Silk Road” project, which focuses on developing information and communications technology infrastructure through BRI routes. This expansion targeted a specific front of digital innovations: 5G investment technology.
In Latin America, China attracted media attention for tapping into global 5G markets, but as a result of the pandemic, this digital focus shifted over to Asia, Africa, and Europe. In late 2019, China began extensive 5G investments into Russian and Cambodian infrastructure development programs, while bolstering Chinese techno-conglomerates. Through 5G, China is advertising cross-border e-commerce, telemedicine, internet finance, blockchain, and overall economic growth for developing countries in the case that they join the remodeled BRI.
How does China uniquely benefit from a “Digital Silk Road”?
It builds a Chinese reliant digital sphere in order to grow Chinese techno-hegemony. Through the expansion of proprietary Chinese digital technology, as well as state-run tech firms, China will be able to cement its digital footprint across the world in two ways.
Through the global Banking Sector. By building technological communications capabilities in the developing world, China ensures that Asian, African, and under-developed European countries can integrate into the global market through e-commerce. However, through the BRI, all of the crypto-currency development, digital financing, and internet transactions will be facilitated through Chinese servers and tech-firms, as companies like Huawei (5G), Ultrain (Cryptocurrency), and Lufax (Internet Banking/Lending) have negotiated joint agreements with the CCP.
Through expanded Globalization. By giving developing countries in Asia, Africa, and Europe the means to grow digital networks, data centers, and cost-effective communications, China modernizes those same economies, allowing them to have a stronger influence on the global market. That uniquely helps China, because China has multiple free trade agreements throughout the developing world. Through the BRI, if countries become more affluent, then China can harness more of their capital through existing trade networks. For example, China has established the Regional Comprehensive Economic Partnership (RCEP) with countries in the Pacific such as Japan, Malaysia, Myanmar, Singapore, and Vietnam. Under the BRI, if those same countries experience a digital transformation, then the comparative value of RCEP increases, giving China the capability to profit from other countries' advancement. Ultimately, that increases the CCP’s financial capital and globalized interconnectedness, which they can use to bolster state industries in all sectors of their economy.
For the last decade, the Chinese government has touted an economic revitalization through the hard infrastructure of the Belt-and-Road Initiative. However, the COVID-19 pandemic has effectively shifted this into a soft infrastructure investment plan, where the CCP focuses more on the future propensity of high-demand, lucrative goods, in order to attract countries that have been devastated under the pandemic’s economic shutdown. In the end, China is poised to take control of the Pan-Asian and Euro-African economic zones through their post-COVID BRI paradigms.
Discussion Questions:
What has been the international community’s response to the BRI, pre-pandemic?
How has the CCP used green technology to appeal to damaged post-pandemic economies?
Why does the BRI uniquely benefit China in the digital information market?
In what ways can China capitalize on the high demand for pandemic healthcare supplies?
In a post-pandemic world, how will the altered BRI impact China’s global plays for hegemony?
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