Is China-led Belt and Road Initiative Afraid of Competition?

Gerry Brown

Hardly a day goes by without some lies about Belt and Road Initiative (BRI) being concocted and disseminated by the empire’s propaganda arm, also known as corporate media. In the first 2 or 3 years after BRI was launched, western press and politicians fabricated the narrative that Beijing sought to export its excess production capacity and establish/widen its spheres of influence with the BRI. Since last year, accusations of China springing debt traps and neo-colonizing unsuspecting Third World nations have become the mantra of western corporate media. Lately, they are spinning tales of BRI unravelling and coming unglued.

As the lies and propaganda are exposed for what they are and gaining little traction, the empire and its vassals from Japan and India to EU are ganging up to counter BRI with their own versions of New Silk Road.

The Asia-Africa Growth Corridor or AAGC proposed by Japan and India was unveiled with great fanfare by BRI-sceptic Modi last year. To date, there has not been any tangible sign of AAGC getting off the ground. It looks like AAGC is merely a publicity stunt to stroke the ego of India’s Modi and Japan’s Abe.

Last week, the US announced talks on a tie up between its Overseas Private Investment Corporation or OPIC and India’s counterpart. This came after the US Congress passed a bill to revamp and expand the funding cap of OPIC to $60 billion. The US had earlier entered into agreements with Japan and Australia on a partnership to take on China-led BRI. Japan International Cooperation Agency or JICA has a war chest of $110 billion and an annual budget of $12 billion. Australia has no equivalent development finance agency; AusAid administers some of the overseas assistance under $1 billion a year. India operates bilateral aid focused on South Asia through the Development Partnership Cooperation with a yearly budget below $2 billion. In fact, India receives much more foreign aid and international project financing than it gives to its South Asian neighbours. All told, the four countries or QUAD have way shallower pockets (under $200 billion, with JICA’s interest in infrastructures being peripheral) than China’s commitment of at least $1 trillion to BRI.

After years of griping about BRI not being a level playing field for EU businesses, Brussels recently rolled out “Connectivity Strategy” linking Europe and Asia. The document is long on motherhood statements such as sustainability, environmental friendliness and labour rights – straight out of the empire’s lexicon – but woefully short on funding details. EU’s complaint about Chinese-funded projects not being open to public bidding is disingenuous and fatuous . Which country would lend tens of billions of dollars at concessionary rates and bear the risk of default, and then put the projects funded by it up for public tender? (The terms of such contracts are actually quite unfavorable compared with privatized build-operate-transfer concessions.) No one has stopped or prevented EU from doing the same!

All the concerns about sustainability and environmental friendliness are unfounded. First of all, Beijing is sincere and serious about building a Green Silk Road. For the record, China is the global leader in Green Finance. To date, the Chinese market has issued more than $30 billion in Green Bonds, the most in the world. Second, the use of gas in lieu of coal for power generation can’t be done in all cases, especially when there’s no gas supply at reasonable prices and there is an acute shortage of power. That’s the case in Mindanao Island in the Philippines and in Pakistan. To insist on gas-powered plants in such circumstances is like asking a person trapped in a famine to have a balanced diet and not to eat high-carbs food that’s available, but go hungry (and die!) until meat and vegetables arrive. Third, to put its money where its mouth is, China is building and funding the world’s largest solar farm in a desert in Pakistan that can generate 1,000 Megawatts of power enough for 320,000 households. The project forms part of the China-Pakistan Economic Corridor or CPEC for short.

The zero-sum mentality of the empire and its vassals is in full display. Instead of joining the Asian Infrastructure Investment Bank or AIIB and participating in BRI to help develop trade and the economy in Eurasia – the US, Japan and India have opted to stay out, and now start their own schemes to counteract BRI.

China isn’t concerned or afraid of the competition. On the contrary, China welcomes it if that doesn’t morph into or turn out to be disruption or outright sabotage. The fact of the matter is Asia’s need for infrastructures and their financing are HUGE! The Japan-controlled Asian Development Bank or ADB published a report in February last year on the subject.

According to the ADB report, Developing Asia (developing countries in Asia ) excluding China has infrastructure needs of $13 trillion in the 15 years to 2030, or $870 BILLION PER YEAR. The infrastructure financing shortfall excluding China is more than half a trillion dollars EACH YEAR! In other words, AIIB’s $100 billion dollars in capital is no more than a drop in a big bucket. Even with China’s multi-year commitment of $1 trillion, the gaping hole is far from filled. Multilateral Development Assistance accounts for a paltry 2.5% of total infrastructure needs! The ADB counts on fiscal reforms in Developing Asia and private investors to bridge the yawning gulf . That’s akin to a new government or administration banking on the elusive or self-deceiving “savings through increased efficiency and waste elimination” to balance the budget!

In summary, the infrastructure needs in Asia are so massive that even the Chinese commitment of $1 trillion to BRI can scarcely meet. The zero-sum mentality of the Imperium to counter the BRI is therefore plain stupid and diabolical.