Development, Government and governance, Trade and industry, International relations | Australia, Asia, East Asia

22 July 2020

The influence of the Belt and Road Initiative is far more complex than international commentators have made it seem, Jon (Yuan) Jiang writes.

Australia’s awkward job of straddling the two great powers of its region, the United States and China, is always the subject of much discussion, and this has been exacerbated in recent times by growing Sino-American rivalry. While claiming to strike a balance in supporting its closest ally and maintaining a productive relationship with one of its largest trading partners, strained Sino-Australian relations suggest that Beijing could believe Australia is leaning away from its influence.

As part of this, China’s Belt and Road Initiative (BRI) has become a focal point of Australia’s ‘China choice.’ The Australian Government has only agreed to do BRI work in third countries, they have chosen not to do the same on Australian soil, declaring that BRI projects in Australia would not serve the country’s ‘national interest’.

In turn, the two BRI Memorandums of Understanding (MOU) that the Victorian Government has signed with Beijing regardless of this federal perspective have been fiercely criticised. United States Secretary of State Mike Pompeo recently threatened that the United States would ‘simply disconnect’ from Australia in public because of the potential risks the Victorian BRI deal may bring.

Regardless of its outcomes, it’s clear that the BRI and these MOUs are becoming a hotbed of debate in Australia. But is that fair, and are parts of the overall picture are missing?

Answering this question means more carefully considering the BRI and its strategic intentions. As many scholars have suggested, this could include reinforcing other countries’ dependence on Chinese economic power, which could strengthen its ability to coerce them in times of escalating conflict. While this is a popular view, it is not the whole picture.

The truth is that the BRI in its current form is neither well defined nor well designed and faces many shortcomings. For instance, various provincial governments within China have begun to essentially derail Beijing’s economic cooperation and peaceful development narrative.

One thing that is important about this is that not all of China is in agreement about how the BRI can be used to provide benefit to the community. But, even more crucially, it shows how decentralised the BRI actually is. Some provincial governments, for instance, simply talk of a ‘bridgehead’ that only vaguely alludes to a sense of growing military power. Others have conversely gone as far as to claim the BRI will restore China’s ‘historical glory’, recalling the ancient tribute system.

More on this: Belt and Road: What’s in it for China?

This is not just a matter of public discussion either. Chinese state-owned enterprises are the main participants in the BRI, but many of these are actually owned by local arms of the Chinese state, rather than the central government.

This means that BRI enterprises’ interests are sometimes more aligned with seeing benefits to a local government than they are with the central government in Beijing.

This is just one example to show that the BRI is not a homogenous, cohesively executed masterplan. Instead, it is a constantly evolving and ambiguously defined network of governments and enterprises, with sometimes clashing, and sometimes overlapping interests.

That said, this makes the BRI inherently more flexible than onlookers might think. From digital and environmental developments to more recent advances in the realms of health delivery and space infrastructure, the BRI endlessly produces novel and adaptive development ideas.

This raises a crucial question. If the BRI is not actually under the total control of the central government, why does that government push it so much?

Besides its well-acknowledged considerations of economic development and improved stability, the BRI has roots in China’s domestic politics, a point which has been largely ignored in the international media.

More on this: Just how efficient is China’s Belt and Road?

The BRI’s brand is linked strongly with the personal brand of Chinese President Xi Jinping, who put forward the idea in Kazakhstan and Indonesia in 2013. In fact, a database of Xi Jinping’s Important Speeches records President Xi mentioning the BRI 1,653 times from 7 February 2014 to 23 August 2019, at an average of more than once a day.

This means it is possible to argue that the political success of President Xi, and therefore the party, is now bonded with the BRI for the Chinese public.

Even more crucially, in 2017, the BRI was incorporated into the Party Constitution in the 19th National Congress of the Communist Party, tightly securing the fate of the party’s legitimacy to the success of the program.

This shows that the BRI is not a temporary phenomenon, or a simple policy framework being used as a means to execute a separate end like ‘debt-trap diplomacy’, but a program that is being perpetuated specifically for its own sake, and clearly intended to last beyond any one presidency or political goal.

To an authoritarian government like China’s, party legitimacy is key. This means the BRI must succeed, even if its success is only nominal.

So, what does this mean for Australia? For a start, the Victorian government’s MOUs are not legally binding and very vague, and if viewed from this angle of Chinese domestic politics, can be understood more completely than simply as China attempting to extend its economic influence.

Given the plans in the MOUs were ‘practically meaningless’ in economic terms, federal outrage at their signing is foolish. If anything, Chinese diplomats, who understood that the plans were economically unimportant, may feel slapped in the face for what was essentially an attempt to impress their bosses back home.

This would be especially true for Chinese top officials such as Premier Li Keqiang, Foreign Minister Wang Yi and former Foreign Minister Li Zhaoxing, who came to Australia to accomplish something about the BRI but achieved nothing.

What criticism of the MOUs fails to understand is that for Chinese diplomats, they are essentially a sort of key performance indicator, which relates to their promotion of the BRI’s ‘success’ to their Chinese domestic audience, who now view such success as central to the party’s legitimacy.

As one commentator helpfully pointed out, these MOUs were not signed so that China could entrench its economic might in Port Melbourne, but so that diplomats can go home to their superiors and say ‘Look boss, we have just signed another country to our initiative, I’ll get started on the press release’.

Ultimately, any discussion of Australia’s role in the BRI should understand its ties to government legitimacy in China, and that deals are likely to be important to Chinese officials as symbolic concessions that countries in the region are tacitly supporting the initiative, rather than significant for their economic influence here. This doesn’t mean Australia should simply accept them, but if policymakers can remember this about the BRI, they have a better chance at making clear-headed judgments about such agreements going forward.

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