Inclusive globalization: unpacking China's “Belt and Road” Initiative

2017-05-01, by Weidong LIU, Michael DUNFORD, from China Energy Fund Committee

China’s Belt and Road Initiative (BRI) is a call for an open and inclusive model of cooperative economic, political and cultural exchange that draws on the deep-seated meanings of the ancient Silk Roads. While it reflects China’s rise as a global power, and its industrial redeployment, increased outward investment and need to diversify energy sources and routes, the BRI involves the establishment of a framework for open cooperation and new multilateral financial instruments designed to lay the infrastructural and industrial foundations to secure and solidify China’s relations with countries along the Silk Roads and to extend the march of modernization and poverty reduction to emerging countries.

Executive summary:

China’s Belt and Road Initiative (BRI) is an overall call for an open and inclusive model of cooperative economic, political and cultural exchange that draws on the deep-seated meanings of the ancient Silk Roads. It does indeed envisage specific projects like infrastructure investment and new multilateral instruments. The BRI is, however, conceived as open and inclusive and potentially global.

BRI embodies China’s new thinking about its own development at a crossroad and its globalization strategy, which will in turn influence future globalization. This Chinese vision differs in significant ways from neoliberal/Washington Consensus globalization and some other recent international initiatives in that it is inclusive. It seeks to achieve win-win agreements. While it reflects China’s rise as a global power, and its industrial redeployment, increased outward investment and need to diversify energy sources and routes, the BRI involves the establishment of a framework for open cooperation and new multilateral financial instruments designed to lay the infrastructural and industrial foundations to secure and solidify China’s relations with countries along the Silk Roads and to extend the march of modernization and poverty reduction to emerging countries.

Section 2 introduces the BRI and explicates the Silk Road metaphor. Though Silk Road refers to an iconic Chinese product, it is actually part of the trade and cultural history of the Eurasian continent and Africa, connecting multiple countries/civilizations and facilitating religious, scientific, technological, people-to-people and cultural exchange. China intended not simply to re-establish the ancient trade routes but to carry on the common cultural heritage of Silk Road and use its cultural meaning as a ‘soft’ basis for international cooperation.

In section 3, the role of states and politics is highlighted in shaping not only national development models but also the trajectories of international trade, aid and investment, and examines the ways in which the evolution of China’s development model and its emergence as a rising power push in the direction of a new phase of globalization. China’s development models prove to be effective in reducing poverty in sharp contrast to much of the rest of the world where neo-liberal globalization saw poverty increase. The BRI also reflects a change in China’s own development model.

Section 4 documents the historical–geographical background of the BRI in more detail, identifying the reasons why BRI came to the fore, and its main characteristics.

With China rising as a global economic power, a global investor and an energy importer, it needs a broader vision to help address problems encountered. Upgrading industries via innovation and spatial shift, and exploring new domestic and international markets are two major solutions in China’s quest for new normal-era growth. These solutions require China to play a new and more active role in the global arena. It is against this background that China proposes the BRI as a new initiative for international cooperation and further globalization of its own as well.

Although the BRI seems to refer to transport and communications corridors, it is fundamentally not several corridors but an open spatial system with a network configuration. It is underpinned by a desire to strengthen an open global trading system in which the hand of the market is accompanied by the hand of government, as it rests on the aim of promoting catch-up development and poverty alleviation, which themselves can expand markets for capital and intermediate goods, create opportunities and increase growth.

Prof. Weidong LIU is the Chair of the Center for the Belt and Road Initiative under the Institute of Geographical Sciences and Natural Resources Research at the Chinese Academy of Sciences.

Prof. Michael DUNFORD is Emeritus Professor of Economic Geography, University of Sussex, Visiting Professor of Institute of Geographical Sciences and Natural Resources Research at the Chinese Academy of Sciences.

This article was originally published in Area Development and Policy Journal (Volume 1, 2016 - Issue 3) and has been granted authorization to use and reproduce by CEFC.

Executive summary is based on the article. Copyright © China Energy Fund Committee (CEFC). All rights reserved.