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24 August 2018

Simon Draper: China’s mysterious Belt and Road Initiative

SIMON DRAPER

People take pictures in front of a “Golden Bridge on Silk Road” installation, set up ahead of the Belt and Road Forum in China in 2017. OPINION: If you’ve hosted any visitors from China lately, you may have felt like they were talking a mysterious new language. Conversations with Chinese guests have been increasingly peppered with the phrase the “belt and road initiative”, often shortened to BRI. The belt and road Initiative isn’t particularly new; it’s been around since 2013. And it isn’t likely to go away. It’s in the Communist Party of China’s constitution. But five years later, it’s still not getting much traction as a concept here in New Zealand. We know this because the Asia New Zealand Foundation added a question about the belt and road to the latest instalment in our Perceptions of Asia tracking survey.


Only 15 per cent of New Zealanders knew vaguely anything about it.

In a way, that’s to be expected, because the belt and road defies definition. But much as we might prefer just to tune out, we shouldn’t.

The belt and road is the framework off which China is hanging its engagement with the world. I’ve previously described it as China’s moon-shot.

NG HAN GUAN

All roads lead to China. The Belt and Road Initiative is all about connecting the world to China. It began as infrastructure projects, but it’s now so much more.

Another way to describe it is as an ambitious way of connecting China to its neighbouring countries and beyond. It applies to all levels of engagement with China, not just business. If you’re in education or the media, for instance, you might well find that members of visiting Chinese delegations talk the BRI talk.

In May last year, New Zealand became one of the “first western countries” to sign a Memorandum of Arrangement to strengthen cooperation on BRI. A joint action plan is due to be finalised this year.

There’s growing interest in what this might look like. But we’re not hearing much of particular relevance yet from Chinese experts. New Zealand doesn’t fit the usual mould of China’s BRI partners, who tend to be developing economies closer to home.

Instead, we are hearing more honesty from China about the domestic drivers for the BRI, maintaining economic growth and addressing excess capacity in the Chinese economy – and maintaining political stability. It’s clear it is still an evolving concept.

Douglas Grimes

The modern Silk Road is made up of roads, shipping and plane routes, and also train tracks.

While some countries have embraced the belt and road, for others it’s more contentious. Malaysia’s prime minister has said he would like to scrap already-suspended infrastructure projects initiated by the previous government.

Meanwhile, Australia, Japan and the United States have formed a partnership to invest in infrastructure projects in the indo-Pacific. And there are grumblings in the Pacific, most recently from the Tongan prime minister, about the ability to meet debt repayments from China’s concessional loans.

It’s important, then, to have an informed conversation about the opportunities and challenges the initiative presents New Zealand. In recent months, we’ve seen the publication of a couple of useful home-grown reports. The most recent was published by the New Zealand Contemporary China Research Centre.

The earlier report, Belt and road initiative: A strategic pathway, was prepared by PWC for the New Zealand China Council, and sets some suggested areas for cooperation.

Kiwis tend to like clarity – if there’s not a checklist of what the belt and road means, it’s easy to think that it’s not well thought-out and therefore we can just ignore it.

But the belt and road will never be clear. It’s deliberately vague. And yet it’s very consequential for New Zealand’s relationship with China.

Just because you might not understand it, or even like it, it doesn’t mean it’s not important.

For our part, the Asia New Zealand Foundation is leading a team of trade policy experts to Beijing and Shanghai next month.

Both China and New Zealand say they want trade liberalisation, but it’s quite a challenging time to make progress with that. It will be good to get a better understanding of our respective priorities and where we may be talking at cross-purposes.

MERCATOR INSTITUTE FOR CHINA STUDIES

The reviving of the Silk Road: These projects were being planned and undertaken as of December 2015 in China’s Belt and Road initiative.

While BRI is not a trade agreement, Chinese experts generally describe it in the context of Chinese President Xi Jinping’s wider promotion of globalisation and trade liberalisation. But it is what you would call a bilateral hub-and-spoke initiative (China is the hub. New Zealand a mere spoke). This jars a bit for New Zealand as a country that has benefited from regional and multilateral trade agreements in which we are all equal spokes.

There’s no doubt the belt and road will continue to come up in New Zealand’s interactions with China for the foreseeable future, including at the opening of the new embassy in Beijing.

SUPPLIED

Executive director of the Asia New Zealand Foundation Simon Draper.

Once again, it comes back to that old adage, knowing your customer. With China as New Zealand’s largest trading partner, we can’t ignore the belt and road. Even if you don’t totally understand what it is yet, it is clear that it’s important to China and will therefore be important to business.

Simon Draper is the executive director of the Asia New Zealand Foundation.

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