China’s Belt and Road Initiative: Cloak for Chinese Strategy to Achieve Economic Dominance
ANINEWS, 31 January 2018, OBOR must be less Chinese centric to survive, say experts
Extract: China‘s plan of winning over friends and supporters in the 70-odd countries through which its multi-billion dollar One Belt One Road (OBOR) initiative runs through could come unstuck in the wake of think tank study claiming that 89 percent of contractors working on OBOR conceived by President Xi Jinping in 2013 belong to Chinese companies.
Question marks over this China-centric approach are bound to exist, says the study undertaken by the Washington-based Centre for Strategic and International Studies (CSIS). The study is actually surprised that only 11 percent of contractors are from companies belonging to other countries.
The Chinascope.org website has flagged this issue, which has also appeared in a report published by the Singapore newspaper Sinchew.
According to the CSIS, of the 34 current projects in Europe and Asia, around 89 percenthave been contracted to Chinese construction companies and only 11 percent have been given to contractors from other countries.
The Sinchew claims that international analysts have expressed their concern about this China-centric approach, since more and more countries are reportedly having a rethink over extending support for China‘s expansionist goals.
Compared to the Chinese way of favouring its own contractors, contracts that the West has funded, typically under the World Bank and the International Monetary Fund (IMF), are more neutral toward the bidders and the grants have been more diversified.
The study showed that 41 percent of these grants were given to local contractors, 29 percent went to Chinese contractors, and 30 percent went to a bidder from a third country.
By various estimates, the BRI is regarded as one of the largest infrastructure and investment mega-project in history, covering more than 68 countries, equivalent to 65 percent of the world’s population and 40% of the global GDP as of 2017. For more, please see the hyperlink below:
Global Trade, 30 January 2018, China’s Belt and Road Initiative: What Does it All Mean?: US-China Commission Holds Hearing on Five Years of BRI
Extract: BRI is generally understood as China’s plan to finance and build infrastructure projects connecting Asia and Europe, but, noted Nadège Rolland, a senior fellow at the National Bureau of Asian Research, “infrastructure development is in fact only one of BRI’s five components. The others are strengthened regional political cooperation, unimpeded trade, financial integration, and people-to-people exchanges.
“Taken together,” Rolland concluded, “BRI’s different components serve Beijing’s vision for regional integration under its helm.”
Indeed, noted Randal Phillips, managing partner for Asia at the Mintz Group, BRI “does not provide a level playing field for western multinational corporations to compete with Chinese firms.” BRI “is plain and simple an… opportunity Xi Jinping sees for China to take center stage in the world,” he added.
The Trump administration’s support for a ‘free and open Indo-Pacific’ is a welcome development, but more must be done to operationalize these ideas. Resources matter more than rhetoric.”
Although BRI is portrayed as a Chinese juggernaut, it has not been without its difficulties. Pakistan and Nepal recently announced that they are reconsidering some BRI projects, Rolland noted, “because of unacceptable financing conditions in the first instance and irregularities in the bidding process in the second.”
http://www.globaltrademag.com/global-logistics/chinas-belt-road-initiative-mean
Japan Times, 11 February 2018, Revisiting Chinese neocolonialism
Extract: The general features of China’s relations with many countries today bear close resemblance to the European colonial powers’ relations with African and Middle Eastern countries in the 19th and 20th century. Among other things, we witness countries exchanging their primary products for Chinese manufactured ones; China dominating the local economy; countries becoming heavily indebted to Beijing; China exerting greater weight on local political, cultural and security dynamics; and Chinese abroad living in their own “expat enclaves.”
For a number of reasons, Beijing has been at pains to rebut accusations that it is yet another neocolonial power exploiting partners through unequal exchange. It has argued, rightly, that local country shipments of agricultural commodities, coal, gas and oil, and resources like copper, tin and uranium, to China have benefited countries such as Australia, Kazakhstan and Namibia.
It should be added that this is not just about China providing a market, but, in some cases the only market. Also, because of its voracious demand, China is raising the price of resources and thus improving the terms of trade and reducing the inequality of exchange.
Critics offer several counterarguments. First, they deride Beijing’s touted connectivity infrastructure, like pipelines and ports, essentially as initiatives to send more resources to China. They add that Chinese projects afford local countries a scant role and that the debts associated with these projects are depleting national treasuries.
Second, they stress that Chinese projects specifically and investments more generally insufficiently use local suppliers and partners.
Third, they assert Chinese companies and projects contribute little to job creation, partly because they use so many Chinese laborers. Fourth, they assert that China is not sharing important technology. Fifth, they contend that China is doing more harm than good regarding host country industrialization because its cheap goods destroy local manufacturing.
For the more pejorative of the critics, China’s vaunted slogan of “win-win” essentially means China wins twice.
The problem of Beijing inadequately using local partners and suppliers is a genuine one, but the critics’ implied alternative — that Chinese MNCs should automatically use local ones — is not ideal if the latter cannot do projects well.
The issue of Chinese job creation is an important one, too, but there are unrealistic expectations about what Chinese investment and contracting can do.
Questioning the sufficiency of technology transfer by Chinese MNCs also is legitimate. But hammering Chinese firms to do more is not a viable way to redress the problem.
Those countries need to improve their ability to bargain with the Chinese side by leveraging other countries and companies, and manipulating market access. They further need to improve the capacities of their firms and workers to maximize employment, technology transfer and partnership opportunities. Rather than just disparaging China, the naysayers should contemplate how they can empower host countries and encourage better Chinese practices. A better world for host countries does not necessarily follow if host countries do not have Chinese capital, goods and political support, and no positive alternatives are put forward.
CSIS, 30 November 2018, OBOR on the Ground: Evaluating China’s “One Belt, One Road” Initiative at the Project Level
Foreign Policy & Domestic Politics 