This week's editorial dives into the historical context of BRI.
Sri Lanka is an interesting example for potential partners of the BRI that are considered smaller than China. On one hand, the investments accompanied by such partnership create huge economic and business opportunities, e.g. tourism, expansion of the harbour and higher employment. On the other hand, it displays perceived realpolitik. China has learned its lessons from the Opium Wars, for example the 99-year lease of Hong Kong.
China has evolved through these learned lessons by the teachings of former colonial powers. In that sense, the BRI may be partially considered as consolidating regional interests and influencing the circumstances China operates in [Harbored Ambitions: How China’s Port Investments are Strategically Reshaping the Indo-Pacific]. Being patient and acting swift like thunder characterizes the BRI. Allegedly, China has been trying for at least 10 years now to open up Sri Lanka by persuading local politicians. This may become an obstacle for China [Along the road: Sri Lanka’s tale of two ports].
Some critics find the economic logic behind the BRI hard to grasp, since certain projects may not have a return on investment (ROI). True as this may be, the airline industry might provide some insight. Airliners use the hub-and-spoke system, i.e. a point-to-point transit system. The platform (BRI) as a whole needs to generate a profit, not the individual routes (BRI-projects). Therefore, at this stage the ROI for certain BRI-projects is considered less important, as long as the ROI of the BRI is not in danger. The losses are considered sunk cost. Regional dependency on China is another form of criticism. However, the same could be said about the 'Marshall Plan' after WOII at the dawn of its conception. And look at the EU as a regional and a global powerhouse [After A Brief Silence, Skeptics Of China's Belt And Road Initiative Are Speaking Up Again].
The AIIB is considered a dominant force within the BRI. Its institutions are utilized by mitigating risk and accumulating a cash pool innovatively. Members reach their decisions through consensus. And if no consensus can be reached, the president takes the decision and is accountable for it. This strict management system convinced credit rating agencies to award good ratings, as does the Basel Committee. Some tech-companies have disrupted the economy. The Chinese are breaking the same molds, but on a different level [Asian Infrastructure Investment Bank – Raising expectations].
China has had an ambiguous attitude towards the outside world throughout its long-lasting history. The conflicting interests (preserving autonomy vs. facilitating trade) are prevalent in the background. To fathom this complex dynamic without any historical context is highly unproductive.
BRI can be considered as a platform for future generations of China to shape their future, just like the Marshall Plan did for others.
A. Cikmazkara
This week's Silk Road Headlines
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