Shakespeare articulated in "Hamlet": 'There is nothing either good or bad, but thinking makes it so.'
The concerns of the risky BRI-endeavours are ever-growing not only for China itself, but also for the developing BRI-partner countries, e.g. Sri Lanka, Malaysia, Maldives and Pakistan. The IMF (a Bretton Woods-institute) is concerned about the mounting of debt upon the BRI-partner countries and US officials associated the loans of the BRI with weaponized capital. Even other critics qualify the BRI-loans as debt-trap diplomacy. Nonetheless, China reacts differently to defaulting borrowers than most developed countries. Sri Lanka agreed to hold a 99 year lease to operate the port of Hambantota, which is considered to be of strategic value for China. Greece has faced strict austerity measures with extensive ramifications on its economy (unfavourable economic development) and the well-being of its population (cutbacks on the welfare state - increase in pension age, no inflation adjustments in wages). These measures might have accommodated China during the purchase of the harbour of Piraeus. [China's massive 'Belt and Road' spending spree has caused concern around the world, and now it's China's turn to worry].
Others focus on the potential of the BRI and the environmental implications it might have. Some even qualify China as a leader in energy investments, i.e. IEEFA. In 2017 China already pledged to spend around $360 billion (2.5 trillion Yuan) on renewable energy by 2020. It seems like China is reducing its need of fossil fuel through energy investments (building three dams that are utilized as hydro power stations) and closing down polluting factories. Reducing smog pollution for health reasons might also be an incentive in this matter. Despite all this, Chinese leaders are discussing to finance a global power grid. This step could be materialized by Chinese technology to transport energy more efficiently than traditional high voltage lines. The latter has an infamous reputation for losing significant amounts of power during transport. The interconnectivity of a power grid could mean that developed countries help other developing countries by providing excess energy though this global grid more efficiently and it helps participants of the Paris Agreement to achieve their goals in reducing CO². However, the interconnectivity of this power grid exposes vulnerable countries to potential blackouts due to geopolitical instability. Others are concerned that China might have geopolitical dominance over smaller countries in Eurasia, and even in eastern parts of Europe [Beijing's New Proposition: A Power Grid to Unite the World].
Assessing the risks involved is paramount for executing a strategic plan. It basically means compromising between what is realistic (stable economic growth) and what is possible (a healthy environment), i.e. strategic ambition versus operational restrictions. Given the track record of China and the ambitions articulated in the 13th five year plan (2006-2020), one can understand that the BRI is plotted out more carefully than others are able to observe. This perceived opaqueness and a non-linear approach enable some to see the BRI as a liability, instead of an opportunity. As Warren Buffet once said: 'Risk comes from not knowing what you're doing.'
A. Cikmazkara
This week's Silk Road Headlines
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