By Simon Denyer
BEIJING — When President Trump withdrew from the Trans-Pacific Partnership trade deal in January, critics said he was leaving a vacuum at the heart of the Asia Pacific, ceding the United States’ role as regional economic leader.
On Sunday, China plans to show how it is filling that vacuum.
At a major set-piece event in Beijing, President Xi Jinping will project himself as the leader of a new economic order and extol an ambitious global trade and infrastructure development plan known as the Belt and Road Initiative.
Some 28 leaders from Asia, Europe, Africa and Latin America — including Russian President Vladimir Putin, Burmese State Counselor Aung San Su Kyi and Philippines President Rodrigo Duterte — will attend the two-day summit.
They will be hoping to land a share of hundreds of billions of dollars in promised Chinese lending and investment dedicated to the building of ports and railways, power plants and pipelines across the globe.
Banners are displayed along a Bejing street ahead of the forum, a two-day event that will be attended by some 28 world leaders. (Wang Zhao/AFP/Getty Images)
The plan, launched by Xi four years ago on a visit to Kazakhstan, was initially modeled on the ancient Silk Road, a network of trading routes that spread from China across Asia to the Middle East, Africa and Europe.
Today, its scope has grown to cover almost the entire world — although not the United States.
Xi announced Sunday’s Belt and Road Forum for International Cooperation during a well-publicized speechin January at the World Economic Summit in Davos, Switzerland, in which he cast China as a champion of globalization and himself as a guardian of the liberal economic order.
So far, the Belt and Road plan is more rhetoric than reality, experts say, more a repackaging of existing projects than new money on the table. Still, the message is coming through loud and clear, and Xi’s flagship foreign policy venture — which he is also using to consolidate his strongman image at home ahead of a key Communist Party congress in the fall — cannot be written off.
“This is another chance for Xi Jinping to strut his stuff on the global stage and burnish his leadership credentials,” said Tom Miller, author of “China’s Asian Dream: Empire Building Along the New Silk Road.” But, he added, it also relates to Donald Trump. “Withdrawing from the TPP left a void at the heart of economic leadership in Asia, and Xi Jinping is trying to jump into that void.”
China’s state media have lauded the plan as “globalization 2.0,” a new model for the world economy driven from the East rather than the West but also an exemplar of “win-win” cooperation.
Yet there is no doubt that Xi is at the helm, and the plan has generated suspicion as well as enthusiasm outside China.
India is unhappy that one of the flagship projects is a $50 billion economic corridor to the Arabian Sea that is traversing the territory of its archrival, Pakistan, and Indian Prime Minister Narendra Modi will stay away Sunday.
The leaders of Germany, France and Britain will not be there, either, mainly because of domestic elections but also because Europe’s core nations are wary of any attempt by Beijing to undermine European unity by showering poorer European countries with cash. The leaders are also unhappy that China is not doing more to open up its own markets and encourage foreign investment.
Putin is equally wary of China’s influence in Central Asia, a region that Russia considers its back yard, and is embracing the Chinese plan with “gritted teeth,” said Frederick Starr, chairman of the Central Asia-Caucasus Institute and Silk Road Studies Program at Johns Hopkins University in Washington.
China’s motives for the plan are primarily economic, as it looks for new drivers for growth and seeks markets abroad to counter a slowdown at home. Construction projects may help relieve overcapacity in industries such as steel and cement, while China’s underdeveloped and troubled west could — in theory, at least — benefit economically from closer links with the rest of Asia.
The plan also offers the country’s vast state-owned enterprises a global testing ground, according to Jan Gaspers at the MERICS think tank in Berlin.
There is a security dimension, too, an attempt to stabilize China’s “near abroad” with economic opportunity potentially countering the spread of radical Islamic ideas in Central Asia.
But it is also impossible not to see the project through a geopolitical lens, a “Chinese effort to build a sphere of influence,” says Paul Haenle at the Beijing-based Carnegie-Tsinghua Center for Global Policy.
Smaller nations that become dependent on Chinese money may feel obliged to support China’s stance on international issues, while the infrastructure being built, such as ports, could have a dual use, one day helping China to project its military power.
But will any of it work?
“I am a bit skeptical,” said Matthew Goodman, who has been tracking efforts to reconnect Asiaat the Washington-based Center for Strategic and International Studies. Not only does China have many challenges of its own, he said, but “the infrastructure business is very difficult: everything from geography to land rights, from political, social and environmental issues to making it a viable investment proposition.”
Commerce Ministry data shows foreign direct investment from China to countries identified as part of the Belt and Road Initiative fell 2 percent in 2016 and has fallen a further 18 percent in 2017. Overall, outbound investment to 53 Belt and Road countries reached $14.5 billion last year, less than 9 percent of the global total.
And when projects have started, not all has been smooth sailing, partly because Chinese firms have a habit of striking deals with countries’ political elites and being insensitive to ordinary people’s concerns — a blind spot perhaps developed in an authoritarian state.
Protests broke out in January over a Chinese-built port and industrial park in Sri Lanka. There have also been concerns in the past about dams in Burma and Cambodia and fears about potential Chinese immigration and land grabs in Central Asia.
Railway projects connecting Thailand and Laos and in Indonesia have run into delays and disagreements over costs, while a flagship project in Europe, a railway to connect Budapest and Belgrade, is under investigation by the European Commission over possible breaches of public procurement rules.
But China is learning from some of its missteps, experts say, with its new Asia Infrastructure Investment Bank hiring Western experts, studying global best practices and pledging to be “lean, clean and green.”
It is also infinitely more committed to its Belt and Road project than the United States was when Secretary of State Hillary Clinton launched a New Silk Road plan in 2011 intended to revitalize Afghanistan as the link between Central and South Asia.
Clinton’s idea never really got off the ground, while the Obama administration was criticized by experts for responding negatively to China’s new bank. The Trump administration is sending a delegation to attend the Belt and Road Forum, led by Matt Pottinger, special assistant to the president and National Security Council senior director for East Asia.
But it may also need a long-term regional plan of its own.
“This is a major challenge to the United States,” Goodman said. “If not through the TPP, we need to re-engage, to figure out another way to play in the Asia-Pacific arena. There is so much at stake for us economically and politically. We don’t have an economic strategy, and we need one.”
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