NIAS Area Studies


PAKISTAN READER

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The BRI Summit 2019
An Under-represented East Asia

  Harini Madhusudan

It is interesting how all of the eastern neighbours of China have not made many official statements after the summit. There could be two reasons, one is that they intend to take part in the economic benefits but do not want to make political commitments. The second reason would be, that the governments are against the initiative but the businesses intend to part-take

Towards the sixth year since BRI as a concept came to being, the second BRI forum was symbolic for China. It showed to the world the magnitude of the support they have received so far and renewed their promises of quality and intellectual property protections. China is looking at the long-term success of the projects and ensures returns on investments.

 

Infrastructure Economies

Japan had its own move of “quality-infrastructure” that it started in 2016, where it addressed issues related to the environmental and social impact of infrastructure investments as well as debt sustainability and the quality of construction involved, directly criticising China’s investment plans. Japan was already a major investor in Asian infrastructure, in 2016 it announced to further increase infrastructure investments by 30% between 2016 and 2020. Fast forward to 2019, Japan has eased its position on China’s investments in the region; this is to the extent that Japan signed up with China to execute 50 infrastructure projects across the world as part of BRI.

South Korea too, in 2013 developed its Eurasia initiative. EAI is based on economic cooperation in Eurasia through infrastructure projects, for example,  the trans-Korean railway, where they hope to encourage peace in the Korean Peninsula. By doing so, South Korea could also access train routes over the Eurasian landmass. This helps them in reducing the logistics costs of its exports to Europe likely by 30 percent. It failed to materialise as they planned it, but the initiative foresaw the elimination of trade barriers and the creation of special economic zones. In the later half of 2018, President Moon Jae In announced that South Korea would be a part of the BRI.

Both Japan and South Korea are export economies, similar to China. Their businesses are inter-connected, for example, if Sony were to produce a product, a part of the hardware would be from China and the software from South Korea. Concepts like that of BRI are a practical option for them to access various markets around the world, knowing that the economies are dependant on each other. There were, however, no official reports that emerged from the two countries after the second BRI summit.

 

The case with Taiwan

With Taiwan, it will be about the cross-strait median; the de facto maritime border between continental China and Taiwan. There has been an increasing push in the leadership of Taiwan to portray themselves different from China and appear more democratic. Taiwan is seen leaning towards the United States and also making military purchases from them. Taiwan, is a very important pawn in the China Containment Policy that the United States is pursuing, a particular trigger for the Chinese leadership. There are however, many Taiwanese companies operating in China and the strength of their economy might encourage China to push their businesses into being a part of the BRI. In the end, Taiwan may have a lot to gain by remaining caught between the US-China Trade war and the BRI.

 

Australian Dilemma

Australia is not an export economy like the other two, but it has been showing interest in making its presence felt in the Asian political frameworks. Within Australia, enterprises, banks and law firms are promoting the BRI as an economic opportunity for the country and, with Chinese endorsement, an Australia-China BRI Initiative has been established to promote Chinese engagement in the Australian economy. China is also utilising the concept to promote its growing economic engagement with northern Australia. However, there are a few strong critics in Australia that say China’s BRI could just be all talk and China can not physically manage to complete this initiative with its existing economic conditions. China would need access to ports in Australia as well, but there were no reports from the Australian media as well, on the second BRI Forum.

It is indeed interesting how all of the eastern neighbours of China have not made many official statements after the summit. There could be two reasons, one is that they intend to take part in the economic benefits but do not want to make political commitments. The second reason would be, that the governments are against the initiative but the businesses intend to part-take; which is probably a reason why the governments want to wait it out before they make formal commitments. Either way, more emphasis needs to be given to the role of the Eastern region to China in the initiative. Despite the views and interests of the region, not reaching the world, or being under-represented; the impact of having all the powerful economies on board to the BRI would have very impressive outcomes. 

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