Author: Huiyao Wang, Southwestern University of Finance and Economics
At the end of 2022, 150 countries and 32 international organisations had signed more than 200 cooperation documents related to joint infrastructure projects with China under the Belt and Road Initiative (BRI). The 2022 report to the 20th National Congress of the Communist Party of China noted that China should promote opening up to the world and development. Anchoring the BRI in a multilateral framework could help China achieve these goals.
The BRI is an ambitious plan by China to build global infrastructure while connecting itself to trading partners. Since its launch, there have been diverse responses to it from the international community. Some countries welcomed the opportunity to form new trade routes, while others — notably, the United States — depicted it as a sign of China’s efforts to overturn the world order. Doubts about the Initiative also emerged around issues related to the environment, labour standards, transparency, government procurement and social responsibility.
The BRI is largely built around China’s bilateral relations with other countries. Bilateral memorandums of understanding (MoUs) and joint statements supporting the initiative are the main forms of cooperation agreements that anchor the BRI. The legal terms in these agreements, though, are relatively weak. The validity periods stipulated in the MoUs are typically short and signatories can withdraw at any time. To a certain extent, MoUs have become a potentially unstable way for China to codify cooperation with other countries. They appear to be more political overtures than genuine commitments to economic and business cooperation.
Multilateral development of the BRI could increase its global reach and enable the Initiative to play a greater role as a new platform for global governance. China has launched a multi-level and diversified multilateral cooperation mechanism for the BRI and invited countries to participate and ensure its multilateral development.
It will be very difficult to attract support from some key international players in furthering the reach of the BRI. The United States, some of its allies and those in the international community who are suspicious of Chinese ‘debt trap’ diplomacy will undermine opportunities for China to expand its economic, strategic and geopolitical power. Yet there are ways in which China could build trust and potentially lock in further multilateral cooperation.
First, international and multilateral structures for decision-making could be established to strengthen the BRI and manage how it provides infrastructure. If several countries were offered and accepted real responsibility over what is considered a Chinese initiative, this could involve establishing a BRI International Steering Committee. Invited countries could send representatives to participate in the committee, helping to form a new order of global and regional governance over the BRI.
A BRI Steering Committee could be aligned with existing multilateral institutions of global and regional governance such as the G20 and the Asia-Pacific Economic Cooperation forum. Countries could regularly gather to discuss BRI-related agenda items and carry out extensive exchanges and consultations. The agreements, plans, mechanisms and projects jointly implemented would promote sequential development at various stages of BRI projects.
Second, the BRI could attract international organisations under the United Nations system to connect and participate in BRI projects. The initiative could encourage the United Nations to establish a BRI cooperation agency, giving full play to the bridging role and global influence of the United Nations. UN involvement in the BRI could also establish alliances with UN system agencies such as the United Nations Development Programme and World Trade Organization. While the support of the United Nations would encourage participants, getting the support of the United Nations is likely to be difficult as the United States and certain other nations are likely to block UN agencies from assisting BRI.
Third, China could engage more developed countries in BRI third-party market cooperation and enhance its cooperation with the United States and Europe in infrastructure construction plans. China has signed cooperation agreements with France and Japan in third countries and such agreements could be expanded to other developed countries. Third-party market cooperation agreements emphasise complementarities. These complementarities include China’s high-level production capacity, the advanced technology of developed countries and the infrastructure needs of developing countries. Bringing these together will provide a new model for high-quality joint construction of BRI projects and an effective means of promoting multilateralism. China could propose infrastructure cooperation between the BRI the EU-led A Globally Connected Europe and the US-led Build Back Better infrastructure initiatives — despite the Build Back Better plan being initially created to counter BRI.
Fourth, China could cautiously consider joining the Paris Club. The construction of the BRI involves huge sums of lending. China can greatly relieve the international community’s doubts about the BRI if its lending practices follow internationally accepted rules. As an emerging creditor, China still lacks experience in managing and controlling external debt risks. The Paris Club enables regular communication between major creditor countries. China could consider joining the Paris Club and joining on to following transparent and sustainable international lending rules and become a responsible creditor country. The move will help mitigate China’s external debt risks and safeguard global financial stability.
Fifth, China could update the Asian Infrastructure Investment Bank (AIIB) and encourage cooperation between international development banks and the BRI. Improving and renovating traditional infrastructure in developing countries, building digital infrastructure and enabling the green transition to achieve carbon neutrality offer potential areas of cooperation. Infrastructure spending can spur investment demand and boost job opportunities, though there are funding gaps.
China could expand the AIIB’s target sectors and regions and provide support for eligible infrastructure investment projects worldwide. A repurposed AIIB could work with the World Bank and other continental development banks such as the European Bank for Reconstruction and Development, Islamic Development Bank and African Development Bank. So long as the global geopolitical environment allows, the arrangement could form an international, standardised, open and transparent infrastructure development system and expand the supply networks for global products.
Since 2013, the BRI has grown from a vision to a series of bilateral arrangements. But the Initiative has the potential to serve as a multilateral platform for international infrastructure development. Harmonising global infrastructure standards and norms of open development could enable more countries to participate in the BRI, help countries explore cooperative development opportunities and promote the recovery and development of the world economy.
Huiyao Wang is President of the Center for China and Globalization, Professor and Dean of the Institute of Development at Southwestern University of Finance and Economics in Chengdu, China.
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