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What is Belt and Road?

A grand idea deserves a stirring introduction and President Xi Jinping did his best to sound dramatic three years ago, when he launched one of China’s boldest ever foreign policies in Kazakhstan.

“As I stand here and look back at that episode of history, I could almost hear the camel bells echoing in the mountains and see the wisp of smoke rising from the desert,” the Chinese leader intoned.

Xi was giving a history lesson that dates back two thousand years to a time when China’s Han Dynasty traded with Asia, the Middle East and Europe through a fabled Silk Road of trails and caravan routes. Today the Chinese want to rediscover that heritage with ‘One Belt, One Road’, an incredibly ambitious plan for a new era of trade with the countries along the transport routes that stretch from China through Central Asia into Europe.

 

Just getting started

Xi’s plan is called yi dai yi lu in Chinese. In English it is commonly described as ‘One Belt, One Road’, which is sometimes shortened to the acronym OBOR.

More recently, official Chinese sources have adopted the wording ‘Belt and Road Initiative’ in English.

Belt and Road is exactly what it says it is – a plan based around two core arteries: the Silk Road Economic Belt and the 21st Century Maritime Silk Road.

The Belt is a land-based route leading from China to Europe via Central Asia. The official outlines of the route stretch from Xi’an to Rotterdam in Holland. And rather confusingly, the Road is its sea-based equivalent, passing through Southeast Asia, Africa and the Middle East on its way to Venice in Italy.

Rediscovering history: President Xi Jinping wants to revive ancient trading routes

Rediscovering history: President Xi Jinping wants to revive ancient trading routes

China’s long-term goals for Belt and Road in diplomatic-speak are policy coordination, infrastructure, unimpeded trade, financial integration and people-to-people bonds. At the moment the plan is at an early stage and investment in infrastructure is the primary activity, much of it in south and central Asia. Hundreds of projects for railways and roads, power stations and transmission lines, oil and gas pipelines, ports and airports are under construction or at the planning stage.

But Belt and Road’s ambitions transcend the practicalities of cement and steel. The ultimate objective is a new spirit of trade, transport and communication that will benefit all of the countries along the route.

All of this activity should give the global economy a boost, first as the investment in roads and railways takes shape, and then as trade and commerce follows in its wake. In its fullest scope, Belt and Road could reach 4.4 billion people across 65 countries that generate about 40% of global GDP, the World Bank has suggested.

 

A strategy or a sound bite?

One of the challenges in talking about Belt and Road is that the Chinese haven’t offered precise outlines of what they hope to achieve with it. Nor is there a single body charged with planning or delivering on the idea. Indeed, it isn’t always clear whether construction that has been labelled as part of the plan might have happened anyway. In many cases, people have jumped on the bandwagon, headlining their projects as part of the Belt and Road effort, when there may not be much of a connection.

100

The number of countries and international organisations participating in Belt and Road, according to President Xi Jinping

The shortage of specifics is deliberate on the Chinese part, however, as it leaves more room for interpretation and experimentation. That isn’t too different to Deng Xiaoping’s approach to the economic reforms of the 1980s, when he talked about ‘crossing the river by feeling the stones’.

Beijing is even being cautious about how it explains Belt and Road, instructing that it shouldn’t be described as a strategy, a programme or an agenda, says Xie Tao, a professor of political science at Beijing Foreign Studies University.

In Chinese the term for “initiative” is preferred, because an initiative is focused on delivering a public good and depends on willing cooperation from others, Xie says.

The message is that Belt and Road is an inclusive effort that will boost everybody, and isn’t just a blueprint for Beijing’s benefit.

China’s critics query this claim, of course. Yet there’s no doubt that Belt and Road is capturing attention because so many people hope to benefit from it. It helps that Belt and Road means different things to different people. Chinese policymakers see it as a chance to spread their currency, the renminbi, internationally as well as redirect some of the country’s surplus steel and cement. Construction bosses sense opportunities to build roads and power plants, while railway executives are chasing contracts for thousands of miles of new track. China’s provincial governments want to grab investment for their home turf, while cash-strapped countries along the Belt and Road are desperate for finance for roads and railways of their own. And naturally, the world’s lawyers, bankers, consultants and engineers want a slice of the action too.

 

Where is Belt and Road happening?

The Chinese haven’t drawn up an official list of participants, although the plan is often described as involving more than 60 countries, comprising almost two-thirds of the planet’s population.

This summer Xi Jinping said that more than 100 countries and international organisations are already taking part in the initiative. China has signed agreements with more than 30 countries along the routes to invest in Belt and Road infrastructure. But the wider count includes other nations, like all the members of the Asian Infrastructure Investment Bank (AIIB), which is expected to be a key source for much of the lending under the plan.

Belt and Road’s impact is going to be felt thousands of miles from the Silk Road of old. For instance, later in this guide we mention how the new railways could deliver more profit for New Zealand’s sheep farmers by allowing longer shelf life for Kiwi lamb in Europe’s supermarkets.

Xi-Jinping-2

Again, the Chinese haven’t wanted to define Belt and Road in a rigid way. “The Initiative is open for cooperation,” the official document launching the plan explains. “It covers, but is not limited to, the area of the ancient Silk Road. It is open to all countries, and international and regional organisations for engagement.”

In a similar style, the initial work on the plan has reached out beyond the two-pronged ‘Belt and Road’ map into six ‘economic corridors’, which are hosting much of the construction of pipelines, power stations, roads and railways.

The most symbolic of these offshoots is the New Eurasia Land Bridge, anchored against railway lines running from Lianyungang in China’s Jiangsu province through Alashankou in Xinjiang to Rotterdam in Holland.

But there are other corridors, stretching north into Russia and Mongolia, west into Central Asia and southwest into IndoChina and out towards India.

Another of the corridors reaches 3,000km from Kashgar in China’s Xinjiang province to Pakistan’s Gwadar, a port on the Arabian Sea. Billed by Chinese officials as a flagship for the Belt and Road plan, it already has deals in place worth $46 billion, for hydro and solar power, coalmines and wind farms, highways and railways, pipelines and communication networks. An ‘early harvest’ section of the plan will see some $26 billion invested in projects slated for completion by 2018.

 

And why is Belt and Road happening now?

The short-term reason is that Xi Jinping is investing his personal and political authority in getting it going. That makes it a pressing concern for his officials, who are keen to show that they are responding. Belt and Road has also become a buzzword for leaders outside China, especially those who want to attract some of its investment.

But the plan is more than Xi’s brainchild. Many of its origins pre-date his presidency, including the ‘Going Out’ policy, which prompted a surge in Chinese investment in resource-rich Latin America and Africa over the past decade. In other examples of what some commentators have described as China’s ‘Great Leap Outwards’, its consumers have become a global force, its tourists are heading overseas in large numbers, and its consumer brands are starting to win fans in foreign markets.

Belt and Road is also following in the footsteps of market forces on the Silk Road, where Chinese firms have been investing for a while. Some of the transport breakthroughs aren’t brand new either – the first Silk Road train to leave Chongqing in western China for Duisburg in Germany departed five years ago, long before Xi’s government started to promote the railroads in earnest.

All the same, Xi’s role is a crucial one. Until recently China’s leaders had stuck to Deng Xiaoping’s famous guidelines that they should avoid the international limelight, making sure to “hide our capacities and bide our time”. Now the times have changed and China’s outlook is more boldly international. Xi has proved this point personally by visiting more than 40 countries since becoming president. Belt and Road is another indicator of the same trend, as a plan to show how China’s skills in trade and investment can reach out beyond its borders to the benefit of the wider world.


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