NEWS
The Belt and Road Initiative is becoming a weapon in the trade war between the USA and China
The Belt and Road Initiative is China’s main foreign economic project. The key goal is to provide the People’s Republic of China with the resources required to strengthen the country’s own economy and support its growth. For this purpose large-scale infrastructure, energy and logistics projects have already been implemented for the past few years in the countries of Middle Asia and Central Asia. The investments come from China. It is hard to overestimate their importance for the region. Countries that are the worse for wear economically receive new railways, ports and power plants. They would never have been able to implement such projects on their own. All these factors facilitate the development of countries participating in the initiative, buttress their economies and reduce unemployment.
By helping the economically weak countries of Middle Asia and Central Asia, China is not only laying the groundwork for economic growth; it is also boosting its own security. Growth in the region’s prosperity will reduce the basis for the dissemination of radical Islamic sentiment, and accordingly terrorism.
While the Belt and Road Initiative is delivering undoubted benefits for all participating countries from an economic and social perspective, the situation is far from rosy from a political perspective. Analysts and observers – both Asian and European – do not rule out the possibility that China has another goal in Middle Asia and Central Asia. It wants to leverage this initiative to reduce the influence of the United States in the region, and possibly dislodge it entirely. Leading politicians in India and Vietnam have already publicly spoken out about the political expansion of the People’s Republic of China through the initiative.
This a dangerous situation. According to the publication The Economist, only the presence of the USA can ensure a system of checks and balances in the region. If this is destroyed, there is a danger that the region will end up entirely under China’s control. Certain participating countries of the Belt and Road Initiative are already unable to cope with the financial burden of implementing the initiative. They risk amassing large debts and ending up under China’s financial control, de facto becoming satellite states. For example, this is currently happening in Pakistan. The country was unable to service the loans taken out on projects under the Belt and Road Initiative and has turned to the IMF for help.
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The USA has in turn expressed its concerns that owing to the Belt and Road Initiative China is gaining such significant influence in Middle Asia and Central Asia that it will at some point start exerting such influence to attain geopolitical goals.
However, it must be recognised that these concerns could become real, inter alia, owing to the policies being implemented by the United States. Donald Trump’s protectionism is pushing the Chinese government to develop its economy without considering the response of the West, and this means even greater rapprochement with Eurasian countries. The following is just one clear example. Several hours before the official declaration of the trade war— the imposition of 25 per cent tariffs on imports of Chinese goods with a value of approximately USD 34 billion — the Chinese authorities declared that they wanted to link up the region’s economies where the projects of the Belt and Road Initiative are being implemented into a single trading network. This will help to mitigate the adverse impact of the US duties. In addition, this will help Chinese companies turn their attention to the markets of partner countries in the initiative. In particular, for this purpose the People’s Republic of China has intensified its support for agricultural infrastructure projects in the region.
It is hard to assess whether the measures being taken by the US administration will be implemented for the long term. However, it is clear that they will result in consolidation of China’s hegemony in the entire region.
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