The Belt and Road Initiative: Goals and Challenges

The “Belt and Road Initiative” represents a revival of the ancient “Silk Road” idea, which connected China to the outside world two thousand years ago. The German traveler and geographer Richthofen was the first to use the term “Silk Road” in 1877 to describe the routes by which Chinese silk produced by the Han Empire from 206 BC to 220 AD passed to Central Asia.

Although the use of this term was limited to this road during that particular historical era, without referring to the trade routes that connected the two regions during later historical periods, the concept was then used to refer to all the roads connecting China and connected Central Asia. and the Mediterranean basin.

The Belt and Road Initiative, also known as the “Silk Road Economic Belt and the 21st Century Maritime Silk Road”, is a development strategy proposed by China with the aim of international connectivity through the establishment of a China- centric trade network consisting of two main parts, namely the Silk Road Economic Road Belt and the Maritime Silk Road Oceanic.

The initiative aims to create a series of infrastructure projects spanning Central Asia and the Middle East, ultimately connecting the dynamic East Asian Economic Circle and the European Advanced Economic Circle. In 2013, China officially announced the “One Belt, One Road” initiative with the aim of connecting China, Europe, Central Asia and the Middle East, and establishing giant projects such as railways, roads and seaports in infrastructure and productivity. The belt contains six economic corridors stretching from China to the whole of Eurasia, some of which converge as countries stretching from the western Pacific to the Baltic Sea along the Belt Road represent an “area of ​​economic cooperation”.

Objectives of the Belt and Road Initiative

China seeks to implement the Belt and Road Initiative to achieve a number of goals, which can be summarized as follows: (1)

1- Benefit from the growth of world trade:

Global trade is expected to grow further in the coming years, driven by several factors, including an expected increase in the size of the middle class in many regions of the world, particularly in the Asia Pacific, Middle East and North Africa. China seeks to take advantage of this expected growth in world trade to dispose of its products.

2- Improving the position of the Chinese yuan in the world

China aims to continue the process of internationalization of its local currency, “the yuan” to make it the main currency of global trade exchange, especially after the yuan was able to join the “Special Drawing Rights Basket” of the International Monetary Fund in 2016. , along with the four listed currencies, which are the US dollar. The euro, the Japanese yen and the pound sterling, and the use of the yuan in the settlement of Chinese trade deals with member countries of the Belt and Road Initiative is a major step that China seeks to trade its currency.

3- Development of the Chinese economy

The Chinese government has attempted to adopt many initiatives to develop the western regions of the country, which suffer from economic weakness. In 2000, it launched a campaign in this context, under the slogan “Go West” to promote economic growth. to stimulate, and invest billions. of dollars to explore for oil and natural gas in those regions.

The “Belt and Road” initiative, specifically the land belt, will contribute to the economic development of Xinjiang and Gansu, and other western regions, and thus, in part, the initiative represents an attempt to strike a balance in economic development between the various regions of the country. On the other hand, the “Belt and Road Initiative” aims to help China implement its “Made in China 2025” economic plan, which aims to transform China into an advanced economy with high added value, while companies with low-cost manufacturing to other countries in the Southeast Asia region.

4- Improving the position of Chinese telecommunication technology companies

The Chinese government seeks to encourage its companies working in the field of communication technology to take advantage of the initiative, in order to play an important role in establishing the infrastructure of the information and communication technology sector in a large number of of the initiative countries, contributing to improving the activity of Chinese companies, especially Huawei, as well as increasing market share of global e-commerce.

5- Strengthening the Chinese presence in the Eurasia region:

There are views that China seeks through the “Belt and Road Initiative” to strengthen its presence in Eurasia, a region of great geostrategic importance.

6- Expanding the external role of China:

The initiative included countries and regions suffering from internal conflicts and unrest, which required the protection of mega-projects established within the initiative, which required the provision of military forces to protect them, as many of the countries covered by the initiative suffers from weak security capabilities, as is the case in some African countries, many Chinese private security companies have started working there, such as securing commercial ships and oil tankers passing near the Somali coast to protect them from piracy, and in this context, the Chinese “Dewey Security Group Limited” Company also protects Chinese companies working in building construction roads in Kenya.

7- Ensuring the stability of the energy supply:

China is seeking to avoid a serious crisis that would impede access to energy supplies, threatening the stability of the Chinese economy. These fears are increasing, given that (80%) of Beijing’s energy needs pass through the Straits of Malacca, despite the increase in its energy imports from Russia and Kazakhstan. China is trying to mitigate the risks of the “Malaka dilemma”. Therefore, through the “Belt and Road” project, China intends to develop a number of alternative trade corridors to the strait, such as the oil pipeline between China and Myanmar, as well as the “Pakistan-China Economic Corridor”, which aims to the port of “Gwadar.” South Pakistan, in the Xinjiang region of Northwest China, by connecting a cluster of roads, railways and oil pipelines. Upon completion of the project, the corridor is expected to be used to import China’s energy needs from the Persian Gulf region.

Challenges of implementing the Belt and Road Initiative

The implementation of the New Silk Road project faces a number of institutional and security challenges, with the different regimes and political and economic interests of the participating countries. The first challenge is poor governance, deep bureaucracy and potential political instability, as the countries participating in the New Silk Road project have diverse and different political and economic systems with legal and financial risks to political stability or social stability.

The countries participating in the implementation of the New Silk Road project enjoy different levels of development and a great disparity in the management of institutions that can lead to the hindrance of the development of infrastructure and the development of trade and investment among the countries involved in the road.

The second challenge is embodied in the Chinese hegemony over the implementation of various projects without considering the local conditions of different countries. Although the countries participating in the New Silk Road believe that China’s large participation in the implementation of projects, through financing and management, will contribute to the acceleration of completion rates, but it may not have a good positive impact on the local economies of these countries do not have.

As for the third challenge, it lies in the problems facing the implementation of infrastructure projects, where the main issue for expanding the scope of financing infrastructure projects and industrial projects is debt financing, especially financing in foreign currencies, and then private investments do not flow. to countries facing crises with the repayment of their sovereign debt. .

The fourth challenge is represented in the possible repercussions internationally as a result of geopolitical tensions, since there are potential risks from the expected political repercussions of military tensions in the South China Sea, and projects that are a cause of geopolitical competition between major countries, especially the United States, and political imbalances in the world (1).

* Researcher at Al-Furat Center for Development and Strategic Studies/2004-Ⓒ2022
www.fcdrs.com

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Reliable sources:
1- Ali Salah and Shadi Abdel Wahab, The Belt and Road Project: How China Connects its Economy to the Outside World, Future Center for Advanced Research and Studies, No. 26, 2018, p. 3.
2- Muhammad Mutawa, The New Silk Road in Chinese Strategy: The Great Objectives, Strategic Weight, and Challenges, Arab Politics Journal, No. 46, 2020, p. 3.

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