The Belt and Road Initiative in South–South Cooperation: The Impact on World Trade and Geopolitics

243 Pages·2021·5.052 MB·English

by  Li Sheng, Dmitri Felix do Nascimento

The Belt and Road
Initiative in South–
South Cooperation
The Impact on World Trade
and Geopolitics
li sheng
dmitri felix do nascimento
The Belt and Road Initiative in South–South
Cooperation
·
Li Sheng Dmitri Felix do Nascimento
The Belt and Road
Initiative
in South–South
Cooperation
The Impact on World Trade and Geopolitics
Li Sheng Dmitri Felix do Nascimento
Faculty of Social Sciences Faculty of Social Sciences
University of Macau University of Macau
Macao, China Macao, China
ISBN 978-981-16-6356-7 ISBN 978-981-16-6357-4 (eBook)
https://doi.org/10.1007/978-981-16-6357-4
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Preface
On a visit to the Macao Museum, we would be surprised by the exhibi-
tion “Reminiscences of the Silk Road—Exhibition of Cultural Relics of
the Western Xia Dynasty,” which features artifacts from the Western Xia
Dynasty founded in 1038. The exhibition “deepens our understanding
of the historical background of the Belt and Road Initiative, which also
brings us to explore its important significance to modern and contempo-
rary development.”1 This reference is just one of the historical references
dating back to the Silk Road, the land route across the Eurasian conti-
nent,whichwasembryonicallyoutlinedbeforeChina’sHanDynasty(206
BC–220 AD).
The period (2013–2021) in which we worked on the development of
the Belt and Road Initiative represents a contemporary historical experi-
ence that encompasses the areas of International Political Economy and
international relations. The structuring of the BRI during these years, as
an instrument of the People’s Republic of China, presented challenges,
changes, and potential within the concept of South-South Cooperation.
Fromaglobalperspective,consideringapanoramaofintenseinstabilityin
theglobalorder(mainlyontheissueofsecurity)andtheeconomiccrises
in developed countries in the context of globalization, most developing
1Macao Museum, 2021, “Reminiscences of the Silk Road—Exhibition of Cultural
RelicsoftheWesternXiaDynasty.”https://www.macaumuseum.gov.mo/en/exhibitions/
85027.
v
vi PREFACE
countries continued to have fragile economies aggravated by increased
technological competition and the financialization of central economies.2
These developments added to the already weakening traditional coop-
eration instruments of multilateral entities that intended to reduce the
distance and inequalities between the Global South and North.3
The purpose of this work is to seek visions, explanations, and anal-
yses that demonstrate, in the development process of the Belt and Road
Initiative,theformationofanarchitectureofintegrationandcooperation
aimed at economic and technological development, which has also had
an impact on geopolitics. We will try to demonstrate that, in addition
to being a proposal for financing infrastructure projects, the structuring
of the BRI and the economic corridors became an interface in the rela-
tionship dynamics among China and developing countries. Thus, from
conception to realization, the South-South Cooperation encountered
(and still encounters) geopolitical obstacles in the insertion of devel-
oping countries, especially due to the rise in the Chinese economy in
relation to developed countries. Regarding the impacts of investments
and partnerships in the areas of commerce and finance, the BRI follows
the dynamics of expansion of the Chinese economy and its geopolitical
pretensions, with the objective of creating power networks at different
levels of cooperation based on the shared hegemony of its decisions.
In the first chapter, The Belt and Road Initiative (BRI): South-South
Cooperation (SSC) with Chinese Characteristics, we seek to demonstrate
thehistoricalrelationshipsbetweenChinaandtheGlobalSouthandshow
how the BRI represents SSC with Chinese characteristics, as a theo-
retical framework for international relations and international political
economics. We will relate it to the process of erosion of neoliberalism in
the face of cooperation for development. As an alternative, China and its
developmentalpathwayarealternativesforcountriesintheGlobalSouth.
Our work also tries to answer questions that are pertinent to contempo-
raneity.DoesSouth-SSCremainahorizonfortheeconomicdevelopment
of countries on the periphery of the Global South? Why did the multilat-
eralinstrumentscreatedinthepost-BrettonWoodsworldfailtointegrate
2Sheng, L. (2012) Dealing with Financial Risks of International Capital Flows: A
Theoretical Framework. Cambridge Review of International Affairs, 25(3), 463–474.
3Gu, X., & Sheng, L. (2010) A Sensible Policy Tool for Pareto Improvement: Capital
Controls. Journal of World Trade, 44(3), 567–590.
PREFACE vii
the global economy? Why did the investment model of western devel-
opment cooperation organizations fail to achieve their goals? Why does
the BRI try to provide different answers than those of the Washington
Consensus? Will we see a reemergence of SSC after the creation of the
BRI?Bypresentingthesequestions,wewilltrytobringoutthespecifici-
ties of the meanings that the BRI has exercised in the multilateralism of
politicalrelationsandintheinterrelationsoftheinterestsofthecountries
that comprise it.
In chapter 2, The Belt and Road Initiative: China’s New Role in
Geopolitics and Security, we will elaborate on what conceptions were put
forward to characterize the BRI as a security and geopolitical risk and
what changes in liberal hegemony are implied by the expansion of the
BRI. We will address the security consideration of the BRI for China and
analyzetherelatedperceptionsandresponsesofChina’srivals,theUnited
States and NATO, whose understanding of the BRI will greatly influence
its development. We will describe the interpretation that US political and
military agents have formulated of the BRI and how Americans see the
BRI as a threat and not an instrument of cooperation. The dilemma of
the security issue in BRI countries with internal conflicts, the potential
risksinthegeographicalenvironmentofChina,andtheBRIprospectsin
the post-COVID-19 world are also discussed.
Inchapter3,BRIandtheEconomicCorridors:OpportunitiesforDevel-
opment, we describe an overview of the development of the BRI and
the six economic corridors it comprises: the China–Mongolia–Russia
Economic Corridor (CMREC), the New Eurasian Land Bridge (NELB),
the China–Central Asia–West Asia Economic Corridor (CCWAEC), the
China–Indochina Peninsula Economic Corridor (CIPEC), the China–
Pakistan Economic Corridor (CPEC), and the Bangladesh–Chinese–
India–Myanmar Economic Corridor (BCIMEC). Different perceptions
of the BRI are analyzed at length, such as from Russia in relation to the
EurasianEconomicUnion(EEU)andtheEuropeanUnion(EU).Specif-
ically, we examine the fragmentation of northern and southern Europe
with the countries that are part of the BRI in the mechanism of Central
and Eastern European countries (16 + 1), as examples.
In chapter 4, Technological and Financial Integration in the BRI, we
will address the problem of the gaps of development in technology and
finance for developing countries. The role of New Development Banks
(NDBs) and Asia Infrastructure and Investment Banks (AIIB) in the
financial architecture of investments for the development of the BRICS
viii PREFACE
andBRIcountriesandtheircharacterizationasMultilateralDevelopment
Banks (MDBs) are explored at length. The Digital Silk Road integration
proposal based on China’s digital ecosystem has also proved significant.
To conclude, we will seek to analyze the impacts of the US–China
trade war initiated by the Trump administration (2016–2021) on the
BRI, the perspective of US–China relations during the Biden administra-
tion (2021), and the disputes that COVID-19 have caused in the Covax
scheme, accelerating global political polarization. However, our task in
bringing the role of the BRI into the South-SSC panorama is a chal-
lenge for a historical process that seems to us to be unfinished. Despite
therecenthistoricalexperienceofanunequalandexcludingglobalization
andthattheBRIdoesnotdirectlydefytheWest-ledmodel,westernhege-
mony (US–EU) presents a set of unilateral practices in the international
politics of its main agents, closing in on “ultranationalist” discourses and
practices to protect themselves from the “unknown other.” The rise of
China,thecooperationinstrumentsbuiltovertheyearsandtheexpansion
of the BRI are part of this context in the search for greater decision-
making space and the right to development that the countries of the
Global South have not yet achieved.
Macao, China Li Sheng
Dmitri Felix do Nascimento
Contents
1 The Belt and Road Initiative (BRI): The South-South
Cooperation (SSC) with Chinese Characteristics 1
1.1 Introduction 1
1.2 The Development of SSC: Still a Long Way to Go 6
1.3 The BRI: A Chance for SSC Resurgence? 19
1.4 The Theoretical Framework to Interpret the Relations
Between the BRI and SSC 30
References 39
2 The Belt and Road Initiative: China’s New Role
in Geopolitics and Security Issue 45
2.1 The Relationship Between the BRI and China’s
Geopolitical Security 45
2.2 The Security Dilemma of China 49
2.3 BRI Under the Security Challenge 51
2.4 The Perspective of the United States 58
2.5 NATO’s Vision of the BRI 68
2.6 The Future of the BRI: When Will Go
in the Post-Pandemic Era? 75
References 77
ix
x CONTENTS
3 The BRI and Its Economic Corridors: Opportunities
for Development 83
3.1 Introduction: What BRI Can Bring to Developing
Countries 84
3.2 Case Studies: The Main Economic Corridors
and Related Countries 87
3.3 The Comparison Between China’s BRI and Russia’s
EEU: Competitor or Complementary? 121
3.4 The BRI in Europe: Divisions of the North and South 130
References 143
4 Technological and Financial Integration in the BRI 151
4.1 Introduction: The Gaps of Development in Technology
and Finance 151
4.2 Financial Integration: The New Development Bank
(NDB) and the AIIB 154
4.3 The Digital Silk Road: The BRI’s Solution to Bridge
the Technology Gap 179
References 198
5 Conclusion 205
5.1 Factor I. The Impact of the Sino–US Trade War
on the BRI: From Donald Trump to Joe Bidden 207
5.2 Factor II. The BRI Amid the Covid-19
Pandemic: US–China Rivalry, the Covax Scheme,
and Accelerating Global Polarization in Politics 219
References 229
Index 233