B3W – An alternative to China’s Belt and Road Initiative

Relevance: Countering China’s growing influence in developing and low income countries.

Synopsis: It is an analysis of G7’s counter to China’s Belt and Road Initiative (BRI).

Background

G-7 leaders have proposed Build Back Better World (B3W) to counter China’s rising influence across 100-plus countries through Belt and Road Initiative (BRI) projects. BRI projects are perceived as debt traps laid by China for its strategic dominance in trade, foreign policy and geopolitics in the world.

What is B3W?

The proposal, though at an early stage, aims to address the infrastructure investment deficit in developing and lower income countries. China has capitalized on this gap through its 2,600 BRI projects with trillions of dollars of investment.

Why countering BRI is necessary?

• The BRI projects broadly aim to facilitate cross-border transportation of goods, access to energy, creating demand for existing excess capacity in Chinese industries.
• The overall focus is on developing transportation, logistics, and communications, which would reduce trade and transaction costs for China’s trade. It gives more market access to Chinese markets and ensures a stable supply of energy and other resources.
• China has also tried to rope in more countries and raised the acceptance level of BRI over time through the BRI summit, Boao Forum for Asia, China-Central and Eastern Europe (CEE), Belt and Road Forum, etc

Many countries, including India, would see an adverse trade impact on their products’ competitiveness, market access, resource extraction etc. due to Chinese competition.

Hence, countering China’s BRI via international projects like B3W is a necessity.

Major projects under BRI

China’s true motives behind investment in BRI projects are a China-centric international economic integration, production networks, hegemony in the Asia-Pacific region, and, eventually, the global economy. It is clear from the pattern and the amount of investment in BRI projects.

Aggressive FDI by China: Since the inception of the BRI in 2013, there was a sudden rise in infrastructure investment in BRI projects compared to investment in non-BRI projects.

• Investment in Africa: China is investing in Africa to lay a comprehensive transportation network. It has strategically made Kenya the African hub and plans to connect it with other land-locked countries in the region, including Uganda, South Sudan, Rwanda, etc.
• Central, South and West Asia is China’s second preferred region under the BRI. 80% contracts are concentrated in Pakistan, Bangladesh, Russia, Iran and Kazakhstan. The China-Pakistan Economic Corridor (CPEC), the Bangladesh-China, India, the Myanmar Economic Corridor (BCIM) and the Colombo Port City Project in Sri Lanka, amongst others, are important BRI projects.
  • BCIM is one of the corridors of the Belt and Road project. It aims to connect China’s eastern city of Kunming with India’s Kolkata through Dhaka in Bangladesh and Mandalay in Myanmar.
• Central Asia: China has a plan to complete 4,000 km of railways and 10,000 km of highways within the Central Asian region as part of BRI.
• East Asia: Since the launch of BRI, China has signed various contacts worth $90 billion with the East Asian region. The biggest contracts have been with Indonesia, Malaysia, and Laos.
• Europe: Major projects include a freight train project from Ukraine to Kazakhstan through Georgia, Azerbaijan, Kazakhstan and, eventually, China, covering a distance of 5,475 km. The Greek port Pireaus, the China-Belarus Industrial Park, and the Green Ecological Silk Road Investment Fund are other major projects.

Conclusion

B3W lacks coherent thoughts and proper planning at this stage. Nevertheless, it is better late than never. Moreover, it remains to be seen what role India will play in B3W since it has been a strong opponent of China’s BRI.