Following China’s footsteps from Andes to Amazon: advice from a Colombian journalist

Andres Bermudez Lievano, who has covered China for a Latin American audience from Beijing and Bogota, shares his views about how China reporting in the region can improve

China and Latin America exist largely in a commodity-centered relationship that is defined by a distinct close-distant paradox, bound together by increasing volumes of trade but separated by physical and psychological distance.

For Andres Bermudez Lievano, the relationship is both the cause and consequence of inadequate reporting about China’s involvement in the continent. As a veteran China reporter from Colombia, Andres has been following China’s footsteps from Beijing, where he ran a news service for Latin American publications, to Bogota, where he tracks Chinese companies and bird watchers to help readers make sense of a China presence that they hardly understand.

Besides being a reporter, Andres also spent two years working in the government office in charge of negotiating one of the world’s most historic peace deals, between the Colombian government and an armed rebellion group (FARC), that ended a half-century armed conflict. The experience equips him with particular insights into conflicts and how they should be covered by media. A great number of China-related stories in Latin America are conflict-filled, from communities resisting Chinese extractive industries in areas devastated by violence to countries caught in the crossfire of US-China trade disputes. These social and environmental conflicts often lend themselves to simplistic, dramatic presentations that Andres has a bone to pick.

Panda Paw Dragon Claw recently interviewed Andres on the side of a workshop in Yangon, Myanmar, another country grappling with conflicts complicated by a large inflow of Chinese interests. Andres shared his views on how to better tell stories about Chinese overseas footprint in Latin America and offered invaluable advice to peer reporters around the world who are trying to cover the expanding Chinese presence for their own readers and audiences.

Andres
Andres (right) with villagers of Caquetá, a conflict-stricken department of Amazonian Colombia where the activities of Chinese oil companies have stirred up controversies.

Panda Paw Dragon Claw (PPDC): Could you give us an overall picture of Chinese involvement in Latin America, particular in relation to the Belt and Road Initiative?

Andres Bermudez Lievano (A): Latin America has not had a historically significant relationship with China, beyond maybe one or two immigration booms more than a century ago and some ideological connection in the 1950/60s. It’s only since the early 2000s that the relationship started to warm up again due to China’s growing appetite for resources and commodities that Latin America could offer in large quantity.

Now everybody has to face the political and economic reality that China is already Latin America’s second largest economic partner, leading the third by a wide margin. And it has already become the number one partner for significant economies like Brazil, Chile and Peru. Despite the closer economic bond, you still have that simple understanding of China reduced to clichés, in government, academia, civil society and in media. This is made worse by the fact that there is almost no presence of Chinese actors on the ground, except for a couple of Confucius Institutes.

This is characteristic of a commodity-centered relationship which is transactional by nature. You don’t have a long-term China presence that people can relate to. Therefore, we have a big gap between close economic ties and true understanding.

BRI in LatAm

PPDC: How is this reality manifested in media coverage about the BRI and Chinese involvement in Latin America?

A: There are generally two prevalent frames adopted by media reports on China. One is the perception that China is a dangerous actor, that they are taking away everything, they are so strange, you never know what they are really here for.

The second frame is more of a fantasized China. One common argument among many businesspeople who want to do business with China from Colombia and wider Latin America is “there are so many millions of them, it’s obviously a good deal”. But when they come to China, they immediately hit the wall. They do not understand the market and the Chinese consumers. They have never figured out Chinese taste and what ticks the Chinese people. Our understanding of China does not go far beyond the fact that “it has many people”.

This results in a very simplistic coverage about China. It’s already not very often that media in Latin America cover China. Even when they do, they often get it wrong or they get it in a very black and white way. You have a lot of stories about social conflicts distilled into very simplistic narratives (e.g. small communities against monstrous Chinese corporate giants). You have a lot of reporting about trade numbers without even explaining what those numbers mean. When media report on “trade deficits with China,” for example, nobody bothers to explain why it exists or what goods are being traded both ways, leaving the impression that China is invading with cheap imports. However, deficit is not a problem in itself: it’s the nature of the traded goods that matters. Costa Rica manages to sell value-added products like computer microchips to China in large volume. And that tends to be an underreported story.

As the US relationship with China sours there is a new trending coverage, which is how our relationship with China can affect our ties with the US, which it shouldn’t. Unlike a marriage, you actually can have mature relationships with two different countries. Serious countries like Chile, Costa Rica and Peru would argue that they have successful and well-negotiated Free Trade Agreements (FTAs) with both the US and China. Why not?

PPDC: What is the consequence of such simplistic coverage of Chinese footprint?

A: The consequences are manifested on a conceptual level. First of all, we have no nuanced view of the socio-economic or environmental footprint of the Chinese presence. China’s involvement in the continent is complex and multi-dimensional. For example, I have reported on how wealthy Chinese bird watchers create opportunities for conservation efforts in Latin America. And yet a very respected conservation biologist that I know simply couldn’t wrap his mind around that idea as he has been so deeply influenced by the image –which is sometimes also true- of China as a biodiversity “bulldozer”.

When our analytical framework of China is entirely oriented towards commodities, we cannot understand China on a more complex level. We focus our attention on selling oil, soybean or beef to China and think little about value-added products or a more evolved relationship. Moreover, we tend not to see the impact behind the trade numbers. An increase of soybean exports can have a direct or indirect result of deforestation in Latin America. The interactions between those two factors are already complicated and usually there are more factors in play. But in a commodity-driven analysis these other factors do not come in.

Equally importantly is the pervasive inability to understand the internal complexity of China and its many players that are active in Latin America. Lately there has been a lot of discussion in Ecuador about problems with the Coca-Codo Sinclair hydroelectric project funded by China and built by a Chinese company. When cracks appeared in the structure soon after its completion, one major newspaper ran a story titled “Chinese company Harbin will weld cracks in dam”. They didn’t know that Harbin is a city in China, different to state-owned Harbin Electric International Company. This was a story about THE most important China-related project in Ecuador and they couldn’t get the company’s name right.

This is not restricted to Ecuadorian media. We confuse the China actors all the time. Very few major economies have such an intertwined web of companies and government. To understand the entire State-owned Enterprise (SOE) system is not easy. But without that we easily confuse the Chinese government, SOEs and Chinese private companies. And that affects how reporters cover a situation. Contrary to what many believe, Chinese private companies are sometimes more obscure than an SOE when they operate abroad. And they face LESS public scrutiny. A Chinese SOE blundering abroad is a much larger story as they are better known economic players back home and dispense with what’s considered publicly-owned funds. Knowledge like this will help a reporter gain a nuanced understanding of the vulnerability and strength of key Chinese players in their stories.

PPDC: What does your experience with researching and covering conflicts tell you about reporting on Chinese projects in Latin America?

A: You know conflict is one of the areas that I cover the most, so I tend to reflect more on this. Social conflict or socio-environmental conflict caused by infrastructure and extractive projects is an area we are not reporting properly. Seeing the conflicts after they erupt is already a bit too late. But at least we are seeing them. What reporters really need to do is to lift the rug and look underneath.

There are fundamental social fabrics to the conflicts in our societies that aren’t necessarily created by China, but tend to emerge when Chinese-invested projects go wrong. For instance, respecting the rights of ethnic minority groups is an area we are not doing very well. Non-compliance with such rights, especially the right to free prior informed consent (FPIC), is a major issue. Colombia struggled with it. But when I went to Ecuador, I found that many projects literally never complied with it. You can see how in a series of Latin American countries they end up going around rights that are constitutionally protected. Chinese companies can exacerbate this existing situation in our societies because this is part of China’s reality: China has a complicated relationship with its own ethnic minorities and this probably make Chinese companies less sensitive and less likely to understand the importance of compliance.

Another common problem underneath those conflicts is the scarce availability of public records in many Latin American countries. Everything from contracts, relocation plans to environmental impact assessments (EIAs) are very difficult to access, leading to a strong sense of secrecy and mistrust among affected communities. And even when they are available, we as journalists and civil society have another challenge of not having the skills to read many of these documents properly. For example, in an infrastructure deal between China and a recipient country, is it really better for that country to have more equity share in that project than letting China have more? What is the risk-ownership ratio that will bring the most benefit to the country? These are not issues we can properly interpret for our readers unless we have access to the files and can digest them properly.

Another reality that is fundamental to understanding many confrontations surrounding projects is the sophistication of community resistance. Across Latin America, communities have understood that it’s better for them to fight cases legally, as we have relatively serious legal systems, with strong constitutions and well-respected constitutional or supreme courts. Communities are currently winning major cases in courtrooms. This has caught many governments and corporates unprepared. Communities are more legally empowered than before and sharing their legal strategies with peers.

PPDC: On a micro level, what do you look for in a conflict situation? What exactly lies “underneath the rug”?

A: Relationships among different actors involved in a controversial project are entangled. More often than not, it is not the simple equation of A vs. B. Sometimes projects are approved on a national level, but even local governments are kept in the dark. So in a conflict seemingly between a company and a town, there might be a hidden central government and a sympathetic local government involved, let alone a set of secondary players: public “ombudsman” institutions, private security companies, military or police forces, legal and environmental NGOs, indigenous organizations…

Plus, people don’t usually understand that conflict is a process. They don’t just happen in one specific moment but over a long period of time. Part of doing good reporting on conflicts is to understand how they really began and how they play out over time. If you look carefully, you will find that there are usually a lot of myths around the origin of a conflict. All of this helps us understand how tensions escalated and what are the future possible scenarios. 

A good piece of journalism about a social conflict or an environmental conflict should be able to show all the sides involved, the different things at stake, and whether there is space for real dialogue. Actors involved in a tense conflict situation often have a “race-horse syndrome”, limited by a narrow tunnel vision. Our reporting is supposed to render a more complete picture of the problem, and it can potentially, one would wish, enable actors to better reflect on how to deactivate a social crisis.

PPDC: What would be your advice to peer reporters who are keen to shed light on some of the same dynamics around Chinese projects in their own regions?

A: For stories specifically related to Chinese interests, it is important to incorporate the Chinese actors’ point of view.

And in this regard we are oftentimes guilty of not making enough of an effort to contact them. Even though we know they are not likely to answer or they have to refer the request to headquarters in China, it’s important we continue seeking answers from them. If anything, doing so builds pressure on them. And ultimately, the Chinese side need to realize that it does them more harm to not have their side of the story reflected in the coverage.

We need to enhance skills for reporters to understand key documents such as project contracts and loan deals. And we should also be able to fact-check claims from all sides, including the affected communities themselves. I have encountered communities instrumentalized by NGOs and radical groups that shout slogans like “they take our water!” without any specific facts that proves it. Often groups in conflict will emphasize more extreme positions (thinking these are more convincing), when in fact the more interesting nuggets of information emerge when you get past these simplistic and crowd-pleasing soundbites.  

And finally, we reporters need to follow up on projects over time, understanding them as evolving processes. There is a large Chinese mining company in Peru that carried out a huge, ambitious and well-publicized relocation of a local community which was considered a successful case in the industry. For many that was the end of social conflicts and of the journalistic story. At the exact sixth anniversary of the relocation plan we teamed up with a Peruvian outlet to revisit the place. What the reporter discovered on the ground was completely unexpected: instead of a poster child relocation case, it had developed into two different conflict situations. On the one hand, some people still refused to relocate, which meant the original conflict was still there. On the other side, the new town turned out to be not functional. It looked beautiful on photos, but shop owners did not have customers and their living stand had diminished, meaning a new conflict had emerged.

In infrastructure projects we tend to only follow up when something bad happens. “The Chinese built this road or bridge which now has a crack”, we realize. But few journalists come back to check if the bridge is actually being used or if the dam really provides as much energy as the developer says. Going back to check the utility of the infrastructure project is as important as checking the problems it is having.

The myth of the Belt and Road in Central and Eastern Europe

Analysis of media and parliamentary discourse shows that the BRI has hardly made a dent in Central and Eastern European perceptions of Chinese influence

By Tamas Matura

The rapid development of China is one of the most important global changes of the last decades. The rise of the Chinese economy and the Belt and Road Initiative (BRI) have had a major impact on its connections with Europe. Through the so-called 16+1 cooperation (now 17+1 since Greece signaled its support for the group earlier last month) exchanges between China and the Central and Eastern European (CEE) region have become more intensive than ever before. And this development does not go unnoticed. Voices of concern in Europe have been particularly strong. EU politicians worry that with China’s increased economic involvement in the region, its political clout could grow to an extent that it would be able to “divide and rule” Europe by undermining EU solidarity on multiple key issues such as transparency norms and human rights.

Given the polarized international debate over the BRI, it is easy to feed such concerns into the familiar narrative of a menacing China. Yet before jumping onto that narrative, it is important to take a step back and assess the true scale of China’s influence in the CEE region and key in-region differences when it comes to perceptions and attitudes. In the past two years, my colleagues and I have been working on a major international research project, called ChinfluenCE. The aim of the research was to assess the image of China and to understand how the wider public and political elites perceive topics related to China. Our research found major differences between media sentiments towards China in the Czech Republic, Hungary and Slovakia. Most significantly, despite all the anxieties about a rising China in the region, the BRI has not been high on the agenda in the above three countries since 2013 (when the initiative was launched by President Xi in Kazakhstan), in both the media space and political discourse.  Instead, our research suggests that intentionally or not, China has yet to developed a narrative about BRI or CEE-China connections on its own terms in the CEE region.

The Core 4

The core of the CEE region is represented by the so-called Visegrad Four countries, namely the Czech Republic, Hungary, Poland and Slovakia. Hungary has been playing a leading role in the 16+1, organized the first China-CEE meeting in 2011 and one of the annual prime ministers’ summit later in 2017, and may become an important link in the BRI. Budapest recently elevated its political relations with Beijing to the level of a comprehensive strategic partnership, and Hungary hosts the biggest stock of Chinese investment in the region. Meanwhile Warsaw and Prague are the two biggest trade partners of Beijing among the four. Due to their geographic location, these countries are an inherent part of any potential land-based transportation corridor between the EU and China.

As reliable public opinion surveys are not available for the time being, the only source of information is to analyze how the BRI is depicted in the media of the CEE countries, and how politicians perceive and talk about the BRI. In the first phase of the project, we have collected, coded and analyzed all printed and electronic media coverage on Chinese politics and economics in the Czech Republic, Hungary and Slovakia for the period between 2010 and Q2 2017. As a result, we have created an enormous dataset based on almost 8000 articles published in the three countries. (The research in Poland is still going on, and will be published in the coming months).

Analyzing the database, we found that the discourse in the Czech Republic and Hungary is heavily politicized. Czech media sources have taken a critical perspective of China with a particular focus on values such as human rights. Meanwhile the Hungarian media focuses mostly on economic issues and the development of bilateral relations, with political values or human rights almost completely missing from the agenda. What is noticeable in Hungarian media, however, is that almost all negative news on China comes from anti-government media, while almost all positive coverage of China comes from pro-government media, indicating the politicized nature of the discourse. In Slovakia the media discourse is overall neutral, and economic issues are the most widely covered topics. Where strong media sentiment is present, however, there is a similar trend as in Hungary of pro-government media adopting a positive tone on China and anti-government media adopting a negative tone.

In the second phase of the project, we looked through almost thirty years of stenographic transcripts of the debate on China in the Czech and the Hungarian parliament and analyzed how the attitudes of different political parties and individual politicians towards China have evolved over the past few decades. Like in the case of the media discourse, there are major differences between the Czech and Hungarian politicians’ attitudes towards China. The Czech debate have experienced significant ups and downs in the past few decades, as it has gone from criticism to a more pro-Chinese period and back to a rather critical standpoint. In the Hungarian Parliament the mood has never been outright pro-Chinese. Right wing parties used to be fierce China bashers in opposition, but they have been neutral or even pro-China since their election victory in 2010. Like the media discourse, the Hungarian parliamentary debate is ideologically less underpinned, and human rights or other values have mostly disappeared from the agenda since 2010.

The 16+1 cooperation and myth of Chinese influence

It has to be emphasized that BRI has never been the main framework of cooperation between China and the CEE countries. The 16+1 initiative is. The story goes back to 2011 when the Hungarian government organized the first China-CEE meeting, where numerous political and business leaders gathered in Budapest. The event was so promising that the Chinese Ministry of Foreign Affairs decided to establish a permanent cooperation with sixteen CEE countries.

16-1-map

The initial idea was to create a semi-institutionalized framework that would enable all parties to meet each other once a year. This was obviously a huge opportunity to the leaders of these relatively small countries to negotiate with their Chinese counterpart every single year. The framework has been developed ever since, it spilled over numerous fields of cooperation between the involved parties, ranging from tourism, through infrastructure cooperation to financial and economic issues. The success of this format is debatable. Some see it is a major success as it has increased the level of exchanges to unprecedented levels between China and the CEE countries, while according to others it is nothing else but a huge pile of unfulfilled promises, without significant economic gains on the side of the CEE countries.

Having grown an average of 9% per year over the past eight years, it is certainly true that CEE exports to China have grown significantly. However, the share of exports to China was as low as 1.2 percent of the total exports of CEE countries in 2017. The stock of Chinese investment equaled to EUR 5.5 billion, which was only 1.2 percent of the total stock of FDI in the five major economies (Czech Republic, Hungary, Poland, Romania and Slovakia) of the region in 2017. Meanwhile the total stock and share of Chinese capital in the five biggest economies (Germany, the UK, France, Italy and Spain) of the EU was EUR 92.3 billion in 2017. In fact, the export dependence of Germany, the UK and of France on China is considerably higher (6.3, 4.4 and 3.5 percent respectively, according to data from UNCTADstat) than any of the CEE countries. Thus, it has to be underlined, that none of the CEE countries are dependent on exports to or investment from China in any aspect. On the contrary, where China has gained real economic influence is in Western member states of the Union.

The BRI in the CEE region

Although Beijing tends to label every kind of cooperation nowadays as BRI related, in fact the number of real BRI projects in the CEE countries is very limited. This is especially true when it comes to the eleven EU member states of the 16+1, as these countries are entitled to receive EU funds for infrastructure development, thus the business model offered by Beijing is less than attractive for them. One prime exception is Hungary, as Budapest has agreed to the joint development of the Budapest-Belgrade railway line (what would eventually connect the Port of Piraeus in Greece managed by China’s COSCO cooperation to the heart of the EU). This project is definitely part of the BRI. However, the construction has not even started yet, and observers expect further delays. When it comes to transport cooperation, Poland is a forerunner in the region, as it has established a direct railway service between the city of Chengdu and Lodz in December 2012, well before the BRI was announced in late 2013. It is considered as the most successful BRI related cooperation of the region, as almost 800 freight trains commuted between China and Poland in 2018. In the Czech Republic, Hungary and Slovakia, the BRI has not achieved tangible results so far.

Consequently, the initiative has had an almost insignificant impact on the media discourse of these countries. Based on media analysis, the BRI has not been high on the agenda in the Czech Republic, Hungary and Slovakia since 2013. Altogether 126 articles (3.1% of the total number of coverage on China) touched upon the BRI from 2013 to mid-2017 in Hungary, 56 articles (2.1%) in Slovakia and only 24 articles (1.9%) in the Czech Republic. In comparison, thousands of articles scrutinized the development and status of the Chinese economy or Sino-Hungarian business relations.

Likewise, when it comes to parliamentary discourse, the impact of the BRI on politicians has been minimal. Hungarian Members of Parliament (MPs) mentioned China 92 times between 2014 and 2018 in the Hungarian national assembly, and the BRI was never mentioned as a topic of its own. The somewhat vague concept of the “new Silk Road” was cited in 13 speeches, but all of these occurrences were related to the topic of the Budapest-Belgrade railway line. One may speculate that the true nature and complexity of BRI is barely known by Hungarian MPs. The Czech case is very similar, as the BRI has never been mentioned in the Czech Parliament since 2013, as a clear sign that the initiative has had a minimal impact in the country.

In summary, despite the enhanced relationship between China and the CEE countries, public awareness of the BRI is still very limited in some of the most prominent countries of the region. Consequently, it would be easy to influence the discourse, as China has failed to develop a narrative on its own terms in the region. Of course, it is also possible that Beijing has never intended to induce public or political discourse on the BRI in the region, since the 16+1 (now 17+1) has served well to frame the narrative in the countries in question. In any case, it is highly probable that Western narratives will continue to shape the mind-set of CEE public and elites in the future, and given the increasing levels of anti-BRI criticism in Washington and in the EU, this important geographical link in the chain of the BRI may develop less friendly attitudes towards the ideas of Beijing.

Tamas Matura is an Assistant Professor of the Corvinus University of Budapest, the founder of the Central and Eastern European Center for Asian Studies, and the Hungarian representative in the European Think Tank Network on China.

 

Monthly Round-up: The Summit

What we know about the second Belt and Road Summit in April 2019?

On Jan 7, a note appeared on an obscure website for exhibition-related information saying that the National Conference Center in Beijing would clear its schedule for the entire April. Events that had booked the Center for April dates would have to give way to a major one associated with “the Party and Nation’s economic and diplomatic strategy.” The 2nd Belt and Road Forum for International Cooperation (hereafter “Belt and Road Summit”) is finally coming.

Dubbed the most important “home-field diplomatic event” of the year, the Belt and Road Summit has sucked up much oxygen from China’s diplomatic and propaganda space as soon as clock started ticking for 2019.

On Mar 8, at a press conference held during the annual National People’s Congress sessions, Foreign Minister Wang Yi highlighted three features of the Summit: higher level (more heads of state compared to the first one); bigger crowd (thousands of participants from 100 countries) and more activities (12 sub-forums and a gathering for entrepreneurs).

While the Summit will certainly be presented as a huge success domestically, the world would probably judge it with a difference set of standards. The information that is available so far can provide some guidance as to what to expect from the Summit.

BRIForum
The Belt and Road Summit’s official website still displays information from 2017. No information of next month’s Summit is available yet.

Roll call

As Wang Yi’s press conference has shown, the number of leaders attending is a key indicator of the global political support the Belt and Road Initiative (BRI) has garnered and will be keenly watched by observers around the world.

29 heads of state (and heads of government), not including President Xi himself, attended the 1st Belt and Road Summit in 2017. This year’s Summit will very likely beat that record given the fact that in the 2 years since 2017, more countries have signed up to the BRI. At the time when the 1st Summit was held, 39 countries or international organizations were on board. According to the National Development and Reform Commission (NDRC), now 123 have formally reached understanding with China with regard to their involvement in the BRI. A portion, if not all, of the new sign-ups will certainly translate into head-of-state participation in the Summit.

But quantity is one thing, some guests are more equal than others. For a BRI that has been dogged by negative media coverage internationally on its setbacks and a “hidden agenda”, high-level participation by certain countries has the narrative busting effect that would define how the Summit is viewed from outside.

Based on existing Chinese language media reports, the leaders who have confirmed attendance include Russian President Vladimir Putin, Philippine President Rodrigo Duterte, Ethiopian Prime Minister Abiy Ahmed, and Kyrgyz President Sooronbai Jeenbekov. While these “old friends of China” can be seen as usual suspects and do not change the dynamics of the Summit, other participants are more interesting. Malaysian Prime Minister Mahathir Mohamad, for example, has accepted the invitation despite his rollback of China invested pipeline projects. The Prime Minister’s renegotiation of Belt and Road deals that his predecessor had reached with China was widely interpreted as an indictment of BRI as pushing unsustainable debt burdens onto other developing countries. His presence at the Summit will help assuage some of the concerns that Malaysia is backing out of the BRI.

Another interesting guest is Italian Prime Minister Giuseppe Conte, whose government’s recent decision to formally endorse the BRI with an MOU drew pressure from Germany and the United States for undermining a Western united front, particularly the G7 group. Italy was reportedly frustrated with the EU’s inaction about its trade deficit with China.

It is worth noting, however, that both Mahathir and Conte’s predecessors were represented in the first Belt and Road Summit 2 years ago. Their appearance this time help to consolidate the BRI’s reception by their respective countries. But at this time of increasing global questioning of the BRI, particularly from the US, what China needs more is probably a breakthrough that resembles Britain’s surprising signing-up to the China-led Asia Infrastructure Investment Bank (AIIB) in 2015. But a polarized us-versus-them atmosphere around on the initiative would make such a breakthrough extremely challenging.

An evolving agenda

Beyond the political symbolism, what the Belt and Road Summit can actually achieve is another question that observers will be asking. For example, Will Mahathir use the occasion to determine the fate of the controversial East Coast Rail Link project that has been hanging in balance ever since his election?

China has its own criteria to gauge success. Dialing back to 2017, the first Belt and Road Summit produced two key documents, a Leaders’ Joint Communique and a List of Outcomes that contains 5 categories, 76 items and 279 action points. NDRC has apparently been tracking the completion of those action points. By Jan 22, 2019, 96.4% of them had either been completed or incorporated into the routine workstreams of the Chinese government.

The List of Outcomes provides a framework of understanding how the Summit’s substance is conceived and organized. The five categories (strategic and policy coordination, infrastructure connectivity, investment & trade expansion, finance cooperation, and people to people connection) correspond to the “5 Pillars” of the BRI. And the 76 items help translate those grand ideas into concrete, measurable steps:

BRIoutcome

Reuters recently got hold of a draft of the MOU that is being negotiated between China and Italy, which illustrates with a concrete example how “strategic and policy coordination” is being formalized at bilateral level. The draft is notably broad stroke but gives a prominent nod to sustainability, Paris Climate Accord and environmental cooperation, invoking an image of “high quality Belt and Road” that Beijing has been touting. While the basic framework of the MOU follows the 5 categories above, Environmental Cooperation is remarkably given a standalone place in the document, no longer a part of the “people to people connection.” The green message is more salient when compared to earlier MOUs China signed with other countries. A 2015 MOU with Poland, for example, was much more rigidly modelled on the “5 Pillars” with a heavy emphasis on infrastructure/investment and no sustainability component.

Some recipient countries have also been pushing to redefine BRI on their own terms. Indonesia, for one, recently laid out four conditions for its BRI projects, which include use of environmentally friendly technology, maximize hiring of local labor, technology transfer and added value for local industry. It is a sign that countries are maturing in their approach to BRI by voicing their own demands and conditions, which may find their way into the BRI agenda reshaped by bilateral and multilateral interactions.

Minister Wang Yi’s press conference also indicates that this year’s Summit might run with an “evolved agenda” by going beyond the original “5 Pillars” and providing more air space for topics that were grouped together before. At the first Summit, 6 parallel sessions corresponding to the 5 Pillars plus one on think tank collaboration were organized. This year, besides the main forum and the Leaders Roundtable which Xi will preside over, 12 sub-forums plus one entrepreneurs convention will also be offered. Information from the Ministry of Ecology and Environment seems to suggest that an ecological sub-forum is definitely being planned. Other topics of sub-forum might emerge in the coming weeks. The general trend appears to be for the Summit to go more granular on issue topic discussions.

Green Belt and Road?

The general elevation of green issues in official rhetoric, MOUs and forum agenda begs the question if any concrete outcomes on the green governance of the BRI will come out of the 2nd Summit.

At the beginning of this year, Minister of Ecology and Environment Li Ganjie announced that the International Coalition for Green Development on the Belt and Road (hereafter “Coalition”) would be formally launched in 2019. The Belt and Road Summit will be an ideal occasion to do that. The Coalition has been at the center of a controversy involving the United Nations Environment Program (in particular its former head Erik Solheim who was forced to resign for violating UN codes of conduct), the United States and China. The UN agency was questioned for its appeared coziness with the strategic initiative of a single member state. Whether China will successfully rollout the Coalition despite the setback is worth watching at the coming Summit. According to Solheim’s vision for the Coalition, which he laid out just before his departure, it should take up the roles of promoting green finance, creating basic principles and standards, and bringing in third parties to help countries along the Belt and Road achieve green development.

It is unclear at this moment whether specific environmental issues will be given a spot in the agenda. For example, China’s involvement in fossil fuel projects along the Belt and Road has received much global spotlight lately. Any institutional development under the BRI on climate change beyond a rhetoric nod will be significant progress toward harmonizing the initiative with the Paris Climate Accord. We have seen some concrete developments on the issue of desertification, where Chinese institutions have mobilized finance, technology and civil society support for afforestation projects along the Belt and Road. The Belt and Road Summit can benefit from an articulation of China’s commitment to “ecological civilization” in the implementation of the BRI.

Interview: What’s missing in the conversation about China’s expanding global presence?

Longtime Belt and Road observer Zhang Hong shares her insights about the historical evolution of China’s “Going Out”

ZhangHong
Former Caixin journalist and George Mason University PhD candidate Zhang Hong (Stella)shares her observations about China’s “Going Out”.

Within the Chinese journalistic community, a “foreign correspondent” is a rare species. Unlike their Western counterparts, Chinese media do not have a long history of dispatching reporters globally to cover events from where they are unfolding. Due to resource constraints and, more crucially, a lack of strong domestic demand for news thousands of kilometers away from home (with the exception of a handful of countries such as the United States), media organizations in China invest grudgingly into overseas operations. The situation differs between state-owned outlets (such as Xinhua News Agency and China Global Television Network), which in recent years have increased their global presence, and more independent outlets (such as Caixin). For the former group, the need to establish Chinese image overseas, more than the improvement of Chinese understanding of foreign affairs, has been the driving force of its global expansion. For the latter group, with all the intention of doing better international reporting, the lack of state support in setting up a stronger footing in foreign countries cripples its international ambition.

Zhang Hong (Stella) was, in her own words, one of the first-generation foreign correspondents working for a non-state Chinese media organization. Stationed in Europe and North America for Caixin Media between 2009 and 2014, she filed stories for Caixin’s readers on topics ranging from reforms in Poland to the Crimean crisis. She described her years in London and Washington as “drifting”, having to conduct journalism in a foreign land without much institutional support from home. While reporting from one country to another, she picked up an emerging theme that later became her research focus as a PhD candidate at George Mason University: the growing presence of China beyond its border and its political and economic implications.

In an interview with Panda Paw Dragon Claw, Stella shared her observations about China’s “Going Out” from both her standpoint as a journalist and a researcher. She believes a “China model” is indeed discernible from the practices of China’s state capital overseas, even though it doesn’t entirely fit the predatory image that Western media are accustomed of depicting lately.

Panda Paw Dragon Claw(PPDC): When you were a foreign correspondent for a Chinese media outlet, what was your mission?

Zhang Hong (Z): My intention was to write stories with more independence than what we usually saw in Chinese state media. I always believe that international news reporting should help our Chinese readership, citizens of a great power, to obtain an understanding of the world that matches China’s global status. A citizenry without empathy for its peers around the globe would become dangerously self-centered and hubristic.

But I found that I couldn’t do what I intended to do and was affected by a sense of powerlessness. Compared to Western foreign correspondents, we did not have the kind of institutional history and tradition that guide our operation overseas. Most non-state Chinese media only began to dispatch correspondents to other countries in the second half of the last decade, after a relatively liberalized period built up their coffer and ambition. When we were stationed in a foreign country, most of us did not have an office and had to build our sources and network from scratch. Since we were not part of China’s official media establishment, we were excluded from correspondence from Chinese embassies and consulates. We were largely “on our own.”

Situation of state media colleagues were slightly better, even though they were very much shaped (and constrained) by the nature of their outlets. Many of them couldn’t do reports that were at odds with the domestic and foreign policy agenda of the Party. And they were often stationed there to spread China’s own voices, more than they were required to do high-quality reporting about that country. For example, state media reporters were sometimes tasked to publish op-eds in local media, a not unimportant part of their job description.

PPDC: What kind of China “Going Out” stories did you cover when stationed overseas?

Z: I left journalism in 2014, and before that I was mainly based in Europe. It was before the Belt and Road Initiative (BRI) became an international spectacle. The pre-BRI stories about China’s “Going Out” that I ended up covering were mainly about Chinese companies shopping for European businesses and assets that were on sale after the debt crisis of 2009. The image of China around that time was that of a “nouveau riche” foreign investor. The Europeans were a bit skeptical of the Chinese’s ability to well manage what they had acquired. And that was the main discussion about China’s overseas adventures.

PPDC: Understandably, that story changed with the BRI…

Z: The BRI focuses very much on infrastructure building, with the Chinese state, not just Chinese companies, at the center of it. The level of Chinese overseas involvement (and the stake) is much higher now than when I was covering the space.

PPDC: With the BRI now so prominent on the global agenda, and popular narratives about it being reinforced by talks of “debt traps” and US-China arm wrestling, what do you think are elements missing in the current conversation?

Z: I think the first element that is not well understood and covered is the historical aspect. BRI should be viewed in the context of China’s multi-decade political and economic evolution. Modern China began its adventure into the global market in the 1990s, and not until 1999 was the concept of “Going Out” as a strategy first laid out. Major Chinese energy companies started to systematically move into other markets around that time. In preparation for the accession to WTO in 2001, a set of policies were also created to facilitate integration into the global market. The period laid the ground for an explosion of “Going Out” activities in the 2000s. On the one hand, China’s economic reform turned the country from a closed autarky to a world factory, driving up demand for resources from around the globe. On the other hand, Chinese companies, nurtured by strong domestic demand, ventured out for new markets and supplies. BRI is an extension to that two-decade journey. To some extent, China is almost driven by an urge to compensate for being absent from the global scene for too long. It is still retaking the globalization class.

Another aspect that’s worth emphasizing is that BRI reflects the “long view” that is embodied in the Chinese political system. China’s one-party system allows the ruling Communist Party to make long term plans and strategies. That’s why you find strong continuity from the “Going Out” strategy to BRI. This is not to say that Chinese leaders in the 1990s were particularly prescient. But it does appear that the approach of “crossing the river by touching the stones” works pretty well in China’s internationalization process, where later leaderships could build on the programs of their predecessors and adapt their strategies by studying the lessons learned.

In my opinion, the reason why stories of “debt traps” or China’s “predatory” behaviors become prevalent is that the international community does not fully understand this historical evolution. And the lack of transparency on the Chinese side is also to blame. When people cannot comprehend the seemingly “sudden” appearance of China on the horizon, they respond with fear and apply familiar narratives to make sense of it.

PPDC: Besides its historical context, what else is unique about the “Going Out” process? Is there a “China Model” being exported?

Z: What I’ve taken note of, as I have written in an article about Chinese investment in Sri Lanka, is the central role played by Chinese state capital in the “Going Out” process. Their prominence does speak to a powerful “formula” of economic growth in China, whether or not you’d like to call that a “model”. This formula is obsessed with infrastructure development, as this is where state capital has comparative edge over private capital. The vehicles of China’s state capital, the state-owned enterprises (SOEs), are a new class of international players in the global economic system that we have never seen before. Fed by a massive internal market and their monopoly status in key sectors, they have grown into gargantuan corporate conglomerates within a short period of time. With that much of capital on hand, they were able to take advantage of the vacuum left by the 2008 financial crisis and extend their tentacles to new places in the world, building and consolidating their access and control of world’s resources.

These conglomerates enjoy unique advantages in the current global economic structure. Backed with the state’s financial and political support, they are much more risk-tolerant than their Western competitors, which enables them to go into the infrastructure sector in developing countries with highly uncertain economic outlooks. Engaging in such strategic sectors in turn locks in long-term structural opportunities for China in these countries. For example, after building the standard-gauge railway for Kenya, Chinese companies will remain in Kenya for years to train the locals how to operate the system according to Chinese protocols; the next generation of Kenyan engineers will know more about how to build things according to Chinese technical standards than European ones.

PPDC: How does the Sri Lanka situation illustrate the model you outlined above?

Z: The Sri Lanka case demonstrates how certain elements of the “China Model” can indeed be exported through BRI. Under a strictly defined “market economy”, the construction of Hambantota Port does not make much sense. There is no natural demand supporting a major port built out of a traditional fishing village. But China’s state capital, coupled with its existing global network, may create demand to match the supply (a new port facility on the Indian Ocean). China Merchants Group, the state-owned Chinese conglomerate that will be running the Hambantota Port, could rearrange some of its global shipping routes to go through Hambantota, creating business for an industrial zone that is to be built adjacent to the port. With CMG’s global reach and resource allocation abilities, there is a fair chance that the Hambantota port may take off as a major trade node.

In this sense, China’s development model does have some “exportability”, even though China’s one-party system itself can hardly be recreated elsewhere.

PPDC: You speak of the Chinese leadership taking a “long view” when it comes to Going Out. Is exporting the China development model the ultimate goal?

Z: I guess the ultimate goal is the so-called “national rejuvenation”. As stated by the Chinese leadership, it is to build China into a real global superpower. Probably due to the Party’s Marxist ideology (which emphasizes the economic base as a determinant in all human activities), there seems to be a firm belief that the goal needs to be achieved through economic means rather than military means. Previous socialist regimes, such as the Soviet Union, never managed to plug itself so deeply into the global economy, let alone occupying structurally important positions. For China, becoming a global superpower in the new era means attaining a strategic, structural advantage in the global economy. And its SOE-driven state capitalism is an instrument to that end. In Party talks, there is already explicit language calling for SOEs to have “capabilities of global resource allocation” and “occupy a privileged position in the global value chain.”

PPDC: As you said, the understanding of those dynamics is still very poor outside China. Do you think there is a role that Chinese media, think tanks or others can play to help shape global perceptions of the BRI?

Z: There could have been a role for them to play, as theoretically speaking they should have better access to the Chinese actors participating in BRI, providing insights that outsiders often do not have. But in reality it is hardly the case due to the generally closed culture with regard to the press. It seems Chinese journalists (barring those from the state media tasked with propaganda) hardly have better access to Chinese companies and government officials than their foreign counterparts. This might also have to do with the fact that reporter tends to be an entry-level job in China; veteran reporters either get promoted to editorial roles (so they are no longer on the frontline doing reporting) or leave the profession after being disillusioned (I myself being an example). So you are left with young reporters who are energetic and passionate about doing good reporting, but without the necessary experience. Plus, Chinese media, when doing stories, still have the tendency of writing to the ears of the decision makers, hoping to have some influence there. So I am not quite sure the Chinese media as a whole is capable of shaping the conversation as part of the global civil society.

PPDC: In 2012, you’ve written a blog titled “the Cambodians who don’t want a dam”, which documented local resistance to a China-built dam and the rejection of China’s development-first mindset. Do you think Chinese media can play the role of safeguarding against the negative impacts of the Going Out process, as many have hoped?

Z: I’m not very optimistic that they can. Having left China’s media industry, I am not in a position to comment on my colleagues’ works today, as I understand that the room for independent reporting has shrunk even more compared to five years ago. However, I am a little disappointed that, for all the attention BRI is getting across the globe, we can think of very few cases of systematic and methodic reporting of BRI from the Chinese media that can draw wide attention. I get the sense that non-state media today are becoming more and more like their state media peers in reporting only one kind of BRI story: that of Chinese investment bringing benefits to other parts of the world. I understand the limitations Chinese journalists are facing, but for someone who used to have high hopes for the profession, this is disheartening.

PPDC: If media is not there as watchdogs, how should the Going Out process been governed given its massive political, social and environmental impacts?

Z: Scholars have described Chinese players as being more elastic with rules: they can follow higher standards when they enter developed markets but are more than happy to do the bare minimum when local governance is weak. At the end of the day, without strong regulation at home, adhering to high standards of corporate conducts is only “optional.” Paradoxically, for all my skepticism about Chinese state capital’s impact on the prospect of global human development, I think it might be easier to induce responsible behaviors in China’s SOEs than private firms in the short term. I think there is real appetite for it right now as the leadership wants China to be seen as a “responsible power.” SOEs are encouraged to take measures to protect the environment and provide services to local communities where they operate. Therefore, if the international community continues to push for these issues, they might gain enough traction in the political agenda, which can then be translated into requirements for SOEs’ overseas operations. That said, having the regulations is one thing, how they are implemented is another. To fundamentally create a system where Chinese players can be held accountable for their overseas activities, deeper governance reform and cultural change within China would be necessary.

Development blogging: understanding social media support for BRI

What a new genre in Chinese social media tells us about how the Belt and Road Initiative is perceived domestically

*Note to readers: I wrote this article originally for my other blog Chublic Opinion, titled “Anxieties of development: emerging voices in Chinese social media.” But the themes explored here are also relevant for readers who are interested in learning where China’s overseas initiatives sit in domestic public opinion.

In August 2018, an online post by “Shenzhen Ningnanshan” (深圳宁南山, hereafter “SN”) piqued the interest of Global Times chief editor Hu Xijin, who pointed his followers to the lengthy list of complaints about high property prices and education costs that, according to SN, threaten to sap the morale of an “urban middle class that has fundamental faith in China’s developmental trajectory”. Hu, who often presents himself as an interlocutor between the regime and the public, acknowledged the complaints’ “authenticity” and “sincerity”. In a published response, Hu reminded government officials to read SN’s article carefully, as it represents “the real worries of the People’s Republic’s hardworking constructors.” These people should be heard and shown the country’s future directions.

The exchange underscores the weight assigned to urban middle class voices by a political elite keen to monitor a constituency consequential to national progress and stability. But SN is no ordinary disgruntled working man. At the beginning of his post, he wrote that his articles were often read by “people up there”, meaning Party leaders and officials, and he hoped that this one reached them too. SN’s extraordinary influence in social media is part of a bigger story of development blogging‘s ascend in Chinese cyberspace. It has become a genre, fueled by the economic slowdown and heightened trade tensions with the United States. Microbloggers such as SN dedicate their social media space to big questions like China’s place in the world and if it can overcome the middle-income trap. And they find a growing audience, including “people up there”, tuned in to listen to their diagnoses of China’s ills and prescriptions for cures.

The escalation of the US-China trade tension in early 2018 became an assembly rallying cry for these online voices, who collectively shaped how the Chinese public perceived the clash between the two countries. SN’s Mar 24 post “Trade War: an interlude in China’s rise to surpass the US” was one widely read online analysis of what the trade war was really about. It distinguished itself from two kinds of “extreme voices”. On the left, Maoists were calling for China to go back to autarky, a state of non-trading economic self-sufficiency, while on the right, people were advocating for deep concessions that would surrender much of China’s industrial and technological agenda. SN’s views were essentially realistic nationalist, conceding that China was not ready to take on the US at this very moment but firmly believing in the inevitability of national rejuvenation through the conquering of technological commanding heights in multiple key industries.

The history of “online statecraft” by Chinese netizens dates to the dawn of China’s Internet age, as early users of chatrooms and BBS forums heatedly debated China’s geopolitical strategies and military posture. The perceived futility of such online discussions in a country with very limited political participation has been a subject of ridicule, as manifested in a popular online joke about a “basement-dwelling patriotic youth“, who preoccupies himself with questions of national security but can’t even guarantee his own personal safety against the intrusions of the state.

Different from the brand of juvenile statecraft that resembles an online projection of masculinity, the emerging development bloggers build their profiles to exude maturity and credibility. SN’s Zhihu page (Chinese equivalent of Quora) describes himself as a “middle class person moving bricks in Shenzhen” (“moving bricks” is a humorous online reference to making money). His Weibo account carries a tag line that says “re-recognizing our own country.” Although his true identity remains unknown, many believe that he works with supply chains in Shenzhen, giving him first-hand insights about the frontier of Chinese technological advancements. A Zhihu user tried to paint an imagined profile of him: “around 40 years old, grew up in a modest family, graduated from a top Chinese university, works at a major manufacturing company and earns 1 million RMB a year.” Some of SN’s peer bloggers are more upfront about their real-life identity. A group of Weibo accounts which frequently interact with and promote SN’s posts, self-identify as the Society of Wind and Cloud (风云学会), which is supposed to be associated with the University of Science and Technology of China (USTC). One of the key voices from the group, Chen Jing (陈经), is research director at Asia Vision, a company specialized in Optical Character Recognition (OCR). Beijing Saidong (北京塞冬, hereafter as Saidong), another popular development blogger who has friendly interactions with SN both online and offline, is a Peking University-educated computer scientist who works in the Internet sector.

Their technology/industry background gives them credibility when they write on issues related to China’s growing industrial might or its competition with other countries in developing next generation semi-conductors, even though their topic areas go way beyond their professional domains. Chen Jing, for example, writes extensively on microeconomics, trade, and… football. In 2016 he even published a book called “China’s government-organized economy” that claimed to have discovered the secret of China’s economic miracle: an economic model that is neither market nor planned, but run by multiple levels of the government using market-based approaches. The idea is not entirely new but it shows the appetite of typical development bloggers, who enjoy throwing out grand theories about China’s rise. They sometimes refer to themselves as the “industrial party”(工业党), people who firmly believe in a country’s industrial might as its passport to success.

The “industrial party” bloggers share a lexicon of terms such as “per capita GDP”, “demographics”, “supply chains” and “national fortune”, which reflects a tendency to think in aggregates and a competitive arena-shaped world view. Their interest in (obsession with) nations, their rise and fall, prosperity and poverty, fill their Weibo/WeChat pages with lengthy, data-heavy accounts of national competition and dominance. Popular posts written by SN in the past year include titles like “The competitiveness of China’s low-end industries“, “China’s development and the East Asian hell model“, and more bluntly, “Challenging white superiority: the competition a thousand miles away“. Collectively they depict a picture of a merciless ladder called “development” on which nations laboriously climb. At the top of the ladder sit countries with the highest per capita GDP, enjoying comfortable privileges, while other lower income countries fight to occupy favorable positions underneath. “Overall, the white world, Europe+North America+Australia/New Zealand+Israel, still makes up the top echelon of nations,” writes SN in a post responding to an IMF data release, “when per capita GDP goes above 40,000USD, only very few non-white nations can enter that area… Japan and a few ethnic Chinese economies, Hong Kong, Macau and Singapore managed to achieve that. We should have confidence in ourselves.”

The racial message is even more explicit in his wildly popular post on how China could break from the East Asian model. A sense of injustice oozes from the text when he observed how, in the past two decades, the 20 or so countries that surpassed Japan in per capita GDP were mainly European. “The life of Europeans is really laid back, while East Asians, whose intelligence and hardwork are universally recognized, have to endure intensive, hellish work hours.” He continued, “there must be a problem when a lazy people’s economic performance goes beyond a hardworking people’s.”

The problem, as SN saw it, was an “invisible hand that pinned East Asian economies on a few narrow and fiercely competitive industrial tracks”. Most of them lack vast agricultural lands or natural resources that support lucrative businesses such as agrochemicals or energy extraction, sectors dominated by Americans and Europeans. More importantly, he asserted that military shackles placed by the United States on East Asian states, particularly Japan and South Korea, suppressed their technological potential, as military-to-civilian transfer is a major pathway of technological innovation. He also maintained that Western capital had been extracting disproportionally high returns from investments in premium East Asian companies such as Samsung, exploiting their “capital superiority.” Those restrictions and suppressions limited East Asian states to a small number of industries such as semiconductors, forcing people in those countries to compete fiercely for a finite number of middle-class jobs generated by those sectors. China, free from the above constraints, could be the only East Asian nation with the potential to redefine an East Asian developed economy, he declared.

If this sounds alarmingly like a (milder) version of Japan’s complaint about a suffocating “Anglo-Saxon encirclement” prior to World War II, fellow bloggers only reinforce the impression by repeatedly invoking the imagery of shrinking “development space” for China. Only in this case, the “space” is not so much the physical territory that pre-war Japan was paranoid about, but rather the remaining seat at the table of developed economies in a game of musical chairs. The sheer size of China’s population makes some wonder how the current global order can accommodate another billion people to join the high-income club. “It took a world-class conglomerate like Samsung to pull 50 million of South Koreans into developed status. China has a population 28 times larger. How could the world absorb another 28 Samsungs?” wrote Weibo user Qingpuluo the day after Trump declared a trade war on China, using very rough mathematics. He believed that China would not reach developed status within the existing global framework by simply “trading with developed economies.” It needs new space.

This is also a theme that SN often explores, although his views are colored by a more ideological tinge. Again using back-of-the-envelope calculations, he asserted in one of his posts that 1.4 billion newcomers to the industrialized club would “completely change the face of “developed economies”, which currently cover just 800-900 million people. Racially speaking, Asians would replace Caucasians as the majority. Politically speaking, the West’s control over the world would be much diminished as China becomes the first developed Asian power that’s not subject to Western military control. Culturally speaking, the “cultural composition” of what it means to be “developed economies” would fundamentally change with China’s entry. He insisted that the white-majority developed world wouldn’t tolerate such tectonic shifts and would be prepared to stave off China’s rise.

In keeping with the industrial party’s manufacture-centric world view, some bloggers looked at the issue through a “global value chain” framework. Citing a recent report in Japanese media, Machinery & Engineering Strategy (机工战略), an industry voice represented on Chinese social media, observed how US companies took in as much as 40% of total global corporate profits (of 18,000 publicly listed companies from 100 countries).  Another blogger distilled the phenomenon into a globalization pyramid made up of 3 camps of countries: at the top are technology and capital providers, in the middle are labor providers and at the bottom are natural resource providers. China’s struggle to move from camp 2 to camp 1 and grab a bigger share from the highest tier of the value chain is considered a major uphill battle that the country has to fight. Saidong has found a real-life illustration of the battle in the global value chain of electronics, where China has evolved from an assembler to a major parts supplier and brand owner, chipping away, bit by bit, the economic cake from Apple, Samsung, and Japanese/Taiwanese manufacturers. “The extensive electronics value chain creates high-end R&D jobs, mid-level trade and logistics opportunities and low-end assembly line employments that can accommodate a huge and diverse workforce,” he argued, “it’s a godsent for any developing economy.”

The idea of “development space” shapes the thinking of development bloggers when they consider major strategic topics such as the Belt and Road Initiative (BRI). To be clear, unlike the way it is scrutinized and debated in the West and in recipient countries, the BRI is barely an issue on Chinese social media, likely due to its lack of connection with the day-to-day experience of ordinary Chinese netizens. One notable exception is the “industrial party”. Deeply concerned about China’s future position in the world, these bloggers quite often engage in intellectual exercises about China’s adventures overseas and what they mean for the country.

Africarail
Development bloggers are exceptions to a Chinese social media largely indifferent to China’s overseas endeavors. Image from an SN post discussing Chinese railway developments in Africa

In a recent long post for the Society of Wind and Cloud, Saidong did an extensive analysis of Africa’s future demographic changes and their implications for China. With multiple graphs, he highlighted the pyramid-shaped population structure of today’s Africa and marveled at how it resembled that of India 40 years ago. Based on a few bold assumptions, he calculated in a quick-and-dirty fashion, that Africa’s total population would reach 2.5 billion in 30 years while its GDP per capita would enter the 3000-4000 USD terrain. “We will witness the emergence of an Africa that’s 2.5-4 times the economic size of today’s India”, he predicted. By then, the continent would have produced a group of mega-population countries. Nigeria, Ethiopia and Egypt would all boast populations over 200 million. As he saw it, in 2050, these countries would still be relatively poor and not fully industrialized. Yet their vast internal markets would make ideal destinations for Chinese industrial products, infrastructure construction capacities (and overcapacities), and Internet services. “Africa, with its size and potential, represents a new market that a late comer like China can more easily access,” Saidong argued, apparently alluding to the resistance China may face when it enters existing markets with established players. At the end of the article he reminded his readers that in the 21st century, China’s “national fortune” would be decided by how it approaches the “6 billion people in African and Asian developing countries.”

When they apply such a world view inward to scrutinize China’s domestic developments, the development bloggers constitute a formidable force on the Chinese Internet, challenging some of the Communist Party’s most important policy agendas. Just as they are sensitive to demographic changes in other developing countries, they are keenly aware of China’s rapidly aging population and are some of the most vocal online critics of family planning policies. The perception of growing populations as a source of national strength and growth potential shapes their attitude toward the one-child policy. In a widely circulated Weibo post, SN took on China’s population control and real estate market at once. “Years of propaganda in our country treat population purely as a burden,” he wrote, “but a large and growing population can actually bring lots of benefits.” These benefits, in his mind, include a great number of entrepreneurial opportunities and the job creation ensued, cheap labor and service that propel new business models, and higher returns from property booms kept afloat by the continued urbanization process. Because of the depth of China’s domestic market, it has the guts to confront the United States without the fear of “economic collapses experienced by Turkey or Iran”.

In the same vein, development bloggers are perpetually worried about China slipping into the same  demographic predicament of its neighbors, Japan and South Korea. The abject lives of Japanese retirees and the country’s looming pension crisis are constant reminders of what China’s own fate may look like down the road.  At the beginning of 2018, confronted by China’s newly released birth statistics of 2017, Saidong warned that in 5-10 years China’s demographic atrophy would be as severe as, if not direr than Japan’s, thanks to 30 years of arbitrary acceleration of a natural process of lowering birth rates and other driving forces of an aging society.

In addition to their intellectual propensities on the population question, their own status as members of an upper-middle class rooted in China’s booming high-tech sectors seems to have made them advocates for certain middle-class-centric policies, all of them centered around child-rearing. The underlying message appears to be that, since high-tech manufacturing is the pillar of China’s next industrial revolution, people employed by such sectors need to be well taken care of by the state for them to concentrate on their excellent work. For instance, reforms in China’s pre-school system and primary education in recent years that tilt heavily towards burden-shedding for kids meet with heavy criticism from this group. Letting children off school at 3pm instead of 5 or 6 creates extra work for parents who need to find ways to fill those hours for which schools no longer bear responsibility. It also creates a massive extra-curricular education market that exploits parents who fear that their kids are not being given sufficient tutoring to prepare them for fierce future higher education competitions. The group also considers rising property prices in Chinese cities a major sore point for this social class and a drag on demographic improvements. Not only is living space being squeezed due to ever higher real estate prices, making it difficult to raise more kids under one roof, but also marriage and child bearing ages are being pushed back as young people have to work longer before accumulating enough capital to form families, if they do so at all.

Complaints like these, and the resonance they generate, tend to produce response from the likes of Global Times’ Hu Xijin. But as Hu himself reminded SN in his piece, the distribution of wealth in today’s Chinese society had made readjustments around issues like property price particularly challenging. While a city’s new comers may look for cheaper paths to property ownership, the city’s propertied class may, in contrast, hope for even higher real estate values for themselves. Measures favoring one side of the equation may stir discontent in the other.

Hu’s response highlighted the social class signature of SN’s brand of development blogging on which its critics often focus. Some of the more visible detractors claimed that, constrained by the narrow interest of their social class, policy prescriptions offered by SN and his peers are biased and could harm the nation as a whole. Maqianzu, a blogger associated with the left-leaning Guancha.cn, has argued that measures to lighten the burden on urban middle class, as SN advocates, would undermine overall social mobility. High property prices in big cities, as he sees it, are a way to continue funding infrastructure expansions in underdeveloped parts of the country and they will provide upward movement channels for the poor. He also has dismissed SN’s complaint about overburdened middle class parents, claiming that ultra-competitiveness in basic education is a result of more qualified students entering the system, another sign of positive, upward mobility in the society. “China has no hope if its middle class is allowed to have a laidback lifestyle,” he wrote provocatively. Instead, the country’s long-term prosperity depends on an over-worked mortgage-bearing middle class that’s constantly kept on their toes. For Maqianzu, the idea that the offspring of today’s middle-class are entitled to effortlessly inherit the social status of their parents is borderline reactionary.

More scathing criticism condemns SN’s writing as nothing more than a kind of “development porn”, using selective, misleading materials to depict an overly rosy picture of China’s economic prospects and industrial prowess, stirring up cheap nationalistic sentiments as its online predecessor, “military porn” often did.

Even if it is just another type of intellectual opium that the Chinese Internet routinely produces, if “people up there” are really paying attention to what the SNs are blogging about these days, they may find it reassuring that a not so small segment on social media is fully supportive of the leadership’s push to bring Chinese manufacturing to the next level against a strong trade headwind. They may be alerted by the intensity of frustration this group of people feel about the Party’s track record in managing the country’s population, education and property market. They may also be encouraged to find a reliable cyberspace ally more powerful in many ways than the official propaganda machinery in its ability to coalesce the hardworking middle class around an assertive agenda of Made in China 2025, Belt & Road Initiative and geopolitical adventures that reclaim China’s development space in the world.

December round-up: Reform, Opening, Belt and Road

As China celebrates 40 years of reform and opening up, the BRI needs to find its own place in and beyond Deng Xiaoping’s legacy

On December 18, 1978, the 3rd Plenary Session of the 11th Central Committee of the Communist Party began its four-day deliberation at the Jingxi Hotel in Beijing. These were the coldest days of a year. But Chinese history books often associate the meeting with the image of thawing ice. It marked the official launch of a grand transformation of China that has since been known as “Reform and Opening Up.”

The 40th anniversary of the historic event dominated the political and media agenda of last month. And it is worth noting how the Belt and Road Initiative (BRI) was presented against the backdrop of Deng Xiaoping’s legacy.

.jpg
The 3rd Plenary Session of the 11th Central Committee of the Communist Party marked the official launch of a grand transformation of China that has since been known as “Reform and Opening Up.”

At a high-profile gathering commemorating the anniversary on December 18, President Xi Jinping referred to the 1978 moment as a “great awakening of the Chinese Communist Party”. Whether or not the Party was asleep before that is debatable, but the significance of the historic watershed is unquestionable. In 1978, China waved goodbye to three decades of Maoist fanaticism and embraced a more pragmatic, common-sensical path toward development. The ideological restrictions on individuals, businesses and society were gradually loosened. The countryside quickly recovered from the shackles of collectivization. The private sector emerged and prospered. Foreign capital flowed in. And the result was a booming economy that lifted hundreds of millions out of poverty and enabled the Party to declare that a “national rejuvenation” was right around the corner.

The BRI naturally found its place in Xi Jinping’s speech that walked the audience through that journey again. It was presented as a logical extension to the decision to open up the country to the outside world, first through a few coastal special economic zones, then along the rivers that radiate inland. As China integrates into the global market, it’s time to go beyond its own borders and begin doing business around the globe. “We moved from letting in to going out,” as President Xi put it.

The idea of the Belt and Road as “Reform and Opening Up phase II” is not entirely new. Chinese experts had been making the argument ahead of the anniversary that BRI inherited and expanded the essence of Opening Up. In a narrow sense, one of the stated strategic objectives of BRI is to link China’s landlocked provinces to west-bound trade routes all the way to Europe through Central Asia. In a broader sense, BRI is seen as staying true to the reform’s key message of “integration”, fitting China into existing global institutions and frameworks such as the WTO.

At this point in history, emphasizing the continuity between BRI and the Opening Up would probably help remove some sharp edges of President Xi’s signature initiative in the eyes of external observers. But despite the insistence that BRI is the child of reform, it is undeniable that the initiative is not without tensions with Deng Xiaoping’s legacy. Its (perceived) geopolitical ambitions and challenge to existing international institutions and norms can be at odds with Deng’s teaching of “hide your capabilities and bide your time”. The dominating role played by state-owned enterprises (SOEs) in the initiative can also be read as a reversal of policies encouraging and nurturing the private sector.

Those tensions were tacitly touched upon in an earlier analysis by Chinese Academy of Social Science scholar Xue Li titled “BRI and the New Reform and Opening”. Xue argues that the BRI’s global impact is probably going to be larger than that of Reform and Opening Up. It continues on the path of opening the Chinese market (largely facing developed economies) but moves on to “unlocking others” (mostly developing economies). According to Xue, this is a departure from China’s traditional philosophy of “winning over others by perfecting one’s own virtues”(远人不服则修文德以来之). Instead, the new administration decides to go all the way to the distant “others” and help them with social and economic development.

He notes that China does not have the power/right to set development strategies for other countries and cannot force them into the BRI. The initiative is a “development strategy” for China, but can only be a “cooperation proposal” for the outside world. This leads to the elevation of “neighborhood diplomacy” in terms of strategic importance, another departure from reform-era diplomatic priorities that “put major power diplomacy, especially with the United States, at the absolute center.” The pivot towards neighboring developing countries, Xue contends, is a clear trend since 2016 and a response to the perceived shrinking/stagnating space for furthering diplomatic relations with more developed countries. His article also implies that China is no longer content with simply accepting the global frameworks and is making efforts to fix some of their flaws through negotiations rather than confrontations.

The analysis underscores the extent to which BRI needs to maintain a linkage to the 1978 legacy while distinguishing itself as an update and reinvention. And that need is not all externally focused (i.e. to placate Western critics). Internally, the public may also need some convincing that with a full-throttled push for the BRI, they are still on the Reform and Opening Up bus that they bought tickets for. One Weibo post captures the difficulty for the Chinese public to appreciate why they should be concerned with the development of, say, Africa or India. “40 years ago, our own opening up helped developed economies find an outlet for their capital and enterprises that their internal markets and free trade agreements within the OECD bloc could not provide.” Now, the Weibo commentator argued, it’s China’s turn to wanting that solution for its internal difficulties: employment, environment, etc, and the public should come on board with that logic in mind.

With all the talks of fixing the global order and “neighborhood diplomacy”, the celebration of the 40th anniversary was still largely a tribute to the past. One item of the program was the awarding of Reform Friendship Medals to 10 foreigners who had made distinguished contributions to Reform and Opening Up. They were American, Japanese, German, British, Swiss, Spanish, French and Singaporean. No one from the developing world received that recognition. It would be interesting to see if in 2028, when Reform and Opening Up policy turns 50, Pakistanis, Sri Lankans or Kenyans would be honored in the same manner for assisting China in its renewed quest for national glory.

November monthly round-up: caught in the crossfire

As US-China tension increases over the BRI, third-party actors find themselves caught in the crossfire.

If a butterfly in Nairobi flaps its wings, would it set off a tornado in Beijing?

Last month, what happened in the United Nations Environment Program (UNEP), headquartered in Nairobi, Kenya, certainly would alarm some policy makers in Beijing. On November 20, news broke that UNEP’s Director Erik Solheim resigned after a major scandal that threatened to undermine the agency’s legitimacy as the world’s leading multilateral environmental body. Most of the allegations against Solheim were not China related. An internal UN audit revealed his abnormally high air travel expenses (half a million US dollars in less than two years) and breaching of UN rules (allowing some staff members to work from Europe when they need to be based in Kenya). But the Guardian report also highlighted a side complaint. The United States, and some UNEP employees, had raised questions about his perceived coziness with the Belt and Road Initiative (BRI).

As recently as Nov 5, Solheim was in Beijing celebrating achievements of the International Coalition for Green Development on the Belt and Road. “China could share its green development experience with other countries through dialogue,” he said, and envisioned three roles for the Coalition: promoting green finance, setting up basic principles and rules for BRI, and serving as third party facilitators for green development in host countries. Ironically, it turned out that the Coalition was at the center of American misgiving. According to the disclosed list of questions posed by the Permanent Mission of the US to the UN in April this year, the US questioned the relationship between the agency and the Coalition, especially the justification for “an organization under a universal governance model devoting its resources to promote a plan exclusive to an individual (country).”

The episode underscores the increasingly divisive international space wherein third-party actors need to navigate to position themselves properly vis-à-vis the BRI. The heightened tension between the US and China over the infrastructure program makes the balancing act especially challenging. During Solheim’s brief tenure at the agency, UNEP entered a partnership with China’s environment ministry to promote “Green BRI” and has helped soften the initiative’s international image. That’s probably why upon his disgraced departure, the ministry’s spokesperson had only nice words to say about him: “Mr. Solheim has paid much attention to and worked hard on south-south environmental collaboration and environmental protection in developing countries.”  

MEE on Solheim
China’s Ministry of Ecology and Environment praised Solheim upon his resignation from UNEP.

If the exchange around UNEP was just a skirmish (Solheim’s oust was largely self-inflicted), what happened at the Papua New Guinea APEC summit was almost an open confrontation. Immediately after Chinese President Xi Jinping’s address to the APEC CEO Summit promoting the BRI as “an open platform for cooperation”, US Vice President Mike Pence told the same audience that countries “should not accept foreign debt that could compromise their sovereignty.” He even went on and dubbed the BRI a “constricting belt and one-way road.”

For decades, the West has offered financing to developing countries on conditions of trade liberalization and market reform. For Pence to remind countries of the need to preserve their sovereignty, therefore, is a bit disingenuous. Nonetheless, the “debt trap” narrative sticks. Almost at the same time as Pence was warning against the BRI, the newly elected President of the Maldives, in his inaugural speech, blamed Chinese loans for his country’s “precarious” financial situation and signaled distancing from a relationship that his predecessor had cultivated.

APEC quickly became another victim of the US-China animosity. The annual Summit on Nov 18 failed to produce a joint communiqué, a disappointing departure from its 20-year tradition, due to US-China disagreement over languages about global trade reforms. A narrative quickly developed around how China sabotaged the whole thing, not just with its insistence on policy arguments, but also with its “aggressive, bullying, paranoid and weird” behavior at the event. In contrast, the Trump administration’s own position of dismantling existing global economic mechanisms such as the WTO and its possible contribution to the deadlock did not receive as much scrutiny.

Chinese response to the criticism was to reiterate its position that Asia-Pacific development is not to be a zero-sum game and a binary “win/lose” choice, and that disputes should be resolved under “mutually agreed rules”. Researchers and think tank specialists wrote articles on Chinese platforms trying to refute the “debt trap” accusation, using data from the IMF and CIA to argue that Chinese loans constitute minor portions of the debt burden of countries such as the Maldives and should not be scapegoated for their economic difficulties.

As third-parties struggle to (re)align themselves with the BRI, the landscape of international development finance is quietly being redrawn. Ahead of the APEC summit, the US, Japan and Australia announced a Trilateral Partners infrastructure fund that would support infrastructure development in the Indo-Pacific region that “adhere to international standards and principles for development, including openness, transparency and fiscal sustainability.” The fund is widely read as a counter-offer to the BRI. As a first step, a financing package for Papua New Guinea to expand electricity and Internet coverage, worth USD 1.7 billion, was unveiled on the day of the summit. If the BRI has redirected global attention to the developing world’s massive infrastructure gap, it could be one of its more positive effects. The question is if, as a price of accessing much needed funds, developing countries would have to pick sides in a fight they don’t want.

October monthly round-up: teacher/student complex

Shinzo Abe’s visit to Beijing sets the two countries on a path to collaborate along the Belt and Road

The key word of the past month was Japan.

On Oct 25, Beijing residents witnessed the rare scene of Chinese and Japanese national flags waving side by side near Tiananmen Square. And the public reaction was mixed. The two countries had been on pretty bad terms since the beginning of the 21st century, with sovereignty disputes over islands in the East China Sea and Japanese politicians’ visits to the controversial Yasukuni Shrine, which enshrines WWII war criminals, continuously overshadowing bilateral relations.

2018 saw the rapid thawing of a once icy relationship thanks to President Trump’s increasingly belligerent trade position against both China and Japan. The US has threated auto tariffs against Japan and has slapped punitive tariffs on Chinese goods worth hundreds of billions of dollars. In the face of a United States no longer committed to a global economic agenda that has largely benefitted manufacturing powerhouses like China and Japan, the two East Asia neighbors find it desirable to put their differences aside, at least for now.

The visit turned out to be quite consequential from a Belt and Road perspective. During his visit, Abe would put an end to four decades of Japanese foreign aid to China and start a new phase of China-Japan partnership along the Belt and Road.

To declare an end to Japanese Official Development Aid (ODA) during a friendly visit is a somewhat awkward task.  

Japan ODA
Chinese online commentators reacted to the end of Japanese ODA with mixed feeling.

Since 1979, after relationship normalized between the two countries, Japan has been a major donor and financier of China’s industrialization and modernization, in the forms of grants, concessional loans and technical assistance. According to a WeChat post detailing the history of Japanese ODA to China, the projects benefited from Japanese assistance include infrastructure projects such as the Beijing-Qinghuangdao railway, telephone networks in Shanghai and Guangzhou, and manufacturing projects such as fertilizer factories in six provinces. Total Japanese ODA to China amounts to 20 billion USD by the end of 2007, which wound down significantly after that point, when China surpassed Japan as world’s second largest economy.

Chinese reaction to Japanese ODA is not entirely of gratitude. Debates are still ongoing as to whether the assistance should be seen as a form of reparation for Japan’s WWII atrocities. China officially waived Japan’s WWII reparations (calculated at 120 billion USD) in 1972 as a generous gesture, when the two countries were negotiating reestablishing diplomatic relations. Some Japanese scholars and officials privately called its ODA a “semi-reparation” even though the Japanese government never acknowledges it.

Motivation aside, Japan’s ODA to China did play a unique role in China’s modernization beyond building up railroads and factories. It showed China how development assistance could be done to advance a country’s own economic agenda. Prof Debra Brautigam’s book about Chinese involvement in Africa documents how Japan introduced Chinese policy makers to the idea of “resource-backed concessional loans”, a formula that China would deploy competently later on in Africa and Latin America. Throughout the 1980s, Japan built infrastructure in China to unlock its coveted coal and oil resources, the sales of which would service the loans. The model opened China to the possibilities of “win-win” partnerships that would become a backbone of its own overseas development model in other countries.

In many ways Japan has been a modern-day teacher to China, a reversal of roles from pre-industrial eras when the Japanese culture absorbed and borrowed insatiably from its neighbor to the West. And now the teacher/student relationship is about to change again. In a press conference in Beijing, Abe declared that Japanese ODA has “fulfilled its historical mission,” and that from now on the two countries would become partners in driving global economic growth.

That partnership may take a very specific form. Before Abe’s visit, there were already expectations in the Chinese media that project-level collaborations in the Mekong region countries, including joint participation in Thailand’s Eastern Economic Corridor (EEC) program, would be on the table during the Prime Minister’s visit. The official term for that cooperation is “Third Party Market Cooperation,” a slightly more neutral name for what Chinese media often bluntly call “participation in the Belt and Road Initiative”. The idea is promoted partly to demonstrate that BRI is open for all countries and deflect the criticism that it is to exclusively benefit Chinese business interests. In state media coverage of the China-Japan Forum on Third Party Market Cooperation, a few cases of Chinese and Japanese business cooperation in a third country were listed, including a petrochemical project in Kazakhstan involving Sinopec and Marubeni and an offshore wind energy project in Germany jointly developed by CITIC and Itochu. 

As expected, Thailand “emerged as a major beneficiary” of the Forum, according to South China Morning Post, with multiple Thai-focused deals (smart city development, highspeed rail, etc.) included in the China-Japan agreement. The Forum also produced an agreement between the Japan Bank for International Cooperation (JBIC) and China Development Bank (CDB) to provide joint loans to infrastructure projects overseas.

Japan has been cultivating the Southeast Asia market for years, with its foreign aid, investments and business interests deeply engrained in many ASEAN countries. This blog has just highlighted, for instance, its deep involvement in Indonesia’s energy planning. As a relatively new comer, China is also eyeing the region as a key part of the Maritime Silk Road. Weeks before Abe’s visit to Beijing, the Chinese media watched with suspicion his summit with five Mekong region leaders, viewing Tokyo’s move to establish an “open and free Indo-Pacific region” a defensive posture against China’s presence. Quoting Thai Prime Minister Prayuth Chan-ocha, Guancha.cn, a Chinese nationalist news site, reminded Japan that Mekong region countries “would rather see Sino-Japan collaboration” that gives profits to each country.

With Abe’s successful China trip, it appears that collaboration will be the theme in the next chapter of the two sides’ complicated relationship.

September monthly round-up: great power mentality

FOCAC exposed tension between Chinese overseas involvement and domestic public opinion

The Forum on China-Africa Cooperation (FOCAC) was a highlight of the past month and once again put China’s overseas involvement under domestic spotlight. Held in Beijing from Sep 3-5, the extravagant event brought high-level representatives from 53 African countries to two days of dialogue, deal making and celebration of China-Africa friendship. In his opening speech, President Xi Jinping announced a $60 billion package to finance development in Africa and spelled out the “5 NOs” and “4 CANNOTs” principles (五不四不能) that would lay the foundation for China-Africa relationship in the coming years. The principles mainly served as a re-affirmation of China’s long-standing non-interference, “no-strings attached” aid policy and a warning to third-party forces trying to undermine the relationship.

In many senses the forum delivered what was intended of it. Politically, it confirmed China’s commitment to the continent as a benevolent partner. Economically, it produced a long list of major infrastructure and investment deals between African stakeholders and their Chinese counterparts. And it even paid environmental dividends for the host city by bringing a week of sapphire blue sky (dubbed “FOCAC blue” by the city’s residents) which ended as soon as the forum was over.

But the high-profile forum also exposed a chronic tension between China’s overseas engagements and its domestic public opinion, a pitfall that policy makers usually strive to circumvent. As soon as China’s $60 billion pledge to Africa was made public, the Chinese Internet was buzzing with murmurs and whispers of disbelief and sarcasm. Under Weibo posts that featured President Xi Jinping’s speech announcing the renewed pledge, where comments were often censored or outright blocked, netizens reacted with emojis of dismay and disapproval.

FOCAC Weibo
Under Weibo posts that featured President Xi Jinping’s speech announcing the renewed pledge, netizens reacted with emojis of dismay and disapproval.

“The controversy around aid to Africa is not so much about whether such investments deliver good returns. It’s a way to express domestic frustrations. The Chinese public can be generous if their own lives are comfortable,” said one commentator on Weibo.

FOCAC happened at a tricky time when the Chinese public was anxious over a series of domestic measures on taxation and social insurance that would affect the pockets of millions of Chinese enterprises and individuals. Among those policies rolled out briefly before FOCAC, shifting the collection of pension fund deposits to the tax authority, widely perceived as more stringent in its efforts, was interpreted by the media as the government’s attempt to fill an enlarging national pension hole which would result in a net reduction of many people’s monthly take-home salary. China’s high social benefit charges have been a burden on enterprises hiring large number of employees. For years, corporates try to dodge their share of pension payments by lowering the reported salaries of their employees, while worker are more than happy to pocket more take-home salary that they can dispense on their own terms.

The government’s revenue-grabbing move touched off widespread complaints from the society, and the high-profile $60 billion pledge to Africa (equivalent to almost 400 billion in RMB) understandably received a fair amount of trolling. To some extent this represents the worst nightmare of Chinese policy makers: Chinese financing overseas is pitched directly vis a vis its domestic fiscal policies. For a long time, the Chinese government has been low-key (to the extent of being secretive) when it comes to releasing its foreign aid figures, largely because of concern over domestic criticism. Senior aid workers have openly complained about the public’s hostility towards Chinese aid overseas. The Chinese Political Compass, an online survey that maps Chinese ideological spectrum online, lists the foreign aid question in its questionnaire as one of the 50 issues dividing and polarizing the Chinese Internet.

Experts believe that the Chinese public is misguided. Wang Yiwei, a scholar at Remin University in Beijing and an expert on the BRI, claimed in a Weibo post that majority of China’s pledged financing would require return on investment. It’s not free lunch. And based on China’s track record, returns on Chinese investments in Africa are “unparalleled” by its investments elsewhere. “Chinese are not stupid. They won’t rush to a place if it doesn’t mean economic opportunities for themselves,” Wang proclaimed, “those who spread rumors about Chinese involvement in Africa are trying to create tension between the public and the leadership.”

Wang was mainly referring to the previous round of Chinese pledge made at the 2015 Johannesburg FOCAC, which also amounted to $60 billion. Within that package, only $5 billion was grant money that did not require repayment. The rest was either concessional loans (loans with below-market interest rates), or injection into equity funds that are largely market-based and generally seek (modest) profits. The new $60 billion package announced on Sep 3 is made of $15 billion of grants and no-interest/concessional loans, $20 billion regular loans, $10 billion private investments and another $15 billion dollar injection into special funds.

Information from Africa seems to bear out the claim that China talks more serious business in Africa than people generally perceive. Bright Simons, president of the Ghana-based MPedigree Network, wrote that while China appeared generous with pledges, it was strict with actually unlocking them into real financing. Of the 2015 pledge, only 2/3 (45 billion) had actually come through, most of which “in the form of sovereign-backed, natural resource securitized loans.” Zimbabwe was particularly bad at translating Chinese pledges into actual financing, redeeming just 2.5 billion of Chinese funds from over 33 billion promised over the past two decades. Angola did much better in this regard largely due to its oil reserves that allowed a reliable means to service its loan payments to China.

Weibo commentators who consider themselves endowed with a long term view urge policy makers to disregard public sentiments and stay on course of its African strategy: “You should stick with  things that are fundamentally right.”

On the other hand, the Global Times‘s editor in chief Hu Xijin reminds readers that they should equip themselves with a “great power mentality:” “China will not be able to maintain its global stature today if it does not fulfill its obligations as a great power,” he wrote, “the idea that foreign assistance is immoral as long as you still have poverty inside the country represents agrarian era thinking and cannot guide our grand practices today.”

Like it or not, the architects of China’s grand schemes along the Belt and Road would probably have to tango with domestic public opinion for a while.

August Monthly Round-up: BRI turns 5 years old

A digest of Chinese media coverage of the BRI in the past month

BRI5yr
Chinese media outlets produce reporting series for BRI’s five year anniversary. Source: Caijing

On September 7th, 2013, President Xi Jinping proposed the “21st Century Maritime Silk Road” while visiting Indonesia. The proposal was a key component of what later became the Belt and Road Initiative (BRI). And to mark the 5th anniversary, Chinese state media have ramped up their BRI coverage with multiple reporting series looking back at the past 5 years.

State media outlets such as Xinhua, CCTV, and People’s Daily have all chosen to allocate generous space to the topic. Among them, CCTV’s coverage is unquestionably the highlight: the television station dispatched teams of reporters to travel along different routes of the BRI. Besides the usual stops at landmark Chinese BRI projects, one team embarked on a Chinese ship that sailed all the way from Jiangsu province in China to Europe through the Arctic Ocean, in a report dubbed “The Silk Road on Ice”.

Across China’s mainstream media, most reports touted the success of the BRI, as expected, and highlighted key projects, with  the People’s Daily offering a comprehensive list in an article titled “China’s Contribution”. Projects cited include the the Gwadar Port in Pakistan, the Kuala Lumpur subway system in Malaysia, and China-Europe freight rail and industrial parks in Belarus and Cambodia.

Despite the largely celebratory coverage, there were still hints of tempered defensiveness in tone and language. For example, in a commentary published in the ideologically conservative Red Flag Digest, the authors insisted that “BRI is an economic cooperation initiative” that should not be overly conflated, and that its two core components were “connectivity of infrastructure and cooperation on (building) industrial capacity”. The authors also responded to comparisons of the BRI to the Marshall Plan, saying that the “BRI is not China’s Marshall Plan” and “it does not seek to expand China’s ‘sphere of influence’, nor does it aim to export the ‘China model’,”

This is notable, and suggests a dialing down of a more assertive message from a year earlier, when state media and key supporters for the BRI advocated the spread of “Chinese wisdom”,”Chinese experience” and “Chinese solutions” to other developing countries. Recently, the escalating animosity with the United States over trade and industrial policy has led some to question the wisdom of touting the Chinese wisdom so loudly.

In less-official media outlets facing fewer restrictions, commentators have been less constrained in their analysis of the BRI. The Financial Times’ Chinese site (paywalled) has recently become a hub of reflective BRI pieces that try to re-calibrate outside perceptions of the grand initiative. In one interview, Singapore-based Chinese politics pundit Zheng Yongnian believes that external world has fundamentally mistaken the BRI as President Xi’s project to achieve “China’s Rejuvenation”. He offers a more tempered rationale for the BRI project, arguing that  “the surplus industrial capacity and capital, a consequence of slowing economic growth domestically, is the main driver of (BRI)” and because “most of (China’s) exported capacity and capital is state-owned, the outside world (has) “mistaken” it for some kind of broader governmental strategy. He also suggests that the BRI is a phenomenon more related to China’s developmental stage than to the will power of its top leader. In his view, Chinese capital and capacity have reached a point where they must search for a “way out” and that trend already started during President Jiang Zemin’s tenure and has only truly accelerated recently. Thus, he believes that the style and personality of the current leader is only a secondary driving factor behind the BRI.. “If this administration did not start the BRI, the next administration certainly would have,” he said.

Besides the Zheng Yongnian interview, Chinese think tankers have offered their take on what went wrong in the international communications of BRI, and how it should respond to negative coverages overseas, reflecting a general concern with the recent prevalence of negative views of the initiative in the international press.

At the other end of the media spectrum, outlets are taking a much more combative approach to the BRI’s image problem overseas. In an interesting piece titled “Who’s denigrating BRI from the United States?”, the nationalist Global Times did some digging inside the beltway and uncovered what it believed to be the source of negative coverage of BRI originated in the US. Beyond editors ideologically hostile to China and politicians with an agenda to thwart China, the newspaper also traced some of the bad-mouthing to an obscure, US Congress-funded organization called BBG that supervises the Voice of America and other outlets. The popular newspaper accused the BBG of orchestrating anti-BRI propaganda through its network, a “Cold War residue”. On the other hand, Global Times also found that “pragmatist Americans” don’t all object to the initiative. Enterprises and individuals are keen to participate. At the end, it cited Janet Eom of Johns Hopkins University as confirming, in her Washington Post article, that the BRI “looks more like a stimulus project than a blueprint for geopolitical control.”

On Aug 27, President Xi Jinping spoke at a Leadership Group meeting marking the 5th anniversary of the BRI. He emphasized that BRI was simply an answer to the changing demand of global governance: “(BRI) is an economic cooperation initiative, NOT geo-political or military alliance building; it is an open process, NOT a closed, exclusive “China Club”; it is a welcoming initiative, NOT a zero-sum game divided by ideological lines.” In this month of backpedalling, the three NOTs sound particularly accentuated.