Economics of the Belt and Road Initiative
Summary
This book provides an encyclopedic understanding of the "Belt and Road" project to the international community, especially after the G7 summit proposed "Build Back Better for the World" (B3W) in 2021 and the "global infrastructure and investment partnership" plan in 2022. This book is an indispensable textbook to understand and study the situation and experience of the "Belt and Road" construction that has been going on for eight years.
Excerpt
Table Of Contents
- Cover
- Title
- Copyright
- About the author
- About the book
- This eBook can be cited
- Contents
- List of Figures
- List of Tables
- Preface
- Acknowledgments
- Introduction
- 1. The historical meaning of the BRI and its new contemporary connotations
- (i) The historical Silk Road
- (ii) Historical implications of the BRI
- (iii) The BRI as the New Silk Road of the present
- 2. The basic connotation of the BRI
- 3. The effect of co-constructing the BRI
- 4. Analysis of the theoretical model of win-win cooperation in co-constructing the BRI
- 5. Concrete paths for co-constructing a high-quality BRI in the 14th Five-Year Plan
- Chapter I Necessary and Sufficient Conditions for the Actualization of the BRI
- 1. Objective matching of supply and demand is a necessary condition for achieving win-win cooperation
- 2. Building a virtuous interaction model and policy guarantee system is a sufficient condition for constructing the BRI
- 3. Conclusions and policy recommendations
- Chapter II Analysis of the Investment Scale Boundary of the BRI: A Benefit Creation and Sharing Mechanism Perspective
- 1. A three-state interactive decision model
- (i) Model environment
- (ii) Baseline model setting
- (iii) Analysis of decision-making issues
- (iv) Discussion of balanced results
- 2. Numerical analysis of the baseline model and its application in the BRI framework
- 3. Extended model
- 4. Conclusions and policy recommendations
- Chapter III Basic Information on the Eight Years of the Construction of the BRI
- 1. Eight years of practice in co-constructing the BRI: Policy communication
- (i) Positive developments in bilateral cooperation
- (ii) Important progress in the area of multilateral cooperation
- (iii) Steady progress in the construction of economic corridors
- (iv) Summary
- 2. Eight years of practice in co-constructing the BRI: Facility connectivity
- (i) Transport infrastructure
- (ii) Energy infrastructure
- (iii) Information network facilities
- (iv) Summary
- 3. Eight years of practice in co-constructing the BRI: Smooth trade
- (i) Increasingly prosperous trade in goods and services with countries along the route
- (ii) Continuous breakthroughs in the construction of trade cooperation platforms
- (iii) Steady improvement in the level of trade facilitation
- (iv) Continued improvement in the level of trade openness
- (v) Summary
- 4. Eight years of practice in co-constructing the BRI: Financial inclusion
- (i) Setting up relevant financial institutions to provide ongoing support
- (ii) Continued increase in financial security and diversification of forms of investment cooperation
- (iii) Steady increase in the internationalization of the CNY
- (iv) Summary
- 5. Eight years of practice in co-constructing BRI: Interpersonal Contacts
- (i) Deepening humanistic exchanges
- (ii) Fruitful cooperation in science, technology and innovation
- (iii) Continued enhancement of foreign assistance
- (iv) Increasing awareness and action on ecological protection
- (v) Summary
- Chapter IV Analysis of the Emblematic Projects in the Construction of the BRI
- 1. China-European Train
- (i) History of development
- (ii) Status of the project
- 2. Qassim Coal-Fired Power Station Project
- (i) History of development
- (ii) Status of the project
- (iii) Significance of the project
- 3. Mombasa-Nairobi Standard Gauge Railway in Kenya
- (i) History of development
- (ii) Status of the project
- (iii) Significance of the project
- 4. The Russian-Chinese Yamal Project
- (i) History of development
- (ii) Status of the project
- (iii) Significance of the project
- 5. China-Singapore (Chongqing) Strategic Connectivity Demonstration Project
- (i) History of development
- (ii) Status of the project
- (iii) Significance of the project
- 6. China and Belarus Industrial Park
- (i) History of development
- (ii) Status of the project
- (iii) Significance of the project
- 7. Xiamen University Malaysia
- (i) History of development
- (ii) Status of the project
- (iii) Significance of the project
- Chapter V Analysis of the Stabilization Mechanism of the Co-construction of the BRI for China and the World Economy in the Year of the Pandemic
- 1. Overview of the impact of the covid-19 pandemic on the global economy
- (i) Impact on the Chinese economy
- (ii) Shocks to the global economy
- 2. Annual growth against the trend in the co-construction of the BRI in the year of the pandemic
- (i) Fruitful policy communication
- (ii) Steady progress in facility connectivity
- (iii) Trade flows grow against the trend
- (iv) Deepening of financial integration
- (v) Reaching consensus on interpersonal contacts
- 3. The stabilization mechanism of the co-construction of the BRI for the Chinese economy
- (i) Import and export trade with the BRI countries stabilizes China’s foreign trade
- (ii) Investment in the BRI countries by China stabilizes China’s attraction of foreign investment
- 4. Stabilization mechanisms for the economies along the BRI route
- (i) The growth of China’s direct investment against the trend in the BRI countries
- (ii) China-European Liner to help smooth trade flows in the BRI countries
- 5. Co-constructing the BRI stabilization mechanism for the world economy
- (i) Contributing to the global fight against the pandemic and helping the global economy to “come alive”
- (ii) Cross-border e-commerce to drive global trade
- (iii) Providing global financial security
- (iv) Promoting the building of a human community of a shared future
- Chapter VI Basic Ideas and Requirements for the Co-construction of the BRI Quality Development
- 1. The basic idea of co-constructing the BRI quality development
- 2. Basic requirements for the co-construction of the BRI quality development
- (i) Strengthening development strategies and policy alignment
- (ii) Deepening the interconnection of facilities
- (iii) Sustained expansion of two-way trade and investment
- (iv) Adherence to market-oriented financing
- (v) Deepening exchanges and cooperation in key areas
- Chapter VII Institutional and Mechanism Innovations for Co-constructing the BRI
- 1. Building a new system for a higher level of open economy
- 2. Building strategic planning docking systems and policy- standard linkage platforms
- 3. Building a 4-in-1 “land-sea-sky-internet” network system
- 4. Improving the construction of domestic supply chain and international industrial chains
- 5. Improve diversified standardized investment and financing system
- 6. Building a coordination mechanism for green humanities exchanges
- Chapter VIII Investment Planning and Financing for Co-constructing the BRI
- 1. Investment planning for the BRI countries in the 14th Five-Year Plan period
- (i) Scale and structure of investment
- (ii) Industrial pattern
- 2. Financing for high-quality co-production of the BRI in the 14th Five-Year Plan
- (i) Subjects of investment and financing
- (ii) Investment and financing modalities
- (iii) Investment and financing cooperation
- (iv) Rules for investment and financing
- Chapter IX Risk Control and Project Management of Co-constructing the BRI
- 1. Strengthening risk control in the BRI
- (i) Potential risk factors for co-constructing the BRI
- (ii) Measures to prevent the risk of co-constructing the BRI
- 2. Optimizing project management in the BRI
- (i) Preparation of project planning and action programmes
- (ii) Optimizing project team coordination mechanisms
- (iii) Developing a dynamic system of project evaluation
- (iv) Building a platform for project information dissemination
- Chapter X Legal System and Implementation Mechanisms for the Co-construction of the BRI
- 1. Perspectives on the legal environment of the BRI
- (i) Greater conflict of laws and legal risks in the BRI domain
- (ii) The complex system of bilateral and multilateral rules relating to the BRI
- (iii) The international dispute settlement mechanism of the BRI needs to be improved
- (iv) Apparent lack of capacity in foreign-related legal services related to the BRI
- 2. Building the legal system of the BRI
- (i) Improving domestic supporting foreign-related economic and trade legislation
- (ii) Emphasis on the role of international soft law in promoting the uniformity of rules in the territory
- (iii) Making full use of the existing international legal system for trade and commerce
- (iv) Active construction of bilateral and multilateral international rules along the BRI route
- 3. Improving the legal enforcement mechanism of the BRI
- (i) Active use of existing international trade and economic dispute settlement mechanisms
- (ii) Establishment of a diversified BRI international commercial dispute settlement mechanism
- (iii) Improving the BRI foreign-related commercial legal service system
- Chapter XI Cultural Communication and Green Development for the Co-construction of the BRI
- 1. Multi-party participation in the cultural dissemination of the BRI
- (i) Government-led promotion
- (ii) Concerted efforts by all sectors
- (iii) Broad participation of all staffs
- 2. Deepening the implementation of the BRI green development
- (i) Clarifying green requirements and refining development standards
- (ii) Optimize energy structure and carry out green innovation
- (iii) Systematic protection and governance, and integration of industrial structures
List of Tables
Table 3.1China’s Comprehensive Cross-Border E-Commerce Pilot Zone
Table 3.2Construction of free trade pilot zone in China
Table 3.3Selected Free Trade Agreements Signed by China
Table 5.2Selected Important Multilateral BRI Meetings Initiated by China in 2020
Table 5.5Foreign Direct Investment in China, 2019 and 2020 (in CNY billion)
Preface
Towards a Co-construction of a High-Quality “Belt and Road Initiative”: A New Journey
The world today is in the middle of major changes unprecedented in centuries. First, along with the new round of scientific and industrial revolution, the global economic landscape is changing, calling for the global governance system to change in response to the times. Second, the process of economic globalization has been challenged by unilateralism and protectionism, and the international situation is frequently characterized by instability and uncertainty. Third, the outbreak of the new COVID-19 pandemic has hit the already sluggish world economy hard again and set back the development gains of human society by decades. At the same time, after China’s economic development enters a high-quality development stage, it strengths to promote common prosperity and the problem of unbalanced and inadequate development needs to be stressed. Therefore, it is urgent for China and the international community to gather the wisdom and strength of all parties in the world to work closely together to address global challenges and inject a strong dose of catalyst to promote practical cooperation among countries and robust inclusive economic growth.
Grounded in this background, China’s attempt to build “the Belt and Road” with other countries has entered a high-quality development stage after ten years of practical development, in turn, it has started paving a new journey. It serves as a Chinese solution to assemble the strengths of all countries and address common challenges. It proposes an international regional economic cooperation initiative to foster the growth of the world economy. It is an important practice of the concept of “building a community of a shared future for mankind”. Promoting the transformation of “the Belt and Road Initiative” to achieve a high-quality development is not only a practical need to recover the world economy and achieve inclusive growth, but also a natural growth of the Chinese economy into a new development stage.
The “Belt and Road Initiative” (BRI) originated in China and its connotation has evolved in the actualization of the pragmatic context. State Councillor Wang Yi gave a concise summary of the contents of the BRI at the briefing session of the “Second International Summit on the BRI” in April 2019. He noted that “the BRI is an international regional economic cooperation initiative proposed by the Chinese President Xi Jinping, with the core of which is to strengthen all-round connectivity with infrastructure construction as the main line, to tap new momentum for world economic growth and create a new platform for international regional economic cooperation.” This statement correctly indicates the general title, content, requirements, tasks, and purpose of the construction of the BRI.
Over the past ten years, the construction of the BRI has adhered to the basic rule of mutual consultation, co-construction and sharing. By focusing on the key issues of concern to all countries and based on the common aspirations for development, it pragmatically promotes numerous landmark cooperation projects to achieve substantive progress. This is evident in the following aspects: (1) in the steady progress of infrastructure construction, with the “Six Corridors, Six Roads, Multiple Countries and Ports” as the main framework; (2) the continued growth of trade exchanges and the steady increase in mutual direct investment; (3) the continued expansion of international consensus, with the concept of building a community of a shared future for mankind that has been gaining popularity and making tangible progress. The BRI has achieved important results in the opening round and successfully completed a “Grand Design” layout of a solidified structure.
Along with the implementation of the BRI, theories on the co-construction of the BRI are also evolving. The BRI follows the trend of the times and the realistic development needs, with the overall goal of building a community of a shared future for mankind and strives to build the BRI into a path of peace, prosperity, openness, greenness, innovation, civilization, integrity, health, growth, poverty reduction and so on. The proposal of these ten paths indicates that the construction of the BRI has not only stepped into a steadily and deeply development stage of a high-quality co-construction in practice, further sharpening and clarifying the focus of cooperation, but also established a more complete system in theory.
The new journey of co-constructing the BRI has set higher requirements in practice. A more demanding practice calls for theoretical guidance that keeps pace with the times. Why does BRI work? How does it work? Has the phased focus of the work changed as we enter the phase of quality co-production? Are there boundaries to the construction of the BRI? How is the optimal investment size captured? A deep doctrinal grasp of these fundamental theoretical issues is essential to lead the work in practice and to boost the morale and confidence of those involved. Therefore, this book focuses on the theoretical system and the actualization path of the BRI, especially revolving around a high-quality development of the Initiative. It is divided into the following four parts:
Part one (from Introduction to chapter II)covers the theoretical basis. The part first rigorously argues for the necessary and sufficient conditions for the co-construction of the BRI, pointing out that the objective matching of supply and demand is a necessary condition, and that the co-construction of a benign interaction model and policy guarantee system based on the five channels is a sufficient condition for the mutual benefit and win-win situation of “the Initiative”. Second, it summarizes the cooperation model of the BRI to achieve mutual benefit and win-win results and analyzes the benefit creation and sharing mechanism of “the Initiative”. On this basis, finally, a theoretical model of economics is applied to discuss the boundaries of the BRI investment, and a three-country interaction decision model and expansion model is constructed, pointing out that the basis of the BRI for win-win cooperation lies in the highly complementary economic structures of the countries along the routes, and the core is to achieve benefit creation and sharing through project cooperation and construction, and arguing for the existence of the optimal scale of investment.
Part two (from Chapter III to Chapter V) focuses on the practice and systematically summarizes the construction results of the ten years of the BRI. This part first summarizes the fruitful results and effective experiences of the BRI from the perspective of the “Five Links” of policy communication, infrastructure connectivity, smooth trade, financial integration, and civic exchanges. It paints an all-round picture of the thriving construction of the BRI. On this basis, quite a few exemplary landmark projects resulting out of the efforts of the construction of the BRI are then analyzed. Their development history, status and significance are summarized in detail. Finally, in view of the widespread and far-reaching impact of the recent COVID-19 pandemic, a special discussion was presented on how the practice of the BRI can contribute to the world economy to counter the impact of the pandemic. How the “Initiative” can play a stabilizing role for the Chinese economy, the economies of the countries along the routes and the world economy through trade and direct investment.
Part three (including Chapters VI and VII) that takes from a policy perspective and provides a comprehensive analysis of the basic ideas, main requirements, and institutional and mechanism innovations for the co-construction of the BRI towards the stage of a high-quality development. This part begins with a thorough discussion of the basic ideas for the high-quality development of the BRI. The basic requirements for the high-quality development of “the Initiative” are proposed, including strengthening the docking of development strategies and policies, further promoting the interconnection of facilities, continuously expanding two-way trade and investment, and deepening exchanges and cooperation in key areas. In terms of institutional and mechanism innovation, special emphasis was placed on building a new system of higher level open economy, building strategic planning docking system and policy standard linkage platform, creating a four-in-one linkage system of land-sea-sky-internet, improving the construction of domestic supply chain and international industrial chain, improving diversified and standardized investment and financing system, and building a coordinating mechanism of green humanities exchange.
Part four (including Chapters VIII to Chapter XI) focuses on the path to the actualization of the BRI high-quality development. It specifically consists of the following four aspects: investment and financing, risk management, legal enforcement, cultural dissemination, and green development. First, in terms of investment and financing, the investment plan was discussed in terms of the scale, structure, and industrial pattern of investment. On this basis, how to promote the financing for the construction of the BRI was also discussed in terms of the main body of investment and financing, investment and financing methods, investment and financing cooperation and the scale of investment and financing. Second, in terms of risk management, it analyzes the potential risks of co-constructing the BRI and discussed several measures to prevent risks, with a focus on how to manage risks by optimizing project management. Especially in the legal aspect, it explains in detail how to promote the construction of the BRI by constructing and improving the legal system in three aspects: analyzing the legal environment, constructing the legal system, and improving the implementation of the law. Third, in terms of cultural dissemination, the importance of multi-stakeholder participation in promoting the dissemination of the BRI cultures was emphasized. Finally, in terms of green development, it was emphasized that firstly, the requirements should be clarified, and the criteria refined. Furthermore, the focus should be on optimizing energy structure and systemic governance of the industrial structure.
In the concluding remarks, it is pointed out that the BRI is not only a product of China’s prudent consideration of the major changes in the international and domestic development environments at the new stage of the world’s unprecedented changes across the past several centuries, but also the most important practical innovation and theoretical development of Xi Jinping’s Socialist Thought with Chinese Characteristics for a New Era. A full understanding of the ideological and theoretical depth behind the BRI is the most important basis for the efforts to strengthen confidence, continuously improve policies, solidify cooperation, share the fruits of development, and continuously play the strong voice of the new era in co-constructing the BRI.
Acknowledgments
I received generous help from many people in wringing this book and would like to acknowledge them here.
Firstly, I would like to thank my project research team, which is mainly composed of post doctoral researchers, doctoral students, and master students under my guidanced. During the research period of several years, they overcame all kinds of difficulties and completed the basic work of the research project through their excellent work. From data collection, paper writing, to manuscript collation, they have condensed their hard work and sweat. Of course, they also received academic training in project research, improved their scientific research level, and laid a foundation for their future academic career. I would also like to congratulate them on their successful departure or their doctorate and master’s degrees. They are Guo Chenglong, Zhang Jihuan, Deng Zhongqi, Gao Tingfan, Luo Lijuan, Yu Wenwen, Li Huanhuan, Chen Jiacheng, etc.
Secondly, I would like to thank the national social science planning office of China, which has given the project research and supported by the National Social Science Foundation of China, and the two universities, Renmin University of China and Guangdong University of Finance and economics, which have provided management services and support during the research period. Guangdong University of Finance and Economics gave me special support during the second half of the project research, which enabled the project research process and the translation and publication of the results to proceed smoothly.
Finally, I would like to thank my old friends, and the translation team and the press. I am deeply grateful to Dr. Jia Wenshan, Dean of Global Engagement Academy at Shandong University (Waihai), China, and Professor of Communication and Global Studies at Chapman University for his enthusiastic encouragement and recommendation to publish this book and include it in the Belt & Road Initiative: Interdisciplinary Perspectivs Book Series edited by him. I would also like to thank Qingdao Tengsheng Global Education and Culture Co., Ltd. for securing the translation of my book manuscript into English. Last, but not least. I thank the editors of Peter Lang who have provided a good guarantee for the final publication of this book.
The research and writing of this book were funded by the National Social Science Foundation of China and the Guangdong University of Finance and Economics with special thanks for the funding of the introduction and employment of high-level talents.
Just as the win-win cooperation inherent in the Belt and Road Initiative has created achievements in project construction, the research, writing and publication of this book are also the results of win-win cooperation among all the parties. I hope that after publication, with the participation of the broad masses of readers, there will be a win-win results just like the construction of the BRI projects. Thanks for reading, everyone.
Introduction
1. The historical meaning of the BRI and its new contemporary connotations
In September and October 2013, Chinese President Xi Jinping proposed the cooperation initiatives of building the “Silk Road Economic Belt” and the “21st Century Maritime Silk Road”, or “the Belt and Road Initiative” (abbreviated as the BRI), respectively. (The “Belt and Road Initiative” concept first put forward by Xi Jinping, 2021, Feburary 1) The BRI that is an inheritance of the ancient Chinese Silk Road both on land and on sea renewed its connotations in the new era.
As shown in Figure 1, the “Silk Road Economic Belt” incorporates six international regional economic cooperation corridors, including China-Mongolia-Russia, the New Asia-Europe Continental Bridge, China-Central Asia-West Asia, China-Pakistan, China-Central and South China Peninsula, and Bangladesh-China-India-Myanmar. The “21st Century Maritime Silk Road” starts from the southeast coast of China and goes through Southeast Asia, the Indian Ocean, East Africa, and North Africa to Europe.
Details
- Pages
- XXIV, 344
- Year
- 2023
- ISBN (PDF)
- 9781636671475
- ISBN (ePUB)
- 9781636671482
- ISBN (Hardcover)
- 9781433192951
- DOI
- 10.3726/b20617
- Language
- English
- Publication date
- 2023 (October)
- Keywords
- The Belt and Road Initiative (BRI) world economy win-win new infrastructure construction contemporary China the New Silk Road Build Back Better for the World (B3W) Global Infrastructure and Investment Partnership plan
- Published
- New York, Bern, Berlin, Bruxelles, Oxford, Wien, 2023. XXIV, 344 pp., 16 b/w ill., 10 tables.
