[EAI Special Feature Commentary] The Evolution and Paradox of China's Belt and Road Initiative: China's Strategic Dilemma Amidst Widening Competition

Editor's Note

This is the second report in the special commentary series, "Post-Shangri-La: The Accelerating 'Indo-Pacific vs. Belt and Road' Dynamic and South Korea's Strategy." This commentary, analyzing China's Belt and Road Initiative (BRI) strategy within the context of US-China competition, was authored by Lee Dong-ryul, Director of EAI's China Research Center and Professor at Dongdeok Women's University. The author explains that the BRI, initially a project driven by economic motives such as regional balanced development and addressing overcapacity within China, gained momentum with the success of its funding source, the AIIB, and expanded globally to become a core foreign policy project of the Xi Jinping administration. However, as US containment efforts intensified, the Xi Jinping administration perceived this as a challenge to the Chinese Communist Party's regime, elevating the BRI to a matter of survival for the administration. Consequently, the author analyzes that this has led to an expansion of US-China competition, irrespective of China's original intentions. Furthermore, the author emphasizes that if this competition escalates into a 'network competition' to attract more participating countries to networks led by the two powers, various countries in the Asia-Pacific region will face 'pressure to choose.' However, this simultaneously presents an opportunity to drive new changes by leveraging diplomatic capabilities amidst great power competition, and thus proposes that the South Korean government should devise a meticulous strategy that allows for flexible diplomacy.

What is the Belt and Road Initiative to the Xi Jinping Administration?

On May 31st, Chinese Minister of National Defense Wei Fenghe attended the Asian Security Conference in Singapore, marking the first attendance by a Chinese Minister of National Defense in eight years. Amidst escalating trade friction with the United States, his presence itself drew significant attention. U.S. Acting Secretary of Defense Patrick Shanahan, seemingly mindful of Minister Wei's attendance, launched a sharp offensive targeting China, stating, "No one country can, nor should, dominate the Indo-Pacific region." However, in his speech on the theme of 'China and International Security Cooperation,' Minister Wei unexpectedly countered the U.S. offensive with the concept of building a 'community of shared future for mankind.' Regarding the Taiwan issue, Minister Wei strongly warned, "It is dangerous to underestimate the resolve and will of the Chinese military." However, he responded relatively cautiously regarding the South China Sea, mindful of ASEAN countries, stating, "The South China Sea is currently stabilizing overall, and I hope you will not underestimate the wisdom and capability of the countries surrounding the South China Sea to maintain peace."

The 'community of shared future for mankind,' along with 'new type of international relations,' constitutes the two main pillars of the Xi Jinping administration's core foreign policy discourse, 'major country diplomacy with Chinese characteristics.' The Belt and Road Initiative is precisely a long-term project to realize the vision of a community of shared future for mankind. As competition with the United States expands across the board, starting with trade friction, the Xi Jinping administration is advocating for a 'community of shared future for mankind' whenever opportunities arise. This concept was reiterated at the second Belt and Road Forum for International Cooperation in April, the Conference on Dialogue of Asian Civilizations in May, and again at the Asian Security Conference.

The reason China advocates for a community of shared future for mankind appears to be an attempt to persuade the international community that China's rise does not pose a threat or challenge, while also seeking to secure allies in its arduous competition with the United States. China is pinning its hopes on the Belt and Road Initiative as a policy that can practically demonstrate the abstract discourse of a community of shared future for mankind. Ultimately, the Chinese government's advocacy of the community of shared future for mankind theory is tantamount to expressing its determination to more vigorously promote the Belt and Road Initiative in the future, despite facing various difficulties.

The Evolution of the Belt and Road Initiative Amidst US-China Competition

The Belt and Road Initiative (BRI) was first proposed by President Xi Jinping during his overseas visits in 2013 and has essentially become the national brand of the Xi Jinping administration. Considering the BRI is a long-term project, it has already faced considerable controversy and fluctuations within the relatively short period of six years. In its early stages, the nature, content, and objectives of the BRI were ambiguous, leading to debates about its very concept, as it was referred to by various names such as 'strategy,' 'initiative,' 'proposal,' and 'project.' In the initial phase of the proposal, the Chinese government sought to aggressively promote it using assertive language like 'strategy' or 'grand strategy' to attract domestic and international attention to 'Xi Jinping's agenda.' This indicates that from the outset, there were doubts about the BRI's success. However, the AIIB, which was expected to be the funding source for the BRI, achieved unexpected success, giving the BRI momentum and leading to rapid growth, to the extent that countries along the routes worried about being excluded. It even generated concerns that the BRI was part of China's hegemonic strategy.

Subsequently, the Chinese government took a brief pause, and the BRI was redefined with more cautious expressions such as 'initiative (構想)' and 'proposal (倡義).' However, the content of the BRI has expanded from its initial economic motives of domestic regional balanced development and pioneering overseas infrastructure markets for excess capacity, to a grand practical project for realizing a community of shared future for mankind. Furthermore, its scope of participation has expanded from neighboring countries along the routes to the entire world. The second Belt and Road Forum for International Cooperation was held as a large-scale event to showcase the expansion and achievements of the BRI both domestically and internationally. Over 40 heads of state and international organizations, including Russian President Putin, attended, and project cooperation and agreements worth over $64 billion (approximately 74.3 trillion won) were announced. The BRI, which had once been in a lull, is being spectacularly revived by the Chinese government amidst escalating competition with the United States. Behind this lies China's backlash and resistance to U.S. containment efforts. Firstly, the U.S. launched a smear campaign, accusing the BRI of trapping participating countries in a 'debt trap.' In March 2018, the Center for Global Development in the U.S. published a report stating that the economic situations of several countries receiving BRI project support were deteriorating and that concerns about defaults on debt to China were rising. The report classified the economic situations of 8 countries—Pakistan, Djibouti, Maldives, Laos, Mongolia, Montenegro, Tajikistan, and Kyrgyzstan—as severe among the 68 countries participating in the BRI. During this process, attempts emerged, such as in the case of Malaysia, to use the review of BRI projects as leverage to extract more economic aid and concessions from China. For instance, Malaysia agreed to a memorandum of understanding to cooperate with China's BRI policy, while also agreeing to extend currency swaps for three years. Loan support was also promised to Pakistan, which was facing an economic crisis. The Chinese government now faces a political situation where it must revitalize the BRI project, regardless of its economic benefits.

Furthermore, during his Asia tour in November 2017, the Trump administration began to concretize the 'Free and Open Indo-Pacific' strategy to counter China's BRI. U.S. Secretary of State Pompeo delivered a detailed presentation of the U.S. position on the 'Indo-Pacific Strategy' at the U.S. Chamber of Commerce shortly before attending the ARF in late July 2018. In his speech, Pompeo, clearly mindful of China's BRI, announced an investment of $113 million in the Indo-Pacific region. China dismissed this proposed investment amount as insignificant, stating it was only one-tenth of the investment proposed by China through the BRI. Nevertheless, China interpreted this proposal, made at a time when the BRI was facing difficulties in the Asian region, as a deliberate attempt to counter China and prevent the development of the BRI by deterring regional countries from participating. The Chinese government appears to have increasingly recognized that the multi-faceted pressure from the U.S. has reached a level where it can no longer afford to back down without perceiving it as a threat to its regime.

The Paradox of the BRI's Evolution Amidst US-China Competition and New Aspects of the International Order

As U.S. containment of the BRI has intensified, the Xi Jinping administration is increasingly framing the BRI as an issue of regime survival and strengthening its commitment to the project. The Xi Jinping administration perceives the U.S. offensive, which began with trade competition and has expanded to include containment of the BRI, as a challenge to the Chinese Communist Party's regime, and the atmosphere is moving in that direction. The Xi Jinping administration faces a dilemma where it is difficult to accept the failure of the BRI, known as 'Xi Jinping's agenda,' due to U.S. containment, even if it does not yield substantial results. President Xi Jinping's promotion of a 'community of shared future for mankind' by leading and directly participating in large-scale events such as the Conference on Dialogue of Asian Civilizations appears to be an effort to show the Chinese people that, despite U.S. pressure, China is advancing towards realizing the 'Chinese Dream.' Consequently, the BRI, contrary to its initial intentions and objectives, is emerging as a critical task linked to the stability of the Xi Jinping regime, showing signs of being drawn into a vortex of competition with the U.S.-led Indo-Pacific Strategy.

The consistent core task of the Xi Jinping administration is to gradually and long-term pursue its rise, strengthen its maritime power, and thereby further consolidate the Communist Party's regime. In the process of strengthening its maritime power, China had hoped to circumvent direct confrontation and conflict with the established maritime hegemon, the United States, through a geoeconomic approach like the BRI. In other words, China intended to gradually seek new avenues for its rise by emphasizing the BRI as a 'public good' that could provide tangible benefits to neighboring countries, thereby expanding their participation and strengthening economic cooperation.

However, the reality is that the BRI, contrary to China's intentions, is leading to an expansion of competition with the United States, as the U.S. has begun to actively contain China's geoeconomic approach. Furthermore, conflicts with neighboring countries, including territorial disputes in the South China Sea with Southeast Asian nations, remain unresolved, and the BRI project is facing difficulties in various places, making it challenging to encourage expanded participation. Yet, the Xi Jinping administration, which has presented the 'Chinese Dream' as its vision and seeks to strengthen its power, faces a dilemma where it is difficult to retreat from its path to becoming a strong nation, fall behind in competition with the U.S., or make flexible strategic choices that involve ceding territory. It has become difficult for the Xi Jinping administration to adjust the construction of the BRI, even if competition with the U.S. intensifies further. The Xi Jinping administration faces the challenge of solving a complex equation that simultaneously considers the Chinese people, the United States, and neighboring countries.

Moreover, the evolution of the BRI, irrespective of China's intentions, has resulted in a new phenomenon in the international order: competition for network formation. Although the BRI began as a development strategy for China's rise as a great power, it cannot unilaterally unfold in the direction and goals intended by China without the active participation and consent of the countries along the routes. China's recent efforts to engage in new charm offensives towards neighboring Asian countries, such as 'civilizational dialogue,' are not unrelated to this. If China intends to seek development through the cooperative linkage approach of the BRI in the future, the possibility of being constrained by the 'power of the relatively weaker' held by the countries along the routes may increase.

It is an interesting change that competition between great powers is activating a new pattern of 'competition for network formation,' unlike the bloc competition of the Cold War era. This change stems from the reality that neither the U.S. nor China can secure an overwhelming advantage in power. Of course, there is a limitation that this network formation competition is still driven by great powers. Nevertheless, if the competition between the BRI and the Indo-Pacific Strategy intensifies, the fierce competition between the U.S. and China to attract overlapping cooperation partners in this process may make it difficult to unilaterally form and lead networks.

In the long term, there is 'hope' for the paradoxical outcome of strengthening the position of regional countries that participate in and form networks. Of course, in the initial stages, regional countries may face a dilemma of choice under pressure in the competitive landscape between these networks, as seen in the case of Pakistan. However, at the same time, it suggests that new spaces and opportunities may be created for exercising diplomatic leverage, as seen in the case of Malaysia. The unexpected attempt by the Japanese Abe administration to improve relations with China amidst escalating US-China competition is also an interesting phenomenon. Despite harboring traditional suspicions towards China, the Indian Modi administration is hesitant to create a confrontational relationship with China at the forefront of the Indo-Pacific Strategy. In the future, if the pressure of choice persists within the cracks of great power competition, the solidarity and cooperation among middle powers facing common difficulties may be activated, leading to a hopeful expectation of driving new changes in the international order centered on great powers. Of course, in the case of South Korea, the reality is that the scope for exercising the 'power of the weak' is very narrow due to the overlap of geopolitical specificities, the reality of division, and the North Korean nuclear issue. Nevertheless, if South Korea is to face the destiny of continuously enduring the waves of pressure resulting from US-China competition, it seems necessary, above all, for the government to foster a consensus base among the entire nation that allows for flexible diplomacy and to devise meticulous strategies based on this. ■

■ Author: Lee Dong-ryul_ Professor at Dongdeok Women's University and Director of EAI's China Research Center. He holds a Ph.D. in Political Science from Peking University's School of International Studies. He previously served as President of the Association for Modern Chinese Studies and is currently a policy advisor to the Ministry of Foreign Affairs. His main research areas include China's foreign relations, ethnic minorities in China, and Chinese nationalism. His recent works include "Changes and Continuity in the Foreign Policy of the Xi Jinping Regime," "China’s policy and influence on the North Korea nuclear issue: denuclearization and/or stabilization of the Korean peninsula?", "Talking About China's Future" (co-editor), and "China's Territorial Disputes" (co-author).

■ Managed and Edited by: Choi Soo-ee, Senior Researcher at EAI

Inquiries: 02 2277 1683 (ext. 206) I schoi@eai.or.kr

The [EAI Commentary] series is designed to provide a forum for experts from various fields to offer in-depth analysis and policy recommendations on major domestic and international issues. Please cite the source when quoting. EAI is an independent research institution independent of any partisan interests. The claims and opinions expressed in reports, journals, and books published by EAI are not attributable to EAI and solely represent the views of the individual author.