China’s efforts are aimed at convincing each country that it will not force them to accept BRI projects against their will. The BRI is not a geoeconomic plan dominated by China. China also does not desire to establish regional organizations to counter the EU, the EEU, or others. More importantly, China can respect the international community’s concerns and worries, can improve the BRI by continuously learning and correcting errors, and can strive to implement the highest-quality development. Therefore, incorrect information and biased thinking are obstacles to understanding the real aims of the BRI.
The Role of Multiple Actors
Different players must perform their own functions when carrying out BRI projects. That means it is necessary to rationalize the basic relationship between government and enterprises and politics and economics. Specifically, the government is the policymaker, but businesses and societies are the main BRI practitioners and builders. The government-guided, enterprise-led BRI pattern has taken shape over the past five years. It would be misleading to equate Chinese companies with the Chinese government’s policy tools when thinking about and analyzing the BRI. It is difficult to draw a conclusion consistent with reality while ignoring the diverging interests between the Chinese government and China’s businesses in this process.
In fact, businesses are the mainstay of pushing forward with the BRI’s development; their goals and actions are sometimes consistent with government policies, and are sometimes to the contrary.54 Therefore, on the one hand, the Chinese government actively cooperates with other governments to improve the business environment by coordinating policy and new trade and investment arrangements under the BRI framework, and it also provides relevant support to Chinese companies. This is an important guarantee that the BRI can make progress. On the other hand, the Chinese government also attaches importance to regulating and guiding corporate behavior through international norms and laws, preventing capital from excessive pursuit of profits that harms the BRI, and avoiding market capture by enterprises and capital.
Those who can benefit from this environment include not only state-owned Chinese companies but also private companies. This is a subject that can very easily cause misunderstandings. Some observers complain that state-owned companies have gained the lion’s share of support and funding when carrying out BRI projects,55 and private companies have been marginalized. In fact, China attaches great importance to the role of private companies. In the short run, China will let private enterprises act as the new force driving the BRI’s development. In the long run, China hopes to strengthen private enterprises through the BRI and thereby optimize its national economic structure. However, the BRI projects implemented by Chinese state-owned companies are usually large scale, and both time and capital intensive. That makes the private companies’ BRI projects relatively too small to attract attention. But among the more than 20,000 Chinese enterprises that are participating in the BRI, private enterprises account for the majority. In 2017, trade between private enterprises and BRI countries accounted for 43 percent of the total trade volume between China and those countries.56 In fact, state-owned and private companies usually cooperate to carry out many large-scale BRI projects, especially those related to infrastructure.57 It’s true that Chinese state-owned enterprises have won those large contracts, but they cooperate with the private sector, often hiring private companies as subcontractors on BRI projects.
Rebalancing the Structure
Optimization has been a key part of China’s efforts to make progress on the BRI over the last two years. Initially, China and the involved countries prioritized the international market, so Chinese businesses and social organizations were encouraged to enter markets in other countries. As a result, scholars and the public have also paid more attention to Chinese enterprises’ efforts abroad. There’s no doubt that the international markets are very important for the BRI’s progress, but it does not help to neglect the fact that China plays an increasingly large role in international economic growth and value distribution as one of the world’s major markets. Therefore, China has tried to balance between opening its domestic market and participating in the international market. The China International Import Expo, which brings Chinese buyers together with foreign companies hoping to sell goods, is one symbol of that rebalance policy.
In fact, the BRI is a strategic plan based on China’s policy of opening its domestic market. One of the main purposes of the BRI is to strengthen the economic and social connections between China’s coasts and inner areas, and to solve one long-term development obstacle that China has faced: the dual nature of its east and west regions and urban and rural areas. With increasing external challenges and diminishing dividends from entering the World Trade Organization, rebuilding the relationship between these areas has become an urgent task for China. The 2008 global financial crisis accelerated the need for China to address this problem, while also hastening China’s response to it.
Conclusion
Despite many misunderstandings about the BRI, the original idea behind China’s implementation remains unchanged. China hopes that the BRI will bring development, prosperity, peace, and security, and it hopes to work with all partners to create a bright future for the world. Therefore, China is striving to set a new pattern to improve the domestic business environment for foreign companies and pursue the intended high-quality development of the BRI along with the other participants. In the future, doing a good job on project construction, market development, financial security, communications, standardized operations, and risk prevention will be the key points of China’s BRI policy. In this process, giving companies a leading role, promoting market-based rules, and optimizing the balance between the domestic and international markets will be crucial to realizing the BRI’s potential.
(This article excerpts from The Belt and Road Initiative: Views from Washington, Moscow, and Beijing.Feng Yujun is vice dean of the Institute of International Studies at Fudan University and director of the institute’s Center for Russia and Central Asia Studies.Ma Bin is assistant research fellow at the Center for Russia and Central Asia Studies and the Research Center for the Shanghai Cooperation Organization, both at Fudan University.)
