The US Senate Committee on Finance and Sub-Committee on Trade have held a debate concerning China’s Belt & Road Initiative and issues related to “Finance, International Trade, Customs, and Global Competitiveness.”
The discussion was held at the Dirksen Senate Office Building, Washington on June 12th, and commences with the following words: “Since its accession to the World Trade Organisation, China has consistently engaged in unfair trade practices that bolster its domestic industries at the expense of free trade and global stability.
China has weaponized foreign investment to force transfer of cutting edge intellectual property, to steal trade secrets, erode the technological gap, and create Chinese state-controlled competitors for American companies”.
You get the idea about where this hearing is going. However, Derek Scissors, a former international economics official at the Pentagon who now works at the conservative American Enterprise Institute (AEI) gave the following statement, downplaying the Belt & Road effectiveness: “China cannot fund a truly global BRI and odds are better that financial constraints will tighten rather than loosen.
Beijing will inevitably focus on what it sees as the most important countries. On economic grounds, these are the richer countries in Southeast Asia for export markets and the Arab world for oil. American policy should anticipate where China’s gaze will finally land and evaluate to what extent this very select set of countries calls for a US response. The BRI as a whole has become a red herring.”
That comment leads one to question whether or not in part, the US tariffs on Chinese goods are designed in part to financially hurt China in order that it cannot support the Belt & Road Initiative.
Daniel Kliman from the Center For New American Security (CNAS) said in testimony;
“Many states find themselves unable to pull away from China, both for fiscal reasons as well as domestic political ones with Beijing frequently exercising lingering influence while awaiting and abetting the restoration of sympathetic elites. Most critically, even countries that have become relatively sceptical about the Belt and Road still perceive few meaningful alternatives to infrastructure projects involving China.”
“BRI is worth trillions – false. China is buying up the participating countries, if so, only in self-defeating fashion. Perhaps the most important mistake is that the BRI represents a growing Chinese footprint globally. It did in 2016, not now. More countries are joining the BRI in name but the extent of activity is shrinking. Moreover, inadequate foreign currency reserves means Beijing will be hard pressed to keep the BRI afloat as a global commercial effort.”
This hearing comes just a few days after the UK Parliament held a debate on the same subject, with expert witnesses appearing to testify.
The American perspective as put to the Senate was essentially dismissive of the Belt & Road Initiative’s ability to stay the course, mainly on the basis that China cannot afford it. However that doesn’t sit well with the concept that China is putting other nations in debt by building it and having them pay these are contrary positions.
There appears no analysis or recognition of the extent of money that other nations have also been spending on BRI projects. Consequently it is hard to make much sense of the legitimacy of the testimony although witnesses may believe their perspectives are correct, that doesn’t mean they are either fully informed or accurate. The Belt & Road Initiative, and the on-going debates about it I suspect will continue for rather longer than the Senate has been told.