26 October 2015
By YC Yap, Research Executive
The 'China Threat Theory’, as proposed by the US and its
Western allies, has seen China reach this position through what is being termed
in diplomatic circles as its ‘Peaceful Rise’. Since the economic reform era of
President Deng Xiaoping (1981-1987), this has generally meant that China has
kept a low, or passive profile in relation to foreign affairs, instead focusing
more on its domestic economy and development.
This began to change in 2013 when President Xi Jinping
gave clear signs that he wanted to chart a more assertive approach to China’s
diplomatic relations. The most visible example of this has been the Silk Road
Economic Belt and 21st Century Maritime Silk Road proposals - officially known
as the Belt and Road Initiative (B&R).
The B&R initiative, currently supported by 57
nations, is perhaps the clearest indicator of China’s diplomatic change of
course from what Professor Xueting Yan from Tsinghua University has termed
‘Keeping a Low Profile’ (KLP), toward ‘Striving for Achievement’ (SFA).
The B&R initiative represents two economic corridors,
one inland and the other by sea that connect the Eurasian landmass with the
waterways surrounding East, South-East and South Asia and the Middle East.
China’s B&R initiative is as much about a need to
develop new trade corridors and markets, fuelled by her domestic economic
overcapacity, as it is about a change in diplomatic approach.
China’s economy has transitioned from agriculture to
heavy industry since the 1980s, and through structural reforms, now sits on the
precipice of a consumption-led growth model. However, in achieving this, there
needs to be a complete re-think on what has propped up this high-speed economic
growth over the last 30 years.
The production of certain goods, such as steel and
petrochemicals, has led to unhealthy levels of pollution and haze in many
cities. However, as the prices of these goods continue to fall reflecting the
decline in capital utilisation, a continuing overcapacity may lead to industry
Industries, such as those producing cement, crude steel,
glass, as well as ship building facilities, have been facing an overcapacity
crisis for over a decade. Yet, it was only in 2013 that Chinese leaders made it
a government working priority to address this.
The B&R initiative only emerged into public
consciousness in 2013. However, overcapacity is not just a cause of domestic
demand saturation; there is also the issue of a lack of external demand. In the
years since the Global Financial Crisis, widespread recession around the world
has led to this lack of external demand in the world’s manufacturing hub.
Moving beyond the
Here, the rationalisation behind the B&R initiative
is that if major infrastructure development can be achieved throughout the
connected areas, this will increase demand and create new markets for ‘Made in
China’ exports. Though B&R is not only being used as a way to stabilise
China’s international trade, it is also a way to assist structural industry
reform to move beyond the economic bottleneck that China now finds itself in.
When once everyone wanted to enter China’s market, now
China wants to enter more foreign markets. In the B&R initiative’s official
document, Vision and actions on jointly building the Silk Road Economic Belt
and 21st Century Maritime Silk Road, the framework consists of five main areas
that promote connectivity in: policy, infrastructure, trade, finance and
Both the Chinese government and private companies have
already started to sign memorandums with countries along the B&R route to
begin the process of facilitating trade and infrastructure development.
Beyond these agreements and others that are sure to be
signed, the B&R initiative relies on existing bilateral and multilateral
mechanisms between countries to conduct multi-level interconnection and
These platforms include the Asean 10+3 multilateral
mechanism, the Regional Comprehensive Economic Partnership (RCEP), as well as
the BOAO Forum for Asia and World Chinese Economic Summit, which allow
stakeholders within the civil society to engage with government authorities.
These multi-level collaboration platforms will help the B&R initiative to
push forward through the implementation process.
There are serious concerns as to the standards and
regulation that come with Chinese investment. The key worry that neighbouring
countries have indicated here is in relation to pollution. Throughout China’s
rapid industrialisation, environmental degradation in terms of ecology, as well
as air, water and soil pollution have reached critical levels. For B&R to
be a success, China will need to display a real commitment to domestic
Malaysia, along with the other Asean member states will
be among the countries along the 21st Century Maritime Silk Road. Here, the
will need to prepare various sectors for an influx of development and capital,
while also paying close attention to China’s domestic economy in order to
calculate risks and opportunities and maximise the potential benefit for
When all is said and done, the main reason for the
creation of the B&R initiative is to boost and transition China’s domestic
economy. Running parallel to this is promotional strategy that is advocating
for peaceful diplomacy to enhance China’s soft power throughout Eurasia.
(This is a translated version. Its original was published
in Chinese in Sin Chew Daily on Sept 29, 2015.)
View original article on Malaysiakini
Back to Top