Description

In 2018, the Asia Society Policy Institute (ASPI) embarked on a policy project to analyze a range of BRI infrastructure initiatives in a single region, Southeast Asia, which offers a microcosm of differing political systems and development levels, all with abundant experience dealing with China. ASPI, aided by a diverse, global task force of eminent experts in relevant fields (see appendix), undertook to examine BRI operations and impacts in five main areas: financial sustainability, transparency (including anticorruption and competitive procurement), labor practices, stakeholder engagement, and environmental protections. This analysis was based on in-depth case studies of major BRI rail, port, and energy infrastructure projects in four countries; in-country meetings with relevant official and nongovernmental stakeholders; and additional research on BRI projects elsewhere in Southeast Asia—some in progress, some completed, and others renegotiated or at a standstill.

ASPI’s “Navigating the Belt and Road Initiative” project is based on five premises:

  1. The BRI can help meet the immense demand for infrastructure development in Asia, which far exceeds what multilateral development banks (MDBs), international donors, and national governments can provide.
  2. The BRI is not going away—by enshrining the BRI into the Chinese Communist Party’s constitution in 2017, China’s leaders made clear that they are wedded to the initiative and will not abandon it, despite setbacks, pushback, and reputational costs.
  3. The scale and scope of the BRI is such that even modest improvements in its procedures and standards could provide significant benefits to project host countries.
  4. Chinese initiatives often evolve from general slogans into more carefully structured programs over time, through an extended trial-and-error process, which may allow for the adoption of improved procedures and standards.
  5. Lastly, the financial cost associated with BRI projects for the Chinese state may prove problematic for the Chinese government, particularly if economic growth slows, and Chinese citizens increasingly question the flow of public money to overseas projects. These pressures give Chinese leaders incentives to seek international commercial and public financing to increase prospects. This in turn will require BRI projects to be structured and operated according to international standards.

With this in mind, we undertook to identify the principal factors causing problems in, or resulting from, BRI projects. We tried to assess how incorporating established best practices or international standards might have avoided such problems and yielded better outcomes for the various stakeholders. With the help of task force members, we used industry and international standards as a comparative benchmark, but also identified relevant Chinese domestic laws, regulations, and procedures that would likely have improved outcomes had they been applied in BRI projects.

 

Publication Details
Publication Year:
2019