As Beijing pushes “One Belt One Road” at full throttle, economic experts have been raising doubts as to whether the plan is economically viable and will prove a success in the long run.
An article published by the Economist recently offered some useful insights on the matter, which I believe our Beijing leaders should take note of.
First, the article points out that as an outward-looking strategy, “One Belt One Road” is still pretty much in the planning stage in many aspects: there is yet to be a systematic and unified mechanism to coordinate efforts in carrying out the strategy, both at provincial and central levels in China.
And then there is the fundamental issue of cost-effectiveness. For example, a direct freight train service between the city of Yiwu (義烏) in Zhejiang province and London stretching 12,000 kilometers is undoubtedly a highly ambitious and monumental project, which was initially conceived to compete with the Trans-Pacific and Trans-Atlantic Partnership programs spearheaded by the US.
The problem, however, is that the cost of delivering cargo from China to Europe through that railway is almost twice as much as that of carrying the goods by sea. This calls into question whether ambitious initiatives like the Yiwu-London express link and other big projects can truly prove sustainable and profitable in the long run.
More importantly, the article points out that the way Beijing been carrying out the Belt and Road strategy largely follows an old pattern, with China dangling foreign aid to other Third World nations.
Simply put, during the process Chinese companies tend to focus only on establishing partnership with local authorities while neglecting the concerns of other major stakeholders such as the local population, small businesses and NGOs, let alone reaching out to them and finding out their wishes.
The fact that Chinese investors have attached little importance to carrying out social responsibility during the course of their investment can probably explain why so many of their major projects in Southeast Asia, such as a proposed hydroelectric power station in Myanmar and a container terminal near Colombo, Sri Lanka, have met with so much opposition among the local population.
Unless Beijing drastically reviews its mindset and implements the Belt and Road strategy in accordance with international norms and universally embraced values, adjusting the approach accordingly, the strategic plan won’t yield the desired results both economically and politically.
This article appeared in the Hong Kong Economic Journal on May 16
Translation by Julie Zhu
[Chinese version 中文版]
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