07.05.2019 Author: James ONeill

BRI Forum Points to Tectonic Shift in Geopolitical Power


The second BRI Forum was held in Beijing from 21st to 27th of April 2019. It was intended by 5000 delegates from 150 countries, including 40 heads of government and representatives of 90 international organisations.

The forum followed a successful trip to Europe by China’s President Xi Jinping where a Memorandum of Understanding was signed with Italy, which joined 16 other Central and Eastern European countries to do so. Switzerland and Luxembourg have similarly signaled an intention to join the BRI.

The Italian deal was greeted cautiously by other EU heavyweights such as France, who nonetheless was happy to sign multi billion dollar deals of benefit to French manufacturers, notably Airbus.

The BRI was first formulated by Xi in speeches he gave in Astana and Jakarta in 2013. Since then, which is only just over five years ago, the scheme has captured the attention, imagination and support of more than 150 countries. There are two major elements: a land-based road, rail and optic fibre network throughout Asia and extending to Europe, and a maritime series of routes linking China to Europe, Africa, and Latin America.

There has never been anything comparable in all recorded history. There have of course been various colonial empires, notably British, French, Spanish, Portuguese and Dutch, in recent centuries. The relationship between the colonial power and its colonies was hugely unequal, with most of the benefits flowing one way back to the colonial power. The colonies were ruthlessly exploited for their resources, both human and natural.

Xi expounded a different vision for the future. In 2017 he further refined this blueprint for the BRI based on for essential principles: peace and cooperation; openness and inclusiveness; acceptance and understanding; and mutual benefit. Building on those principles the blueprint has continued to evolve, in part because like all ideas, time and experience dictates that adaptation and modification are required to ensure support and further development.

A recognition of the need to adapt and modify the original proposals and address criticisms was demonstrated in Xi’s keynote speech to the forum. Xi did not resile from his initial four basic principles, but added to them. The refinements included a commitment to transparency in the means by which decisions about investments would be made. A sub commitment in this context was a continuation of China’s efforts to eradicate corruption.

A second refinement was a movement to enhance consultation with individual countries and existing multilateral groupings. A third element was recognition by China that one of the major criticisms leveled against China was alleged theft of intellectual property. That allegation was always overstated and does not withstand close scrutiny. Nonetheless, Xi committed to sharing China’s intellectual property. It is already the world’s leader by a very significant margin in new patents registered with the world patent office in Geneva.

The sharing of intellectual property includes setting up science parks and major personnel exchanges with the other members of the BRI. The sting in the tail here is that non-members of the BRI, notably the United States, will not share this benefit, and that will be to their detriment, not China’s.

Another major criticism leveled by Western nations against the BRI is that it creates a “debt trap” for the relatively poor and underdeveloped nations that are participating. Such a criticism never acknowledges that the major Western controlled financial institutions, the IMF and the World Bank, and notably their dominant power the United States, have a far worse record of using financial manipulation to impoverish debtor nations.

The price of IMF and World Bank bailouts has been “structural adjustment” of the debtor nation’s economies. In particular, this has meant that poor countries have had to reduce their spending on health, education and infrastructure, minimize the role of the state, privatize domestic industries, create flexibility in labour market (i.e. reduce wages and conditions), and reduce regulatory controls on foreign investment and ownership of national resources.

Not only are those countries impoverished by such policies, they lose sovereignty and the freedom to formulate alternative strategies. The principal beneficiaries of IMF and World Bank intervention are large multinational corporations. There is little wonder therefore, that there has been a rush of nations to join the BRI. Are they in fact jumping from the frying pan into the fire?

Coinciding with the BRI forum, the Rhodium Group published an analysis of what they called the “debt trap question.” The results of the analysis came from a review of 40 cases across 24 countries where China was engaged in external debt renegotiations.

The key findings included finding that asset seizures are a rare occurrence, and that in the majority of the cases the result of the renegotiation was an outcome favourable to the borrower. In 18 of the 40 cases, the debt was written off; in 11 cases the debt was deferred; in four cases refinanced; and in another four cases the terms were renegotiated.

An example of the different mode of operation of China is seen in the case of Malaysia. Prior to the last election in mid-2018, and then candidate Matathir Mohammad criticized the Malaysian East Coast Rail Link project as unfair. After Matathir won the election the project was put on hold. China agreed to renegotiate terms. A new agreement was reached in April 2019 (after only eight months) and construction resumed immediately.

Matathir attended the BRI forum and pledged his support for the Initiative. He said, “I am fully in support of the BRI. I am sure that my country, Malaysia, will benefit from the project”. China has had similar success with other countries when they are able to see past the anti China propaganda and evaluate the project in terms of its benefit for their own countries.

Mahathir’s statement is not a sentiment one hears expressed by countries that had endured “negotiations” with the IMF. Their experiences with the IMF and World Bank are a major reason why 152 countries have now signed on to the BRI.

Another keynote speaker at the forum was Russia’s President Putin. His speech clearly expounded the view that the BRI was more than a vehicle for development. The BRI closely aligned with Russia’s aim to establish what Putin called a “Greater Eurasian Partnership”.

Cooperation between the members of the Eurasian Economic Union and China’s BRI projects went far beyond economic benefits. The Greater Eurasian Partnership aimed to “promote a closer alignment of various bilateral and multilateral integration processes that are currently underway in Eurasia.”

”It is important,” Putin said, ”that we come up with effective ways of responding to the risks of a fragmented global, political, economic and technological landscape and growing protectionism, with illegitimate unilateral restrictions imposed bypassing the United Nations Security Council or, even worse, trade wars as its most dangerous expressions.”

Although the United States was not mentioned once in Putin’s speech, it is obvious at whom the remarks are addressed. Even in the short time since the forum concluded the United States has issued further military threats to Venezuela following an American organized coup attempt, imposed additional sanctions on Iran, sent a carrier task force to the Persian Gulf “sending a message” to the government of Iran, and imposed hundreds of billions of dollars of additional tariffs on Chinese imports. Perhaps needless to add all of these actions are contrary to international law, the UN Charter and existing multilateral trade agreements.

Putin referred to his “good friend” Xi and that he considered the People’s Republic of China “the country we consider to be our key supporter, our natural partner in the integrated development of the continent.”

This represents the West’s worst nightmare. As Andre Vltchek says, “nothing outrages the West more than the prospect of losing absolute control of the world.”

The United States has for decades sought to prevent a political, strategic and military partnership developing between Russia and China. They fail to see that it is their policies and actions that provide a major impetus for Sino-Russian cooperation.

The BRI is the clearest expression yet of that loss of western control. It is why the United States is heavily lobbying its diminishing band of allies such as Germany and Australia not to participate in Nord Stream 2 and to join in confrontation with China in the South China Sea respectively.

Tony Cartalucci argues that the recent terrorist attacks in Sri Lanka are to be seen in the light of American resistance to the growing geographical and geopolitical influence of China. Joseph Thomas makes a similar argument in regard to Thailand. This is consistent with a pattern of US conduct since World War II.

The fact that 152 nations have joined the BRI from every region of the world is evidence that the majority of the world’s nations see the BRI as a better alternative then the bullying, financial destruction, invasions and occupations employed by the United States to maintain their hegemonic view of the world.

They are surely right. The BRI forum amply demonstrates that a tectonic shift has taken place in the world’s geopolitical landscape. The great danger posed to the stability of the world is the degree to which the West will fight to retain the privileges it has enjoyed for the past 400 years.

James O’Neill, an Australian-based Barrister at Law and geopolitical analyst, exclusively for the online magazine “New Eastern Outlook”.