Asia-Pacific News

Why soft power could be the real value of China's massive Belt and Road project

Key Points
  • Several high profile projects under China's "One Belt, One Road" infrastructure initiative have met stumbling blocks
  • China recognizes the importance of its international reputation, and OBOR is at least partly aimed at improving this
  • Emerging economies with similar aspirations towards development look set to be most cooperative partners, responsive to a soft power push

China's "One Belt, One Road" (OBOR) initiative might bank on the development of infrastructure to boost its standing as a growing superpower, but the real value could be the soft power it affords the world's second largest economy.

A train at the Urumqi South railway station. China is spending on high-speed rail projects as part of its "One Belt, One Road" initiative.
Zhang Peng | LightRocket | Getty Images

Announced by Chinese President Xi Jinping in 2013, "One Belt, One Road" comprises of two routes — the Silk Road Economic Belt and the 21st Century Maritime Silk Road. The routes link China to Europe by way of Central Asia, Southeast Asia, South Asia and Africa.

Through building infrastructure and networks, from high-speed railways to university accommodation, China aims to boost free trade and development in regions traversed by OBOR.

Yet despite the exuberance of Chinese media in covering the recent Belt and Road Forum in Beijing 一 including plenty of mentions that OBOR would bring about "win-win" results 一 progress made in OBOR-linked infrastructure projects could be telling a different story.

Slow, but not necessarily steady?

Given the broad nature of OBOR in terms of scope and objective, assessing infrastructure projects linked to the initiative as a whole proves difficult. This is further complicated by the vast number of private, public and international institutions involved in the initiative.

"Chinese government officials and business executives, especially those at state-owned enterprises, frequently go out of their way to describe various activities as adhering to the principles of OBOR, even when those connections are rather tenuous," the Economist Intelligence Unit (EIU) said in a 2016 report.

OBOR: 'No initiative in history has been perfect'
OBOR: 'No initiative in history has been perfect'

With some 65 countries involved in OBOR, whether or not "win-win" results can be achieved depends on a host of variables, including political risks, ease of doing business and economic stability in partner countries. A large proportion of projects remain in the planning or tendering phase, according to the EIU's report.

Several high profile initiatives, however, have stalled.

Agatha Kratz, an associate policy fellow at the European Council on Foreign Relations, told CNBC that a number of high-speed rail projects under the OBOR umbrella "have been agreed upon, but have seen little or no concrete development."

One of those projects is China's plan to develop a rail network that links it with Southeast Asia 一 crawling through Cambodia, Laos, Vietnam, Myanmar, Thailand, Malaysia and Singapore.

Agreements on the stretch of the railway in Thailand were made in 2010 but negotiations are still taking place, according to Kratz. "This particular project saw a lot of ups and downs as it was going to be financed by China and built by Chinese companies, but the Thai government finally decided to finance it itself (while) still using Chinese technology," Kratz said in an email.

"The official line now is that the project will start construction in 2017, but I'm sure there could be some more delays."

For Thailand the railway would allow the country to develop outside of the Bangkok hub.

"The economic benefit (of the railway) is much higher than financial return," Transport Minister of Thailand Arkhom Termpittayapaisith told Xinhua last December, referring to how more tourism and investment is expected to roll into regions in the country beyond Bangkok.

Other Southeast Asian rail projects have faced a similar fate. While work in Laos reportedly began in 2016, Kratz indicated that progress could be minimal. In Indonesia, the Bandung-Jakarta line is unlikely to meets its 2019 completion deadline as work has yet to begin.

Given how infrastructure projects require time before returns materialize, later stages of projects can be put at risk, especially if the "commercial and political coalitions supporting a deal … change," added Ja Ian Chong, an associate professor at the National University of Singapore.

The Pakistani army undertakes security measures ahead of the opening of a trade project in the Gwadar port, west of Karachi on November 13, 2016. The port is a key part of the China-Pakistan Economic Corridor.
Metin Aktas | Anadolu Agency | Getty Images

Besides delays, some OBOR initiatives, such as the development of the $46 billion China-Pakistan Economic Corridor (CPEC), face terrorism and security risks. The project in Pakistan involves the construction of energy, road and port infrastructure, including the Peshawar-Lahore-Karachi railway network and Gwadar airport.

However, CPEC construction sites have been targeted by extremist factions in Pakistan, and the threats to security could be set to continue, Carnegie-Tsinghua Center for Global Policy experts Shi Zhiqin and Lu Yang wrote in an article last December, warning that it was "uncertain" if Pakistan would be able to maintain the security of the new transportation routes.

China and Pakistan have already cooperated on big projects, including a port on the Arabian Sea at Gwadar. Though India has not embraced the plan and may join with other countries such as Japan on their own effort.

Pakistan has deployed almost 15,000 personnel for the safety of Chinese employees working on CPEC, John Calabrese at the Middle East Institute wrote in an article last December.

This enhanced security cooperation between China and Pakistan takes place against growing tension between India and Pakistan, Calabrese said, adding that OBOR could "inadvertently heighten threat perceptions."

In a statement made at the Belt and Road Forum, Pakistan's Prime Minister Nawaz Sharif cautioned against politicizing CPEC, which he said aimed to build "a peaceful, connected and caring neighborhood."

India, which chose not to send an official delegation to the forum earlier this month, clearly disagrees. India and China fought a brief but bloody border war in 1962 and India and Pakistan have engaged in three conflicts since independence.

The real value of "One Belt, One Road"

The real benefits of OBOR to China could be the international clout it stands to gain as its attempts to spearhead international policy and improve relations with OBOR partner countries.

Tim Summers, senior consulting fellow of the Asia Programme at Chatham House, said that China's soft power push with emerging economies grappling similar aspirations towards development were most likely to be successful.

'OBOR is the perfect tool for China to push influence'
'OBOR is the perfect tool for China to push influence'

Chinese leaders appear to recognize the country's public image problem. Liu Yanhua, a counsellor of the State Council, acknowledged in a speech at an OBOR seminar earlier in the week that China had faced backlash despite investing billions in infrastructure in some countries due to its lack of attention to the environment and local communities.

Soft power was first openly acknowledged as a part of China's agenda in 2007, when then-President Hu Jintao called for the country to employ the concept at a party congress.

Soft power is as important in the OBOR equation as investing in hard infrastructure, said Gong Xue, senior analyst at the S. Rajaratnam School of International Studies, Nanyang Technological University.

The Chinese government knows it has a shortfall of soft power and has invested in think tanks, scholarships, culture and the media in a bid to correct this, Gong said. "The Chinese government has sensed the international investment environment is changing … (This has led) them to pay attention to details such as the response from civil society, the role of business actors, language and cultural barriers in their investment plans," Gong said in an email.

"(T)he metaphor of Silk Road is itself a sort of soft power, conjuring images of a past age of openness, connectivity, peaceful trade, cultural exchange ... in which China was a central player," Summers added.

Alongside the big business present at last weekend's forum were a number of leaders from the world's major non-governmental organizations, including United Nations Educational, Scientific and Cultural Organization, the World Health Organization and the International Labour Organization.

OBOR will help Chinese brands go global: Economist
OBOR will help Chinese brands go global: Economist

Joshua Kurlantzick, senior fellow for Southeast Asia at the Council on Foreign Relations cast doubt on the success of the project's soft power aims, particularly among China's Southeast Asian neighbors.

He explained that these countries are "highly worried about China's increasingly assertive military behavior in recent years, particularly in the South China Sea." Other countries traditionally less friendly towards China, including India and Japan are less likely to play ball. But, the strategy could be more likely to work in Africa, as well as some of Eastern Europe and Central Asia, where "Beijing is already relatively popular."

Summers said that China's "positive reputation is mainly based on (its) economic success." He explained that "at best for China, (its partners) are neutral about its governance and political system, and get on and do business while ignoring politics."