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About this book

The Belt and Road Initiative (BRI), officially unveiled in 2013, is Chinese President Xi Jinping’s signature foreign and economic policy initiative to achieve improved connectivity, regional cooperation, and economic development on a trans-continental scale. This book reviews the evolving BRI vision and offers a benefit-risk assessment of the BRI’s economic and geopolitical implications from the perspective of Asian stakeholder countries, using both qualitative and quantitative research methods. Among the value added of the book is first an online perception survey of opinion leaders from Asian participating countries on various aspects of the initiative. To our best knowledge, the survey is the first of its kind. Second, the book presents the simulation results of a computable general equilibrium model of the world economy to estimate the potential macroeconomic impacts of the BRI as a whole and those of its constituent overland and maritime economic corridors. Third, the book makes ten key evidence-based policy recommendations on how to enhance the prospect of a successful and mutually beneficial BRI 2.0 to both China and stakeholder countries.

Table of Contents

Frontmatter

Chapter 1. China’s Belt and Road Initiative: Introduction and Overview

Abstract
This chapter reviews how China’s Belt and Road Initiative (BRI) is evolving. It begins with a discussion of the historical, economic, and geopolitical contexts in which the initiative was rolled out by Beijing in 2013. Through the BRI, China seeks to expand its diplomatic manoeuvring space, reclaim its past glory, provide infrastructure finance to neighbouring countries, and revive its slowing economy. By discussing, among others, the scope and the coordination financing mechanisms of the BRI, this chapter explains how the initiative is being implemented by the Chinese government. The broader trade and investment relations between China and three Asian sub-regions of interest, namely, East and Southeast Asia, South Asia and Central Asia are provided. The major achievements of the BRI to date are also highlighted. The chapter concludes with an overview of the structure of the book.
Pradumna B. Rana, Xianbai Ji

Chapter 2. Proliferating Major Power Infrastructure Initiatives

Abstract
This chapter compares the BRI with parallel infrastructure development and financing initiatives championed by other major world powers partly in response to China’s launch of the BRI. These include Japan’s Expanded Partnership for Quality Infrastructure (EPQI), various India-led initiatives in South Asia and beyond, the United States’ infrastructure vision for the Indo-Pacific region, and the European Union’s Strategy on Connecting Europe and Asia. It finds that in terms of ambition, scale, and scope, the BRI is in a class of its own. Japan’s EPQI is a credible alternative source of high-quality infrastructure financing. India occupies a central position in relation to regional connectivity and economic cooperation in South Asia. In contrast, the initiatives of the United States and the European Union are less concrete so far.
Pradumna B. Rana, Xianbai Ji

Chapter 3. Potential Economic Impact of BRI: A Computable General Equilibrium Analysis

Abstract
In this chapter, authors estimate the potential macroeconomic impact (defined as increase in national real GDP) of the BRI stakeholder countries by using the Global Trade Analysis Project (GTAP) model, which is a multi-region, multi-sector, comparative-static CGE model of the world economy, and its latest database. Macroeconomic impacts of the BRI corridors as a whole as well as the impacts of individual constituent overland and maritime economic corridors are estimated. Two conclusions emerge from the preliminary simulation results. First, trade liberalisation policies may generate higher economic benefits than reduction in transport costs. Second, land-locked countries such as Mongolia, Kazakhstan, and Nepal are likely to benefit the most from the BRI. With respect to the Maritime Silk Road (MSR), countries that are already well-embedded in the global maritime shipping networks such as Malaysia and Singapore are projected to benefit more than others.
Pradumna B. Rana, Xianbai Ji

Chapter 4. The Perception Survey of Asian Opinion Leaders

Abstract
This chapter presents the results of a perception survey of Asian opinion leaders, defined as including policy-makers, academics, business representatives, and media practitioners from 26 Asian countries that have signed a BRI agreement with China. The respondents’ perspectives on, among others, the following issues were solicited: (1) why China launched the BRI; (2) the perceived benefits and risks to the countries participating in the BRI; and (3) policy reforms they would like to recommend both to China and their own governments to make the BRI a win-win proposition. The responses of over 1200 opinion leaders from all over Asia presented a fairly positive, yet mixed, assessment of China’s BRI. A considerable number of policy recommendations were also offered by the respondents to both China and to their own governments on how the BRI could be improved.
Pradumna B. Rana, Xianbai Ji

Chapter 5. BRI and Southeast Asia

Abstract
This chapter assesses how the BRI has been implemented in Southeast Asia and its implications. After highlighting the key BRI infrastructure projects in the region such as the China-Laos-Thailand high-speed railway (HSR) and the New Yangon City in Myanmar, it is argued that the BRI strengthens transport connectivity in Southeast Asia, reduces cross-country economic divide, boosts digitalisation in the region’s economy, and facilitates the region’s smart urbanisation process. The key risks posed by the BRI in the region relate to China’s growing hegemony and challenge to the centrality of the Association of Southeast Asian Nations (ASEAN), exacerbation of South China Sea (SCS) disputes, and governance risk in the form of corruption and debt distress.
Pradumna B. Rana, Xianbai Ji

Chapter 6. BRI and South Asia

Abstract
This chapter examines the implementation of the BRI in South Asian BRI stakeholder countries (which do not include India). It finds that the BRI strengthens intra-country transport connectivity for Pakistan and has the potential for improving international transport and commercial connectivity for land-locked Nepal, making it a land-bridge between China and India. BRI-funded energy projects like power plants and transmission networks in South Asia also help ease power shortages in the region. Industrial parks and special economic zones built under the BRI will facilitate South Asia’s drive towards industrialisation and economic modernisation. The risks confronting BRI-funded projects in South Asia include India’s opposition to the BRI which has led to political instability and ‘regime flips’ in Sri Lanka and Maldives, rising debt ratios in countries like Pakistan and Sri Lanka, and the worsening of the already rampant corruption in the countries of the region.
Pradumna B. Rana, Xianbai Ji

Chapter 7. BRI and Central Asia

Abstract
The BRI has transformed Central Asia from a land-locked and ‘forgotten’ region to a land of economic opportunities. With the initiation of the BRI by China in 2013, the volume of intra-regional international trade and the inflow of foreign investment into the region have surged. The number of China-Europe trains transiting through Central Asia has also increased significantly. In addition to connectivity, the BRI has contributed to industrialisation and financial sector development in the Central Asian region. On the other hand, the BRI could lead to debt distress in several countries, with Tajikistan being particularly vulnerable. The BRI may have also aggravated Sinophobia in several Central Asian Republics. The BRI has to navigate a complex geopolitical environment in Central Asia. If implemented improperly, BRI infrastructure projects could worsen the region’s pre-existing geopolitical fault lines.
Pradumna B. Rana, Xianbai Ji

Chapter 8. Policy Recommendations

Abstract
Based on the findings of the preceding chapters, this final chapter of the book derives ten key policy recommendations that China and Asian BRI stakeholder countries should implement. These policies will help maximise the benefits of BRI while minimising the risks so that an improved BRI 2.0 with win-win outcomes could emerge. The recommendations include: (1) enhancing transparency, (2) strengthening economic and infrastructure governance, (3) securing the buy-in of other major powers such as Europe and Japan, (4) multilateralising the BRI, (5) liberalising and facilitating trade, (6) managing public debt risk, (7) preparing a national infrastructure development strategy, (8) empowering and protecting local communities, (9) addressing missing links in BRI transport networks, and (10) upgrading BRI transport corridors into economic corridors.
Pradumna B. Rana, Xianbai Ji

Backmatter

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