Published 04 June 2024
As the developed world tries to wean itself off critical trade dependencies with China, the West’s most realistic response to Beijing’s Belt and Road Initiative lies in building the manufacturing capabilities of the Global South to promote economic resilience and healthy competition.
Coming as it did in the wake of the global financial crisis and the Eurozone debt crisis, China’s Belt and Road Initiative (BRI) was launched to a receptive audience when the country’s domination of the world economy seemed certain. In addition, the low hurdle to formal participation ensured widespread take-up.
Nevertheless, the initiative has not been an overwhelming success in achieving Beijing’s multiple strategic objectives. China has increased its soft power among ruling elites in a myriad of countries, but this can prove ephemeral when underlying national interests are not aligned. China has reoriented its trade patterns towards less geopolitically distant countries, but at the expense of increasing its rift with liberal democracies, which it depends on as export destinations and for the supply of much needed critical goods. The BRI is also costing China up to 1.5% of its GDP every year.
Against this backdrop, the European Union announced its Global Gateway in 2021 and the US announced its Build Back Better World and Indo-Pacific Economic Partnership. The G7 also flashed out its Partnership for Global Infrastructure and Investment and Blue Dot Network in 2022, as attempts to emulate the BRI.
Download How should democracies respond to China BRI by Stewart Paterson:
In this final paper in a series of four on China’s flagship project as it enters its second decade, Research Fellow Stewart Paterson set out to explore some remaining key questions: Does the political economy of liberal democracy lend itself to emulating BRI? How are liberal democracies already engaging with the Global South? Is a response to BRI necessary to defend and promote the interests of liberal democracies or is there a better way forward? Is it necessary or desirable to frustrate China’s BRI ambitions?
© The Hinrich Foundation. See our website Terms and conditions for our copyright and reprint policy. All statements of fact and the views, conclusions and recommendations expressed in this publication are the sole responsibility of the author(s).
Stewart Paterson is a Research Fellow at the Hinrich Foundation who spent 25 years in capital markets as an equity researcher, strategist and fund manager, working for Credit Suisse, CLSA and most recently, as a Partner and Portfolio Manager of Tiburon Partners LLP.
Have any feedback on this article?
Related Articles
