The Future of China’s Belt and Road Initiative and Our Global Environment
Between the 25th and 27th April 2019, the second Belt and Road Forum for International Cooperation took place in Beijing. The leaders of 36 countries, along with 5,000 participants representing 150 nations, attended this three-day symposium. According to official sources, the Forum yielded 283 “concrete” deliverables (delineated here) and nearly £50 billion worth of corporate deals.
In his opening remarks (text; video), Chinese President Xi Jinping struck a conciliatory tone by addressing the concerns and critiques that are most commonly leveled against his signature Belt and Road Initiative (BRI). He assured the visiting dignitaries that the BRI “is not an exclusive club,” and thus China will “act in the spirit of multilateralism” in order to “fully tap into the strengths of all participants.” He also affirmed China’s “strong commitment to transparency and clean governance,” and its “zero-tolerance” policy toward corruption. In an attempt to allay fears of “debt trap diplomacy,” Xi unveiled a Debt Sustainability Framework “to provide guidance for BRI financing cooperation.” He then called upon all BRI participants to “follow general international rules and standards” pertaining to the development, procurement, and management of projects. Finally, Xi pledged to remove trade barriers, lower tariffs, and stabilize the renminbi’s exchange rate. Whether Xi’s wide-ranging promises to these ends can or will be fulfilled remains to be seen.
Based on the stated deliverables of the Forum, the joint communiqué from the Leaders’ Roundtable, the two official reports (first; second) that preceded the gathering, and Xi’s own words, I believe there is one key area above—yet intertwined with—all others that we must keep our eyes on: the environment.
In October 2018, the Intergovernmental Panel on Climate Change released a Special Report on Global Warming of 1.5°C. Stated simply, in order to save what’s left of our environment, global emissions must be reduced by 45% by 2030 and then to “net zero” by 2050. This inescapable reality is finally sinking in for China and its BRI partners, hence the consistent “green” theme throughout the Forum.
Although it still has a long way to go, China has become much “greener” in recent years. Domestically, China is waging a successful “war on pollution,” gradually phasing out petroleum-fueled vehicles and single-use plastics (with pilot programs underway in Hainan), implementing robust reforestation campaigns, cracking down on ozone-depleting substances, enacting a strict ivory ban, and making sizable investments in lab-grown meat and plant-based alternatives. Despite a deluge of guarantees to make the BRI “greener,” China’s improvements at home have generally not been accompanied by matching measures abroad.
Case in point, although China is now a world leader in renewable energy, from 2014 to 2017, only 5.3% of its BRI energy loans in developing countries were granted to non-hydropower renewable projects. In contrast, petroleum and coal ventures accounted for 43% and 17.9% of these funds, respectively. While these figures reflect negatively on the China Development Bank and China Exim Bank (the primary lenders in question), these two institutions are not the only parties at fault here. The onus must be on host-country entities to ask and advocate for “greener” BRI investments as well.
In terms of its foreign environmental policy, China has been a rather opportunistic actor. For example, in January 2018, China left several of its Southeast Asian neighbors in the lurch (especially Malaysia) when it suddenly banned all imported recyclables. The reverberations of this decision continue to be felt by supply chains worldwide. Although the real responsibility lies with the creators of this waste, rather than with its recipients, China is in a position to use its BRI mechanisms (like the International Green Development Coalition) to negotiate a solution to this escalating problem. Whether it is inclined to do so is a different story.
The Arctic is at the frontier of climate change, and Chinese ambition too. Melting sea ice is rapidly expanding navigable waters in unprecedented ways. By next year, China anticipates that 5% to 15% of its international trade will be transported via the Arctic Ocean. Russia and the United States, among other Arctic nations, are exploiting these reductions in sea ice levels as well, for both commercial and military purposes. What makes these circumstances so alluring to logistics firms and national navies alike is that Arctic passages, when accessible, are nearly two weeks faster than the Suez Canal routes typically taken by Eurasian-bound vessels. The global extractive sector is also paying close attention to the evolving dynamics in the Arctic. This is because, as noted by the United States Coast Guard, the American Arctic alone contains nearly £765 billion of rare-earth minerals, 30% of the world’s natural gas, and 90 billion barrels of oil—all of which become much easier to tap as temperatures continue to rise. However, the benefits of faster cargo delivery and cheaper fossil fuels are far outweighed by the adverse environmental effects of unfettered maritime traffic, mining, and drilling.
The Arctic is the proverbial canary in the coal mine. If we can save the Arctic, then we can save the rest of our planet’s environment too. Doing so, though, will require unparalleled levels of cooperation. Given China’s burgeoning role in Arctic affairs and its observer status on the Arctic Council, China can either help lead the campaign to preserve the North Pole, or it can just keep exacerbating the scramble for the Arctic via its BRI.
While China, along with its allies and adversaries, determine their respective Arctic strategies, coastal settlements throughout this region continue to live in constant fear of severe flooding. In Svalbard, the northernmost region of Norway, which houses the “doomsday vault” (a repository of virtually all of the world’s seeds), the conditions are even worse. Meanwhile, Arctic habitat loss—caused by a warming planet and rapacious industry alike—is not only threatening reindeer populations, but also jeopardizing indigenous peoples (such as the Sámi) who rely on these animals to survive.
An unfortunate pattern of BRI development is that it tends to occur at the expense of endangered animal species, as well as the vulnerable human communities that coexist with them. For example, experts warn that it is highly likely that a Sinohydro venture on the Indonesian island of Sumatra will result in the extinction of the Tapanuli orangutan, while another Sinohydro facility in a Guinean nature reserve could kill 1,500 chimpanzees and compel 8,700 people to relocate. Meanwhile, in the Democratic Republic of Congo, the nearly £14-billion Inga 3 Dam (which, if completed, will be the largest infrastructural feat in Africa’s history) will displace 37,000 people, according to the Chinese-led project’s own director. In Laos, 4,400 farmers have already been forced off their land by the ongoing construction of a BRI railroad. In Brazil, certain Chinese investments are contributing to the deforestation of the Amazon. For instance, the proposed Chacorão Dam (which has previously piqued Chinese interest) would flood 19,000 hectares of Munduruku tribal land.
China, alone, does not deserve all of the blame for the cases listed above (and the many others not mentioned). The host-country governments and corporations that passively allow or actively encourage these types of unsustainable investments are equally, if not more so, culpable for the destruction of their own national heritage.
Over the course of several smaller gatherings within last week’s Forum, six multilateral agreements pertaining to the Global Energy Interconnection (GEI)—an ancillary initiative of the BRI—were signed. Formally launched in March 2016 (2.5 years after the BRI), the GEI is China’s vision for a vast “super grid” to link all of the world’s power sources. The plan has a tentative completion date of 2070 and a price tag of £29 trillion. Although this dream will never fully be realized (due to innumerable obstacles: logistical, political, financial, etc.), the GEI is nevertheless galvanizing China and its BRI partners. In fact, a majority of BRI energy projects explicitly connect to the GEI or are peripherally within its purview.
In his address to the Infrastructure Interconnectivity Subforum, Liu Zhenya, the Chairman of the GEI Development and Cooperation Organization, declared that the GEI “will fundamentally solve major environmental challenges.” From increases in wildlife trafficking, to the £1.9-trillion-per-year oceanic plastic pollution crisis, to the proliferation of biosecurity risks, to global sand depletion caused by unbridled urbanization, environmental challenges related to the BRI abound.
Although China’s newfound commitment to the environment at home is laudable, this philosophy, and actions in furtherance of it, have not generally been demonstrated and replicated via the BRI abroad—in spite of Xi’s words to the contrary at the Forum.
As the United Kingdom prepares to recalibrate its global relationships in a post-Brexit era, it is imperative that British government and industry alike adapt prudent approaches to potential BRI participation. Technology-driven platforms, such as Intelligence Fusion, can empower your business to enter the BRI market in a profitable yet sustainable manner. After all, the future of our global environment hangs in the balance.
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