China’s frosty reaction to alternative Belt and Road project

Plans by US, Australia, India and Japan to develop infrastructure programs in the Asia-Pacific region have caught Beijing by surprise

In an alternative world, it is an intriguing possibility. A series of stripped-down regional infrastructure projects to rival China’s Belt and Road Initiative, the trillion-dollar program of ‘New Silk Road’ superhighways, connecting the country with Asia, Africa, the Middle East, Europe and Latin America.

But in reality, this proposed plan by Australia, the United States, India and Japan is starting to resemble a “threat” to the world’s second-biggest economy’s ambitions of increasing its global footprint.

As news leaked out about the blueprint from a senior US official in the influential Australian Financial Review, Beijing immediately viewed it as an attempt to counter its spreading influence in the Asia-Pacific region.

Before leaving for a trip to the United States for a meeting with the US President Donald Trump in Washington, the Australian Prime Minister Malcolm Turnbull tried to put the project into perspective.

Asked about the scheme, he blamed the media for always looking at issues as if they were Cold War-style rivalries. “That’s not the way we see the region,” he told Sky TV.

Even Tokyo played down the big four’s Belt and Road 2 project. Yoshihide Suga, Japan’s Chief Cabinet Secretary, pointed out that it was normal for the group to regularly exchange views on issues of mutual interest.

“It is not the case that this is to counter China’s Belt and Road,” he said.

But in practice, when Prime Minister Turnbull goes to the White House on Friday, China will have a prominent place on the agenda.

The Australian PM has already talked about the need for “trillions of dollars of additional infrastructure investment” in the region, which could be interpreted as a direct challenge to the ‘New Silk Road’ scheme.

Naturally, this could involve the 11 members of the controversial Trans-Pacific Partnership, a trading bloc of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, even though the US pulled out of the TPP under President Trump.

Prime Minister Turnbull will also try to balance the Washington administration’s ‘America First’ dictum with his commitment to strong economic ties with China. After all, the US is the single largest destination for Australian overseas investment, worth US$482 billion, and its most important ally.

“Australian firms lead the world with infrastructure financing and management – examples include Macquarie, Lendlease, Transurban and IFM,” Professor Simon Jackman, CEO of the United States Studies Center at the University of Sydney, told the BBC.

“Part of Australia’s agenda in Washington will be to not only export a policy model but to create investment opportunities,” he added.

‘Belt and Road 2’ would also fit nicely into those parameters and complement Japan and India’s skill sets in technology, IT and steel production, key building blocks for major infrastructure development.

But for China, this is seen as a direct rival to its ‘New Silk Road’ program, which was rolled out by President Xi Jinping in 2013, especially in the Asia-Pacific region.

Predictably, the specter of the US looms large in the country’s state-owned media when dealing with Belt and Road 2 coverage.

“It is normal to understand why the US leads other nations to find ‘alternatives’ to the Belt and Road, since the US has always considered it a challenge to its power in the [world],” Xu Liping, a senior research fellow at the Chinese Academy of Social Sciences, told the conservative Global Times.

“The US is the only country with experience of wielding strategic influence at a global level. The US is concerned that China would do the same due to the Belt and Road Initiative’s broad coverage. It is an effort by the US to maintain its global power, and not to lose its alliance,” Xu added.

Yet despite the rhetoric, the project is likely to produce economic benefits for a region which is desperate to upgrade its infrastructure. In the end, two Belt and Roads might be better than one.

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