One Belt One Road is an ambitious concept and needs tactics to match / Jim O’Neill

by Jim O’Neill, chair of Chatham House

A successfully implemented BRI could unleash huge economic growth. Here’s how China can reposition it as a global project five years ago I listened to Chinese President Xi Jinping unveil his vision for the Belt and Road Initiative at the Boao Forum for Asia in Hainan province.

The excitement about the potential of linking up so many historically important countries along the old Silk Road, all the way through to Europe, was so easy to be swept up in.

Whether it be neighbouring Kazakhstan or distant but crucially located Austria, the conceptual benefits could be huge. For someone like myself, with a background in international economics and especially development economics, I realised just how transforming this could be.

Not only does economic theory suggest that international trade and cross-border investment boost economic growth in a win-win way, but there is a huge amount of evidence that this in fact happens. Whether it be Singapore, to take one example in Asia, or Switzerland, in Europe, there are countless examples. Indeed, China itself, since beginning to open up 40 years ago, has perhaps benefited more than many realise from just these two forces, both of which lie at the core of the BRI concept.

People may not realise the potential scale of what a successfully implemented BRI could unleash.

I created the acronym BRIC when, in 2001, I first highlighted the potential for the economies of Brazil, Russia, India and China to become important to the world. (The acronym was later expanded to BRICS with the inclusion of South Africa.) In 2003 colleagues and I first showed that by the late 2030s these four combined could become economically larger than the G7 countries.

Three of these four countries are critically placed for the BRI, with China at its eastern edge and India and Russia in key geographic places. If the continuing development of the BRI just achieved major increases in trade between China and these two, that in itself could have huge positive trade and foreign direct investment consequences, not just for these countries, but also for satellite nations of each of the three.

In some ways the BRI is the first major global initiative that modern China has embarked upon, and it is hardly surprising that there may be some serious challenges. Obviously, China is unique in many ways, including its political system and its interplay with business.

It is also unique in that, for such a large country, in its modern incarnation it has understandably completely prioritised domestic development. The launch of the BRI changes this and brings China’s uniqueness into so many other countries.

I have some specific ideas to help reposition the BRI. First, China should invite some other key Asian countries to feel empowered to influence the path of the initiative. A seemingly radical idea would be to encourage India to influence the next stage. Whenever I have discussed this idea with seasoned Asia watchers they think I am either joking or very naive, due to the two countries’ tricky historical relationship. An undiplomatic response might be, “If China can’t really engage India, then the whole project cannot really be serious.” After all, China and India are immediate neighbours, part of the same BRIC political small club, and the only countries with billion-plus populations. If the BRI is truly ambitious, then it requires serious ambition.

Second, why not invite some non-Chinese expert entities to devise a code of best practice for BRI project financing that would guide how infrastructure projects might be financed? Such an approach might even help improve the operational efficiency of Chinese companies.

Third, China should seek a group of trusted helpful countries, possibly involving the most advanced countries such as Britain to help with these two ideas and perhaps others. An even more radical idea might be to invite the United States to be such a trusted ally as part of some truly ambitious trade deal. Apart from anything else, it would demonstrate to the US that the BRI is not about China trying to impose its will on the world.

What is for sure is that the underlying ambition of the BRI concept is so ambitious it requires equally ambitious tactics to ensure its success.

Jim O’Neill is chair of Chatham House. The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.

This article was originally produced and published by China Daily. View the original article at chinadaily.com.cn