Hong Kong, China – A growing number of China’s trade partners are looking to the country’s Belt and Road Initiative (BRI) as a powerful tool to shore up sagging global trade.
These ambitions were on display on Wednesday during the opening of the two-day 2019 Belt and Road Summit in Hong Kong. The event was attended by more than 5,200 people, including a slew of top-tier government officials from Asia and beyond.
Among them was Dana Meager, Slovakia‘s state secretary at the ministry of finance.
Meager was vocal about the negative impact of the ongoing US-China trade war on global trade and the role the BRI has to play in allaying the effect.
“The world has become an irrational place to live in,” she said. “The US-China trade war has impacted Slovakia and other countries in the region it is in. One of the spillover effects is weakened business confidence.”
Meager has high hopes that the BRI could help boost trade. Despite some initial suspicion and doubt due to geopolitical circumstances, Meager feels a lot of countries have warmed up to the idea of the BRI.
“I’ve witnessed an eagerness to be integrated. Countries that were competing are now cooperating,” she said. “The way out [from the shadow of the US-China trade war] is through further economic integration via the BRI”.
The role of Hong Kong
For Hong Kong, which hosts the annual summit each year, the stakes could not be higher. The semi-autonomous Chinese territory is looking to tap into the BRI to shore up its battered image and secure a spot as a linchpin of China’s signature foreign policy initiative.
The financial hub is also looking to the BRI to provide some economic support after a summer of social unrest sparked by a now-withdrawn bill that could have seen suspected criminals extradited to mainland China for trial, and to boost an economy that could enter a recession this quarter.
Throughout Wednesday’s event, local speakers made a point of easing any concerns about Hong Kong’s stability and ability to service BRI-related needs.
“Hong Kong can make a pronounced difference as the financial capital of China and expand lending capacity,” Hong Kong Financial Secretary Paul Chan Mo-po said during the summit.
“Hong Kong is in the position to promote multilateral economic cooperation”.
The Asian Development Bank (ADB) expects that the BRI will result in infrastructure projects amounting to $1.73 trillion a year until 2020, Chan said, and Hong Kong wants to set itself up as a channel for as much of that investment as possible, both into and from mainland China.
For China, the BRI may provide a means of diversifying its economy away from overreliance on trade with the US.
Many believe this is possible. One speaker after another on Wednesday considered how the initiative could link up participating countries, driving globalisation and opening up trade.
“One of the key main goals of the BRI is “unimpeded trade”. Technically speaking, if more trade routes and new export markets are opened up under the BRI, China should have less dependence on the US export market,” Vicky Ma, a partner at the Hong Kong office of law firm Clifford Chance said.
A new Silk Road
Several Asian countries have jumped at the opportunity to curry favour with China and, perhaps, secure BRI projects and the billions in funding that could come with them.
But such projects have not been without controversy. Some observers have accused the BRI of being a debt trap, pointing to Sri Lanka and Pakistan, which inked deals for projects they are unlikely to be able to pay back.
“The Philippines sees huge opportunities in the BRI, especially with diversifying into non-traditional export markets,” said Angelo Taningco, assistant secretary for economic affairs for the Philippines Department of Trade and Industry.
“Our government has shown it is serious about the BRI.”
“There are no winners in trade wars as history has shown. The last one led to a global recession that lasted 10 years. Countries are smarter now,” Taningco said.
Thaung Tun, Myanmar’s union minister for investment and foreign economic relations echoed those sentiments.
“There are countries that are now looking to isolate themselves, with sentiments against globalisation and up against liberalisation,” he said. “But Myanmar is coming out of its shell and looking for opportunities to do the opposite of that … We welcome the BRI and are ready to open up our corridors”.
It is unclear if the so-called new Silk Road is the global platform the world needs or a spider’s web of influence as some fear. What is certain is that it is enabling China to take a step closer to the centre of the world stage, forging alliances with as many countries as it can on the way.