Op-ed: BRI “eroding national sovereignty” is false argument

The Opening Ceremony of the 2019 South Asian and Southeast Asian Countries Commodity Exhibition and Investment and Trade Fair. (Photo by Li Faxing from People’s Daily Online)

Recently, some western politicians, think tanks and media outlets claimed that China’s Belt and Road Initiative (BRI) jeopardizes national sovereignty of the participating countries. They argued that Belt and Road countries might lose control over projects under China’s “debt trap”, and Beijing has obtained control over select infrastructure projects through equity arrangements, long-term leases, or multi-decade operating contracts. Such arguments go against facts, and are illogical.

The BRI has been upholding the principle of wide consultation, joint contribution and shared benefits since it was proposed. It fully respects the sovereignty of participating countries. The Initiative adheres to the purposes and principles of the Charter of the United Nations, and opposes exclusiveness, unilateral acts and forced decisions. It aims to achieve win-win results based on mutual respect, equality, mutual benefits, as well as dialogues, consultation and cooperation, allowing each participant to have a sense of gain.

Meanwhile, the Initiative highlights the alignment among the development strategies of the countries along the route. Every country should enjoy the right to develop, and has its own development strategy and planning. So far, no Belt and Road agreement has been forced or reached unequally. In addition, China places high importance on the debt sustainability of all Belt and Road countries. It never forces other countries to cooperate, nor sets “traps”.

Financial integration is bedrock for Belt and Road construction, and the debt sustainability is closely linked with the BRI sustainability. The construction of the BRI needs huge capital investment, while most of the participants are developing countries. The imperfect financial system and lack of financing channels are posing challenges for the financing and investment of BRI projects. In order to solve the problem, the BRI is committed to building new platforms of cooperation and innovative mechanisms of investment and financing, and is actively attracting various capitals.

The BRI involves both Chinese and foreign organizations that together form a capital guarantee system for the Belt and Road construction and have issued a series of risk control measures regarding investment and financing, including the Guiding Principles on Financing the Development of the Belt and Road, and the Debt Sustainability Framework for Participating Countries of the Belt and Road Initiative. Though participating countries of the BRI are shouldering relatively heavy debt burden, such burden has no necessary relation with Belt and Road projects. The debts of some countries, created years before they cooperated with China on the BRI, were a result of the massive loans from other countries and international financial organizations, and China is not the largest creditor. The debt coming from China is the efficient investment and admissible assets of the Belt and Road projects. Increasing the debt suggests increasing valid assets – assets from which the countries can receive long-term returns. Besides, BRI projects are carried out in a variety of forms. It’s farfetched to equate a certain form of cooperation with “erosion of national sovereignty”.

Focusing on the promotion of interconnectivity, BRI construction involves a great number of infrastructure projects. These projects call for huge investment and involve long construction periods, and in fact create low profits and cannot produce immediate returns. In addition, they are always built in harsh environments with huge difficulties and risks. However, realization of such projects is urgently needed by the participating countries in order for them to achieve social and economic progress. When many western enterprises are avoiding such projects, Chinese companies are rising to these challenges. Regarding infrastructure projects such as highways, railways, ports and power stations, Chinese enterprises adopt practical solutions and make full consideration of investment, returning cycle, human resource and technology. National sovereignty is never an issue as the specific cooperation models and duration are decided through consultations. According to US public opinion, why is it considered an “erosion” of national sovereignty to hold a long-term equity of 51% or more, while holding a short-term equity of 49% or less is not?

Is the globally-accepted BOT (build-operate-transfer) model adopted by Chinese enterprises also considered “erosion of national sovereignty”? Based on such logic, many US enterprises are also “eroding national sovereignty” before they transfer projects, as they participate in BOT projects in China and other countries. China has always encouraged cooperation in third-party markets based on Belt and Road construction. Since the proposal of the initiative, China has signed cooperative documents on third-party market cooperation with France, Italy, Spain, Japan and Portugal, which promotes effective alignment for China’s advantageous capacity, developed countries’ technology and the development needs of developing countries. A batch of American enterprises including Caterpillar, Honeywell, and General Electric, have already joined Belt and Road projects, and are enthusiastic about Belt and Road construction. Are the above nations and enterprises accomplices that have assisted China to erode the sovereignty of other countries?

By fanning the “erosion of national sovereignty” and slandering the BRI, the US is trying to sabotage the relationship between China and Belt and Road countries with the so-called “great power competition” mentality and also attempting to narrow the space China needs to conduct positive interaction with the world. The BRI has become a popular public product around the world. To protect the image and long-term interests of the US, Washington should assist the development of Belt and Road countries with more concessional loans, lower cost, higher efficiency and an equal and respectful mindset, rather than undermining the foundation of the BRI.

By Jia Xiudong, a researcher with China Institute of International Studies

(People’s Daily Online)