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What alternative futures face the BRI?

Posted By Carl Michael, Thursday, July 2, 2020

Carl Michael makes assumptions about the alternative futures of Belt and Road Initiative in his seventh blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

The future of the BRI will be shaped by factors both inside and outside China. China’s future geopolitical, economic and social conditions will have a significant impact on the rest of the world. Before one considers whether the BRI will be complete by 2050 or not, one must consider what alternative futures are plausible and probable, and the factors which influence those alternative futures. Some factors which impact the future will not change very much. Among these are the rate of technology change, China’s geographic position, the inherent logic of Eurasian integration and China’s demographic destiny. Its aging society and decreased birth-rates will have a major impact on the potential of workforces in China and the world, with consequent impacts on economic competitiveness.

 

Environmental stress and changing climate will impact not just China and Asia but the Arctic and the wider world. Currently unviable areas could open to further economic exploitation and some current areas may no longer be economically viable. Environmental stress in turn will trigger population movements within and between nations which could be accelerated by growing economic inequality. In both China and in other nations a significant percentage of the current rural population would have migrated to cities, transforming both China and other nations into predominantly urban states with megalopolises poised to change internal political dynamics. The interaction of contributing factors such as these will impact the future of the BRI directly as well as indirectly. The Eurasian littoral has become increasingly crowded as the visible face of the hegemonic ambitions surfaced by the advent of the BRI narrative. Consequently, the concept of the Indo-Pacific has been adopted as a balancing mechanism and narrative in both economic and geopolitical space. The fault lines between the two narratives is where conflict has the greatest ability to impact the future of the BRI.

 

In addition to horizon scanning, the following sections will consider alternative futures for the multifaceted BRI at the macro level using a two-axes scenario technique. The axes are based on two key factors selected as having the most impact on the future, which is considered in terms of interaction between the two factors. The first of the factors used will be ‘Globalisation vs. Nationalism’. Globalization refers to the trajectory of the international economy and global geopolitics. ‘Nationalism’ refers to the ways that countries other than China promote their own long-term future interests. The second factor will be ‘BRI facilitates vs. BRI impedes’. The combination of factors is presented as two axes encompassing four plausible positive future scenarios. These are used as lenses with which to view possible futures unfolding over the period to 2050. The four future scenarios that will be covered in the next sections are: ‘The BRI facilitates globalisation – A Converging World Order’, ‘The BRI impedes globalisation – A Continuing World Order’, ‘The BRI facilitates nationalism – A Conflicting World Order’, and ‘The BRI impedes nationalism – A Constraining World Order’. It should be noted that these scenarios are objective and plausible caricatures and it is quite probable that components of one may be fused together with another.

 

The hope is for a BRI which ennobles mankind in the broadest possible sense and the fear is that the drive to ‘complete’ the BRI could end up sowing loss and division. The evolution of the BRI and any effective response to it will require radical geopolitical changes. The goal of presenting the scenarios which follow will have been achieved if they are seen to be plausible, address the fundamental fears of all concerned yet leave room for hope in the image of the future.

 

© Carl Michael 2020

Tags:  Belt and Road Initiative  China  economics 

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Eurasia’s Heartland 2050: What is the Expected Future?

Posted By Kimberly Kay Daniels, Monday, June 29, 2020

Kimberly Daniels, a member of our Emerging Fellows program envisions Eurasia’s Heartland in 2050 through her sixth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

The expected future of Eurasia’s Heartland in the year 2050 could play out as a scenario that reflects a continuation of current trends in geopolitics among the U.S., Russia, and China. As it was in 2020 and earlier decades, it is driven by geopolitical positioning through foreign policy. Characterized by a territorial approach to Heartland power and a unipolar international order, it is the future least likely to unfold.

 

By 2050 in this scenario, there is a grand chessboard of geopolitical positioning and a territorial power play between the U.S., Russia, and China. After all, the player that triumphs in achieving universal domination, according to Mackinder, will wield control over the earth’s largest continental landmass by way of Heartland-centered power. From the Heartland, throughout the Afro-Eurasian continent, and across the globe by land, sea, air, and digital communications, it is a region unrivaled potential for economic growth and global impact.

 

In the Afro-Eurasian region, Eastern Europe is an emerging contributor to science and technological advancements in the production of vaccines and engineered therapeutics. Central Asia, now the green energy capital of the world, leads the way in providing access to affordable, reliable, and renewable energy for all its populations and selling the surplus to meet demand. The Middle East and African regions south of North Africa are exclusive suppliers of precious gemstones, mineral resources, popular metals, and stone.

 

Across the African continent are state-of-the art manufacturing facilities, distribution warehouses, and production studios. They support talented producers of high-quality textiles and fashions, contemporary art, Afrobeat, Afro-jazz, and other rhythmic music, as well as award-winning documentaries and films. West, East, and South Africa stimulate growth through sustainable agriculture and tech-driven agribusinesses, and dominate the market of plant-based pharmaceuticals. And the Congo has become the major supplier of fresh water for Africa and Europe. Despite escalating social and religious tensions in the region, the Afro-Eurasian continent, beginning with the Heartland, is the jackpot at stake in a winner-takes-all power struggle.

 

Russia and China’s foreign policies involve a territorial approach to Heartland power. Russian foreign policy allows for land grabs in the Caucasus and in Eastern Europe. She considers it her right to protect former Soviet States from further encroachment by China and Western influence. China’s foreign policy is still multifaceted. She has partnered with Russia and Iran for green-energy developments in Central Asia. Likewise, through trade, foreign direct investment, and increased militarization to protect BRI infrastructure and all of her borders, she now has full influential reach into Central Asia and the Middle East. Separately, Russia and China are advancing their interests in Africa. They understand Africa’s strategic importance to their geopolitical positioning.

 

The U.S. remains the sole superpower, always ready to defend a unipolar international order. Her geopolitical positioning is reflected in foreign policy aimed at containing Russia and China. She resorts to sanctions against Russia and Iran, a trade war with China, and threats of a stronger military presence in Central and Western Europe. Her containment strategies merely shadow her approach in 2020 to their expanding Heartland power and influence.

 

The expected future of Eurasia’s Heartland in 2050 could resemble a continuation of geopolitical positioning between the U.S., Russia, and Chin. However, this makes it the least likely future to unfold. Disruptions are likely to change how things play out, and shape one of three alternative futures.

 

© Kimberly “Kay” Daniels 2020

Tags:  China  Eurasia  Heartland 

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Is an Asian Union possible and preferable?

Posted By Travis B. Kupp, Thursday, June 25, 2020

Travis Kupp, a member of our Emerging Fellows program checks the possibility of shaping an Asian Union in his sixth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Asian regionalism has a complex past and an uncertain future. Events of the 20th century including a tumultuous process of decolonization, industrialization, and ideological reconciliation have set the stage for stronger relationships between Asian nations. The growth of the Association of Southeast Asian Nations (ASEAN) provides a potential starting point in the eastern part of the continent that could lead to broader unification, continuing its legacy of increased economic cooperation. Central Asia could serve as another point of origin for unification with its compelling location as the geographic heart of Eurasia. Regardless of where an Asian Union emerges, its approach to international rules and norms—especially from a security standpoint—will ultimately determine how firmly it takes root and how successfully it grows.

 

The expansion of ASEAN over the years provides a thread toward increased economic cooperation across the continent at a minimum. Originally exclusive to southeast Asia, the Association has added a “Plus Three” component to include economic heavyweights China, Japan, and South Korea, as well as an East Asian Summit that includes India, Australia, and New Zealand. This trajectory could continue into the creation of an East Asian Community that looks similar in nature to that seen in Europe as a precursor to a deeper Asian Union. However, it may be unpalatable to nations in Central and Western Asia who may not be keen on joining an organization that developed over many years without any of their influence in the process.

 

Alternatively, the dormant seeds of the short-lived Central Asian Union (CAU) could sprout in the fertile soil of China’s Belt and Road Initiative. The establishment of this bloc would initially serve as a counterbalance to the Chinese - and Russian - led Shanghai Cooperation Organization (SCO), which includes many nations that continue to be wary of each other’s intentions. The CAU could then be instrumental in leading to a more equitable framework for continental integration. As the geographic nexus between cultures in every direction, Central Asia could be a more acceptable birthplace for an all-inclusive union.

 

Whether emerging from East or Central Asia, negotiating existing international relationships and norms will make or break an Asian Union. For instance, many ASEAN nations enjoy a relationship with both China and the USA and would rather keep it that way. However, China has an interest in unchecked access to disputed seas along its entire coast. This could lead to an attempt at forcing the hand of these countries to “side with Asia” for handling its own regional security, thus creating the conditions for potentially decades of intra- and international conflict. Central Asia would similarly need to play a careful balancing act between Chinese and Russian interests without picking sides. Even if successful in this endeavor, the region has historically not integrated well with the existing world order and may not have much incentive to push for the non-hostile establishment of a Union.

 

An Asian Union that spans the entire continent is an unlikely future for 2050 but should not be disregarded as impossible. Tremendous shifts that have taken place over the last century both within and between Asian states, in particular through the development of economic infrastructure under Western security guarantees, make such a regional institution worth considering. This could emerge from China’s relationships with Central Asia and Russia in the west, or with from China’s involvement with ASEAN in the east. Either way, a successful Asian Union will need to carefully navigate its security framework in order to avoid provoking the distrust and potential opposition of the rest of the world. An Asian Century without a broad Union is a more probable outcome in the next few decades.

 

© Travis Kupp 2020

Tags:  Asia  China  economics 

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What are the drivers of change?

Posted By Kimberly Kay Daniels, Monday, May 25, 2020

Kimberly Daniels, a member of our Emerging Fellows program inspects the players that may change the rules of world-power game in her fifth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

The question of a plausible world power shift from the West to Eurasia’s Heartland in 2050 necessitates an understanding of the trends driving change in today’s geopolitical landscape. Geopolitical positioning by the U.S., Russia, and China could continue the status quo. However, trends of increasing geo-economic strategies, geo-technological warfare, and geo-cultural identity suggest possible disruption to the current world order. These drivers of change could influence alternative ways in which the future unfolds.

 

Continued geopolitical positioning by the U.S., Russia, and China to exploit Heartland power is driving change from a unipolar to a multipolar international system. Following the Cold War, the U.S. moved forward, unchallenged as the sole superpower in a world order characterized by unipolarity. America extended her assumed “greatness” and sought to spread her influence throughout Eastern Europe, Central Asia, and the Middle East directly or indirectly through regional partners and global institutions. Russia and China did likewise, albeit more gradually and astutely. All three’s tendency to leverage the Heartland to their own advantage shows a pattern of promoting and protecting their geopolitical agendas and interests in the region. Presently, the U.S. hints at purchasing Greenland, whether to block China from establishing a Polar Silk Road or contain Russia’s growing presence on the island. As Russia, China and other stakeholders increasingly drive a multipolar world order, with the U.S. promoting an “America First” policy, America’s greatness is diminishing.

 

Russia and China’s foreign-policy shifts toward geo-economic commerce is disrupting the U.S.’ extension of power. Russia expanded her foreign policy, desiring partnerships with Muslim majority countries and other non-traditional partners in the Middle East, Central Asia, and Africa. Beyond political, military, and or security cooperation, Russia organizes international commerce among them by trade and energy imports-exports. China became the manufacturing hub for American companies pursuing competitive advantages through inexpensive labor. She adapted her foreign policy to support state-controlled capitalism, and could become the economic superpower by 2050. Ideally, China’s Belt and Road Initiative will facilitate international commerce across Afro-Eurasia through connectivity. However, India and other stakeholders perceive it as a precursor to economic colonialism in the Heartland. Russia and China’s foreign-policy shifts along with their embrace of geo-economic commerce has the U.S. scrambling to “Make America Great Again.” This change driver signals increasing disruption to U.S. power abroad. Still, China’s handling of COVID-19 may disrupt her superpower dream.

 

Geo-technological warfare supposedly waged by Russia, China, and Iran is progressively disrupting the international order. In this New Cold War era, they stand accused of cyberterrorism, cyber espionage and cyberwarfare against Western targets. These digital tactics pose as serious a threat to the established international order — based on peace and cooperation — as nuclear weapons, although on a different scale. Election hacking is eroding people’s trust in democracy. Fake news continues to damage the media’s credibility. And thefts of intellectual property and trade secrets are costing businesses, inventors, and artists billions of dollars in unrealized revenues. As digital warfare increasingly undermines international law, disorients governments, threatens national security, and destabilizes societies, disruption to the international order is accelerating. Geo-technological warfare has Western targets concentrated on reactive policies and measures and distracted from Heartland strategies. It is a change driver that could threaten the U.S.’ “Buy American, Deregulate, Innovate” domestic agenda.

 

Geo-cultural identity as a unifying ideology emphasized by Russia and increasingly adopted by her partners is disrupting Western influence in the Heartland. The underlying cultural spirit of Russia’s foreign-policy is expressed by Eurasianism. Identification with this ideology seemingly implies one’s rejection of Western civilization and capitalism, acceptance of authoritarianism, and or value for unity. South Caucasus, North African, and Muslim majority countries in Central Asia identify with the ideology’s inclusion of the Muslim community (“Ummah” in Arabic). Turkey adopted Eurasianism to symbolize her geopolitical reorientation from the West to Eastern and Central Asia. However, growing resentment among Turkish citizens of Syrian refuges and migrants may disrupt Turkey’s embrace of Eurasianist solidarity, especially if COVID-19 worsens. As Russia increasingly unites much of Afro-Eurasia around a geo-cultural worldview, Western influence in the Heartland is declining. This change driver could transform geopolitics, while Russia’s “Ummah Pivot” (rebalance to Asia) may position the Heartland for a world-power shift to the East.

 

Will the geopolitical landscape be shaped by a continuation of the same? How might geo-economic strategies, geo-technological warfare, and or geo-cultural identity drive change toward alternative futures? Could world power shift to Eurasia’s Heartland in 2050? These are the questions scenario stories will explore.

 

© Kimberly “Kay” Daniels 2020

Tags:  America  China  Russia 

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What does increased attention from Moscow mean for Asia?

Posted By Travis B. Kupp, Thursday, May 21, 2020

Travis Kupp, a member of our Emerging Fellows program inspects Russia’s attention towards Asia in his fifth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.


In 2018, former Putin aide Vladislav Surkov wrote that "Russia's epic journey toward the West … [after] numerous fruitless attempts to become part of western civilization" had concluded. If this in indeed true, then the nation’s borders dictate that increased interest in Asia, from the Black Sea to the Sea of Japan, is likely over the coming decades.

 

China’s future as a great power and its reach west through the Belt and Road Initiative (BRI) threaten Russia’s influence in the region as a whole. Cooperation between China and Russia in the Western and Central Asian states could be a regional stabilizing force if economic and security agendas can be harmonized. On the other hand, these agendas could lead to flashpoints along Russia’s entire southern border if integration is resisted. Either way, Moscow’s game in Asia will assuredly affect the nation’s identity and regional alignment into the future.

 

Russia is keenly aware of its need to have a non-hostile relationship with China. While it is possible that a more complete alliance could form, the mid-20th century psychology of great power politics remains alive and well in Moscow. It is therefore more likely that the coming decades will see a warm-yet-wary relationship emerge with Beijing. In this future, Russia will play a careful game of reinforcing its security and economic partnerships with China while engaging in bilateral relationships with India and Southeast Asian nations as a hedge. Russia will also take advantage of its natural gift as the wide belt of land that separates China and all other nations to its South from direct access to the Arctic.

 

As interest in the northern pole heats up and Siberia becomes more inhabitable, Russia will likely take full advantage of the desire for influence in the region. Moscow may begin to welcome an increasing number of immigrants from India and elsewhere into its Far East in order to balance out the increasing presence of Chinese workers and reap the rewards of diverse labor force. This could in time start to tip the scales of economic power in Russia’s favor. However, at least in the coming few years, Moscow will be more focused on holding its ground as an energy enabler and economic beneficiary of the Chinese powerhouse.

 

Without friendly relations between Russia and China, Western and Central Asia could become a hotter geo-economic, if not literal, warzone. Chinese political influence through the BRI buildout could lead a threatened Moscow to push neighbors like Kazakhstan to pick a side. This is a future in which Asia’s middle increasingly resents the exploitative mindset of its behemoth neighbors, resists integration into this different flavor of globalization, and descends into fracture and volatility. Weakened economic relationships along its southern border, along with the need to secure it, could force a reluctant Russian reunion with Europe. However, Moscow will not be keen on making the concessions to the West that would likely be necessary.

 

Asia has long been a key arena of Russian foreign policy but is likely to now become the primary focus as an Asian Century looms. It remains unclear what course this future will follow, whether more cooperative or competitive. Cultural differences will continue to be a wedge between still-European Moscow and its southeastern neighbors, but over time an alignment of values could add fuel to the fire of Asia’s global growth. On the other hand, mismanagement of this partnership could serve to ignite conflicts in the unstable Central and Western Asian region. Regardless, if an Asian Century is inevitable, Russia may come to belong more and more to the continent over the next few decades.

 

© Travis Kupp 2020

Tags:  Asia  China  Russia 

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Does technology impact the BRI?

Posted By Carl Michael, Tuesday, May 5, 2020

Carl Michael inspects the impact of technology on Belt and Road Initiative in his fifth blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

The term technology covers the development and utilization of technical capabilities in relation to people and the environment. Technologies are material and non-material or digital inventions that have enabled human beings to survive, thrive and advance. They ought not to be considered in isolation from the era or the societies in which they exist. For instance, some experts consider that were it not for the development of the chariot, China itself as a unified entity would not exist. Such is the impact of technology on society. Continuing on this note, if one considers the very concept of the state as a ‘technology’ in its own right, one can define a state as the sum of human endeavour in the production of economic, military, social or artistic outcomes. Extending this train of thought, one can consider the state or the BRI to be a ‘network’, and one which acts within a global network.

 

The evolution of the BRI must be considered in the context of political technologies such as states and intra-state activities. It should be acknowledged how these technologies interact with other cutting-edge technologies and the resulting evolution of governance. In this macro-context, national or civilizational interactions are part of a complex technological network. When insights from complexity theory and network theory are incorporated into one’s perspective, the evolution of the BRI and its vision can be viewed in a new light. This provides a viewpoint which could be useful when considering how technology impacts the intentions driving an initiative such as the BRI. The economic future of China is technology dependent and effective utilization and transfer of technology will be at the heart of the BRI. Further to this, as BRI members develop, there will be greater demand for advanced technologies, wherever they come from.

 

For China, technology and success are almost synonymous and the ‘Made in China 2025’ strategic plan is the blueprint for China’s intent for seizing leadership in advanced technology. It is a world leader in digital payment systems and the intent is to surge forward in ICT, artificial intelligence, robotics, high-speed railways, biotech and medical technology, pharmaceuticals, space technology, renewables, energy efficiency, electric vehicles, nuclear energy and military technology. To fuel this surge China needs access, one way or another, to commodities from developing countries or cutting-edge technology from developed countries. The BRI presents China with opportunities to use its accumulated capital to increase its ability to control and optimise global value chains on favourable terms for developing and exporting its technology.

 

The danger from the current global crisis has showcased China’s strategic biotech capabilities. Chinese leadership in other key technology sectors can be noted from its young, large and ambitious technology workforce, its recent accounting for a third of a space-launches, its pushing ahead with ambitious plans for cleaner and safer next-generation nuclear power, and its acknowledged strength in 5G telecom networks and digital platforms. With this in mind, we can see that China’s ‘Technological Tianxia’ will be one of fast, technologically driven economic and social change with a centrally managed approach, including the use of technology for military and power-projection. The speed of this change is considerable. China took just over a decade for over a billion people to double industrial output per person. In comparison, the UK took well over a century and the US took about half a century. The technology driven vision of the future will be a distinctive factor for an imagined community such as the BRI and this vision will be driven by Chinese technology prophets, entrepreneurs, influencers and venture capitalists.

 

© Carl Michael 2020

Tags:  Belt and Road Initiative  China  technology 

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Which stakeholders could influence a world-power pivot?

Posted By Kimberly Kay Daniels, Wednesday, April 29, 2020

Kimberly Daniels, a member of our Emerging Fellows program identifies players that could likely affect the world-power game in her fourth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

India, Iran, and Turkey are three regional powers being wooed as part of U.S., Russian, and Chinese geopolitical agendas. How they align their aspirations with the civilizational values of the U.S., Russia, and China may upset the balance of power. One of these or other stakeholders could influence a world-power pivot to Eurasia’s Heartland.

 

To advance their respective civilizational values, the U.S., Russia, and China have extended their rivalry through India, Turkey, and Iran. The U.S., an ally to Israel, firmly defends the values of Western European civilization. She seeks to cozy up with India in Asia and desires Turkey to support her interests in the Middle East. Russia is a self-described Eurasian civilization state. She’s friendly with Iran, pursues an alliance with India, and is improving relations with Turkey. China has been characterized as a civilization state due to her historical heritage, religious diversity, and distinct cultural identity. Despite border disputes with India, she aims to preserve their cultural and economic exchange, dating back to the Old Silk Road. She sweetens relations with Turkey through increased trade and wants Iran as a strategic partner. These regional powers could play critical roles in shifting the balance of world power.

 

An aspiring emergent global superpower determined to safeguard her borders, India has civil relations with the U.S., Russia, and China. Her foreign-policy agenda is aligned with a multipolar power balance. Supposedly, India is moving away from some Western values — liberalism, individualism, and secularism — that conflict with traditional Indian culture. Yet, she may promote U.S. and Japanese interests in Asia. India could counter China’s encroachment into Central Asia through the Belt and Road Initiative (BRI). Still, for her security, India will “make nice” with China, including joining China’s Shanghai Cooperation Organization (SCO). Recently, India purchased Russia’s S-400 missile defense system against strong U.S. objections and sanctions. Her bilateral relationship with Russia across mutual interests likely will mean continued economic, political, security, and nuclear cooperation in the future.

 

Turkey is a wild card and complicates the rivalry between the U.S., Russia, and China with her own aspirations. A NATO member and Western ally against communism during the Cold War, she aspires to be a major regional power. Even so, she faces a Kurdish rebellion, Greek territorial disputes, and threatening Iranian power. Potentially, Turkey may stabilize the Middle East and contain Russia’s expanding influence. Still, she defied U.S. expectations and joined Russia in backing rebels in the Syrian War. Having secured Russia’s S-400 missile defense system, she is abandoning Western liberal democracy and embracing authoritarian rule. Plans to connect Turkey’s Middle Corridor transportation network with the BRI supports China’s trade ambitions in Eurasia. But how they address a bilateral trade deficit that favors China could better or sour their relationship.

 

Supported by Russia and China, Iran seemingly has hegemonic aspirations of being the central regional power in the Middle East and Central Asia. However, her increased involvement in Lebanon, Iraq, and Syria has incited Israel’s military opposition. She rejects westernization and strategizes to limit U.S. influence in Central Asia. Trade with Russia is Iran’s saving grace, given the destabilizing impacts of U.S. economic sanctions to deter her from amassing nuclear weapons. Yet, despite their reciprocal friendliness, Russia refused Iran’s request for a S-400 missile defense system. While Iran sought but was denied full membership in the SCO, it’s likely she will stay connected to China through economic and cultural exchanges along the BRI. Their bilateral relationship could solidify Iran as China’s strategic partner in the area. 

 

India, Turkey, and Iran add to the complex rivalry between the U.S., Russia, and China. Will these regional powers or other stakeholders influence a world-power pivot to the Eurasia’s Heartland? Understanding the forces that could drive or block change is key to reducing uncertainty.

 

© Kimberly “Kay” Daniels 2020

Tags:  China  Russia  world-power 

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Could trade deals deliver a more unified Asia?

Posted By Travis B. Kupp, Monday, April 20, 2020

Travis Kupp, a member of our Emerging Fellows program checks the possibility of a unified Asia through trade ties in his fourth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Globalization is not on the decline, but it is evolving. Developments over the last two decades—including a financial crisis and a pandemic—have accelerated the change in economic relationships between and within all regions of the world. Trade with neighbors, in particular, have come into the spotlight as nations narrow their focus. Asia is no exception. Over the coming years, China and India will be playing an economic game with the rest of the continent that could lead to Asian unity or heightened distrust and paranoia. Deep trade integration could bring a form of economic unity to Asia that would totally eclipse Western markets.

 

The rise of the Association of Southeast Asian Nations (ASEAN) is a signal of what could be realized across the continent. The regional organization has come to develop relationships with other Asian and Pacific nations, including China and later India. As the geographic scope of partnership has increased, so has the complexity of pursuing common interests in light of imbalanced power. India’s recent decision to not participate in ASEAN’s proposed Regional Comprehensive Economic Partnership (RCEP) is indicative of these limits. India is an attractive market for exports but has concerns that the terms of RCEP could result in a flood of imports, especially from China, harming its domestic industry and agriculture. While India’s economy continues to experience strong growth relative to the rest of the world, it is not yet capable of competing directly with its advanced Eastern neighbor in the trade arena.

 

In one possible future, India’s growth outpaces China and it makes the necessary structural changes and infrastructure investments to dramatically increase its exports. These developments occur while the encircling Belt and Road Initiative (BRI) struggles through a decelerated Chinese economy and underwhelming returns on its massive foreign investments. India takes advantage of these trends to strengthen its trade relationships in both Southeast and Central Asia, creating a new balance of geo-economic power in the region. China reluctantly recognizes this new state of the world, scales back its assertiveness to avoid military conflict, and becomes a more amenable partner in a broader trade union across the continent.

 

In another future, India’s infrastructure remains inadequate to take advantage of its demographic and economic growth lead. The BRI successfully draws Central Asian nations closer into China’s orbit of influence, heightening tensions with interested neighbors Russia and India. China uses RCEP as a lever to increase pressure on Japan, Vietnam, and others with respect to its territorial disputes. Nations across Asia face a difficult choice whether to cave to Chinese pressure or face the economic consequences of their trade sanctions. The rest of world seeks to better balance its flow of trade with China while taking a careful approach to relationships in the rest of Asia, mostly seeking less risky deals closer to home. What unity exists in this future Asia is predicated on whether you are under Chinese economic influence or not.

 

Trade integration promotes peace, but it does not erase borders nor national interests. While disputes about exactly where some Asian nations begin and end may not be settled anytime soon, successful strengthening of trade agreements could lead to unprecedented regional integration and stability. While unanticipated events in the coming decades could accelerate the balance of power in favor of China or India, what is certain is that trade relationships with these two nations will be a determining factor for Asia’s future. The way these regional economic alliances develop will either create a newfound unity or an uneasiness felt around the globe.

 

© Travis Kupp 2020

Tags:  Asia  China  trade 

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What is the institutional base of the BRI?

Posted By Carl Michael, Friday, April 3, 2020

Carl Michael reviews the institutional base of Belt and Road Initiative in his fourth blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

The primary institutional base underpinning the BRI is provided by the three interlocking branches of political power in China. The Communist Party of China (CPC), the State Council and the Peoples Liberation Army (PLA). The CPC continues the long tradition of a unified Confucian ruling entity, which seeks to represent the interests of the whole of society, in comparison with a Western-style political party approach. Chinese governments are expected to cope with the challenges posed by a huge population and vast territory, ostensibly shaping a political culture characterized by valuing a longer-term vision, a more holistic perception of politics which places high value on the country’s overall stability and prosperity. This single-party approach, embodied by the CPC, is often contrasted with the impact of change of central government every few years in multi-party democratic systems as well as the national chaos following China’s 1911 revolution which sought a Western political model. The CPC exercises oversight of the BRI through the Central Foreign Affairs Commission.

 

The State Council on the other hand is the chief administrative authority in China and it exercises authority over the BRI through cabinet-level bodies such as Ministry of Foreign Affairs and the Ministry of Commerce which is responsible for foreign trade policy and agreements and foreign direct investment. These bodies and their predecessors were instrumental in China’s entry into the World Trade Organisation.

 

Chief among the financial institutes which underpin BRI activities is the government-owned China Development Bank (CDB). It is one of the most powerful banks in the world and has been crucial in transforming China’s economy and competitiveness. Even though other national development banks have financed political projects and favoured industries that private investors would eschew; never has such an institution existed with so much capital and financial capability with control delivered into the hands of one body, the CPC. The rise of Chinese capital availability overseas is an ever-increasing trend facilitated by the CDB which specializes in financing infrastructure, energy and transportation. In this it is complimented by the Exim Bank of China which specializes in financing trade, investment and economic cooperation; and the Asian Infrastructure Investment Bank, whose starting capital and credit ratings have made it a rival to the World Bank, ADB and the IMF. In addition to these banks, the government-owned Silk Road Fund fosters increased investment in countries participating in the BRI.

 

Any understanding of the institutional base of the BRI would be incomplete without considering the role of the Chinese PLA, which is the largest military force in the world. The recent growth of the PLA’s global power projection capabilities and strategic nuclear missile capabilities has been noteworthy. Local conditions in many BRI areas are highly unstable and scenarios where China may require the PLA to protect its interests beyond its borders are not unrealistic. As China’s growth has moved it along the path to becoming a true maritime power, so also has the PLA navy expanded its global reach with the acquisition of aircraft carriers, carrier-killer missiles and overseas bases. The perception of the PLA as being the armed wing of the CPC means the PLA’s deployment abroad is extremely sensitive in nature.

 

There is concern regarding the rise of a global player with an institutional base such as China’s. The justifiable unease in many parts of the world arises from the links between its national mission, power projection capabilities and political system. If this unease is not alleviated, the BRI could be perceived as a neo-colonial form of tributary diplomacy even as China works to reinstate its rightful civilisational place in the world order.

 

© Carl Michael 2020

Tags:  Belt and Road Initiative  China  safety 

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How prepared is Asia for its changing demographics?

Posted By Travis B. Kupp, Friday, March 27, 2020

Travis Kupp, a member of our Emerging Fellows program checks the preparedness of Asia for demographic changes in his third post for our EF blog. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Among the most significant determinants of an Asian Century is demographics. The expectations and behaviors of a nation’s people—driven in part by attributes that can be measured in aggregate, like age—influence economic performance and political dynamics. Projected declines in the working age populations in East Asia present a major challenge to maintaining their gravitas. Meanwhile, the rest of the continent generally has a much better outlook, at least in terms of potentially productive youth. Immigration policies that succeed in overcoming ideological intolerance may be the key to sustaining Asia’s rise to global dominance.

 

Japan is a preview of what could potentially happen at a different scale for its neighbors. The archipelago nation is now selling more adult diapers than baby diapers in supermarkets. The increased spending on healthcare that comes with this age demographic inversion is unsustainable with a simultaneously shrinking workforce and tax base. Japan recognizes that efforts to raise its fertility rate will not be sufficient to address the problems already emerging. Longevity of life is coming to also mean longevity of work-life well beyond the age of 60. Automation of care is being developed, where possible, to lower the costs of the ballooning system. It is yet to be seen whether this will be a successful formula for saving the nation’s economy.

 

China is taking a different approach. Demographic data shows their working population shrinking and the trend portends a net population decline starting as soon as 2032. Like Japan, China has started offering cash bonuses and subsidies to encourage more births, but it is unlikely that this will be enough to cover the dearth of young people to care for the elderly in the short term. Nor will automation of such services soon be ready to take on the task at scale. Instead, China is bolstering its economy by moving the value chain from the Middle Kingdom to tributary states in Central, South, and Southeast Asia through its Belt and Road Initiative. In a time of national economic war, however, it is not unthinkable that some of these target states may attempt to limit the extent to which others draw on their resources.

 

Migration will increasingly be a flashpoint as Asian demographics change. Cultural similarities make Southeast Asia the clearest option from which China and Japan could draw human capital, or at least extract the output. China is adamant that newcomers assimilate to their norms, an approach that may need to be loosened in light of its expanding global reach. India’s government, particularly in the case of Muslims, seems determined to reject even its own over ideological differences. West and Central Asia have growing populations that could strengthen the Asian position but are better poised to bolster Russian and European populations, even though immigration policies in both destinations are lacking. All of these tensions will escalate if regimes do not adapt quickly enough to the inevitable changes in their constituencies.

 

Asian nations, on the whole, are unprepared for what lies ahead demographically. Economic and social policies are slowly and insufficiently trying to adapt to a future in which families are small and the old outnumber the young. Regimes attempting to unilaterally solve for these shifts without sufficient regard for pressures beyond their centralized control, like accelerated migration, will face the most serious challenge. While some nations may have more reason to be optimistic, they will need to be ready to compete to keep their workforce from migrating to other more attractive markets. If an Asian Century does come to pass, one thing is certain: it will be with a populace that looks quite different than the one we know today.

 

© Travis Kupp 2020

Tags:  Asia  China  demographics 

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