In the debate of emerging China, COVID-19 has entered as a wild card entry and has changed the global strategic equations. It is too soon to predict what curves will Chinese foreign policy take to keep its aspirations of great power alive, but Xi Jinping’s signature policy of Belt and Road Initiative (BRI) has started displaying frailty. Beijing’s stance is that COVID will only have a short term impact on BRI. China’s rise as global power depends on BRI.
Currently, BRI and its related projects are at a halt; China Pakistan Economic Corridor, Cambodia’s Sihanoukville Special Economic Zone, along with other projects of BRI in Indonesia, Malaysia, and Myanmar have come to a standstill. Chinese Labor has returned to China along with this restriction by almost 130 countries, is placed from the entrance of individuals from China. It will take time for Chinese workers to get back to projects not just because of a pandemic, but due to the rise in anti-Chinese sentiment. For instance, an anti-Chinese view has started in Kazakhstani; Kazakhstan regarded as the ‘buckle’ of BRI.
BRI is a trillion Dollars initiative that will reap benefits for Beijing. Although COVID-19 has puzzled the future economic cards for BRI, inherent vulnerabilities in BRI were already present. Structural dependence on Chinese companies, reliance on Chinese labor, and eye on cheap credit from Chinese banks have posed further questions to the prospect of BRI and its dependence on Beijing. Investment opportunities depend on debt relief from multilateral companies.
A look into China’s internal situation is important to understand economic investments for BRI. China has faced the lowest economic rate in the last three decades. Calculations are showing a 13% shrunk in GDP between January and February. Chinese development bank has shown interest to support companies that are working in BRI but will be pickier towards new investment opportunities. A tradeoff from BRI is expected that will be is utilised to uplift domestic health structure along with other economic recovery plans in China. Aftershocks will constrain Chinese investment for BRI, but its extent is still incalculable.
Similarly, economies along BRI routes are in a recession, which will hinder the economic investments of developing states under BRI. For instance, the biggest BRI project receiver is Pakistan, this all-weather friend, is poised to sustain $8.2billion loss according to the Asian Development Bank. Similarly, Bangladesh’s figure is $3billion, Thailand will not be able to reach its yearly target of 2% growth. It is a matter of time when this pandemic will take over the African economy.
The global supply chain of BRI depends on China’s manufacturing, which is hampered by COVID-19. China’s flow of goods is at a point where it ran into a trade deficit for the first two months of 2020. BRI transport system depends on the shipping industry, which has reached the worst point as more tonnage of container ships was idled around the world than the 2008 financial crisis. Dynamics are starting to change as 60% of small and medium-sized industries in China are made operational, but still, the rate of recovery is slow.
To counter global narratives that will affect Chinese projects worldwide, China is upfront to take the lead role in the world to counter COVID. China is providing aid to BRI member state, Pakistan first to receive antidote vaccines, China has announced to sell ventilation, masks testing kits to Italy. Similarly, Spain will receive support from Beijing. China has used ‘Mask diplomacy’ as a soft power to alter the table on critics. This will help to develop narratives that will work in favor of BRI.
The ramification of COVID-19 on BRI states is not clear, but it’s unlikely that BRI will be able to reach its 2021 objectives. Belt and Road initiative will experience a short term-delay due to COVID-19, but in the long run, BRI will be able to sustain an economic crisis. XI-Jinping will like to leave a legacy for whom BRI is a cornerstone in China’s March west policy.