China's Belt and Road Initiative (eBook)

Wenxian Zhang is a member of Rollins College faculty, and a recipient of the Cornell Distinguished Faculty Service Award, as well as an Arthur Vining Davis Fellow. His recent books include China Visualized by Americans and The Entrepreneurial and Business Elites of China.Ilan Alon is Professor of Strategy and International Marketing at the University of Agder, Norway, and the Editor-in-Chief of the International Journal of Emerging Markets and European Journal of International Management. Previously, he was visiting scholar at Georgetown University, Harvard University and both the University of International Business and Economics and JiaoTong University in China.  Ilan is the President of the Chinese Globalization Association and has published over 100 peer-reviewed articles and 30 books including China Rules: Globalization and Political Transformation.  Christoph Lattemann is Professor of Business Administration and Information Management at Jacobs University Bremen, Germany. He is the Director of the Jacobs Center for the Research on China and Globalization, Vice-Director of the Confucius Institute Bremen, and Vice President of the Chinese Globalization Association. Previously a visiting scholar at Harvard University and Stanford University, Christoph has published over 150 scientific publications and ten books. He is currently senior editor for the International Journal of Emerging Markets.

Foreword 7
The Deep-Level Substance of the Belt and Road Initiative 7
Acknowledgements 11
Contents 12
Notes on Contributors 16
List of Figures 24
List of Tables 25
1: Introduction 27
1 Part I: Contextual Overview of the Belt and Road Initiative 29
2 Part II: Regional and Geopolitical Perspectives 31
3 Part III: International Trade, Foreign Direct Investment, and BRI 34
4 Part IV: Financial, Legal, and Cultural Perspectives of BRI 36
5 Final Reflections 38
Part I: Contextual Overview of the Belt and Road Initiative 40
2: China and the Twenty-First-Century Silk Roads: A New Era of Global Economic Leadership? 41
1 A Leaderless World Order? 42
2 China’s “Great Rejuvenation” 43
3 Still Waiting for Godot? 44
4 BRI and Chinese Grand Strategy 47
5 Geoeconomics as the New Geopolitics? 51
References 53
3: The Global Strategic Environment of the BRI: Deep Interdependence and Structural Power 58
1 Introduction 58
2 Deep Interdependence and Structural Power 59
3 Analyzing China’s BRI in a World of Deep and Complex Interdependence 63
3.1 Chinese Objectives 63
4 The USA and the Marshall Plan 65
5 Managing the BRI in an Environment of Deep Interdependence 66
6 The Asian Infrastructure Investment Bank 69
7 Soft Balancing Against China: USA, Japan, India, and Vietnam 71
8 Conclusions 72
References 74
4: One Belt, One Road, One World: Where is US Business Connectivity? 77
1 Introduction 77
2 BRI in History: US Involvement Along the Silk Road 80
3 US Connectivity with the BRI in the Digital Age 81
4 Gains, Costs, and Risks of US Business Connectivity with the BRI: Resource-­Based and Institutional Views 87
5 Conclusions 91
References 92
Part II: Regional and Geopolitical Perspectives 95
5: Free Trade Agreements as BRI’s Stepping-Stone to Multilateralism: Is the Sino–Swiss FTA the Gold Standard? 96
1 Introduction: A Dynamic Framework for BRI Initiatives 96
2 Application: China FTA and Evaluation Frameworks 101
2.1 China’s Trade and Supporting Instructions 102
2.2 FTA Evaluation Framework 105
3 Conclusion: Sino–Swiss FTA Evaluation and General Findings (A Putative Gold Standard?) 109
References 111
6: Belt, Road, and Circle: The Arctic and Northern Europe in China’s Belt and Road Initiative 115
1 Introduction 115
2 Links Between China’s Intensifying and More Confident Arctic Diplomacy and the BRI 118
3 Nordic Countries’ Perspective on and Engagement in the BRI 123
4 Conclusion 126
References 129
7: China’s Strategy Toward Central and Eastern Europe Within the Framework of 16 + 1 Group: The Case of Poland 134
1 Introduction 134
2 16 + 1 Group 135
2.1 16 + 1 Group and BRI 135
2.2 Poland’s Role in the BRI 136
3 History of Sino–Polish Relations 137
3.1 Pre-World War II 137
3.2 Socialist Poland 138
3.3 From Transformation On 139
4 Toward the Sino–Polish Comprehensive Strategic Partnership of 2016 140
5 Assessment 141
5.1 Poland, CEE, and Geopolitical Determinism 141
5.2 Polish Strategy 143
5.3 SREB and the EU 145
6 Conclusion 147
References 148
8: The Impact of the Belt and Road Initiative on Central Asia: Building New Relations in a Reshaped Geopolitical Scenario 154
1 The Belt and Road Initiative: Focus on Central Asia 154
2 Uzbekistan: BRI Projects and Regional Cooperation 158
3 Kazakhstan: Central Asian Pivot of the Modern “Silk Road” 161
4 Tajikistan: Between the BRI and the EEU 164
5 Conclusion 167
References 168
9: Live and Let Live: Africa’s Response Options to China’s BRI 173
1 Introduction 173
2 Expected Impact of Chinese Engagement 176
3 Navigating Mutual Dependence and Power Imbalance 178
4 The Case of Kenya 181
5 Summary and Conclusion 191
References 192
10: Small State, Smart Influence: China’s Belt and Road Extended to New Zealand 197
1 Introduction 197
2 Responses to the BRI: Contextualizing Power and Small States 198
3 New Zealand’s Power to Influence China’s BRI 202
4 Limits of Influence and Intrinsic Vulnerability of a Small State 206
5 Conclusion 209
References 211
Part III: International Trade, Foreign Direct Investment, and BRI 216
11: The Overall Development of the Belt and Road Countries: Measurement, Ranking, and Assessment 217
1 Introduction 217
2 Selection of Indicators to Measure Overall Development Levels of the BRCs 220
2.1 Economic Development 220
2.2 Governance 220
2.3 Resource Endowment 221
2.4 Environmental Protection 221
2.5 Social Development 221
2.6 Business Environment 222
2.7 Structural Transformation 222
2.8 Country Size 223
3 Measurement and Ranking Methods of the Overall Development Levels of the BRCs 223
4 Data Sources 229
5 Results and Rankings 230
6 Main Statistical Findings 230
6.1 Political Stability and Good Governance are of Vital Importance in the Development of BRCs 234
6.2 The Overall Level of Economic Development is Heterogeneous Among the BRCs 235
6.3 Potential for Cooperation is High as Resource Endowment is Unbalanced Among BRCs 236
6.4 Structural Transformation Accelerated for BRCs 237
7 Policy Implications 237
References 240
12: Effects of Trade Facilitation Measures on Trade Between China and Countries Along the Belt and Road Initiative 242
1 Introduction 242
2 Literature Review 243
3 Model, Data, and Regression 246
3.1 Trade Facilitation Evaluation 246
3.1.1 TFI System Establishment 246
3.1.2 Trade Facilitation Evaluation Based on Analytic Hierarchy Process (AHP) 246
Weight Determination 246
Data Source 248
Trade Facilitation Evaluation System Model 248
3.2 Empirical Analysis of the Impact of Trade Facilitation on Trade Flows 250
3.2.1 Methodology 250
3.2.2 Variable Description and Data Source 251
3.2.3 Regression Results 252
4 Conclusions and Implications 253
References 254
13: How the Belt and Road Initiative Affects China’s Outward FDI: Comparing Chinese Independent Firms and Business Group Affiliates 257
1 Introduction 257
2 Theoretical Analyses and Hypotheses Development 260
3 Data and Methodology 265
3.1 Data 265
3.2 Measures 266
3.3 Data Analysis Method 267
3.4 Empirical Results and Discussion 268
4 Conclusion 271
References 273
14: Competitive Advantages of China’s Agricultural Exports in the Outward-­Looking Belt and Road Initiative 278
1 Introduction 278
2 Literature Review 280
3 Methodology 282
4 China’s Trade in Agricultural Commodities 284
5 BRI and Differentiation of Policy Measures in Agricultural Exports 286
6 Conclusions 295
Appendix 1 296
Appendix 2 296
Appendix 3 296
References 296
Part IV: Financial, Legal, and Cultural Perspectives on BRI 299
15: The Role of China’s Sovereign Wealth Funds in President Xi Jinping’s Ambitious Belt and Road Initiative 300
1 2007–2013: The Development of CIC and SAFEIC, China’s Two Largest SWFs 301
2 CIC’s and SAFEIC’s New Roles in President Xi’s Post-2013 Global Initiatives 304
3 Consequences for CIC and SAFEIC of Participating in President Xi’s BRI Programs 306
4 Can China Continue to Finance BRI Through CIC- and SAFEIC-Owned and Controlled Financial Institutions? 309
5 Summary and Conclusion 312
References 313
16: The Changing Rules of International Dispute Resolution in China’s Belt and Road Initiative 315
1 Background to China’s Belt and Road Initiative 315
1.1 Political and Policy Background 315
1.2 Chinese Government Support in Implementing the BRI 316
1.3 Surge of Outbound Investments 317
2 Legal Risks and Challenges 317
3 Available International Dispute Resolution Mechanisms 318
3.1 International Commercial Arbitration 320
3.1.1 The Seat of Arbitration 320
3.1.2 Ad Hoc Versus Institutional Arbitration 321
3.1.3 Other Factors to Consider in Drafting an Arbitration Clause 325
3.2 International Investment Arbitration 326
3.2.1 Bilateral Investment Treaties 326
3.2.2 Ad hoc or ICSID Investment Arbitrations 327
4 Conclusion 329
References 329
17: Globalization 5.0 Led by China: Powered by Positive Frames for BRI 331
1 Introduction 331
2 Research Method 332
2.1 Framing Analysis 333
3 Five Waves of Globalization Synthesized 334
3.1 Globalization 1.0: Ancient Silk Road (Third Century BC—1400s) 334
3.2 Globalization 2.0: European-Led Colonial Expansion (1450–1950) 335
3.3 Globalization 3.0: US-Led Modern Economic Growth (1945–1990s) 335
3.4 Globalization 4.0: Internet-Based Global Integration (1990s–2013) 336
3.5 Globalization 5.0: China-Led Global Collaboration (2013–present) 336
4 BRI Drives Globalization 5.0 337
5 Frames Used to Promote BRI 338
5.1 Frame 1: Development 339
5.2 Frame 2: Mutual Respect and Mutual Trust 339
5.3 Frame 3: Seeking the Power of Narrative in the Ancient Silk Road Story 340
5.4 Frame 4: Actions Speak Louder than Words 340
5.5 Frame 5: China is a Partner, Not a Colonialist 341
6 Conclusions 342
References 343
18: Final Reflections 346
1 Is BRI a Win-Win Framework? 348
2 Conclusion 351
Index 352