Belt and Road Initiative | The Great Chinese Seduction in Canada

Ambassador Kong Peewu says Canada can use this initiative to reduce global carbon emissions and fight poverty.

He rejects warnings from Canadian counterparts that the plan would allow Beijing to coerce developing countries.

Here's a look at what China has to offer and why some are sounding the alarm.

What is Belt and Road?

The Belt and Road Initiative is a massive infrastructure plan that aims to connect Asia, Europe and Africa through a series of railways, ports, bridges and coal-fired power stations, some of which follow trade routes along the ancient Silk Road.

Beijing launched this initiative ten years ago. The Chinese Communist Party government says its goal is to replicate China's exit from poverty by boosting growth in developing countries.

The Canada Western Foundation says Belt and Road projects are key to understanding Beijing's relationships with other countries — and its efforts to boost the country's reputation in the Global South.

“It is part instrument of foreign influence, part international development project, and an important goal of making China more competitive,” said an analysis by the China Research Center in Calgary. “The Belt and Road Initiative creates both opportunities and challenges.”

Beijing says the initiative is not aimed at spreading its governance model, but experts say it nonetheless represents a challenge to Western influence because it gives China influence over supply and production chains.

Who supports the initiative?

UN Secretary-General António Guterres praised the initiative as a model of cooperation between countries of the Global South, saying it had “tremendous potential” to improve living standards and slow climate change.

In 2019, the World Bank estimated that the Belt and Road Initiative could help lift 7.6 million people out of extreme poverty, as well as 32 million people out of moderate poverty. This is largely because it connects large rural areas to economic opportunities and cheaper products.

Many developing countries hosting BRI projects say financing is much easier than what Western institutions offer, and is better aligned with local governments' priorities.

However, an analysis by the Munk School of Global Affairs and Public Policy suggests that such praise often comes from authoritarian states pursuing projects that Western funders consider too risky.

What criticisms do you face?

US think tanks have ridiculed the initiative over its environmental impacts and allegations that China is using the project as a tool of economic coercion.

After helping build coal plants, Beijing changed its plan last fall to focus on mitigating climate change and preventing corruption.

But global financing bodies like the World Bank are still calling for more transparency in how projects are financed to protect against “debt trap diplomacy,” that is, when a country takes out a loan that it may not be able to repay, and then has to make up for it by transferring assets or taking certain political positions. .

China rejects allegations that it engages in predatory lending, arguing that it is clarifying its expectations for developing countries. Beijing blames the debt problems on the difficult economic recovery from the Covid-19 shock.

“(If) anyone suggests that China is a destructive global power, that is definitely not consistent with the facts,” Kong Biwu said in an interview with The Canadian Press.

Why is China looking for new investments?

China has spent $1 trillion on the initiative so far, but has cut spending in recent years as some countries struggle with debt related to the project.

Chinese President Xi Jinping marked the initiative's first decade last October by saying it would move “from physical to institutional connectivity,” focusing on digital infrastructure, training and exchanges for international students.

Jeremy Paltiel, a professor at Carleton University, said this reflects the failure of Belt and Road Initiative projects in countries burdened by bureaucracy, instability and mismanagement, which prompted China to change course.

“They have been questioned and are now talking about high-quality investments,” explained this specialist in Canadian-Chinese relations. They may also have less money to spend, because the Chinese economy is not doing so well. »

What is Beijing's message to Canadian investors?

Ambassador Kong calls on Canadian companies to invest directly in Belt and Road Initiative projects in third countries.

Mr. Kong added that Canadian companies should consider going to China and think about how they can reap the benefits from these projects while contributing to a better world.

In addition, Kong said Canadian companies could win lucrative contracts to build projects. He gave the example of the American elevator company Otis, which contributed to building railway stations in Egypt through the Belt and Road Initiative.

Should companies be careful?

The Canada West Foundation says the initiative is already impacting the way Canadian companies operate and develop development projects in countries from Indonesia to Nigeria.

He notes that Canada's engineering and design sectors could benefit from global contracts and that increased critical infrastructure could help boost exports, both for Canadian companies and their foreign competitors.

But Mr. Paltiel noted that any Canadian company involved in the Belt and Road Initiative project would likely face criticism, especially from south of the border.