KHON KAEN, Thailand — What makes up China’s development strategy? For many observers, little answers that question more than China’s recent flagship initiatives: One Belt, One Road, and the Asian Infrastructure Investment Bank.
Both projects have one thing in common: Supporting the push for infrastructure development in Asia. But when it comes to Beijing’s involvement, the discussion often turns economic and political. China — the argument most commonly goes — is using these initiatives solely to expand its clout in the Asia-Pacific region, all while winning projects to sustain its economic gains.
As China continues to grow as a global power, so too does its footprint on the development sector. Its rise comes at a moment when the status quo is shifting in the aid industry. Traditional standard bearers such as the U.S. and EU may still drive the majority of funds and set the agenda, but protectionist policies and changing domestic priorities are setting in motion significant changes.
In this six-week special series, Devex examines China's expanding role in aid and development across the globe. From tensions in Ghana to projects in Pakistan, from climate financing to donor partnerships, from individual philanthropy to state-financed investment, this series traces the past, present and future of Chinese aid and development.
Li Hong, China’s representative to the United Nations Economic and Social Commission for Asia and the Pacific, would phrase the first argument differently, but he doesn’t shy away from acknowledging that China’s development strategy is as much about the growth of the region, as that of his own country.
“As for Chinese foreign policy, we attach great importance to development, especially joint development,” he told Devex at the sidelines of the 2017 Mekong Forum hosted by the Mekong Institute in Khon Kaen, Thailand. “China cannot sustain its growth as in the past 30 years for 8, 9 or even 10 percent each year, but if we could develop together with the regional countries … then we can have another 30 years fast growth.”
We asked Li how China plans to accomplish that, as well as address issues on social and environmental protection surrounding Chinese aid projects. He spoke on those topics, and about some of the common misconceptions attached to Chinese foreign assistance.
The conversation below has been edited for length and clarity.
I want to know what role you see China playing in the Asia-Pacific region. But before that, can you give me an idea on how Chinese development cooperation works?
First of all, I would like to say the world economics are changing, and China’s big rise in this area is factual. We have to face the new situation in the region.
As for Chinese foreign policy, we attach great importance to development, especially joint development. It is one of the ways forward to handle the current challenges and uncertainties. So if we could work together to pursue win-win development solutions, that will be the best outcome for us, for all the region.
One other objective for us is, when China’s own development is making progress, is to provide more international products, public products, for the region. This is one of the areas where China attaches great importance. We think this is good for China, good for the region, and good for all.
“Peace and stability will provide the environment for development, and development will promote peace.”—
We consider strongly that only through win-win development can we sustain the growth of the region and the world. China cannot sustain its growth as in the past 30 years for 8, 9 or even 10 percent each year, but if we could develop together with the regional countries, including all these Belt and Road countries, and Asia-Pacific countries, then we can have another 30 years of fast growth, and every country can benefit from this process.
Of course, for development, you need environment, you need security and stability. And in our experience, we also think it’s important to have political stability for every country. So we support all countries to have their own political stability process. We think such processes are very important and indispensable to development. Peace and stability will provide the environment for development, and development will promote peace.
These are the basic considerations, or essence, of Chinese foreign policy.
You talked about international, public products. What are those?
For the public products or goods for international development, I think first of all of the Chinese Belt and Road initiative, which establishes a platform for all countries involved to cooperate. So we establish the platform, all countries have their own role, and all players are equal. They can have their own contributions and they can have their own benefits.
I think the One Belt and One Road initiative not only provides a platform, but also provides vision — and the vision is: We need to cooperate and integrate with each other. For example, connectivity is one of the key elements for the Belt and Road initiative. And then after connectivity, we should promote trade, industrialization, technology, people to people communication, and technological cooperation. All these aspects we’ll develop along the Belt and Road initiative.
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Another one is AIIB. This is also one of the very important public products. China is an initiator, we are not taking all the responsibility. Everybody can have a say in this platform, and they have their own consideration. We also learn from the previous experience and expertise of institutions like ADB, the World Bank. So we learn from their lessons and experience to put into our own new platform.
So through such a way, we think we can help these countries in the region to find the finance solution for their development. The Belt and Road initiative complements AIIB. These are what we consider public goods we can provide.
There’s a common perception that the initiation of AIIB raises competition among multilateral institutions and even bilaterals when it comes to infrastructure. Some say that’s a good thing, but there’s also a fear it might trigger a race to the bottom and leave environmental and human rights safeguards behind. How does China plan to address these safeguards issues when implementing its infrastructure projects?
First of all, for AIIB, I think, there’s no doubt it is complementary to the existing financial institutions. They are complementary to each other in many sense. For example, ADB, in the past, has been quite limited in the region. It cannot meet the strong demands for infrastructure construction in this region. According to ADB reports, I think the demand in the last 10 years has been quite high. ADB cannot meet all the requirements. So that’s why we have this AIIB. The demands are strong. Even with the AIIB, it still cannot meet all the demands. So we need also further development means.
Second, you mentioned the environment, humanitarian stance. I think from the first day the AIIB was established, AIIB has a special department for environment impact assessment. This is very similar to the existing institutional mechanisms. And AIIB will follow almost all the rules and norms which ADB and the World Bank have been endorsing. Besides, I think what we are improving is the efficiency. But of course, efficiency should not compromise the norms and stance for environment, for other important issues.
You mentioned competitiveness. I think, of course, if you have two or three mechanisms, there must be some competitiveness. But this competitiveness is good for the region. It’s good for the member countries to get more efficient financial support for their development needs. If this competitiveness is positive, why not? We should encourage such competitiveness. I would have no concern or worry about such competitiveness.
What are some of the common misconceptions you encounter on Chinese aid?
For this issue, first of all I would say that China is a newcomer in international aid. So we have a long way to go for internal institutional arrangements for the management of this aid, and also for how to mobilize the international community to help us spend such aid.
This is one of the challenges we are facing. We review from time to time. We try to improve. So this is the first point I’d like to emphasize.
Secondly, perhaps in some areas we may not keep the same track as developed countries in accomplishing international aid programs. But for the most part, we are trying to learn from them. We are trying to even cooperate with them. It’s getting more and more transparent.
Third, I think there are really a lot of misconceptions among the media, and in some countries’ perceptions. I think that there are different reasons for this. Part of the reason is some of the old style people, they have this Cold War mentality. They are not happy to see China so rapidly coming to this international aid field, and they are not happy to see Chinese competition with them.
But I think we also need a more transparent, more open-minded, inclusive approach. We are confident that Chinese intention for international aid is to pursue win-win solutions. There’s no doubt on that.
What are some of the things that the Chinese government has taken to address these different aspects you mentioned?
I think that we are learning from Western countries to establish some [advisory] board, which includes not only Chinese people, but also international organizations or some prominent people on the board, to decide how projects could be accomplished.
What role is China playing now in the Greater Mekong and wider Asia-Pacific?
Actually, first of all, I would like to say, that China has an influence on the regional countries is a fact. We are not intentionally pursuing any kind of leadership in this region, but as the Chinese economy impacts the region, this is factual. So now I think, especially in this Greater Mekong Subregion, we have an increasing role in leadership, or for economic development, especially in the area of connectivity. Of course, ASEAN and the Asia-Pacific Economic Cooperation are all doing their connectivity activity, but Chinese leadership in this area is undeniable. So connectivity is one of the very important areas.
The second area I think we are pursuing is a kind of industrial capacity cooperation. This cooperation, some people say, is for China to direct our capacity to the regional countries. But from my perspective, some of our capacities are very advanced. Not advanced as the Western countries, but advanced in this region. So it would be very helpful if we diverted some of this capacity to the region, to promote industrialization and to establish value chains in more countries. So this is the second element.
The third element for China is the conception of development. How to develop? As per our experience, establishing economic zones heightens development strategy for the long term, for 10 years, 5 years.
So we are trying to cooperate with the regional countries, to establish a regional long-term vision. And then step by step, we are working together in that direction. This is very important. I think China is now operating a big role in this area. So we have our own experience, and this can be shared with countries.
But we are not imposing the Chinese concept of development on any other country. We are doing it together.
Could you identify some of the big projects you have in the region?
In this region, we have developed railway transportation in ASEAN countries. We have made great progress in negotiating the China-Indonesia Highway Project. The China-Thai railway project is also making steady progress. These are very important achievements for connectivity in transportation.
If these projects can really work together and we could pursue the Asia-Pacific railway project,
connecting Southeast Asia through China to Europe by railway. This is one of the big visions we are taking step by step.
China is also very active in building hydropower dams. What’s the interest in China in helping countries in this area?
As the nation's largest hydropower dam goes online, promising to reduce Cambodia's energy dependence on its neighbours, residents must make way. Hundreds of indigenous minorities are staging a last stand with the help of local activists.
I think as industrialization is building up in these GMS countries, the high demand for electricity is rising. And regional countries cannot supply such electricity demand. So hydropower is one of the alternatives power solution. This is one of the reasons why we develop hydropower. China utilizing hydropower has a long history, and there are some manageable approaches for hydropower development. We don’t believe that hydropower is a taboo. If you manage it well, you can manage the impacts.
How much responsibility do you bear for these kinds of projects, or do you let the local governments handle more of the responsibility?
I think it’s a joint effort. Even our hydropower company has a lot of environmental or humanitarian projects to help the regional people to manage the impacts, not only to the environment, but also to their life and welfare.
Recently I joined a conference in Cambodia, talking about these hydropower projects. And they showed a lot of projects, and regional people welcome such projects, which can migrate their poor to better places for development. And the arrangement is quite good. So I think through such joint efforts between government, the private sector and the local people, local authorities, such management of collective impact is feasible.
Editor’s Note: Mekong Institute facilitated Devex's travel and logistics for this reporting. However, Devex maintains full editorial control of the content.
In this six-week special series, Devex examines China's expanding role in aid and development across the globe. From tensions in Ghana to projects in Pakistan, from climate financing to donor partnerships, from individual philanthropy to state-financed investment, this series traces the past, present and future of Chinese aid and development. Join the conversation on our Facebook discussion forum.