Of Global Concern: Governance and Sustainability Along the Belt and Road

Dr. R. James Ferguson, Bond University, Australia




This article first appeared on the Australian Institute of International Affairs 'Australian Outllook

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China has attempted to shift the Belt and Road Initiative (BRI) toward improved environmental, health, and governance outcomes

But much more needs to be done if a “Green BRI” is to become one leg of a global sustainability transition through 2060.

China’s BRI is a megaproject that from 2013 expanded to engage over 142 countries and international organisations, and forged numerous economic corridors across four continents, as well as the Arctic and the Indo-Pacific.  The People’s Republic of China (PRC) planned to invest approximately US$1.25 trillion by 2025, with total investment of up to $8 trillion expected over the following decades. Its scope is so huge that “BRI” is an umbrella term for wide-ranging regional and global initiatives supported by the Chinese government at different levels: nationally, across development and multilateral banks, and by Chinese companies seeking to expand international operations.

Controversies soon raged about the BRI: as promoting PRC’s geopolitical influence, whether it operated as a “grand strategy” for China, its negative impacts on the environment and labour conditions, concerns over the creation of debt traps, and if it could be economically sustained over coming decades. Beijing responded to many of these concerns, seeking to use “green investment” in a market now worth over $300 billion, plus improved environmental guidelines, to transform the BRI into a Green Belt and Road Initiative. This was linked directly to national plans to transform China into an “Ecological Civilization” and to support the UN’s Sustainable Development Goals (SDGs), based on Chinese priorities. These goals were repeatedly emphasised in the speeches of President Xi Jinping and in PRC policy documents, but remain a “bridge too far” given systemic problems that limit governance and sustainability across interlinked ecological, social, and economic domains.

Some of these problems for the BRI can be briefly outlined here. First, despite national planning documents, the BRI encompasses a huge range of aid, banking, industry, trade, and business operations, many of which down to 2018 included investments in polluting and carbon-intensive fossil fuels, heavy industry, and manufacturing. By 2021, there was an increased emphasis for new investment into non-fossil fuels, alternative technologies, and green supply chains, thereby becoming more congruent with China’s goal of carbon neutrality by 2060. However, even though the Asian Infrastructure Investment Bank (AIIB) does have environmental regulations, investment from the AIIB is only a small proportion of total BRI funding, while green funding itself needs tighter regulation to ensure sustainable outcomes rather than mere “green washing.” Currently, companies and investors are only loosely controlled by PRC recommendations or by the domestic laws of national partners, which in some cases are flouted or poorly enforced – a major problem for developing countries generally.

A second problem is the limited economic steerage capacity of the PRC government, both at domestic and international levels. It might be expected that an authoritarian state with powerful security and surveillance agencies would have strong national economy governance capacities. In reality, diverse domestic forces distort this capacity, including competing provincial and city agents, the need to maintain high levels of growth to retain the leadership of the Communist Party, the role of state-owned enterprises in strategic areas, pockets of bad debt within the Chinese economy, difficulties in sustaining rural livelihoods, and growing public demands for a better quality of life and improved environmental conditions. Here, the old adage of the difficulties in turning a huge ship in new directions remains true for China.

Steerage by the PRC leadership is also limited at the international level. The PRC has to cope with a complex landscape of multiscale actors that are its effective “partners” in the BRI, ranging from highly regulated European companies to underdeveloped countries with limited state capacity, varying levels of corrupt leadership, spillover zones of regional conflict (especially in Africa, Eastern Europe, and the Middle East), populations subject to political turmoil, high levels of violence, and limited ability to deal with pandemics and climate change. This has generated growing security costs for protecting the BRI and some financial overruns and failures for megaprojects maintained for political influence, such as in Pakistan and Sri Lanka.

President Xi Jinping has argued that the key to China’s future prosperity is successful co-development with its major partners, leading to the policy narrative of a “common destiny.” China has come into global governance as a major investor, a supporter of the Paris Agreement, a strong supporter of the SDGs, remains deeply engaged in UN peacekeeping, and is strategically engaged with organisations that help stabilise regions where it invests, for instance the African Union and ASEAN (Association of Southeast Asian Nations). Thus, China needs to maintain high levels of international investment while sustaining a huge domestic transformation, costing up to $18 trillion, if it wishes to become carbon neutral by 2060.

Moreover, the growing power of China, its territorial conflicts in the East and South China Seas, its geopolitical competition with the US, India, and Japan, and its increasingly authoritarian government led to a drop in its soft power and influence in past years, though there has been a mild reversal of this in 2022, with surveys conducted by Brand Finance seeing China rise to fourth place in its global ranking for 2022, mainly across business and trade areas. Alternative schemes such as the US’s Blue Dot network for sustainable infrastructure investment, Japan’s “Expanded Partnership for Quality Infrastructure” program, the India-Japan jointly funded Asia-Africa Growth Corridor, and the G7’s “Build Back Better World” have been created partly to counter the BRI. Likewise, groupings such as AUKUS (Australia, United Kingdom, United States trilateral) and the Quadrilateral Security Dialogue, plus the listing of China as a direct future challenge for NATO, indicate that the PRC has failed to gain a permissive environment for leadership on global governance issues.

Another major medium-term problem is the threat of an “economic, long-term COVID-19” partly driven by financial and human capital losses alongside limited medical infrastructure in developing countries. Here, the answer is not the politically-motivated closing of borders, but the creation of a truly global medical infrastructure that is resilient and forward looking. China moved in this direction from 2017 with the launch of its “health silk road,” complementing the BRI. This needs to be taken further to regain global confidence in China and to support a sustainable and green BRI. An upgraded commitment to a reformed World Health Organization, an internationalised health silk road with better vaccines and greater transparency, and linkage to regional initiatives such as ASEAN’s health response fund and medical reserve centres could be part of this process. China’s top-down approach to COVID-19 has proved to be effective only in the short term. Greater international capacity in detecting, researching, and creating new vaccines and ensuring their fair distribution requires enhanced cooperation by the major and developing powers, not competition among them. Strong future growth in the Chinese and the global economy requires a successful, sustainable, and green BRI.

Not all is doom and gloom on the global governance horizon. Positive signs include Xi Jinping’s support in December 2022 for the UN’s Global Diversity Framework and Global Development Initiative, for the Belt and Road Initiative International Green Development Coalition, for the Kunming Biodiversity Fund, increased investment in green funds and renewable energy through 2021-2022, and China’s improving regulations for green finance. Some easing of tensions between China and the US (and Australia) may even open up improved funding and dialogue for shared environmental and investment standards, paralleling current dialogues with the EU. The challenges of climate change and achieving SDG targets have become central to both PRC and UN forward planning. Put simply, a better governed, increasingly multilateralised, and truly “Green BRI”’ is needed as part of any global transformation towards inclusive and sustainable development.

Dr R. James Ferguson is an Honorary Adjunct Assistant Professor in the Faculty of Society & Design at Bond University, Australia. His research areas include international relations, environmental politics, strategic studies, globalization and planetization. Until 2021, he was the Director of the Centre for East-West Cultural and Economic Studies and Assistant Professor of International Relations at Bond University. Recent books include Greening China’s New Silk Roads: The Sustainable Governance of Belt and Road (2021), China’s Eurasian Dilemmas (2018), and The Politics and Philosophy of Chinese Power (2017, co-authored).



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