Europe, Africa, Asia. China's Belt and Road Initiative in the Global Trade, Investment and Finance Landscape Canada and US Next

 Europe, Africa, Asia. China's Belt and Road Initiative in the Global Trade, Investment and Finance Landscape, Canada and US Next

 May 14, 2021

https://www.oecd.org/finance/Chinas-Belt-and-Road-Initiative-in-the-global-trade-investment-and-finance-landscape.pdf

China's Belt and Road Initiative: a security threat?

Ex-B.C. premier Christy Clark was ebullient in 2016 when she announced a range of partnerships with China. The tide of opinion has turned since.

From China’s perspective, the logic behind the strategy is clear. With its sources of GDP growth coming under increasing strain, China must continue to make progress in opening up the economy. That means building mutually beneficial relationships with neighboring countries, which can benefit by taking over some of China’s lower-value-added activities. That promises to boost their own growth while creating space for the Chinese economy to move up the value chain, where productivity and wages – important determinants of consumption – are higher.

China has already laid the groundwork for these relationships, strengthening economic cooperation and trade with countries along the “belt and road.” It has also spearheaded the creation of multilateral institutions – notably, the Asian Infrastructure Investment Bank – to support the investment projects.

China’s comparative advantages, including a global financial center in Hong Kong and a regional financial center in Shanghai, reinforce its leadership role. Add to that the recent surge in fast-growing, innovative companies – such as Huawei, Alibaba, and Wanda – and China is well placed to implement Xi’s ambitious vision. Recent analysis of China's military modernization effort has focused heavily on the People's Liberation Army's (PLA) development of concepts and capabilities to deter or delay foreign forces responding to crises along China's periphery. However, China developed these capabilities within the context of broader strategic requirements. This study describes China's overarching national and security strategies and its approach to war and escalation control; summarizes its military capabilities developments; and reviews its concepts for deterrence in strategic and conventional domains. This report is intended as a general reference document for senior defense officials and other policymakers seeking an understanding of the links between China's national development strategy and its security and defense policies, strategies and concepts.

Recommendations

• Understanding and managing competition with China on a global scale will be of the highest priority for U.S. leaders in the coming decade and beyond.
• U.S. policymakers should work to develop a broad range of regional and global scenarios to support crisis planning in the context of U.S.-China competition.
• U.S. and allied planners should develop a broad menu of options to respond to various levels of Chinese coercion and aggression.
• Understanding how China responds to U.S. and allied security initiatives, and how China itself seeks to shape the regional security environment, is key to maintaining US extended deterrence (strategic and conventional) in the coming years.

The report assesses the perceptions of China's leaders on many critical issues — from their views of the international security environment and domestic and international threats, to their approaches to crisis management and escalation control, to the development of military capabilities and deterrence concepts. As this study indicates, these Chinese assessments are not static; they evolve as China's hubris in the world increases and its national interests grow, and the conclusions Chinese planners draw from such assessments also change. The necessity of continuing to monitor and analyze emerging literature and assessments on concepts discussed in this report — particularly those with broader implications for current events, such as China's offensive on territorial claims in the South China Sea and prospects for crisis management — will be spotlighted.

Key Findings

• Chinese perceptions and assessments are not static, they change and evolve as China's ambitions and hubris for its standing in the world increases and its national interests grow, and the conclusions Chinese planners draw from such assessments also evolve.
• It is necessary to continue monitoring and analyzing emerging literature and assessments on concepts discussed in this report — particularly those with broader implications for current events.
• China might have a higher threshold for risk than the United States may expect, particularly when it comes to defending such "core interests" as territory and sovereignty claims. This could lead Chinese leaders to do something that they would not consider escalatory but which the United States might.
• Although "active defense" and China's "no first use" policy state that China will not fire the first shot (or nuclear weapon), the definition of what the "first shot" entails is ambiguous.
• The strength of our alliances, defense capacity of our allies and partners, and U.S. military presence in the region does impact the direction of Chinese research, development and acquisition and capabilities development, particularly in high-technology areas.
• China's expanding interests increasingly require a capacity to provide security for investments and business ventures around the world.