How Is China’s Belt and Road Changing Central Asia?

Since the Belt and Road Initiative (BRI) was announced in 2013, China’s expanding economic, geopolitical, and business presence around the world demonstrates its eagerness to play a more significant role in the systems of international governance and law. Central Asia, and Kazakhstan, in particular, have strategic relevance to the BRI. Remarkably, the BRI was launched during Chinese President Xi Jinping’s September 2013 visit to Astana, highlighting Kazakhstan’s critical transit role in China’s pivot to Europe. For Central Asia, BRI projects look highly promising, allowing regional countries to increase connectivity, expand regional trade, and modernize their obsolete transport infrastructure. From China’s perspective, the BRI is the way to deliver public goods, promote global connectivity, and portray itself as a responsible stakeholder.

Although the BRI is an ambitious global strategy, it provokes much criticism, especially in liberal countries. Among the highlighted barriers to the BRI’s success are geopolitics and policy coordination, investment uncertainty and low transparency, social resistance, and corruption surrounding some projects. Observers have some skepticism about the Chinese model itself, which is considered to ignore liberal values such as democracy, human rights, and the rule of law.

In my article “Rule-Making, Rule-Taking or Rule-Rejecting under the Belt and Road Initiative: A Central Asian Perspective,” published by the Chinese Journal of Comparative Law in June, I explore several BRI projects in Kazakhstan and the potential for China’s model to shape the legal and institutional landscape in Central Asia. If China claims to be a stakeholder in the international system, what are the implications for the legal systems of the BRI countries and their governance systems? To what extent does the BRI lead to the expansion of China’s institutions and legal norms in Central Asia?

Is China a Sufficient Rule-Maker?

The BRI seeks to build a regional community of shared interests and norms, where China desires to contribute to the system of global governance. China aspires to play a greater role by bringing its development model to the international spotlight. For some academics, the BRI represents the evolution of China’s role in global governance from being a rule-taker to an active rule-maker. The idea of internet sovereignty provides a good illustration of China’s ambition to shape the norms of global governance traditionally driven by the West. Beijing employs the BRI as an avenue to build a network of countries that adhere and adopt its cyber policies, digital standards, and technologies. Increasingly restrictive cybersecurity laws that imitate China’s legislation have been passed in Uganda, Tanzania, Thailand, Egypt, Turkey, Russia, and Kazakhstan.

However, although China desires to see a new distribution of power, it still expects to achieve that goal within existing institutions. Beijing actively engages with the United Nations and other intergovernmental platforms utilizing standard diplomatic negotiations and various bilateral and multilateral dialogues. The country has been updating and expanding its network of bilateral treaties with the host countries to meet the needs of investor protection, judicial cooperation, and dispute resolution.

China’s Model in Central Asia

China’s model focuses on strengthening economic growth, but it appears to have no real intention to change the governance and political regimes in BRI countries. In contrast to the West, Beijing pays less attention to market reforms, freedom of speech, good governance, and transparency in the region, viewing calls for such principles as potentially harmful and destructive for the current political status quo.

China, being economically more powerful, is one of the most prominent investors and trade partners for Central Asia. This deep economic engagement allows Beijing to put some pressure on Central Asian governments to ally with China’s plans and policies. However, these same investment inflows, fuelled by low transparency around BRI projects, contribute to the existing “Chinese threat” sentiment among the population in Central Asia. As a result, despite China’s desire to export its development model by promoting the BRI, it is perceived by the local community as inconsistent with civil society, liberal values, and national interests. It raises particular doubts that China’s model and legal system would facilitate further institutional progress in the region.

Like China, Central Asian countries, to a large extent, are authoritarian states. They share similar political values and seek to defend themselves from human and civil rights criticisms and the call for political reforms, which they often label as interference in domestic affairs. For Central Asian governments, including Kazakhstan, Beijing and its model of a market economy driven by the state, with weak civil society and the political hegemony of a single ruling party, is a robust reference point that helps to protect the regime’s legitimacy. Although the BRI can potentially improve physical infrastructure in Central Asia, it pays less attention to an increasing demand to solve socioeconomic and institutional problems, including better environment, healthcare, education, civil society, equality, and the rule of law.

Despite Chinese investors’ concerns about weak regulation and high corruption in Central Asia, some academics argue that the high level of corruption and insufficient checks on the executive branch create fewer democratic constraints for China to achieve its policy goals. To protect its companies and encourage investments along the BRI, the Chinese government prefers to rely on closed-door negotiations and political and financial ties with the host countries’ leadership. The success or failure of Chinese investments would affect bilateral political relations and future inflows of capital from China. Since the 1990s, many aspects of China–Kazakhstan relations, including the common border, trade, and oil and gas resources, have been closed to public review. The absence of public disclosure has become one of the main concerns among the Kazakhstani population that gives rise to controversy about the opaque nature of the local government’s dealings with China.

Even though China’s law considers bribing, including payments to foreign government officials and officials of international public organizations, as a criminal offense, the interpretation of those provisions remains ambiguous. For example, it is unclear whether the norm covers managers of state-owned enterprises or family members of foreign government officials and what jurisdiction prevails: China’s or the one where the official exercises authority. Scandals around some BRI projects show that China’s anti-corruption laws are far from perfect. China deals with serious corruption problems domestically. Although Beijing devotes its resources to fight corruption, it is doubtful that it will enforce a zero-tolerance corruption policy in the context of dealing with Central Asia.

China is the most economically, technologically, and politically powerful country among the BRI states. China’s political reputation, law, and policies directly affect the BRI, its outcomes, and how it is perceived. The Chinese legal system, with its dimensions of the flexibility of norms and their application, tends to adapt to different contexts and relationships. China seems to apply a similar approach to BRI projects in Central Asia by acclimating to the local context and managing its relations with the leadership on a bilateral basis. The flexibility of the Chinese leadership in approaching the BRI in Kazakhstan implies that legal norms per se are not the primary basis for China to rely upon.

Some Limitations

However, the degree to which the BRI can influence the Central Asian institutional landscape depends on a few factors.

With the BRI, Beijing’s presence in Central Asia has been rapidly expanding, replacing Russia as the leading investor. The recent downturn of oil prices and the effect of Western sanctions against Russia have disrupted the Russian economy. The economic stagnation limited Russian investment capacities and, as a result, eroded its economic influence in the region. China, in turn, has been growing its economic and political power in the bilateral relations with Central Asian countries. Furthermore, China has been gradually pursuing its soft power. China has been increasing the number of scholarships for Central Asian students and established more than 20 scientific centers focused on Central Asia studies.

Despite its growing impact, China cannot compete with Russia’s institutional, cultural, and legal legacy in the region. China is mindful that other countries, including Russia, have strategic political and economic interests in Kazakhstan and the rest of Central Asia. The presence of different interests and the existing prejudice against China’s influence constrain the possible extension of Chinese norms and institutions to Kazakhstan. The study of the BRI projects in Kazakhstan provides a solid basis for the assumption that Beijing does not insist on bringing its legal rules and prefers to operate BRI projects within the local legal framework. The institutional and political landscape existing in Kazakhstan still allows China to protect its interests and fulfill its agenda. However, Kazakhstan does not have enough economic and political standing to be an equal partner for China. Therefore, while the amount of Chinese investments increases and China’s presence in the region grows, China can choose to be more forceful in exercising its bargaining power.

How Can the BRI Countries Preserve Their Interests?

Opacity around BRI projects in Kazakhstan feeds into speculations and general anxiety about China’s presence. Highly limited information about dealing with China raises the question of whether China embraces the best governance standards or sticks to the existing institutions and norms. It is worth mentioning that China has been making some efforts to improve the transparency and reciprocity of BRI projects. Beijing actively engages its soft power tools to explain the BRI’s agenda and goals and reach out to domestic and international communities. China seems to acknowledge the critical role of promoting collaboration and inclusivity, aspiring to higher standards of legal norms and institutions, and enhancing projects’ quality.

However, China remains a state capitalism authoritarian model that lacks openness and freedom. It is an open question if China can offer Kazakhstan and other Central Asian countries a new system that promotes the rule of law, active civil society, transparency, and accountability of governmental institutions. Instead, China supports the existing institutions and political status quo.

The public, academics, and experts should have a chance to exercise more scrutiny over BRI projects to assess possible risks and minimize corruption. An open and well-informed discussion over the protection of domestic interests, fairness, governance, and business opportunities can build trust and address legitimate concerns over the BRI projects in the country. Better communication and transparency would help China to promote the BRI as a win-win initiative that benefits local communities and the environment, instead of bringing advantage solely to Chinese investors and a small group of the regional political elite.

Roza Nurgozhayeva

The Diplomat

July 9, 2020

https://thediplomat.com/2020/07/how-is-chinas-belt-and-road-changing-central-asia/