Ambiguity a roadblock to Belt and Road progress

China is looking like it will replace the US on the world stage as a champion of free trade. Photo: Getty Images

The Belt and Road Initiative is of significant interest to China when it comes to trade, but nuances of the initiative are yet to materialise, writes Sam Sachdeva

COMMENT: Writing about China as someone who had never visited before, it was easy to conceive of the country in a monolithic manner.

With a population of 1.4 billion, to say China is big is an exercise in redundancy, but that scale does make it difficult to think of the country’s approach to trade and economic issues in a human way, particularly compared to New Zealand’s more modest size.

But as part of the Asia New Zealand Foundation’s Track II delegation, I got a sense of China’s diversity.

Travelling between rural, agriculture-focused Harbin, e-commerce hub Hangzhou, centre of power Beijing and cosmopolitan Shanghai, the range of opportunities on offer to New Zealand – and the different tensions in each space – was much more evident.

With the United States increasingly looking inwards under President Donald Trump, there has been much talk about China taking its place on the world stage, including as a champion of free trade.

Chinese President Xi Jinping has encouraged this image, but as our discussions made clear, the truth is far more complex.

There does appear to be a desire to become a more open and liberalised economy, but on China’s own terms.

There was less talk of multilateral agreements than I expected, with RCEP (which China is involved in) and TPP (which it is not) both appearing to be far from the top of people’s minds.

The discussions that did take place about trade were largely centred around Xi’s flagship Belt and Road Initiative (BRI), the topic of much debate in New Zealand.

Having tried to write about the BRI and what it may mean for our country, I’ve experienced a sense of frustration at feeling unable to produce a nuanced perspective.

Being there reassured me that is not solely down to shortcomings at my end, but in large part a result of the ambiguity within China itself about what BRI can or will be.

While it has been sold as China’s response to globalisation, the approach seemingly being taken – of the country developing projects on a bilateral basis with individual countries – is somewhat of a distance from New Zealand’s preferred multilateral approach.

That China might prefer to leverage its size in negotiations is not a shock, but it is surprisingly close to Trump’s own preferences in trade – and will be on my mind when writing future pieces about whether or not China can fill the gap left by the US.

That’s not to say scepticism is the only attitude to take: I was interested to hear of an “internal third world” within China, with products such as bulldozers developed for that market but also suitable for export to developing countries.

Some in China see New Zealand as a test bed of sorts, bridging the gap between developed and developing countries through pilots for products and services, and how that pans out will be an area of great interest.

The trip gave me a better understanding of the Chinese “gradualism” when it comes to areas like trade.

Making incremental changes little by little, instead of sweeping strokes, seems to win the day.

That has positive aspects – such as Shanghai’s free trade zones, designed to test out standards from the TPP deal to see if China could handle them – and negative, given the country may be less ambitious in some areas than we would want in an ideal world.

Having an appreciation for that approach, and understanding its shortcomings, is going to be invaluable as I try to square China’s policy moves with the New Zealand context – and that’s an appreciation I would never have gotten sitting in front of my keyboard in Wellington.

Sam Sachdeva visited China as part of a Track II delegation with the Asia New Zealand Foundation. He and the other delegation members will discuss their experience at an event in Auckland on Tuesday 3 October (click here for more details).