Carl Michael reviews the institutional base of Belt and Road Initiative in his fourth blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

The primary institutional base underpinning the BRI is provided by the three interlocking branches of political power in China. The Communist Party of China (CPC), the State Council and the Peoples Liberation Army (PLA). The CPC continues the long tradition of a unified Confucian ruling entity, which seeks to represent the interests of the whole of society, in comparison with a Western-style political party approach. Chinese governments are expected to cope with the challenges posed by a huge population and vast territory, ostensibly shaping a political culture characterized by valuing a longer-term vision, a more holistic perception of politics which places high value on the country’s overall stability and prosperity. This single-party approach, embodied by the CPC, is often contrasted with the impact of change of central government every few years in multi-party democratic systems as well as the national chaos following China’s 1911 revolution which sought a Western political model. The CPC exercises oversight of the BRI through the Central Foreign Affairs Commission.

The State Council on the other hand is the chief administrative authority in China and it exercises authority over the BRI through cabinet-level bodies such as Ministry of Foreign Affairs and the Ministry of Commerce which is responsible for foreign trade policy and agreements and foreign direct investment. These bodies and their predecessors were instrumental in China’s entry into the World Trade Organisation.

Chief among the financial institutes which underpin BRI activities is the government-owned China Development Bank (CDB). It is one of the most powerful banks in the world and has been crucial in transforming China’s economy and competitiveness. Even though other national development banks have financed political projects and favoured industries that private investors would eschew; never has such an institution existed with so much capital and financial capability with control delivered into the hands of one body, the CPC. The rise of Chinese capital availability overseas is an ever-increasing trend facilitated by the CDB which specializes in financing infrastructure, energy and transportation. In this it is complimented by the Exim Bank of China which specializes in financing trade, investment and economic cooperation; and the Asian Infrastructure Investment Bank, whose starting capital and credit ratings have made it a rival to the World Bank, ADB and the IMF. In addition to these banks, the government-owned Silk Road Fund fosters increased investment in countries participating in the BRI.

Any understanding of the institutional base of the BRI would be incomplete without considering the role of the Chinese PLA, which is the largest military force in the world. The recent growth of the PLA’s global power projection capabilities and strategic nuclear missile capabilities has been noteworthy. Local conditions in many BRI areas are highly unstable and scenarios where China may require the PLA to protect its interests beyond its borders are not unrealistic. As China’s growth has moved it along the path to becoming a true maritime power, so also has the PLA navy expanded its global reach with the acquisition of aircraft carriers, carrier-killer missiles and overseas bases. The perception of the PLA as being the armed wing of the CPC means the PLA’s deployment abroad is extremely sensitive in nature.

There is concern regarding the rise of a global player with an institutional base such as China’s. The justifiable unease in many parts of the world arises from the links between its national mission, power projection capabilities and political system. If this unease is not alleviated, the BRI could be perceived as a neo-colonial form of tributary diplomacy even as China works to reinstate its rightful civilisational place in the world order.