Now that Chinese President Xi Jinping has cemented his hold on China until at least 2022 and possibly beyond, he can plough ahead with transforming his country into a global superpower.
Crucial to Mr Xi’s ‘China Dream’ vision is the Belt and Road Initiative (BRI), a $US1 trillion project to develop a network of railways, ports and special economic zones spanning more than 60 countries and generating 40 per cent of global GDP.
However the finer details of this hugely ambitious project aren’t yet mapped out, which has resulted in lingering confusion about what it involves and whether countries such as Australia should sit up and take notice.
The tinkering with the name of the scheme hasn’t helped things. The megaproject was launched by Mr Xi in 2013 and was initially called the ‘Silk Road Economic Belt,’ as it’s inspired by the ancient trade route.
It was subsequently rebranded to ‘One Belt, One Road’, which sounds a bit like a backpacker’s travel anthem and caused greater confusion, largely because it involves building three overland routes plus a maritime route to connect China with Europe and Africa. So in 2015 it was simplified to the ‘Belt and Road Initiative’.
Nevertheless, ‘OBOR’ stuck and is more commonly used by those outside China.
What’s Australia waiting for?
Although Australia is geographically isolated from all routes, membership is open to anyone and Mr Xi has said that developing northern Australia would be helpful to realising BRI’s potential. Despite 68 countries signing up, including New Zealand, Australia has so far declined to take part.
In recent days, Prime Minister Malcolm Turnbull said that, contrary to reports by the ABC, the government’s reluctance is due to economic and business concerns rather than those relating to security.
“We obviously welcome Chinese investment that meets our foreign investment guidelines but we’d prefer to focus on specific projects and investments rather than engaging in generalities,” he said.
Professor Ian Hall, a professor of international relations at Griffith University, believes the cautiousness is justified.
“For all the hype, Beijing’s intentions and design for OBOR remain unclear and so do the opportunities for Australian businesses,” he told The New Daily.
He said that the most significant benefit would likely be increased investment in sectors such as agriculture.
“But I think that this money from China will flow into profitable investments anyway, regardless of whether the Australian government signs a MoU with the Chinese government.”
Weighing up the risks
Many countries that lie along BRI’s path have poor credit profiles and are considered the world’s riskiest to do business with.
“Businesses looking to get involved in BRI need to seek professional advice and remain rigid in their assessments – and not be distracted by the size of the prize at stake,” Nick Henderson, director of China Practice at Asialink, said.
However, Jean Dong, CEO of the not-for-profit Australia-China Belt and Road Initiative, said that “no one is asking companies to go into risky regions” and that firms should instead focus on what makes them globally competitive.
The working group has organised two business delegations to China involving Australian CEOS engaged in infrastructure, construction, banking and agriculture. A delegation involving energy and mining is planned for next year.
“We’re definitely seeing an increase in interest and at the same time, China is releasing more and more information about actual projects. I think people are starting to have an ‘ah-ha moment’ where they realise it’s actually very important to take part,” she said.
However, Ms Dong said that Australia’s business community would feel more confident about getting involved in multilateral projects if its government got behind BRI.
“We would like to see the Australian government providing more support for industry to enable them to negotiate better terms,” she said.
Dr Alice de Jonge, a senior lecturer at Monash University, believes that Australian companies should nonetheless forge ahead or risk missing out on investment opportunities.
“The window of opportunity will gradually get narrower and narrower.”