No national project of global reach carries as much stake and attracts as much attention as China's Belt and Road Initiative (BRI). Conceived in 2013, the BRI is the colossal brainchild of President Xi Jinping and his government.
If realised as planned, it would expand China's footprint throughout the Eurasian landmass and through the high seas from China to eastern Africa. The grand project should be understood as a function and campaign of China's quest for a return to the imperial glory it lost over the past couple of centuries.
Indeed, the BRI harks back more than a thousand years when trade flourished along what was then called the "Silk Road" that straddled the Middle Kingdom and the Western world.
Thitinan Pongsudhirak teaches International Relations and directs the Institute of Security and International Studies at Chulalongkorn University.
Back in the 14th century, what was a vibrant overland trade route between East and West was complemented by China's maritime exploration under Admiral Zhang He. In conventional textbooks, the oceans and high seas are famously crossed and new lands discovered by Europeans. But in fact the Chinese may well have done all of this before, only to be subsequently colonised and subjugated, and unable to have a say in how world history was written.
Such is the context of the BRI.
When President Xi ascended to power in 2012, he was faced with China's growing greatness that had to be sustained. Maintaining growth and stability at home meant having to find markets and projects abroad. In Kazakhstan in September 2013, President Xi announced the Silk Road Economic Belt (SREB), complemented a month later with his watershed speech in Indonesia for a 21st Century Maritime Silk Road (MSR). Since then, both the overland belt and maritime road have become front and centre in international affairs.
On the face of it, the BRI is a natural offshoot of China's breakneck growth at home. After three decades of phenomenal annual growth, in double digits in the initial phase, overcapacity issues beset the Chinese economy, as growth slowed to a 6% range. Its huge state-owned enterprise sector was vulnerable to economic slowdown. Growth symptoms, such as urbanisation, consumerism and urban-rural inequality, became conspicuous and alarming. The only way forward was to make the world China's ultimate market.
Thus China, as it stands now, eventually became the largest trade and investment partner of Southeast Asia, displacing the United States, Japan and the European Union, which were dominant just 25 years ago.
But the BRI is designed for much more than addressing overcapacity at home. China wants to increase its structural economic and financial power by promoting its currency unit, the renminbi (RMB), as a global reserve currency. That the RMB is now part of the International Monetary Fund's Special Drawing Rights basket of leading currencies testifies to China's financial ambition.
In recent years, the RMB has faced uphill tasks in becoming a global currency. According to People's Bank of China data, it was the fifth most used payment currency in the world in 2016, and eighth in global foreign exchange transactions. Only 29% of China's trade was settled in its own currency, and only 10% of China's outward direct investment was transacted in RMB. The currency's cross-border role peaked in 2015 but has been on the decline owing to fears of depreciation, let alone devaluation by China's authoritarian capitalist government. Making it a global currency would require China being able to promote global capital mobilisation in its own currency to foreign entities.
This is where the BRI comes in. It is already backed by immense financial muscle. Loans worth some US$30 billion have been agreed by the China Development Bank, another $80 billion from its Export-Import Bank, with commitments through China's Asian Infrastructure Investment Bank for another $30 billion and New Development Bank for $20 billion. China's Silk Road Fund provides another $40 billion in potential financing. All told, some $900 billion has been estimated for 60-odd countries involved with BRI in the coming years.
Moreover, China needs to secure its energy lifelines away from the seas, where US naval capacity remains immense and potentially threatening to Chinese interests. More than 80% of China's oil and 30% of natural gas imports from the Middle East are carried through the Straits of Malacca. If push comes to shove, and the Straits are closed off, China would be crippled. The US is the only country with maritime might through its naval forces that can dominate the Indian and Pacific oceans more than any other major power.
China's Belt projects, especially those with Pakistan, are intended as energy hedges against the former's maritime vulnerabilities. The China-Pakistan Economic Corridor is worth up to $40 billion. Investing so much in Pakistan has incurred India's ire but China sees the risk as unavoidable.
To be sure, China's BRI has been met with a multi-layered pushback. At the geostrategic level, the "Free and Open Indo-Pacific" (FOIP), supported by the US, Japan, Australia and India to a lesser extent, is geared to check China's expansionist projects. So far, the FOIP lacks a concrete vision, programmes and resources but is now codified as the main US strategy for its engagement with Asia.
Some of the recipient countries of Chinese funding, from Sri Lanka to Malaysia and Montenegro, are concerned about China's undue leverage and potential "debt traps" for dependent developing countries.
Suspicions among BRI-involved countries over China's objectives and methods are likely to intensify in the coming years.
Nevertheless, China now may feel entitled to its own version of "manifest destiny", analogous to America's continental expansion in the early 19th century, as it bids to regain its lost imperial glory by reasserting and reconstructing its ancient silk roads.
Neither denying China's historical role nor appeasing its expansionist claims and aims is the way to go, however.
Engaging and enticing China to make its BRI and financing vehicles, such as the Asian Infrastructure Investment Bank, consistent and compatible with the hitherto rules-based international order is the only effective and workable way to allow and enable China to regain some but perhaps not all of its past greatness and glory.