Posts Tagged ‘BRI’

Catching up posting as ever, this another piece for South China Morning Post looking at China’s problems along the Belt and Road with reference to current tensions with India potentially being an indicator of what could happen more substantially.

China must get along with regional powers to make its New Silk Road plan work

Raffaello Pantucci writes that Beijing is seeking to increase its presence in regions where it is going to need more friends than enemies, including India

Geopolitics matters. As we move deeper into a multipolar world, the importance of grand strategy will only grow. Relations between states at a strategic, economic and even emotional level will all intertwine to create a complicated web that will require sophisticated diplomacy to navigate. For China this is a particularly important lesson to learn, given its keynote “Belt and Road Initiative” that requires an acquiescent and peaceful world to deliver on its promise of building a web of trade and economic corridors emanating from China and tying the Middle Kingdom to the world. China’s current stand-off with India highlights exactly how geopolitics can disrupt Xi Jinping’s foreign policy legacy initiative.

The details of the specific transgression within this context are not entirely important. China is asserting itself in its border regions and changing facts on the ground to solidify claims. Indian push-back is based on strategic relations with Bhutan that go back a long way and a concern about how this changes Indian capabilities on the ground.

It comes at a time when relations between China and India are particularly low, with suspicion on both sides. Most analysts do not seem to think we are going to end up with conflict, but it is not clear at the moment what the off-ramp looks like. But whatever this exit looks like, we are undoubtedly going to see China finding it tougher to advance its Belt and Road Initiative through India’s perceived or real spheres of influence in South Asia.

This is something which is already visible in the broader tensions between China and India over Pakistan. China has focused on the country as a major ally that it is supporting to develop its domestic economy and improve its strategic capacity for a variety of reasons. Yet this approach directly undermines Pakistan’s perennial adversary India’s current approach of isolating Islamabad on the international stage as punishment for cross-border terrorism.

Further, the CPEC route’s cutting through disputed territories in Kashmir provides a further spur to Indian concerns. At a more tactical level, China’s refusal to allow Jaish-e-Mohammed leader Masood Azhar to be included on the list of proscribed terrorists, and its blockage of Indian entry into the Nuclear Suppliers Group, all point to a relationship with which Beijing is clearly playing an aggressive hand. India has also shown itself to be a hardball player in this regard, making public shows of proximity to the Dalai Lama, a source of major concern to China.

Of course, such a posture is either capital’s prerogative. Past relations between China and India have been fraught. The two countries have fought wars against each other. Yet at the same time, the overall tenor between the two is often in a different direction: both are proud members of the BRICS grouping (arguably the two leaders of it), and both have embraced the Asian Infrastructure Investment Bank. India is keen to gain a slice of the outbound Chinese investment, while China is keen to access India’s markets. Both see the opportunities and recognise that as Asian giants they have an upward trajectory over the next few decades. Together they will undoubtedly be stronger than alone.

But this positive message is thoroughly buried under the negative news around the border spat in Bhutan. Rather than being able to build a productive relationship, the two countries now find themselves at loggerheads. This is a problem for both, but has an important lesson within it for China as it seeks to advance its Belt and Road Initiative globally.

To be able to credibly realise the Belt and Road Initiative, China is going to need to have positive relations with partners on the ground, in particular major regional powers. With plans to build infrastructure, expand investments and grow physical footprints on the ground, Beijing is seeking to substantially increase its presence in regions where it is going to need more friends than enemies. When looking across South Asia, this means having a productive relationship with India. Without this, Delhi will find ways of complicating China’s approach or, more bluntly, obstructing it. Given the importance of some of the South Asian routes to the development of some of China’s poorest regions, it is important for Beijing to make sure that these corridors related to the Belt and Road plan live up to their promise.

And this lesson is one that will be relevant outside a South Asian context. For Beijing to be able to deliver on the promise of the Belt and Road Initiative, it is going to need to watch the geopolitics. Similar problems may eventually materialise with Russia, or on the seas as Beijing seeks to turn the 21st Century Maritime Silk Road into a reality.

Without friends along these routes, China is going to find it very difficult to make these visions work no matter how much money they try to throw at the problem. With nationals, companies and interests broadening and deepening, China needs an acquiescent environment and countries that are eager to work with it. Geopolitics is a chess game of many different levels, and as power becomes more diffuse on our planet, Beijing is going to have to learn how to play these games if it wants to deliver on the promise of its grand visions.

Raffaello Pantucci is director of international security studies at the Royal United Services Institute in London.

This article appeared in the South China Morning Post print edition as: It’ll be tough going without friends on the New Silk Road

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LONDON, 19. MAY, 11:56

Chinese leader Xi Jinping trumpeted his foreign policy vision – the Belt and Road – to great fanfare this past week.

Yet a consistently discordant note was heard from European reporting around the event, with officials talking to press about their lack of understanding of the project. While some of their concerns were understandable, there was an element of missing the point.

  • The symbolic first arrival of a Chinese train in Germany (Photo: DB Schenker)

Xi Jinping may talk in terms of a project, but in reality what we are seeing laid out is a grand vision: one that Beijing is using to re-shape its engagement with the world.

For Europe, it is important to figure out exactly what this means. Otherwise, it could both miss out on an opportunity, and create a series of potential problems with a relationship that will continue to be important going forwards.

First, it is important to dispel what the Belt and Road is not. It is not a giant aid project. Nor has China particularly ever pretended that it was.

Leadership will get caught up in grandiloquent language about how the project is a great gift to humanity. However, in reality, it is a vision of re-connecting the world in a manner that will support Chinese trade flows and help Chinese companies go out into the world.

At its core, it is about helping to develop China’s underdeveloped regions – parts of the country that are deeply disconnected from its bustling ports.

Second, it is important to understand what is actually happening. Not all of the strands of the Belt and Road are new, nor are they all the same.

What has been happening in Central Asia for almost two decades, re-branded as Belt and Road, is not the same or as important domestically to China as newly advanced projects in parts of Africa or Eastern Europe.

At the same time, some corridors seem to be advancing far more slowly: the Bangladesh-China-India-Myanmar Economic Corridor (BCIM) is one that has been talked about since the late 1990s, but has only now actually moved into clear action across its entire route.

The point is, while the Belt and Road is discussed by Beijing in the same light, the reality on the ground is very different in each and every case.

Third, it is a vision with a long timeline. China is thinking to a very long horizon. In typical fashion for a centrally planned economy, it is considering things into the future and not the short- to medium-term eye-line with which most Western governments operate.

So, when the country looks to build train links across the continent that make little economic sense now, it could be that the lens we are looking at them through is too short.

Once China is able to develop its western regions and create industrial and manufacturing bases out there, it might suddenly become more economically sensible to put goods on trains across the continent.

Fourth, not everything is expected to work – this is a leadership vision and not a project.

The Belt and Road was first christened by Xi during a set of speeches in Astana and Jakarta. Laid out then, they were outlined as a pair of concepts that would slowly catch on and become the defining foreign policy concept that Xi Jinping would offer the world.

Conceptual Nature

The illogical nature of a Belt being over land, while a Road went to sea highlighted the conceptual nature of what was being laid out. In fact, the seeds of the concept could already be found in previous administrations – Jiang Zemin had his “Develop the West” concept, and Hu Jintao’s administration was the one that started up the idea of refocusing on Xinjiang and developing its relations with its neighbours.

Both of these served as ideological godfathers to the Belt and Road, which in essence took this model and internationalised it.

But the point is that none of these were specific projects. They were rather broad policy directives that were launched out of Beijing which were then followed up and pushed out by the many institutions in China, to varying degrees of success.

The BCIM was born under Jiang Zemin and went nowhere, and while the Hu Jintao initiative with Xinjiang and Central Asia was more successful, there are a few projects along the route that have failed to deliver as they were intended.

None of this is that surprising, as, ultimately, the leadership’s announcements should be assessed as a central policy direction rather than detailed plans.

Initially, when the speeches were delivered, there was no specific policy planning behind them.

Now that the concepts have firmly caught on, almost everything has become Belt and Road – in part this is because the concept is so broad (so everything fits under it), but also it is a way for everything to try to connect with the bright vision laid out by the leadership.

This includes ideas and projects that have a very limited connection to the actual Belt and Road – there is an almost inexhaustible list of Chinese regions that have defined themselves as the crucial points on the Belt and Road.

Within this, not everything is going to work (because it never does). But this is not a concern, as ultimately what has been offered is a concept rather than a project, meaning that it will not ultimately fail, as no specific parameter for success has been laid out.

EU Engagement

All of this is essential for European policymakers and thinkers to understand.

If they are to properly engage with the vision, they need to first understand it in granular detail – something that is eminently doable through the numerous reports that have been published, or by undertaking research themselves.

They then need to appreciate what the vision actually is and the timelines to which it is operating, and then finally focus on which aspects do correspond with their specific interests.

China’s biggest problem with this vision is that it requires considerable support, consent and contributions from the countries along and at the end of the routes, and those that are more likely to succeed are those with supportive partners.

Consequently, Europe can choose which aspects it wants to engage with and simply ignore the others. This will not necessarily stop them from happening, but they are not realities Europe has to engage with if it does not want to.

The key in all of this is for Europe to decide exactly what its strategy towards China is going to be, and what it is that it wants to do to engage with this century’s rising power. In the Belt and Road they are facing Xi Jinping’s foreign policy legacy.

Given that the conceptual outline is focused on the Eurasian continent, Europe has an opportunity to re-craft its relations with China in a way that connects with the leadership and potentially has a game-changing impact across the continent the two powers share.

It is not enough for European officials to simply tell the press they do not understand the Belt and Road – the vision is clear enough, but the point is to decide how to engage with it.

Raffaello Pantucci is director of international security studies at the Royal United Services Institute,a think tank in London

Back on my China in Eurasia theme, this time a piece timed to land at my institutional home RUSI to coincide with the big Belt and Road Forum taking place in Beijing. Lots more on this topic to come, and if you want more have a look at the China in Central Asia site.

Separately, spoke to the Times about returning foreign fighters to the UK from Syria, to Politico about Brexit and counter-terrorism, and the Mail on Sunday about Khalid Ali, the arrested Westminster terror plotter.

China: Understanding Beijing’s Belt and Road Initiative

A great deal of rhetoric is expended over China’s gigantic investment initiatives. Still, many of the economic projects are real, and Western governments will be well advised to understand their purpose.

The Middle Kingdom is asserting its centrality in global affairs by hosting the Silk Road summit this weekend. Aimed at showcasing President Xi Jinping’s ‘Belt and Road’ vision, the conference will bring together leaders, officials and experts from around the world.

Apart from the signing of some large deals and some affirmations about China’s eagerness towards free trade, the summit’s real importance is in the message it sends about China’s place in the world.

First announced in 2013 in a set of speeches in Astana and Jakarta, the One Belt, One Road (now renamed the Belt and Road Initiative) is at its root about putting a new name on a series of initiatives that built on existing Chinese investment and trade relationships.

The decision to first focus the initiative on Central Asia was a reflection of the fact that the region served as a conduit for China’s decades-long approach to investment around the world.

With a model of building infrastructure using Chinese firms deployed to deliver on loans provided by the country’s financial institutions to open up trade and markets, Beijing’s investments in Central Asia since the end of the Cold War provide a model for the globalised Belt and Road Initiative.

For countries along the routes, there is the difficulty of understanding and connecting with the Chinese investments in a manner that is useful to them, so that they are not simply roads passing through their territories.

For outside powers, such as the UK, there is the challenge of comprehending where they sit in the broader vision, as well as how they can connect with these projects along the routes.

To understand these issues better, there are three key aspects to remember. First, the concept is not a monolith. Each of the strands of the Belt and Road are different; at different stages of development, advanced to differing degrees and of variable importance.

In some cases, China is building on a long history of investment, while in others China is starting from a very low base of investment. It is important to distinguish between the rhetoric and the reality in each case.

Second, it is important to remember that this is not a giant aid project; China is making commercial investments in many cases. In some, the loans have been offered at reasonable rates and the implementing partner is contractually obliged to be Chinese. Looking at the Asian Infrastructure Investment Bank projects, they are in fact put out to open tender.

It is only in very few cases that the investment being offered acts as pure aid. China is still developing its aid profile, and this is key in understanding what China is doing under the Belt and Road.

The ultimate aim is to develop a series of trade and economic corridors using Chinese companies (thereby helping them go out into the world) to help China develop domestically. This is fundamentally a selfish vision aimed at advancing Chinese interests.

Third, it is important to think of the vision with a longer horizon that we are used to considering. At the moment, there is little economic logic to placing goods on trains from China to go to Europe: the route is far more expensive than going by sea and the highest value goods that need to get across land quicker need to travel by air.

Consequently, the much-vaunted trains which are travelling across the Eurasian landmass bringing goods between Europe and China are for the most part going full one way and empty back.

Furthermore, they are being subsidised by Beijing or the regional governments from where they depart. They do not currently make economic sense.

But it is possible that this is looking at them on too short a timeline. Seen from Beijing, the idea is to lay these tracks and develop these routes so that once China’s western regions become more developed and productive, they can take advantage of these routes.

Over time, what seems a short-term loss may turn into a longer-term artery of international trade. The point is that it is possible that the horizon with which the Belt and Road is currently considered is too limited.

In fact, it is something with a much longer timeline and is fundamentally, seen from Beijing, about re-establishing China as the centre of a global network of trade and economic routes that will help re-wire international trade.

These three elements are essential to bear in mind when outside powers are seeking to connect with the vision. It is important to understand each corridor in detail, to focus on the commercial opportunities that the corridors will create and to think with a longer horizon that most governments usually consider.

Once this learning has been absorbed and considered, it will be easier to understand how to connect with China’s vision – something that is as relevant to countries such as the UK at one end of the route as those that are along the routes.

For the Chinese investments are happening, notwithstanding the hyperbole that will be on display this weekend; money is being spent, and ground is being broken.

Banner image: The first goods train service from China to the UK arrives at DB Cargo’s rail freight terminal in Barking, East London. Courtesy of PA Images

Slightly delayed posting of a new piece for my institutional home RUSI looking at how the UK should connect with Asia in the new Trumpian world. It struck me as interesting that while the US elected a President who spoke of isolation and scrapping treaties, the Chinese Premier tracked the new Silk Roads in China’s ongoing burst of international connectivity. Separately, spoke to the Guardian about the latest possible death of Mokhtar Belmokhtar.

Britain and Asia in a Trumpian World: Only Connect

As the US appears set to limit its global involvement under President-elect Donald Trump and China intensifies its engagements across the world, an opportunity has arisen for Britain. It is one the UK government should seize.
hammond-xi
The contrast could hardly be greater: as the US voted in a president who has not committed himself to free trade and is keen on closed borders, Chinese Prime Minister Li Keqiang crossed the new Silk Road from China to Europe through Kazakhstan, Kyrgyzstan, Russia and Latvia, promoting precisely the opposite ideas.

And with concrete results. In Gwadar, Pakistan, Prime Minister Nawaz Sharif and Chief of Army Staff Raheel Sharif watched as the first load of products to make the journey down the China-Pakistan Economic Corridor from western China leave for the seas. As America closes in on itself, Eurasia is opening up ever more. And the British government, which has not missed these trends, needs to develop a more strategic approach if it is going to effectively position itself to take advantage of them.

In stark contrast to the apocalyptic vision of international relations which seems to be associated with US President-elect Donald Trump, China’s economy is pushing itself ever-more aggressively into the world. Chinese President Xi Jinping’s ‘Belt and Road’ concept has become an all-encompassing foreign policy vision, espousing trade and connectivity with talk of the ‘revival of silk roads’ and ‘connectivity’. Nowhere is this clearer than in Eurasia, where China is re-drawing the economic and geopolitical map, as it steers money, companies and people into re-establishing Eurasian continental links.

Li’s tour in many ways mirrored Xi’s in June, when he travelled to Serbia, Poland and then Uzbekistan. And while the announcement of the first load of trucks making it from Kashgar in western China to the coast in Baluchistan was actually far more symbolic than economically significant, it did show how ‘Belt and Road’ connectivity rhetoric was producing results.

It is on this divergence of global attitudes between a retreating US and a thrusting China that UK and other middle powers would do well to focus. A simplification, perhaps, but clearly something is fundamentally shifting and in a world of growing giants, the UK needs to focus on how it can best position itself against these shifting tectonic plates.

The answer for London is a need for greater and closer engagement. With the US, it is likely too early to decide on how to deal with a Trumpian America. However, with China, the answer is to find ways to connect with this surge of Eurasian connectivity. At the same time, London has also to find ways of engaging more seriously with other Asian partners by taking advantage of the broader global shift taking place. Asia is a story of multiple rising giants, and the UK is well regarded by many of them. Britain has long under-performed in its engagement in Asian strategic and security affairs and now is the moment to take a more substantial posture on the issues that preoccupy its partners there.

The current British government has already started to make noises in this direction: while Li was crossing the continent and the US was voting for Trump, Prime Minister Theresa May was in India and Chancellor of the Exchequer Philip Hammond hosted the latest Economic and Financial Dialogue with China in London. These moves need to be matched by a more serious engagement in regional strategic and security affairs.

Both China and India realise their growing weight in international affairs and want to engage with the UK as a serious power, but are often concerned that London does not take their strategic concerns seriously. This is likely less true for China than India. However, at the same time, the fact the UK has such an enhanced and visible engagement with China is having a detrimental knock-on effect on other Asian partners for whom China is a competitor and antagonist.

There are two important aspects from this for the UK to note. First, London needs to establish a more comprehensive and strategic dialogue with Asia. This means not just paying lip service to regional security questions, but playing a more forward role in engaging and understanding them. British diplomatic, analysis and security personnel across Asia and in government offices in London need to be enhanced and bolstered so that policymakers have a more substantial understanding of Asian dynamics and a demonstrable desire to engage in them.

Second, the UK needs to move forwards into playing a more engaged strategic role. Rather than continuing as a passive observer of regional dynamics, the UK should move into a position where it can build on its existing relationships to play the role of regional peace-broker.

To focus on Eurasia in particular: the current Chinese-driven surge of connectivity has the potential to be a collective net boon, but at the moment it is only partially working. Hiccups such as regional neighbours refusing to let products travel across their borders, or China being unable to resolve long-standing historical tensions, have hindered the smooth progress of the Belt and Road concept. If London stepped in to find a unique role as broker and diplomat between regional powers, it could help to encourage the aspiration of connectivity which serves a broader group of nations than just China.

Looking at South Asia, the UK’s relationships with both India and Pakistan place it in a unique position to try to lower tensions. Admittedly not an easy task, and one that has been attempted in fits and starts for some time, but a more focused effort on both sides of the border might help show a level of strategic seriousness that the UK is accused of missing in its current pursuit of trade deals.

By stepping forward to play this role – a position that may become vacant if Trump’s isolationist America happens – the UK will be able to carve a new role for itself in the world, one which benefits more from Asian growth without being too openly mercantilist.

The UK has been somewhat rudderless strategically since the referendum in June to leave the EU.

The election of Trump has further accentuated this perception, and there is a palpable concern about what might comes next. But the world has kept turning, and Chinese-driven Eurasian connectivity continues its inexorable surge. If the UK wants to truly benefit from this shifting world order, it needs to rapidly define where exactly it will sit and what it will bring to the table. Engaging more seriously and substantially in Asian strategic affairs would be an important place to start.

 

 

New piece for the Financial Times excellent Beyond BRICS blog, this time providing an evaluation of the links between the Asian Infrastructure Investment Bank (AIIB), the Silk Road Fund and Xi Jinping’s ‘Belt and Road Initiative.’ A lot more on this general topic on my parallel China in Central Asia site. This aside, spoke to the Telegraph about the recent terror attack in Quetta, Pakistan.

China’s Development Lenders Embrace Multilateral Co-operation

aiib-inaugural-mtg

There has been much speculation on the role of the Silk Road Fund (SRF) and Asian Infrastructure Investment Bank (AIIB) in China’s outward investment push.They are both instruments created by Beijing to provide economic firepower and bring international credibility to the ‘Belt and Road’ vision that has become President Xi Jinping’s keynote foreign policy concept. But in reality they have both undertaken a series of investments that, while substantial and linked to ‘Belt and Road’ countries, pale in size next to China’s overall outward investments.

While the AIIB has quite clearly been subsumed into the ‘Belt and Road’ project, the SRF has so far largely focused on commercial projects which are focused on profit rather than national strategy.

AIIB has so far made two sets of project announcements. The first were announced on June 24, 2016 and included a $165m loan for a power distribution project in Bangladesh, a $216.5m loan co-financed with the World Bank for a national slum upgrade in Indonesia, a $100m loan co-financed with the Asian Development Bank (ADB) and UK’s Department for International Development (DFID) to finance the Shorkot-Khanewal section of the M-4 motorway in Pakistan and a $27.5m loan for the Dushanbe-Uzbekistan Border Road Improvement Project in Tajikistan, co-financed with the European Bank for Reconstruction and Development (EBRD).

A second set were announced in September, including a $300m loan for Tarbela 5 hydropower project in Pakistan, co-financed by the World Bank and a $20m loan to finance a 225 MW power plant in Myanmar, a project which is set to possibly receive a further $58m from the International Finance Corporation (IFC) and $42.2m from the Asia Development Bank (ADB).

Of these projects, the only one that is uniquely funded by the AIIB is the power grid project in Bangladesh. All of the others are co-financed, or more accurately, the AIIB has bought into existing projects. Another significant detail is that with the exception of the Indonesian project, all of the projects are ones that can be captured under the broader ‘Belt and Road’ vision – which has three principal strands pushing out across Eurasia: China-Pakistan Economic Corridor (CPEC), Silk Road Economic Belt (SREB), and Bangladesh-China-India-Myanmar Economic Corridor (BCIM).

Of the $829m the bank has invested so far, $400m has been invested into projects which fit under CPEC, $27.5m into SREB, and $185m into projects which could fit under the BCIM.

In other words, almost 75 per cent of the AIIB’s first projects have been steered towards existing Chinese economic visions. And in many ways, the Indonesian project could also be captured under this banner, given the fact that Indonesia fits into the under-developed 21st Century Maritime Silk Road concept as well (and was the country in October 2016 that Xi announced the concept in the first place).

There is very little distance between the AIIB and Beijing’s ‘Belt and Road.’ And in fact, the parts of the ‘Belt and Road’ it is feeding are those parts which are going to ultimately have a resonance on China’s most under-developed regions that are the ultimate focus of the ‘Belt and Road.’ It is therefore hard, on the basis of its first projects, not to consider the bank as a tool of the ‘Belt and Road’ rather than a new independent financial institution advancing general regional development goals.

The Silk Road Fund is a more obvious tool than the AIIB. With a total capital of $40bn, the first $10bn was made up with money from the Chinese State Administration of Foreign Exchange (SAFE), which accounted for 65 per cent of the initial funds, Export-Import Bank (accounting for 15 per cent), China Development Bank (accounting for 5 per cent) and the China Investment Corporation (accounting for 15 per cent).

Established specifically to ‘promote common development and prosperity of China and the other countries and regions involved in the Belt and Road Initiative,’ the Fund is a commercial entity that is focused on projects that will generate returns.

Having laid out this logic, the Fund’s first investments have followed these principles, starting with an investment of $1.65bn in April 2015 to build the Karot hydropower project in North East Pakistan.

In September 2015 it announced it would purchase 9.9 per cent of the Russian Yamal liquefied gas field for $1.2bn, and more recently it was revealed it had explored putting almost $2bn into buying Glencore’s Vasilkovskoye gold mine in Kazakhstan.

It ultimately lost that deal to another pair of Chinese buyers. Outside these obvious ‘Belt and Road’ deals, the Fund has also invested in ChemChina to purchase Italian tire maker Pirelli, invested $100m into the China International Capital Corp (CICC) a state investment bank that prior to its initial public offering (IPO) in November 2015 was seen as taking losses internationally, and finally pledging some $300m to the IPO of China Energy Engineering Corp (CEEC) an international power plant construction firm.

To understand the ‘Belt and Road’ logic of the CEEC-Silk Road Fund investment, it is instructive to look at Mr Xi’s visit to Serbia in June 2016, seven months after the IPO announcement. Mr Xi was present at the signing of an MOU between the CEEC, the Silk Road Fund, China Environmental Energy Investment Ltd and the Serbian Ministry of Energy and Mining. The MoU laid the foundations for CEEC to undertake further energy projects in Serbia, joining already advanced CEEC projects in Lithuania and Bosnia-Herzegovina.

Taken as a whole, the Silk Road Fund is a heavier investor in ‘Belt and Road’ projects than AIIB. While the AIIB’s announced deals add up to $829m, the SRF’s amount to at least $3.25bn (not including the Pirelli deal, the exact numbers of which are not immediately available). In addition, the Fund has been reported as considering an investment of between €5-10bn into the European Fund for Strategic Investments, or the so-called Juncker Plan.

But all of this pales next to China’s overall outward investment numbers. The Ministry of Commerce announced outward investment last year at $145.67bn and EY, a consultancy, has predicted that this year’s total will surpass $170bn.

Taken against this background, the SRF and AIIB are clearly minnows. But they are minnows which have focused on national interest, something that highlights the degree to which the broader ‘Belt and Road’ is aimed at advancing national interest rather than being a benevolent vision for Eurasia.

It also illustrates to outsiders that to properly understand how to connect with the ‘Belt and Road’, there is a need to understand China’s broader international ambitions under the vision.

Raffaello Pantucci is director of international security studies at RUSI, a think tank based in London.