The rise of protectionism in recent years has accompanied dramatic changes taking place in the world, leaving global statesmen and scholars anxious about the future of globalization. Since the 2008 international financial crisis and especially after 2016, the globalization trend has taken a sudden downturn marked by Brexit and a series of protectionist policies implemented by the Donald Trump administration. Once stalwart champions of free trade and globalization, the United States and Britain both took a step back, causing the locomotive of globalization to lose power and switch tracks.
Against this backdrop, the Belt and Road Initiative (BRI), which was proposed by China, has become an anchor for the precarious global economy and a propeller of the reform and development of globalization. Five years ago when it proposed the initiative, China was aiming to improve the global economic governance system. Now, changes in the global context have objectively raised the initiative’s importance to new heights—it is a platform for increasing numbers of heads of state and government to explore new modes of global economic governance. In short, the BRI is leading a new type of globalization and will usher in a new era of inclusive globalization.
The term “inclusive globalization” is an immanent critique of neoliberal globalization of the last 30 to 40 years that features both similarities and differences with the latter. Inclusive globalization does not involve de-globalization or a reversal of globalization but rather a radical evolution and reform of globalization. The fundamental difference between the two is that inclusive globalization is designed first and foremost to improve people’s livelihoods rather than only serve the interests of capital.
In the research and practice of both global and national development, the relationship between markets and government intervention has been a consistent focus. An inclusive growth model requires a more active state to avoid becoming subservient to the needs of capital accumulation, with greater emphasis on social equity, environmental sustainability and improved governance capacity. First, governments need to strengthen cooperation to address global challenges such as turbulence in financial markets, climate change and similar global pains. Second, countries need to strengthen the protection of ordinary people and increase the living standards of the poor through training and education, targeted poverty alleviation, mass entrepreneurship and innovation, job creation, infrastructure provision, and other measures. Third, a country needs the ability to guide the allocation of financial resources and provide basic, reliable and affordable public services. The BRI attaches great importance to the role of governments, emphasizing interactive bilateral or multilateral policy coordination, alignment of development strategies, plans and projects and a proactive search for points of agreement and mutual benefits. The aim is not just to meet the need of capital expansion, but do so in ways that meet the needs of less developed regions and ordinary people, spread the benefits to more regions and more people and provide for inclusive, win-win adaptation and adjustment.
Inclusive Infrastructure Development
Inclusive infrastructure development means providing reliable and affordable infrastructure in less developed areas and countries. Many studies have shown that connectivity is a prerequisite for developing opportunities for a region to benefit from economic globalization, and that investing in infrastructure bottlenecks can spur economic growth and social and financial returns. Although modern infrastructure has linked many parts of the globe, making the world smaller in many ways, many regions and billions of people still lack full access to the modern infrastructure system. Even in some developed countries such as the United States, infrastructure has become outdated and dilapidated due to a lack of investment.
These problems are closely related to changes in national and global capital markets since the 1980s. Over the past 25 years, regional banks and traditional savings organizations have lost out to new financial intermediaries such as pension funds, mutual funds, sovereign wealth funds, funds of private corporations and certain types of insurance companies. The fundamental problem is that the funds supplied by these financial intermediaries are more likely to be invested in speculative or short-term investments in financial markets. Hot money that flows from one country to another to earn short-term profits is exemplary, as is the conduct of institutions such as hedge funds. Infrastructure projects are, however, large scale and capital-intensive with long turnover times and long payback periods that require patient long-term funding. The gap between these needs and the predominance of short-term financing led scholars like Justin Yifu Lin to emphasize the importance of a serious “maturity mismatch” in the global infrastructure financing market and the need for more “patient capital.” One of the priority areas of the BRI is the provision of substantial infrastructure financing for connectivity of facilities to accelerate access to modern infrastructure networks in less developed countries and regions and provide opportunities for development. The provision of patient capital is one of the important reasons the BRI has been welcomed by many developing countries.
Inclusive Development Paths
Globalization does not require a unified development model—promoting the so-called “best practices” and established formulas for development should be abandoned. In the years since the 1980s, the United States, Britain and other countries sought to transfer neoliberal ideals and policies often in the shape of conditionality to other countries, especially developing countries. In the late 1980s, the Washington Consensus emerged as a set of policy prescriptions adopted by Washington-based institutions such as the International Monetary Fund, the World Bank, and the United States Treasury Department. In the 1990s, these and sometimes a wider set of neoliberal measures were imposed on countries in need of financial assistance. At least until the global financial crisis of 2008, the World Bank peddled to developing countries a set of “best practices” whose essence was privatization, marketization and liberalization.
Nearly two decades of history have shown that almost all the countries that were forced to follow the recipe of the Washington Consensus were subsequently mired in serious economic difficulties for some time and lost their economic independence (which was indeed an objective of the measures). Although frequently recommended (but unable to be imposed), China did not adopt these standard prescriptions. Instead, it explored its own development path of “crossing the river by feeling the stones.” As a result, it achieved rapid and sustained economic growth. It is precisely for this reason that unlike the neoliberal globalization model, China’s BRI does not involve the identification of one best development path (namely, one centered on contemporary economic, institutional and political conditions in developed countries). Instead, the BRI stresses that each country should choose a development path that suits its own development conditions and its own circumstances. At the Belt and Road Forum for International Cooperation in May 2017, Chinese President Xi Jinping noted that China has no intention to interfere in other countries’ internal affairs or export its own model of development, but seeks to achieve a new model of win-win cooperation.
Inclusive Participation in Globalization
The very concept of inclusive globalization embodies the notion that it involves all countries and all people in the world. Although global powers are the catalysts of globalization, all countries should have the basic right to equal participation. In historical experiences of global economic expansion, strong countries exercised dominant (hegemonic) influence. The expansion of colonial trade was dominated at various times by the Portuguese, Spanish and Dutch, followed by a wave of imperial expansion led by Great Britain and subsequently the United States. The liberal international order dominated by Western countries has been associated with an extremely unequal system of international trade and investment. In the last phase of economic globalization, multinational corporations and Western-dominated international organizations supported by the United States, the only global superpower, exercised extraordinary power, leaving many countries in a weak position to negotiate with them. While further advancing globalization, a key issue in promoting an inclusive path concerns methods to care for the weak and limit the dominant influence of great powers.
The BRI adheres to the principles of “openness, inclusiveness, equality and mutual benefits” as well as that of “achieving shared growth through discussion and collaboration,” lifting the largest common development factor atop the agenda and giving priority to joint development and common prosperity. Moreover, the initiative is neither confined to a small group, nor just for groups with one set of beliefs or social values. The initiative upholds open-mindedness and welcomes all interested countries and regions to participate in appropriate ways on equal footing. The Joint Communiqué of the Leaders Roundtable of the Belt and Road Forum for International Cooperation specifically emphasized the need for special attention on least developed countries, landlocked developing countries, small island developing states and other such parties. Such players are the cornerstones of a strong and inclusive BRI.
Over the past three centuries, Western European and North American countries led development, emerging as “developed” countries and colonial/imperial powers, and have since occupied a leading position in the global economic order. These Western countries have developed self-centric ideologies and a sense of cultural superiority, under pressure from which many developing countries have been left with a sense of cultural inferiority. Especially in recent decades, increasingly powerful forces of economic globalization and the projection of Western political and ideological power have eroded the cultural independence of many countries and non-Western civilizational values. Hollywood movies, McDonald’s fast food culture, Western-inspired and supported “color revolutions” and wars in some cases have swept through many countries and regions, bringing all kinds of cultural conflicts. The evil consequences of the dominance of Western doctrine and Western cultural superiority are very detrimental to global sustainable development.
The ancient Silk Road’s principle of mutual respect and mutual learning upheld completely different cultural values. The BRI also venerates the Silk Road spirit, respecting cultural differences and emphasizing the principles of common development and common prosperity on the basis of the preservation of cultural pluralism and shared peace. Chinese President Xi Jinping has repeatedly stressed that the BRI does not involve an ideological or political agenda. There is no place for concepts of cultural superiority or inferiority anywhere in it. Through equal exchange and mutual learning, cultures have become more colorful and more innovative.
Two of the four key topics of this year’s Boao Forum for Asia Annual Conference are “An Open Asia,” and “Globalization and the Belt and Road Initiative.” Economic globalization has reached a crossroads. Anti-globalization rhetoric is becoming strident and trade wars are on hair-trigger alert. So the promotion of inclusive globalization with the help of the BRI has become a more attractive political concept to more political leaders from around the world. Inclusive globalization can also enhance the integration of Asia, providing a new philosophy and a new driving force for its advancement.
The author is director of the Center for the Belt and Road Initiative Studies and assistant director of the Institute of Geographic Sciences and Natural Resources Research at the Chinese Academy of Sciences.