What Japan Needs to be Careful

of Japan-China Cooperation on BRI

By MIFUNE Emi

The first meeting of the Committee on Japan-China Business Development and Promotion in the Third Country, an inter-ministry and government & business discussion body, was held on September 25, in Beijing. The Committee was established based on the agreement between Japanese and Chinese government when Li Keqiang, Premier of the People’s Republic of China, visited Japan in May. The Committee discussed the bilateral cooperation on building infrastructures in the third countries, among others. The Government of Japan regards the Japan-China summit meeting in last fall as ‘the new start of Japan-China relations,’ and set forth its support on Belt and Road Initiative (BRI) since last year. When Prime Minister Shinzo Abe visits China in October, a ‘forum’ on Japan-China cooperation projects in the third countries minding the BRI is scheduled to be held. While media in Japan tend to talk about BRI as a wide economic zone initiative, the economic aspect is only a part of it. As seen in the ‘Important Speech’ of General Secretary Xi Jinping at the 5th Anniversary of BRI promotion, they placed it as ‘a backing to transform the current global governance system’ and is an ‘important, practical platform’ towards building the ‘community of humankind’ which is a China-led international order. Therefore, there is an aspect on BRI as a tool to transform the current international economic order while spreading ‘Chinese standard.’ It is also clear that it has the aspect of military strategy from the case of Djibouti. China built its first ever supplying base overseas in Djibouti, of which owes 80% of its foreign debt to China. The base ‘has the aerial operation capability’ and is a ‘fortress way better for the use of anti-piracy and humanitarian operations,’ according to Stratfor Worldview’s analysis on the photos taken by satellite, published in Summer last year, the magazine suggests that ‘it could be used for organizing open sea navy or other purposes.’

It is reported that the ‘third countries’ where Japan and China will work together are in Southeast Asia, Middle East, and Africa. Yet the world is being alerted on the enormous debt given to the recipients countries of BRI. Christine Lagarde, Managing Director of the International Monetary Fund, warned on April 12 this year that BRI investments are not a free lunch. In the previous month, Center for Global Development, an American think-tank, had published a report on debts of BRI participants, indicating 23 countries are difficult to repay. Despite China’s claim it would contribute to help developing countries achieve Sustainable Development Goals (SDGs), the spirit of SDGs --human rights, democracy, and good governance-- and BRI do not match. Moreover, BRI debt issue is not only an issue for the resource rich countries or ones in a strategic locations, but also for China itself as phrased ‘China’s Great Wall of Debt.’ The government of Japan is moving forward to deepen the BRI cooperation in the third countries, while the world are now careful of it with the ‘debt trap’ and ‘Great Wall of Debt.’ Would this cooperation model be a win-win one, or lose-win, for Japan in the paradigm of the international relations?

The Japanese government emphasizes the bilateral relation with China has “returned to be the normal.” However, when seeing the news that China Coast Guard’s 4 vessels violated the territorial sea of Japan near Senkaku Islands of Okinawa on September 7, the following day of the big earthquake in Hokkaido, there would be few Japanese who believe the ‘improved relations’ from such China’s attitude. Will Japan’s cooperation on BRI in the third country benefits Japan? Let us see from the case in Africa. The presence of China in Africa has increased outstandingly in recent years. The export share of Africa, for example, were 3.3% to China and 3.0% to Japan in 2001, which became 10.4% and 1.6% respectively in 2016. The import share changed from 3.7% China and 4.2% Japan in 2001, to 16.6% and 2.2% in 2016. Until 2017, China is the biggest trade partner of Africa for 9 years straight. China’s investment to Africa is around 3 billion dollars, which is 40 times increase since 2003. Japan’s BRI cooperation in Africa where China has a big presence would make its cost-benefit performance relatively low. The Japan-China cooperation in Africa which is rich in resources and has a voting power in the United Nations would bring a lose-win outcome, rather than win-win, to Japan in mid- and long-term perspective, considering Japan’s weakening influence overseas based on decreasing demography which changes its fiscal structure.

China is expanding its presence with BRI, and actively supporting Africa’s effort to diversify the economy and development capability in the areas such as capacity building, anti-poverty, industrialization, and agricultural assistance, since the Johannesburg Declaration adopted at Forum on China-Africa Cooperation in 2015. Meanwhile, China covers the BRI participating countries with BeiDou navigation satellite system under ‘Belt & Road Spatial Information Corridor’ initiative, and China-Arab States BDS/GNSS Center was established in Tunisia in April 2018. Under the Digital Silk Road initiative, Huawei, ZTE and other Chinese companies are building information technology infrastructures in BRI countries. A French newspaper Le Monde has reported in January this year that the African Union’s Headquarter building donated by China was under surveillance. The development cooperation is just a part of BRI projects.

The Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) was held this year at the Great Hall of People with the attendance of the head of states or leaders from 53 countries including China and Africa. China’s General Secretary Xi Jinping said “let us build China-Africa Community” in his speech and announced 60 billion dollar aid in total in the coming 3 years. This includes debt weaver for the ones due at the end of 2018 held by Least Developed Countries (LDC), Heavily Indebted Poor Countries (HIPC), landlocked and small island developing states; 15 billion dollar non-grant, no interest, or priority loan; setting the limit of loans up to 20 billion dollars; assisting to establish 10 billion dollar special loan within the China-Africa Development Fund, as well as 5 billion dollar special fund for trade import loan; and over 10 billion dollars investment by Chinese corporations. It is reasonable the BRI is criticized as ‘new colonialism’ by seeing China keeps excessively investing with its purpose to excessively indebted Africa. The FOCAC Beijing Summit meeting adopted the “Beijing Declaration -- Toward an Even Stronger China-Africa Community with a Shared Future” and the Beijing Action Plan (2019-2021) as the guideline of China-Africa relations in coming years. China and Africa agreed to build community with a shared future, with hand in hand, and to promote the joint development projects to focus in the coming 3 years and on in the fields of (1) industry promotion, (2) connecting the infrastructures, (3) smooth trade, (4) green development, (5) capacity building, (6) health and hygiene, (7) people-to-people and cultural exchange, and (8) peace and security, listed as the eight major initiatives.

China is expanding its standard of rules and systems through joint projects of BRI, not only the infrastructure. The Beijing Action Plan includes providing the training to 1,000 elites in Africa, scholarship for 50,000 students, training of 50,000 people, assisting to establish Confucius Institute within the schools and providing educational materials, helping Chinese language courses to be implemented to the local education systems, anti-poverty assistance, exchange program for 150 Master’s and Doctor’s degree students in the field of science and technology, inviting 200 researchers annually, and capacity building and technical assistance to media. It can be seen that China is expanding its influence in soft aspect, and that is their political aim in strengthening the BRI people-to-people connectivity. While China emphasizes to “back the development based on each country,” it wishes Africa to help realize the Chinese ideal as the international consensus. At FOCAC Summit, China demanded Africa to maintain ‘five nos:’ (1) no interference in African countries' pursuit of development paths that fit their national conditions; (2) no interference in African countries' internal affairs; (3) no imposition of China's will on African countries; (4) no attachment of political strings to assistance to Africa; and (5) no seeking of selfish political gains in investment and financing cooperation with Africa. This is indeed a challenge against Washington Consensus, to call to ‘Beijing Consensus.’ Washington Consensus is a political package of new liberalism, the United States government or international organizations’ condition to the developing countries to accept in exchange for the aid or loan. On the other hand, Beijing Consensus does not demand the aid recipient to democratization or liberalize, which is accepted by regime-change reluctant African and Middle Eastern nations. Beijing Consensus is clearly different from the spirit of Free and Open Indo-Pacific Strategy proposed by the government of Japan at the Tokyo International Conference on African Development held in Kenya in 2016.

The Chinese Communist Party (CCP) established Xi Jinping’s diplomatic philosophy at the Central Foreign Affairs Committee held on June 22 and 23. The Central Foreign Affairs Committee is one of the important body of the center of CCP, tasked to analyze the trend of the international environment and that of surrounding China, to clarify the philosophy of its overseas operations, principle, strategic goals, and major assignments. This time, the second held under Xi administration, indicated to promote the global governance further to be much fair and reasonable one to build the ‘community of humankind;’ consistently defend the nation’s interests in sovereignty, safety and development, bottom lining the ‘core interest;’ widely united cooperation among the ‘natural alliance’ in the international practice; and others as the diplomatic guideline in the coming 5 years. Hence China will never change its attitude towards Senkaku Islands while it is determined to “consistently defend the nation’s interests in sovereignty, safety and development.” So what China says about “more fair and reasonable global governance” is an idea to transform the current one to the one based on Beijing Consensus. Would the Japan-China cooperation with BRI in mind gives Japan a win-win relations, or lose-win one that is taking away the trust and pride of Japanese nationals in the government’s ‘value & interest sharing diplomacy?’

(This is the English translation of an article written by MIFUNE Emi, Professor, Komazawa University / Academic Member, Global Forum of Japan, which originally appeared on the e-forum “Giron-Hyakushutsu (Hundred Views in Full Perspective)” of GFJ on October 2, 2018.)