HOME
TRADE
FTAs
CHINA
EUROPE
USA
FDI
DEVELOPMENT
INTELLECTUAL
PROPERTY
GLOBAL
ECONOMY
INDIA
AFRICA
TAX
FINANCE
CREDITINSURANCE
HUMAN
RESOURCES
CLIMATE
ACTION
TECHNOLOGY
WEALTH
CORPORATE
AVIATION
LUXURY
TRAVEL
LIVING
INVESTMENT
"
Table 1. China’s trade agreements (shaded rows = BRI countries)
Figure 1. Countries within same economic corridor show significant differences in terms of logistics performance, trade policy and business environment
ABOUT
ARCHIVE
AWARDS
SUPPLEMENTS
THE GLOBAL TRADE AND FINANCE PLATFORM
![An early assessment The BRI is a young initiative. But, after five years, enough information exists to provide an initial assessment of the strategy. As more data becomes available on the performance of BRI projects, it will be possible to produce a more rigorous evaluation of its progress. The BRI responds to the unfilled need for investment in infrastructure across the developing world and offers improved access to the world’s fastest growing large market. As such, it should be viewed benignly, but it is not. Many observers view the BRI with suspicion. Official donors in Japan, the European Union and the United States have been especially active in voicing concerns. In this section we identify both those concerns that we believe reflect misunderstandings or that are, to a lesser or greater degree, exaggerated, and – crucially – those that reflect the BRI’s genuine shortcomings. Geopolitics Many critics claim that the BRI is not really a trade or development initiative but a drive to extend China’s influence. This charge is part true but is also disingenuous. From the Marshall Plan to the European Coal and Steel Community and to the (ill-fated) Trans-Pacific Partnership, initiatives such as the BRI have been motivated by geopolitical and security considerations as much as by economics. Undoubtedly, China’s heft and the rapidity of its rise present a unique challenge to the established powers. It does not help that the BRI is gaining traction at a time when the United States and the European Union are on the defensive. The US Administration has embraced protectionism. The EU is reeling from Brexit and from the advance of national populism across the continent. To assuage worries about its growing weight, China’s leaders never tire of declaring that they have no ambition to dominate or to replace the United States in its global leadership role. But should China be believed? At the core of the debate over China’s influence are vastly different perceptions about what China is trying to do. For example, Yan Xuetong, a prominent Chinese political scientist wrote that China believes countries should follow their own paths: “[China] views national sovereignty, rather than international responsibilities and norms, as the fundamental principle on which the international order should rest” (Yan, 2019). In contrast, Jim Mattis, the former United States Secretary of Defence, widely considered a moderate, stated in his letter of resignation to President Donald Trump that it was “clear that China and Russia, for example, want to shape a world consistent with their authoritarian model – gaining veto authority over other nations’ economic, diplomatic, and security decisions – to promote their own interests at the expense of their neighbours, America and our allies.”17 To these political debates must be added the hand-wringing over China’s Made in China 2025 plan18, which sets leadership in high-tech industries as an objective, in direct competition with Germany, Japan, the United States and the other advanced economies – and with a hefty dose of state support to boot. Although the two dozen or so high-tech firms with the highest stock market capitalisation are still predominantly American, Chinese firms in the digital and other sectors are quickly catching up in terms of research and development expenditure and are increasingly replacing European and US incumbent firms in leading R&D positions (Veugelers, 2018). Valid as these geopolitical and macroeconomic concerns might turn out to be – a matter on which we choose not to deliberate here – it is important to judge the BRI on its merits as a trade and development initiative. Objectives and priorities The world is by now familiar with the EU’s and the US’s trade agreements. Stakeholders might accept or object to specific provisions in the US and EU agreements, or they might accept or reject them outright, but they know quite precisely what they are dealing with. Similarly, the World Bank’s approach to lending and the conditions associated with it are clearly spelled out, as, typically, are the Bank’s priorities in engaging with specific countries. In contrast, the BRI’s objectives as stated, for example, in Xi’s Astana speech and as subsequently applied in practice, are extremely broad and its modalities are undefined. For some observers, this passes as pragmatism (‘The Chinese Way’), but in reality, it reflects China’s difficulty in coordinating such a vast overseas enterprise. As a result, many inside and outside China are confused about the scope of the BRI. Thus, international observers such as the World Bank, the Center for Global Development and the Center for Strategic and International Studies, describe the BRI differently as “an ambitious effort to improve regional cooperation and connectivity on a trans-continental scale” or as a “vast investment scheme”, or as “an infrastructure financing initiative for a large part of the global economy.” In its 2015 white paper (NDRC, 2015), the Chinese government described the BRI as aiming to create a single market, ie. as “promoting orderly and free flow of economic factors, highly efficient allocation of resources and deep integration of markets.” The lack of clarity has political consequences since those who oppose the BRI can define it pretty much as they wish. It also has economic costs since those tasked with executing the BRI can assume that ‘everything goes’ and pick and choose those projects or activities that suit them best, rather than those that correspond to well-defined development priorities. Geographic scope If the BRI’s objectives are not clearly communicated and understood, its geographic priorities are even less so. Intended to replicate the ‘Silk Road’ in Xi Jinping’s original formulation, in the 2015 white paper the BRI is described as covering, but not “limited to, the area of the ancient Silk Road. It is open to all countries, and international and regional organisations for engagement, so that the results of the concerted efforts will benefit wider areas” (NDRC, 2015). In one analysis, the BRI is intended to link China with some 65 other countries that account collectively for over 30 percent of global GDP, 62 percent of population, and 75 percent of known energy reserves (World Bank, 2018c). More recent estimates put the number of countries that are part of the BRI in triple digits. Even the largest development programmes are normally directed at specific regions, or at countries belonging to a well-defined group (eg. the Least-Developed Countries). These programmes also provide some sense of country priorities within them. Not so the BRI. For example, Hillman (2018) identifies the six main geographic channels most often mentioned as constituting the BRI, and the countries most often mentioned as part of each channel. He finds that except for Pakistan – a BRI poster programme – Chinese projects are just as likely to be found outside this group of countries as within it. Corridors It is difficult to identify a shared agenda among BRI countries, even within the same geographic corridor. Clearly the needs of poor nations such as Pakistan, Myanmar and several in Central Asia and East Africa, are very different than those of EU members such as the Czech Republic, Portugal and Greece, which the BRI supposedly aims to reach. Countries within the same corridor have world-class infrastructure; in others infrastructure is inadequate. In the same corridor there are countries with good and bad logistics, liberal and restrictive trade policies, and strong and weak business climates (Figure 1). No guide is available from the BRI on how interventions across such a diverse group will be identified and prioritised. State-owned enterprises China’s state-owned enterprises play a major role in the BRI. These firms certainly display genuine advantages, such as low costs and well-honed skills in their areas of specialisation, but they also often benefit from subsidised financing, soft budget constraints, monopoly or oligopoly positions at home, privileged supplier and customer relationships, an implicit or explicit state guarantee and various forms of other non-transparent subsidies. These SOEs will also tend to favour Chinese suppliers19. Here is yet another indication that China’s state capitalism and its one-party political system sit uneasily in a liberal-democratic world order. The US Congress agrees on little nowadays, but there is consensus across the political spectrum that Chinese policies have to change and that if they do not ‘something has to be done about China’. This view is shared to a greater or lesser degree by the US’s major allies20. These criticisms of China are well-grounded as they relate to the internationally most competitive products, such as steel, aluminium, solar panels, semiconductors and the already mentioned high-tech sector. But it is unclear whether this argument also extends to the kind of infrastructure projects being realised under the BRI. If Chinese firms withdrew from the infrastructure sector in developing economies, would others take their place? A dataset21 of World Bank infrastructure projects open to internationally competitive bidding suggests that over the last decade, Chinese firms have superseded western firms and gained a dominant share in construction, provision of capital equipment, and project design and engineering. In 2007, 5.5 percent of funds for World Bank projects outside of China were awarded to Chinese companies; in 2017 this share stood at 36 percent of total procured project costs outside China. Chinese firms now mostly face competition from developing countries such as Turkey. As mentioned previously, few private-sector investors are eager to underwrite the risky long-term infrastructure projects that Chinese SOEs are eagerly taking on. Perhaps this is the reason why, while many policymakers and politicians are vocal about the distortions associated with the BRI, the private sector is quite silent. Allocation of resources The BRI is also often criticised inside China. The main objection is that it is a waste of resources in a country that is still relatively poor and requires more investment in its own backward regions. Estimates by Dreher et al (2017) suggest that total official finance given by the Chinese government could amount to $350 billion between 2000 and 2014, equal to approximately 0.5 percent of GDP generated in that period in China. This is a significant sum for a developing country and compares favourably with the $360 billion of official development aid (ODA) and official development finance that was spent in the same period by the United States government. However, most of China’s estimated $350 billion outlay consists of export credits and loans extended at market rates. Counting only official finance granted on ODA-like terms, Dreher et al (2017) estimate Chinese foreign aid between 2000 and 2014 to amount to at least $75 billion, an amount similar to ODA disbursements from the Netherlands in the same period (OECD, 2018). Thus, China’s ODA may amount to only 0.1 percent of GDP between 2000 and 201422. Transparency Lack of transparency is perhaps the defining trait of the BRI and the projects carried out under its umbrella. For example, the BRI is undoubtedly a very large programme, but how large? The amount China has committed under the BRI is unknown and the additional amount envisaged is vague. Numbers mentioned, which may include projects launched before the BRI, range from $1 trillion over an unspecified period to $8 trillion over 20 years (Hurley et al. 2018). But the formal pledges made up to 2014 to the Silk Road Fund, managed by the Central Bank of China, stood at just $40 billion. The discrepancy in these numbers reflects the fact that China’s finance comes principally on commercial terms from its state-owned infrastructure firms and development banks, the China Development Bank and the Export-Import Bank of China, and that the grant element in most loans is small or non-existent. These banks do not disclose their lending sums and precise terms are difficult to identify. The situation is especially murky for those projects that are non-debt generating and take the form of BTO (build, transfer and operate) arrangements, where the main obligation is to buy the product (eg. electricity) at a predetermined price. Other projects are paid off in the form of natural resources according to agreed price formulas, and some are carried out in exchange for a share of ownership in the mine, port or facility in question. How the cost and risks of BRI projects are shared between China and partners and according to which criteria, are not specified. This lack of transparency in projects financed contrasts with the way in which development finance is normally provided through multilateral channels and most bilateral ones. The provision of aid and the clearance of a World Bank or, say, United Kingdom Department for International Development investment project is subject to a well-defined and transparent review process. In contrast, deals struck under the BRI and involving Chinese commercial banks are not23. Even the BRI MoU between China and its partners is typically not publicly available. The involvement of China-supported multilateral banks could provide a remedy, but their participation remains marginal at this stage. Due diligence Another criticism levelled at the BRI is that some projects, such as a $12 billion refinery in Ecuador24 or a $4 billion railway line between Addis Ababa and Djibouti25 have been discontinued or seen enormous financial losses. To be sure, as the long and difficult experience of the World Bank shows, this is not the first-time infrastructure projects in a difficult developing country context have run into trouble. Most recently, the World Bank had to cancel a $265 million road project in Uganda26. However, there is a widespread view, which is also often shared by Chinese observers, that not enough due diligence is present in BRI projects. The ability of the client to repay, either because of risks inherent in the project, or because of macroeconomic and fiscal constraints, stands out as an issue to which Chinese operators are not paying enough attention. The possibility that over-eager lenders can push unwary borrowers into bankruptcy or default is not new and not limited to China – as shown by the collapse of banks and companies during the Asian financial crisis, the sub-prime crisis in the United States, the euro area sovereign debt crisis and the large official lending to poor countries that eventually had to be forgiven (with conditions) under the Highly-Indebted Poor Countries Initiative and the Paris Club. Nor is the build-up of unsustainable sovereign debt usually associated with a single project. World Bank (2019), which analyses the rising indebtedness of low-income countries, shows that the phenomenon is overwhelmingly the result of increased current spending, not investment in infrastructure. Still, the fact remains that some BRI projects are very large compared to the size of the economies of the countries where they are implemented, as in the case of Laos and Montenegro, and that, moreover, projects tend to come in bunches (port, airport, road, all to develop the same region), which can make the overall package too large for the recipient’s GDP. There are well-known examples of Chinese lending proving unsustainable. An international airport and a deep-sea port near Hambantota in Sri Lanka, financed largely with loans from the Export-Import Bank of China, have been running large losses since completion. To escape mounting debt, the maritime port has since been leased for 99 years to China27 and the airport will be operated by the Indian Airports Authorities28. Recently, the government of Pakistan ran into a current account crisis on the back of large BRI infrastructure projects that increased public debt and worsened the balance of trade. Now, the country is seeking financial assistance from the IMF29. Related worries arise over the financial sustainability of the China-Laos railway line as the project cost, $6 billion, is equivalent to half of Laos’s yearly GDP30. Several of the countries interested in the BRI have low credit ratings, high debt and weak governance, and appear set to borrow new large amounts from China. Hurley et al. (2018) identified eight countries where high debt levels, low credit ratings and high likely borrowing under the BRI cause concern: Djibouti, the Maldives, Laos, Montenegro, Mongolia, Tajikistan, Kyrgyzstan and Pakistan. Most of these countries have borrowed from the Export-Import Bank of China for very large infrastructure projects, the costs of which amount to double digit percentages of the countries’ GDPs.](images/u101954-214.png?crc=4163545251)
![Policy implications China’s efforts to forge stronger links with its neighbours and more widely with its trading partners around the world are legitimate, so long, of course, as the underlying intent remains peaceful. The same can be said of any other country. The focus on infrastructure is welcome and needed. Enhancing bilateral trade by building transport infrastructure and concluding trade agreements will ultimately have the effect of stimulating global trade as well. The infrastructure investments under the BRI could reduce global trade costs by between 1.1 percent and 2.2 percent (de Soyres et al. 2018), even without accounting for efforts to improve the operation of customs and reducing other forms of barriers to trade. Two facts are clear. First, China, the world’s most populous nation, is not ready for a wholesale departure from the state-capitalist development model that has worked so spectacularly for it, and of which the BRI is in some sense an offshoot. Second, China is fully committed to the BRI and, one way or the other, it is going to continue along that path. But the BRI, to be effective, needs to meet the basic conditions of a trade and development strategy, which are clear objectives, adequate resources, selectivity, a workable implementation plan, due diligence and clear communication. The established donors are right to be concerned that some of these conditions are not met, especially regarding issues related to due diligence and, more specifically, fiscal sustainability. Detailed proposals for revamping the BRI are beyond our scope. But it is obvious that the BRI needs a better articulated, coordinated and more transparent plan that identifies objectives by corridor and by country and in each case specifies modalities. Clear communication is important given China’s size and the challenge of coordinating such a broad endeavour within and outside of China. In a politically-charged environment, a failure to clearly define the BRI risks inflaming and empowering the opposition. Most importantly, China must do a better job of evaluating the risks and costs of projects. Chinese firms and banks have plenty of bad domestic loans to worry about; they do not need a set of international debt crises to deal with as well. The BRI is and should remain primarily a Chinese initiative to retain its advantages in terms of access to financial resources, speed and execution. However, a more systematic effort to collaborate with multilateral institutions and learn from accepted standards where it is possible to do so – such as is envisaged in the MoU signed in 2017 with the multilateral development banks, could help overcome some of the BRI’s shortcomings. A more transparent approach is likely to help Chinese and international firms to decide where their investments should go. And, if China envisages a BRI that will require several trillion US dollars of investment, it would surely benefit from leveraging its own efforts using other funds from bilateral and multilateral donors, and from the international private sector. For many developing countries and even for some relatively wealthy nations such as Australia, New Zealand and EU members to the south and east, the BRI could represent a significant commercial and infrastructure investment opportunity and should be viewed as such. But, considering the preceding discussion, these nations should take special care in evaluating the projects and the commercial conditions attached to them. They should not rely on their Chinese counterparts for ad-hoc project proposals, and should instead develop their own infrastructure strategies based on a benefit-cost analysis of the main projects, yielding clear priorities. Obviously, money must be repaid, and the ability to pay for a large project must be evaluated based on the overall national fiscal condition, not just on the project’s intrinsic profitability. The Great Powers that vie with China for influence and for markets would be well advised to adopt a constructive stance toward the BRI. While insisting that China reforms its initiative along the lines of greater transparency, improved due diligence and safeguards, the EU and US should also acknowledge that there are very important areas of synergy between their own efforts and those of China. The BRI is consistent with their development efforts. It should be easy to see that infrastructure investment in Africa and expanded African trade can also improve the EU’s commercial and investment prospects, and might even be in Europe’s security interest writ large. The EU also has an interest in a Eurasian land bridge, which could provide a non-trivial boost to Europe-Asia trade (García-Herrero and Xu, 2016). The EU has also responded by highlighting its own connectivity initiatives linking the EU and Asia, which remain very modest in scope in comparison to the BRI31. Similarly, Latin America, in whose prospects and stability the United States has a vital economic and security interest, could benefit greatly from the BRI. A notable effect of the BRI is to pose a challenge to the established donors to increase and accelerate their provision of infrastructure in developing countries and even within their own borders. Insofar as the BRI represents increased competition for stodgy development banks in infrastructure provision, that is all to the good. The Compact with Africa (CwA), a G20 initiative that began under the 2016-2017 German G20 presidency, is intended to stimulate investment in African infrastructure by improving macroeconomic management, strengthening the business environment and attracting private sector interest. About a dozen African nations have joined the Compact and initiated a wide range of reforms. The CwA is an example of the kind of response that is needed, though one that remains untested for lack of enough private sector response to date. Endnotes 1. The Regional Comprehensive Economic Partnership (RCEP) includes: Australia, Brunei, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Philippines, Singapore, South Korea, Thailand and Vietnam. 2. See https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/14/51/Special-Drawing-Right-SDR 3. Data from the China Global Investment Tracker published by the American Enterprise Institute. 4. Ibid. 5. By contrast, China’s largest trading partners face high MFN applied tariffs in China. For example, the EU faces 8.2 percent tariffs on its non-agricultural products exported to China on average (trade-weighted), and the United States 6.5 percent (WTO et al, 2018). China has recently announced unilateral MFN tariff reductions across a wide range of products. 6. See https://migrationdataportal.org/data 7. See https://www.migrationpolicy.org/article/international-students-united-states 8. See https://www.ukcisa.org.uk/Research--Policy/Statistics/International-student-statistics-UK-higher-education 9. See https://internationaleducation.gov.au/research/International-Student-Data/Pages/default.aspx 10. See http://usa.chinadaily.com.cn/epaper/2017-03/02/content_28409976.htm 11. Based on WITS (2018) trade indicators. This number is likely to be higher in reality as many oil exporting economies which export to China (Saudi Arabia, Iran, United Arab Emirates) do not report their exports to China. Furthermore, data is only for Mainland China and a significant share of exports reported to Hong Kong are likely to be directed to China. 12. A similar study by the Asian Development Bank (2017) projected infrastructure investment needs in Asia to sum to $26 trillion between 2016 and 2030. 13. See http://www.worldbank.org/en/about/annual-report/fiscal-year-data 14. See https://www.adb.org/news/adb-2017-operations-reach-289-billion 15. Authors’ calculations using data from http://projects.worldbank.org/ 16. One such memorandum, between China and the government of Victoria, a province of Australia, was recently made public at the insistence of opposition parties and the Australian Federal Government; see https://www.abc.net.au/news/2018-11-12/victoria-china-belt-and-road-infrastructure-agreement-released/10487034 17. See, for example, https://edition.cnn.com/2018/12/20/politics/james-mattis-resignation-letter-doc/index.html 18. See http://english.gov.cn/2016special/madeinchina2025/ 19. Ghossein et al (2018) collected data on how Chinese-financed BRI projects select the firms that execute them. The authors find that very little information is available as most state-owned Chinese lenders do not disclose their lending activities: “The limited available data however indicate that Chinese companies account for the majority of BRI-procurement, even in light of their high share of total infrastructure projects in developing countries” (Ghossein et al, 2018). 20. This consensus has resulted in at least two concrete steps. First, the EU and the EU have separately brought WTO cases against China, challenging its status as a market economy. And, in 2018, the EU, Japan and the US joined forces to change the rules of the WTO to combat hidden subsidies and intellectual property theft, a thinly veiled attempt to target China specifically. On 12 November 2018, the EU, Japan and the US submitted proposals to the WTO’s Council on Trade in Goods that propose stricter rules for the disclosure of government subsidies and intro- duce administrative sanctions against offending members. These proposals aim mainly at subsidies from Chinese government agencies or state-owned enterprises, which are alleged to lead to overcapacity and disadvantage non-Chinese companies. Furthermore, the EU, Japan and the US plan to increase protection of trade secrets, such as source codes, with instruments within and outside the WTO. 21. See http://www.worldbank.org/en/projects-operations/products-and-services/brief/summary-and-detailed-borrower-procurement-reports 22. In 2016, China reported granting 0.36 percent of its GDP as ODA to the OECD Development Assistance Committee, while the United States reported granting 0.15 percent of its GDP. 23. According to Hurley et al (2018), “for multilateral institutions such as the World Bank and the AIIB [Asian Infrastructure Investment Bank], the financing terms for loans to sovereign governments are publicly available. This practice is also followed by most bilateral development finance institutions. However, CDB [China Development Bank] and China Exim Bank do not disclose the terms of their loans, making it difficult, if not impossible, to accurately assess the present value of the debt owed by a country to China”. 24. See https://blogs.platts.com/2016/02/15/ecuadors-refinery-dream-fuel-for-thought/ 25. See https://www.scmp.com/business/banking-finance/article/2170549/botched-chinese-railway-project-africa-warning-belt-and 26. See https://www.ft.com/content/cfc5faf2-a81a-11e5-9700-2b669a5aeb83 27. See https://www.ft.com/content/e150ef0c-de37-11e7-a8a4-0a1e63a52f9c 28. See https://economictimes.indiatimes.com/news/politics-and-nation/sri-lankan-government-reworking-mou-on-airport-deal-with-india/articleshow/65281702.cms 29. See https://www.ft.com/content/005393f2-cd2d-11e8-9fe5-24ad351828ab 30. See https://asia.nikkei.com/Politics/China-s-Belt-and-Road-rail-project-stirs-discontent-in-Laos2 31. See https://eeas.europa.eu/regions/central-asia/52916/connecting-europe-asia-eu-strategy_en References Asian Development Bank (2017) Meeting Asia’s Infrastructure Needs, Asian Development Bank De Soyres, F, A Mulabdic, S Murray, N Rocha Gaffurri and M Ruta (2018) ‘How Much Will the Belt and Road Initiative Reduce Trade Costs?’ Policy Research Working Paper 8614, World Bank Group, available at http://documents.worldbank.org/curated/en/592771539630482582/How-Much-Will-the-Belt-and-Road-Initiative-Reduce-Trade-Costs Dreher, A, A Fuchs, B Parks, AM Strange and MJ Tierney (2017) ‘Aid, China, and Growth: Evidence from a New Global Development Finance Dataset’, Working Paper 46, AidData, available at https://www.aiddata.org/publications/aid-china-and-growth-evidence-from-a-new-global-development-finance-dataset García-Herrero, A and J Xu (2016) ‘China’s Belt and Road initiative: can Europe expect trade gains?’ Working Paper 5/2016, Bruegel Ghossein, T, B Hoekman and A Shingal (2018) ‘Belt and Road Initiative’, MTI Global Practice Discussion Paper 10, World Bank Group Global Infrastructure Hub (2017) Global Infrastructure Outlook, available at https://outlook.gihub.org/ Hillman, JE (2018) ‘China’s Belt and Roller Coaster’, Commentary, 14 September, Center for Strategic and International Studies, available at https://www.csis.org/analysis/chinas-belt-and-roller-coaster Hurley, J, S Morris and G Portelance (2018) ‘Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective’, CGD Policy Paper 121, Center for Global Development IMF (2018) Balance of Payments and International Investment Position Statistics (BOP/IIP), International Monetary Fund, available at http://data.imf.org/bop Jayaram, K, O Kassiri and I Yuan Sun (2017) Dance of the lions and dragons: How are Africa and China engaging, and how will the partnership evolve? McKinsey & Company National Bureau of Statistics of China (2018) National Data, available at http://data.stats.gov.cn/english/ NDRC (2015) ‘Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road’, News Release, 28 March, National Development and Reform Commission, available at http://en.ndrc.gov.cn/newsrelease/201503/t20150330_669367.html OECD (2018) ‘Detailed aid statistics: Official and private flows’, OECD International Development Statistics (database), available at https://doi.org/10.1787/data-00072-en UNCTAD (2018) World Investment Report 2018. Investment and new industrial policies, United Nations Conference on Trade and Development Veugelers, R (2018) ‘Are European firms falling behind in the global corporate research race?’ Policy Contribution 2018/6, Bruegel World Bank (2017) Measuring and analyzing the impact of GVCs on economic development, World Bank Group, available at http://documents.worldbank.org/curated/en/440081499424129960/Measuring-and-analyzing-the-impact-of-GVCs-on-economic-development World Bank (2018a) World Development Indicators, available at http://wdi.worldbank.org/ World Bank (2018b) Annual Report 2018, International Bank for Reconstruction and Development/The World Bank World Bank (2018c) ‘Belt and Road Initiative’, Brief, 29 March, available at https://www.worldbank.org/en/topic/regional-integration/brief/belt-and-road-initiative World Bank (2018d) Doing Business 2018, The World Bank World Bank (2019) Global Economic Prospect: Darkening Skies, International Bank for Reconstruction and Development/The World Bank WTO, ITC and UNCTAD (2018) World Tariff Profiles 2018, World Trade Organisation Xi, J (2013) ‘Promote Friendship Between Our People and Work Together to Build a Bright Future’, speech at Nazarbayev University, Astana, 7 September, available at: https://www.fmprc.gov.cn/mfa_eng/ wjdt_665385/zyjh_665391/t1078088.shtml Yan, X (2019) ‘The Age of Uneasy Peace’, Foreign Affairs 98(1), available at https://www.foreignaffairs.com/articles/china/2018-12-11/age-uneasy-peace The authors are grateful for very helpful comments from Otaviano Canuto, Jean Dong, Alicia Garcia-Herrero and Guntram Wolff, and for informative discussions with Homi Kharas and with participants in a China Centre for International Economic Exchange Seminar held in Beijing in November 2018. This article was originally published on Bruegel](images/u101973-222.png?crc=322825925)
