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Johan Van de Ven is a Senior Analyst at RWR Advisory Group, a Washington, D.C.-based consultancy that advises government and private-sector clients on geopolitical risks associated with China and Russia’s international economic activity. Johan leads RWR’s research and analysis of the Belt and Road Initiative (BRI), the centerpiece of foreign policy under President Xi Jinping, and also edits the Belt and Road Monitor. He graduated from Tufts University with a Master of Arts in Law and Diplomacy, and also holds a First Class Honors Degree from Oxford University in Chinese Studies. In December 2015, China Hands Magazine named him to the 2016 class of “25 Under 25 Rising Stars in U.S.-China Relations.”



Young China Watchers (YCW): Tell us about your role as a Senior Analyst at RWR Advisory Group, and how your work experience at Danwei (a now closed Beijing-based consultancy founded by SupChina’s Jeremy Goldkorn) and China Policy (an Australian-owned Beijing-based consultancy) prepared you for such a role?

Johan van de Ven (JV): At RWR, my work revolves around helping public and private-sector clients understand the geopolitical risks associated with Chinese overseas economic activity. In some cases, this has involved providing deep-dive investigations of Chinese political and economic engagement with certain countries. Other clients rely on our proprietary database, IntelTrak, to stay up to date with topics of concern, be that companies, countries, or sectors. We track project updates and monitor a wide range of risk-related information on a daily basis, ranging from construction delays to concerns about military dual-use potential.

Our day-to-day research centers on scouring open-source material for relevant information. In that sense, my experience working with Jeremy Goldkorn and Barry Van Wyk at Danwei laid the foundations for this. Not only did I gain a close familiarity with the Chinese media environment, but Jeremy’s maxim of “never trust a number in China” often comes to mind when looking at seemingly overinflated BRI deals. My time at China Policy gave me a solid understanding of the institutional interplay behind the surface of Chinese politics and, as well as an appreciation of the need to identify the individuals who shape policy. This lesson has also stuck with me in my work on BRI, whose development has been shaped as much by the bottom-up agitation of self-interested officials as it has by elite design of grand strategy.

I would also say that anybody looking to work on BRI, or any other aspect of Chinese foreign policy, would do well to spend as much time in China as possible. While it is possible to do significant research on China with just an overseas internet connection (even with the Great Firewall), time spent in China is the surest way to gain a grasp of the language. Likewise, where the opportunity permits, travel in BRI focus areas can be eye-opening. My own interest in BRI was kicked off after bumping into a Chinese shopkeeper on a bus in Serbia, who told me about a new “friendship bridge” that had just been opened by Li Keqiang.

 

YCW: Based on your research, how has BRI changed since its inception in 2013, and how has the Chinese leadership sought to promote it in 2019? What markets do you anticipate will see greater or less BRI activity (either geographic or sectoral)?

JV: RWR’s proprietary database, IntelTrak, provides a great vantage point into how the BRI has changed in recent years. Covering the vast majority of Chinese overseas lending and investment since 2011, our data shows that BRI-related activity peaked remarkably early—in 2015—before declining steadily since then. If current rates of investment and lending continue, however, 2019 may still reverse that trend.

There are several factors at play in why the numbers have dropped. One is the wearing-off of the initial wave of stimulus; another is the tightening of regulatory approval processes in China, meaning that it is mechanically harder to get money out. While the relative decline is notable, however, 2018 still saw approximately saw over $100 billion committed—so predictions of BRI’s death are certainly off-base.

“This means that the Chinese government has been quite responsive to concerns raised about the environmental impact of BRI projects as well as the impact of ‘debt trap diplomacy.'”

Comparing what we know about BRI now to what we did in 2013, one major takeaway is that the debate over what it is or is not continues to live on. That’s due to a reluctance on the part of the Chinese government to offer up any kind of sectoral or geographical definition. This reluctance actually makes strategic sense, because it allows BRI to be adapted to changing conditions, be they geographical, political, or financial.

While we aren’t really much closer to knowing what the BRI is, we do have a more developed idea of what it is intended to do, or in other words what the goals of BRI are. For instance, this April, Chinese Ambassador to the US Cui Tiankai said that “building a community with a shared future for mankind is the agenda” and “BRI aims to promote connectivity.” While this type of phraseology often gets dismissed as propaganda, it does provide a window into the core goal: boosting China’s soft power. This means that the Chinese government has been quite responsive to concerns raised about the environmental impact of BRI projects as well as the impact of “debt trap diplomacy.” This responsiveness was best demonstrated during the Second Belt and Road Forum in May, which saw the unveiling of a debt sustainability framework modeled on IMF and World Bank standards and a green finance initiative spearheaded by the People’s Bank of China and the City of London Corporation.

With this in mind, I think changes in where money is spent will be sectoral, not geographical. In particular, I would expect to see an increase on current levels of investment in developing renewable energy facilities, transmission infrastructure, and power storage capabilities—as well as efforts to safeguard access to relevant raw materials. Already, we have seen an increase in lithium-related investment in IntelTrak this year.

 

YCW: You recently published an article for the Jamestown China Brief which analysed China’s growing interest in Latin America and the willingness of Chinese state-owned enterprises (SOEs) to to fill the void left by failed local competitors. Is China’s presence in the region related to the BRI, and how are local leaders reacting to Chinese investment in the region?

JV: Increased Chinese engagement in Latin America bears all the hallmarks of BRI. The China-Community of Latin American and Caribbean States (CELAC) Forum, first held in 2015, mirrors other gatherings more commonly associated with BRI, such as the 16+1 grouping for Central and Eastern Europe or the Forum on China-Africa Cooperation. Indeed, the perception that Latin America is part of BRI is backed up by the inclusion of several countries from the region on a list of “international cooperation” partners on the official Belt and Road Portal, published the General Office of the Leading Group of the Belt and Road Initiative. The nature of Chinese investment and lending in Latin America also aligns with BRI economic modalities, such as securing raw materials need as inputs for advancing manufacturing. Indeed, just in the last few months, Chinese companies have recently signed lithium-related agreements in Chile and Bolivia.

The question of how local leaders are responding to BRI is more difficult to answer, due to the range of stances adopted by regional leaders. Among the most welcoming is Chilean President Sebastian Piñera, who attended the Second Belt and Road Forum. Brazil’s Jair Bolsonaro seemed intent on developing an antagonistic relationship with China, but has backed away from that stance more recently. Meanwhile, there has been scant exchange between Mexico’s Obrador administration and their Chinese counterparts, despite Lopez Obrador having talked up a number of infrastructure projects that are in need of financing. Suffice to say, countries across the region have reacted in very different ways to the BRI and China more broadly.

 

YCW: China has experienced some success in marketing the BRI to countries in the EU, with Italy signing onto the initiative in April of this year. Where do the differences lie in the EU regarding the nature of the BRI and its utility in Europe?

JV: Italy is a unique case—from what I understand, former Ministry of Economic Development Undersecretary of State Michele Geraci played quite a pivotal role in lobbying in favor of Italy’s decision to join BRI, even if Geraci has since said that then-Deputy Prime Minister Matteo Salvini signed off on the decision. Prior to joining the government, Geraci worked as an academic at a number of universities in China. His affinity for China may have had some role, but there is also a logic that joining BRI will bring more foreign investment. Indeed, Geraci himself argued that signing up would spur economic growth.

This logic may have applied to other EU member states that have joined BRI, including Greece and Portugal. For Hungary, joining BRI meant access to finance for a critical rail project that was quicker and more expansive than what EU agencies had offered. It should also be recognized that Chinese diplomats have lobbied hard for certain member states to join BRI. This approach showed a realization that having close relationships with just a handful of these countries would be enough to significantly inhibit any EU policy efforts directed against China, such as moves to scrutinize foreign investment, due to unanimity requirements in some EU decision-making processes.

It should also be recognized that Chinese diplomats have lobbied hard for certain member states to join BRI. This approach showed a realization that having close relationships with just a handful of these countries would be enough to significantly inhibit any EU policy efforts directed against China, such as moves to scrutinize foreign investment, due to unanimity requirements in some EU decision-making processes.

In contrast, while officials from countries in northwestern Europe have offered praise for BRI, they have not gone as far as signing any formal agreement signalling support for BRI. In the case of the Netherlands, this is rooted in a belief that their asymmetry vis-à-vis China is best tempered by engaging China collectively through the EU, rather than on a bilateral basis. Historically close relationships with the United States also play a role in limiting engagement with BRI. Last but not least, there are also concerns that BRI is part of a Chinese strategy to “divide and conquer” Europe—leading some countries to withhold their support. Differences in attitudes between certain member states are also linked to relative strengths of different parts of the government, such as the security establishment’s advocacy for scrutiny of Chinese investment holding sway over a commerce department intent on promoting trade relations with China, or vice versa.

YCW: As a D.C.-based China-watcher, you have seen firsthand the changing nature of the U.S.-China relationship since the Trump administration came into power. Do you feel like there is still room for debate in D.C. about how the U.S. should resolve its issues with China? 

JV: Over the course of the current administration, China policy has evolved to an issue on which there is a large degree of unanimity. On certain topics—such as the repression of minority groups—that is an accurate depiction. However, the last few months have seen a debate emerge within the Beltway China-watching community regarding both the goals of China policy and how these goals should be achieved. This was best demonstrated by the publication of two open letters, one calling on President Trump to “stay the course” and another declaring that “China is not an enemy”.

The polarized nature of this discourse gets in the way of productive debates on substantive policy issues. As an example, of all the many BRI op-eds published over the last six years, very few delve into specific policy recommendations for what the U.S. should do in response. I would say, though, that there are a number of forums that actively seek to nurture a more focused debate, such as the Asia Society’s ChinaFile.

 

YCW: Can you recommend BRI-related materials to our readers? What are the most helpful articles, books or podcasts to help the young China-watching community learn more about the BRI?

JV: A lot of writing about BRI is heavily colored by the authors’ background—in terms of geography, academic discipline, or political standpoint, so it is necessary to seek a range of perspectives. I’m a big fan of the work of the guys behind Panda Paw Dragon Claw, who do a good job of writing accessibly about complicated issues, such as the sustainability of BRI lending. Erik Myxter-Iino’s Belt and Road Podcast features people working on BRI from a wide range of angles.

BRI is at the confluence of a number of fields of study, so people looking to understand it better would do well to read deeply on topics such as politics (for instance, Richard McGregor’s The Party), economics and finance (Dinny McMahon’s Great Wall of Debt as well as Henry Sanderson and Mike Forsythe’s China’s Superbank), and geopolitics (Sulmaan Khan’s Haunted by Chaos), among many others. Lastly, RWR’s own Belt and Road Monitor is the most comprehensive regular round-up of news related to BRI.

 

YCW: What are your recommendations for further reading on China:

JV: 1. Wild East Football: A website dedicated to all aspects of Chinese football/ soccer Wild East Football;
2. Chinese Storytellers: A newsletter featuring non-fiction writing by authors identifying as Chinese;
3. Oracle Bones by Peter Hessler: A brilliant first book for anyone interested in China.

 

— Interview by Alice Slevison

 

 

Featured Young China Watcher – Johan van de Ven, Senior Analyst at RWR Advisory Group
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