China’s belt and road plans for Southeast Asia face uncertain ‘long-term prospects’ as social, environment concerns persist: study
- Worries about the Belt and Road Initiative’s environmental and social costs ‘are likely to hinder progress’, according to the ISEAS-Yusof Ishak Institute report
- Beijing ‘remains committed’ to the region’s projects, but has pivoted more towards ‘soft’ health and digital infrastructure amid the pandemic, it found
Disputes over compensation, forced relocations and an influx of unskilled Chinese workers continue to plague belt and road projects in Southeast Asia, as the pandemic has sped up China’s pivot towards prioritising digital and health infrastructure, according to a new report.
“Southeast Asia rose to become the top belt and road investment destination in 2020, despite a steep decline in China’s overall belt and road investments worldwide,” wrote Wang Zheng, a visiting fellow at the ISEAS-Yusof Ishak Institute and the study’s author. “Nevertheless … challenges stemming from the ongoing pandemic and local concerns about social and environmental costs are likely to hinder the progress of belt and road projects in the region.”
Health, digital pivot
Travel restrictions, lockdowns and other pandemic-era curbs have disrupted Beijing’s global belt and road push over the past two years. But Wang’s study, which analysed an original data set tracking major China-financed projects, found that Beijing “remains committed” to boosting the progress of its projects in Southeast Asia.
Most of these projects are currently clustered in the energy (29 per cent), transport (23 per cent) and metals (18 per cent) sectors, the study found. Yet it said the data also showed China’s efforts to diversify belt and road projects by expanding into healthcare services, telecommunications, and education in Southeast Asia.
China’s engagement with the global healthcare sector surged 246 per cent from US$130 million in 2020 to US$450 million last year, the report said, citing figures from the Green Finance and Development Centre’s China Belt and Road Initiative Investment Report 2021.
“These projects are but a few examples of China’s endeavour to participate in regional health governance via the health silk road – a dimension of the Belt and Road Initiative that has gained momentum in China’s foreign policy agenda amid the pandemic,” Wang said.
The digital silk road, meanwhile, has been a part of Beijing’s belt and road agenda since at least 2017, with the core aim of pushing leading Chinese tech firms “to gain the upper hand in the emerging global digital markets, especially against the backdrop of intensifying US-China strategic rivalry,” Wang said.
The pandemic served to emphasise the importance of digital infrastructure, not only in terms of enabling remote working solutions such as teleconferencing and antivirus measures such as mass contact tracing, but also because “it allows China to transcend physical barriers aggravated by lockdowns and social distancing measures”, he said.
Huawei, one of the companies at the forefront of 5G development, “has been deepening its cooperation with Asean in the face of severe pushback from Western countries in recent years,” Wang said.
Besides Huawei, ZTE is also a major provider of 5G network services in Indonesia, Malaysia and the Philippines, the study said, adding that “while private tech companies remain main drivers of the digital silk road in Southeast Asia, state-owned companies are key stakeholders, too”.