Chapter 4: The Belt and Road Initiative
4.3 Comparing “Going-out” and the “Belt and Road Initiative”
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end of 2018.215 Plans are being floated for a second pipeline that would carry 30bcm per year from West Siberia over 30 years.216
4.3 Comparing “Going-out” and the “Belt and Road Initiative”
Section 3.2.3 identified a link between the “going-out” strategy and the Belt and Road Initiative in that both share the common goal of addressing China’s perceived energy needs.
Both strategies also share features such as funding mechanisms and a pattern of delayed announcement.
In Chapter 3, this paper showed that at its core, “going-out” was an energy strategy, though it did later expand to include other industries. Likewise, statements by high-level officials suggest that the Belt and Road is also an energy strategy at heart. At the June 2017 Cross-Strait CEO summit, Zhang Yansheng stated that the core of the Belt and Road
Initiative is “West-West Cooperation” (referring to western China and western Asia) because of western Asia’s abundant oil resources.217 Zhang is the current Secretary-General of the Academic Committee of the National Development and Reform Commission, the body responsible for “formulating and implementing strategies of national economic and social development,” making his statements about the Belt and Road highly authoritative.218
The defining features of both the “going-out” and the Belt and Road (overseas investment and infrastructure development respectively) were foreshadowed even before the policy was officially announced. CNPC began pursuing overseas investments in 1993, but
215 Ibid.
216 Guo, "Cnpc to Start Laying Second China-Russia Oil Pipeline in June".
217 Xiulan Chen, "Zhuoyan Nengyuan Zhangwo Lu Pao Dailu Xixihezuo (著眼能源掌握 陸拋帶路西西合 作)," China Times, http://www.chinatimes.com/newspapers/20170603000739-260309.
218 "National Development and Reform Commission (Ndrc)," National Development and Reform Commission of the People's Republic of China, http://en.ndrc.gov.cn/mfndrc/.
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“going-out” did not receive government blessing until 1997, and was not established as an official strategy until the publication of the Tenth Five-Year Plan in 2001. In the case of
“going-out,” the Chinese central government identified that “China’s petroleum import dependence had already become a permanent feature of the Chinese petroleum economy,” so it was willing to adopt a strategy that CNPC had already begun implementing.219 Kong emphasizes that the development of “going-out” was a “cumulative and reiterative output”
based on how the NOCs responded to the challenges that they faced, with the government merely incorporating it into official documents post hoc.220
Likewise, this chapter has shown that some of the projects that China considers to be a part of One Belt One Road, such as the ESPO pipeline, predate even the informal
announcements made by President Xi in 2013. On the other hand, the China-Kazakhstan oil pipeline, completed in 2009, is not mentioned in Belt and Road documents.221 CNPC maintains a hand in a number of the pipeline projects under One Belt One Road, but the extent to which CNPC and other NOCs may have influenced the development of the One Belt One Road concept is unclear.
Like the “going-out” strategy, One Belt One Road may also be making use of concessional loans. For example, leaked plans for the China-Pakistan Economic Corridor reveal that China will provide loans to Pakistan’s agricultural sector through the China Development Bank and “actively strive to utilize [Chinese] national special funds as the discount interest for the loans of agricultural foreign investment.”222 Much as Chinese investments under “going-out” were part of a multifaceted approach involving the cooperation of state banks and backing from the central government, the leaked plan
219 Kong, China's International Petroleum Policy, 46.
220 Ibid., 60.
221 Shaofeng Chen, "Has China's Foreign Energy Quest Enhanced Its Energy Security?," The China Quarterly, no. 207 (2011): 610.
222 Khurram Husain, "Exclusive: Cpec Master Plan Revealed," Dawn, https://www.dawn.com/news/1333101.
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recommends that “[i]nternational business cooperation with Pakistan should be conducted mainly with the government as a support, the banks as intermediary agents and enterprises as the mainstay,” which is to say that although Chinese companies will be able to count on some degree of government assistance and financing, they will ultimately be responsible for their own investments.223
It is clear that state-owned banks continue to play a role in financing Chinese projects.
In 2016, China Development Bank held $110 billion in outstanding loans to countries under One Belt One Road.224 At the recent Belt and Road Summit, China announced that it would contribute 100 billion RMB ($14.5 billion) to the Silk Road Fund, 250 billion RMB ($36.2 billion) in “special lending schemes” to the China Development Bank, and 130 billion RMB ($18.9 billion) to Eximbank to “support co-operation on infrastructure, industry capacity and financing.”225 China also leads the multilateral Asian Infrastructure Investment Bank (AIIB), which has made roughly $1.7 billion in loans for nine projects related to One Belt One Road.226 From this we can see another way in which the Belt and Road represents a continuation of the “going-out” strategy.
Where the two strategies differ is in their specific energy focuses. Under the “going-out” strategy, the NOCs prioritized equity oil, while the Belt and Road Initiative seems to prioritize infrastructure projects. The importance of this distinction will be explained in further detail in the next chapter.
223 Ibid.
224 Gabriel Wildau and Nan Ma, "China New 'Silk Road' Investment Falls in 2016," Financial Times, https://www.ft.com/content/156da902-354f-11e7-bce4-9023f8c0fd2e.
225 Charles Clover, Sherry Fei Ju, and Lucy Hornby, "China's Xi Hails Belt and Road as 'Project of the Century'," Financial Times, https://www.ft.com/content/88d584a2-385e-11e7-821a-6027b8a20f23.
226 Ibid.
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