Reflections on the Chinese “Belt and Road” Initiative
Recently, China held the Belt and Road Forum for International Cooperation. What is the significance for global society? And how will the legal community respond to this initiative?
On 14 and 15 May 2017, Beijing held the Belt and Road Forum for International Cooperation (BRF), with around 1500 representatives from over 130 countries and over 70 international organisations participating, including heads of state and government leaders from 29 countries. What is the significance for global society? And how will the legal community respond to this initiative?
What is BRI?
The Belt and Road Initiative (BRI), also known as the One Belt One Road (OBOD) Initiative when first proposed in 2013, originates from the ancient Silk Road trading routes throughout Eurasia, and aims to boost the global economy. In the spirit of free international trade and investment, the object of this 21st century initiative is to strengthen international cooperation, eradicate poverty, create jobs, address the consequences of the international financial crisis, promote sustainable development, and advance market-based industrial transformation and economic diversification.
During the forum, over 270 bilateral and multilateral agreements were reached, covering policy cooperation, infrastructure construction, trade, finance and other activities. More than $1 trillion has been pledged to be injected into infrastructure construction in over 60 countries. Also, the Silk Road Fund (SRF), established in 2014 as a financial institution to provide investment and financial support to the BRI with a total capital of $40 billion, received another $14.5 billion contribution from China during the BRF.
New World Order?
The BRI is portrayed as China’s new world order. Indeed, China’s participation in the international community is influencing other parts of the world. It cannot be denied that present-day China is interconnected with the global market and that its economic growth has fuelled the world’s economy during the past decade. But this is not to say that the BRI will completely change the current world order. On the contrary, an open economy, free and inclusive trade and opposition to all forms protectionism are emphasized in the Joint Communique issued during the BRF. In fact, in his speech at the Davos World Economic Forum 2017, President Xi Jinping of the People’s Republic of China had already explicitly expressed his support for globalisation, against the background of global political changes in 2016 and the trend towards protectionism.
However, China is certainly keen to reshape the international order in a more China-friendly way, and to promote Chinese domestic products and services overseas through this initiative. Criticism from peer countries is not unfounded, and China today does face issues such as transparency and corruption, environmental protection and sustainable development and an urgent need for domestic reform. The operation of the BRI and the SRF also requires to be monitored on the basis of international standards such as corporate governance and financial risk assessment.
What is the BRI’s impact on the legal community? How will it influence Chinese legal scholarship, particularly regarding cross-border disputes? The Supreme People’s Court of the People’s Republic of China published 8 guiding cases on 7 July 2015 and 10 guiding cases on 15 May 2017 regarding the BRI respectively (in Chinese only). All 18 cases concern international civil and commercial disputes, covering different aspects of company law, international contract law, maritime law, international air law, international trade and financial law, recognition of arbitral awards and recognition of foreign judgments.
These guiding cases are intended to offer guidance to lower courts to address future cross-border disputes. The publication of these guiding cases fills the void of certain legal uncertainties in the Chinese legal system and also reflects that Chinese courts are more willing to deal with cross-border disputes, be bound by international obligations, respect foreign legal systems and treat foreign parties on an equal basis. The courts have even started to invite foreign stakeholders and media to participate in these trial processes in an attempt to improve transparency in the Chinese judicial system.
The Way Forward
Progress has been made in international rule-making and the domestic judicial system in China since the start of BRI, which has pushed China again to integrate in the global market. However, it still remains to be seen how far this new initiative can go. There is no doubt that more legal research needs to be conducted regarding the participating jurisdictions and the potential cross-border disputes that are likely to emerge in the next few years.