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Forum on China's Economic Reach Helps Leader Extend His Own

by Christopher Bodeen and Gillian Wong
Sunday May 14, 2017

China will seek to burnish President Xi Jinping's stature as a world-class statesman at an international gathering centered on his signature foreign policy effort that envisions a future world order in which all roads lead to Beijing.

The Belt and Road Forum opening Sunday is the latest in a series of high-profile appearances aimed at projecting Xi's influence on the global stage ahead of a key congress of the ruling Communist Party later this year. All feed a fundamental yearning among ordinary Chinese: to see their country's prestige and status rise.

"Xi is now seen as a world leader with a lot of influence and respect internationally and that will definitely boost his domestic appeal," said Joseph Cheng, a long-time observer of Chinese politics now retired from the City University of Hong Kong.

Leaders from 28 countries are set to attend, including Presidents Vladimir Putin of Russia and Rodrigo Duterte of the Philippines. The most prominent attendee from the West will be Italian Prime Minister Paolo Gentiloni.

Other Western nations, including the United States, will be represented by junior officials. Washington is sending a delegation led by Matt Pottinger, special assistant to the president and senior director for east Asia at the National Security Council. Britain, Germany and France are to be represented by finance officials.

That's partly because of developments at home, but also is a reflection of concerns that China may be exporting its standards on human rights, the environment and government transparency, while leaving poor countries with unsustainable levels of debt.

Yet the forum is as much about promoting Xi's image at home as it is about pushing his vision abroad.

Chinese state media outlets have linked Xi inextricably to the two-day gathering in Beijing, which will revolve around Xi's plan for a vast network of ports, railways and roads expanding China's trade with Asia, Africa and Europe. Xi has even popped up in a series of English-language promotional videos produced by the official China Daily called "Belt and Road Bedtime Stories."

"He's showing vision. Leaders have to be visionary. He's showing hope in their economic future by proposing a very significant economic plan," former U.S. ambassador to China Max Baucus told The Associated Press. "I think it's going to help him very much ahead of the next party congress."

The party will hold its twice-a-decade congress this fall at which Xi will oversee an infusion of fresh blood in leading bodies, most importantly the all-powerful Politburo Standing Committee. Xi rose to the top of an intensely competitive system riven by factions and rivalries to take the reins of the party in 2012, and has steadily accrued powers well beyond those of his predecessors in areas such as defense, internal security and the economy.

He's also fallen back on the hallowed tradition of political campaigns and sloganeering, preaching the "Chinese Dream" of prosperity and national rejuvenation, pushing a sweeping anti-corruption campaign and cracking down on the infiltration of "Western" democratic values that could threaten party control.

In the international sphere, he's presided over both the Asia-Pacific Economic Cooperation forum and the G-20 meeting of industrialized states, both of which were attended by former President Barack Obama. In January, Xi sought to portray himself as a champion of globalization and free trade at the World Economic Forum in Davos, in contrast to President Donald Trump's protectionist rhetoric.

On an entirely different level though is his signature initiative formally known as "One Belt, One Road."

It aims to reassert China's past prominence as the dominant power in Asia whose culture and economy deeply influenced its neighbors as far as Africa and Europe. It speaks deeply to Chinese pride in their country's explosive economic growth and political clout after a century of humiliation at the hands of foreign powers that formally ended with Mao Zedong's communist revolution in 1949.

The initiative also furthers the Xi administration's reputation for muscular foreign policy. Under Xi, China has strongly asserted its claim to virtually the entire strategic South China Sea and established the Asian Infrastructure Development Bank as a global institution alongside the World Bank, Asian Development Bank and International Monetary Fund.

And unlike APEC and Davos, it involves the disbursal of potentially trillions of dollars in contracts, expanding both China's economic reach and Xi's personal authority as holder of the purse strings. The ADB says the region, home to 60 percent of the world's people, needs more than $26 trillion of infrastructure investment by 2030 to keep economies growing.

"China has not just the resources now, which is key, but also the vision and desire and strategy to push its engagement outside its borders," Afghan Ambassador Janan Mosazai told the AP.

A rail cargo link between China and Central Asia across the northern Afghan province of Balkh opened in August and the country is discussing possible Chinese investment in rail, hydropower and fiber-optic networks.

Yet the initiative also comes with significant risks to Xi's stature and legacy.

So far, it's been loosely defined and appears to be including more and more projects of peripheral importance and questionable value. Since so many of the states involved have weak economies and limited capacity for growth outside of mining, the potential for waste and corruption is high, raising the possibility of small returns on the vast sums being spent and massive losses for the Chinese state banks funding the projects.

The initiative could also set back the goal of establishing a domestic economy centered on consumption rather than investment, warns political commentator Hu Xingdou.

"China's investment priority should be at home, not abroad," Hu said, adding that such forward-leaping overseas investments "may delay domestic development."

Already, there is much discussion of Chinese foreign policy failures and economic losses in places such as North Korea, Sri Lanka and Venezuela, said Cheng, the Hong Kong scholar.

"It's easy to just give out money," Cheng said. "China has to prove that these projects are sound and they have the management expertise to carry them through."

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