tv Heritage Foundation Discussion on Chinese Infrastructure and Connectivity... CSPAN December 18, 2018 3:37pm-5:20pm EST
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have years ago it would been necessary for us to talk about what the belt and road initiative actually is. this is not the case today. so much coverage, so much commentary, so much press on the everyone has an idea about what it is and what it is attempting to do, what the chinese intentions are behind it. itterms of nomenclature, wasn't be all right, at one point it was called silk and belt, maritime economic road, one belt, one road initiative for a little while, until i think beijing came to the conclusion it sounded too exclusive to call it one belt, one road, although it made perfect sense to call it that, and then finally settled on bri.
but none of these changes in nomenclature changed the substance of the initiative. it is that substance we are here to talk about. from a geopolitical perspective it is a big deal. a friend in singapore tells me it is an attempt by the chinese to create a common, geopolitical space that they can dominate. seems likeopolitics it is a political science, but i will let the audience judge how important that is. impactan testify to the it has had on perceptions in the region, particularly india and japan. we have heard that from the indians and japanese, but others are concerned about the bri. in addition to seeing benefit on the economic side of it, at least it is obviously intended chinese influence
around the world, in addition to whatever economic impact it has in china. and that has an impact on u.s. interests, both in the region and the aunt. so we are here to talk about regard, andsome what not -- not in what we called china's billion-dollar infrastructure project, but the reaction to it and how reactions are evolving. aboutings are changing the way the chinese themselves and the government and party in beijing see it. to help us through that we have three find panelists. jeff smith's heritage's own research fellow covering south asia. heritage to the foundation over a year ago from the american foreign-policy
counsel. -- foreign-policy counsel. -- foreign-policy council. he is also an author, and is an on that relationship and dynamic. jeff is the author of a heritage paper on the issue we are and you cant today, pick up a copy outside if you are watching online or on television, you can go to heritage.org and download a copy. he will talk about that in his remarks today. jeff will tell you i am his boss, and that is true, but i counted myself as the fortunate
one because his office is next ap his braincan t on a regular basis, and he really cannot say no. yun sun,ill turn to director of the china program at the stinson center, worked at brookings, also worked in beijing, she was a china analyst for the international crisis group specializing on foreign-policy in the developing world, and did that work from beijing, so she is well-equipped to talk about the chinese perspective. she has been looking at it and it detail for a long time. and then we will turn to dan n, senior fellow at cnas. -- ntury for
dan just came up with a paper entitled power play, addressing china's belt and road strategy. dan comes with freshly developed perspectives on what the u.s. response should be. tois very useful for him finish up our panel discussion and then we will turn it over to the audience. let me turn to jeff to get us started.
jeff: the bri has a brand problem at the moment. monthtidbits of news this underscore that reality. in the eu, india and the u.s. worked to remove any positive mention of the belt and road initiative from any u.n. resolutions. last year there were three resolutions that in some way offered a degree of praise for the bri. these three groups, the u.s., india and the eu worked last december to have the bri removed from two of those, and this year, the third resolution was scrubbed of any praise of the bri. china has reportedly commissioned internal reports highlighting the backlash to the bri, with the aim of pushing xi,
's outward push at a time when the economy is struggling. signs it seemsr every month, and a recognition in beijing, that the narrative surrounding the bri has become negative, and from beijing's perspective, problematic. andrew small, noted expert on china and pakistan relations, said this month that the first isse of the belt and road effectively over. a new model has not emerged but it is clear the old one is no longer sustainable, with the possible exception of italy, no major western country has signed belt and road cooperation agreements or memorandum of understanding. the trend in most cases is moving in the opposite direction, toward greater
negativity toward the bri. have seen that reflected in unprecedented ways, in measures unveiled by western countries over the past year to restrict foreign investment, implicitly directed at china. when i think about concerns about the bri, this is a new phenomenon. the belt road has been around for five years -- the belt and road has been around for five years. 2017, you go back to just there was only one country vocally critical of bri and that was india. the shift in the united states came in august of last year. shortly after trip to india, secretary of defense matches offered criticism of bri in congressional testimony, and that opened the floodgates.
voiceng you started to concerns. the european union and a --cession of u.s. officials voicelia started to concerns. the european and a succession of u.s. officials. and the opposition india has expressed from the outset has continued. i would like to separate these concerns into two categories, direct concerns and indirect strategic concerns. some of these are inherent to the bri, concerns being voiced by the west and others. they relate to the lack of standards, transparency and accountability, things i am sure you have heard before if you have been watching the bri, the way deals have been done in secret and obtain -- and contain objectionable provisions, the way these deals have instituted
corruption, nepotism, lendinging institutions' national standards and precipitating a race to the bottom. in some cases, these bri cooperation deals appear to be a one-way street where nations assume large amounts of chinese debt, paying interest to chinese financial, compensating chinese firms using chinese materials and chinese workers. according to a study by csi csis, chinese firms only use 6% local contractors. tot's in contrast multilateral development banks would traditionally use 40% local contractors. there is concern about that distress for companies
participating in the bri. projects being tracked the class the globe -- being tracked across the globe, many are on hold because of problems. on the books,i $62 billion has been pledged by and pakistan's external debt payments next year will 7.7 billion, from dollars annually to 12.7 billion dollars annually. meanwhile, its foreign exchange reserves over the past two years have fallen 40%, from $16.1 billion to $10 billion. that is unsustainable. warned in march pakistan's ability to repay debt is low, and a return on chinese
investment in pakistan is very low, and in some cases may be supporting bad debt. 20 three of the 70 countries are atpating in the bri risk of debt distress according to the center for global development. eight are in serious trouble, including djibouti, laos, mongolia, montenegro, pakistan entity to stand -- pakistan d tajikistan. there are separate, strategic concerns that are not inherent to the bri, but that are being merged with and amplified by the bri. these are concerns about the way china does business, about the rising assertiveness and nationalism and the changes to
chinese policy we have seen since 2008. the outgrowth of chinese power, theintolerance for dissent, of chinese dissidents abroad, the rest of foreigners in china, the crackdown on academic freedom. by most accounts, chinese experts will tell you there has been a shift over the past decade in china's not just foreign policy but domestic toward a more assertive nation and a more repressive nation at home, and the bri has amplified some of these concerns and served to, served as a proxy for some of these concerns. and this outgrowth of shark times"china's "global had an interesting op-ed on
shargh power in 2017. china's shark power contrasts with soft power understood in the west. soft power centers on attraction and persuasion, yet shark power revolves around manipulation and distraction. the article insists china's use of stealth to shape public opinions is sharp but not coercive. china is taking advantage of the situation, rather than undermining the western democratic system. it concluded that while the u.s. and allies have been bent on transforming china for peaceful evolution, what an irony to see this trend in reverse. so with these strategic concerns, you have seen a number of chinese practices related to the belt and road that have given us pause. sri lanka present a model
some in thewhat west and india are concerned about the nexus between economics and geopolitics in the the way inad, and which the stance of the economic investments may be used to advance china's agenda. many of you are familiar with that if you have been following the belt and road, but essentially the was large chinese investments being put into a white elephant projects that have very little commercial inue, deals that were signed secret that were later found to have contained objectionable provisions including granting land and airspace, granting china sovereign control over there was aspace, report in "the new york times" that said sri lankan officials
said from the start the intelligence possibilities of the port location were part of the negotiations. chinese demand centered on handing over equity in the port rather than allowing easing of financial terms. so there are several instances of chinese practices in sri lanka that have caused concern in the west, but even in india this is why i think india was one of the countries that opposed the bri from the start. it is also important to note these investments and concerns in sri lanka date back to 2008, before the bri. these concerns have been around for a while. that is why i say not all of this opposition is inherent to the bri. it is inherent to the concern about the way china does business, and the bri has served to magnify that.
but as in sri lanka, china and the bri are becoming a political many countries, malaysia, burma, indonesia, the maldives, opposition parties are -- are using increasing concern about growing debt to china to criticize ruling parties. and when they win elections and come to power, they are questioning, canceling, reviewing, amending these deals with china. and the west, you have seen a more concerted effort not only in developing countries to question these deals, but in the west to both push back against chinese investment and promote an alternative vision for regional infrastructure, and provide these countries that are seeking investment with an alternative that does not carry so many strings attached.
q and left a lot here for a, but i want to reiterate that does very later, bri much of a brand problem. and when i wonder, can china and change international perceptions about bri, i'm not helpful. the chinese recognized early on there were perception problems, even before this opposition crystallized in the west. you saw it in their attempt to change the name from one belt, one road to the bri. they tried to relabel the cpac core door, recognizing how much opposition that has generated in india, a territorial claim in kashmir.
you have seen efforts inside china to reshape the narrative, but i have not seen any efforts to fundamentally change the way they do business. that is the only way they are going to be assuage -- going to be able to assuage concerns in the developing world and the west, and simply changing phrases and elements of the narrative isn't going to cut it. by changing the way they do sibusiss, fundamentally changing a project that carries the hallmark of president xi jinping and is very much a part of his legacy, now enshrined in the constitution, is no easy feat. i look forward to michael my co-panelists's views on the bri. you and i have talked
about this before, but what responsibility lies with the governments themselves for taking the money? about it as ifk they are passive recipients who are victims of this nefarious program on the part of the chinese, but we don't talk much about why they took the money. what is wrong with the governance in these places, that if the deals are so bad, why did they so readily take them? cases, the deals are bad for the country on a but they mayis, not be so bad for the ruling party or the dictator in power, whoever whoever's pockets are being lined. if you're from the world of hammantoyota and to sri lanka's
president, it's a good thing to get an airport or port built in takedistrict so you'll that deal and take the money that starts flying into your illegally froms chinese firms when there's an election a few years later. but is that a good deal for the country? when terms are revealed later country, thehe opposition, many economists find deal.o, it wasn't a great part of the problem is that these deals are signed in secret. not up to the level of transparency we're used to and if they had been, they might been rejected. >> i differ a little bit and you this in terms of what we think are prospects for change in china but one of the things that i think augusts for more change and beijing will understand is the practicality of it. that it's becoming obvious that the projects are not sustainable do them.y they
so you put up all of this political capital and economic dictator and then he's gone and you've got to adjust some of the projects that are canceled, others go on under different terms. from a practical perspective, you would think beijing would have to understand that in order be sustainable, they have to conduct business differently. good segue for you to us what's going on in beijing? you, dr. loman. i enjoy your remarks about the external assessment of b.r.i. and i'll talk about the internal b.r.i.s about where really stands and i think one thing is really quite clear. b.r.i.r.i. is not -- if reveals anything about china's it's not astegy, mature or sophisticated as we thought it was.
b.r.i. did not come up with a comprehensive or completely mature thought process with designed and with everything fell through which is say,hat in china, people that the famous remark was we're crossing the river by feeling the stone so now b.r.i. the second time that china is crossing the river by feeling the stone. terms of the assessment of b.r.i. at five it's very difficult to draw a completely black or complete white conclusion and say that difficult to it's completely a success or failure.y a the glass is half full or half see itepends on how you and where you stand. analysis inside china and the focus internationally, of course, most of the attention has been focused on the problems.
because where there's a problem, there's room for analysis and news.s room for the impact, if feel it's very difficult to draw b.r.i.y conclusion about so for example, after five years, if we compare china's withnal influence today china's external influence back in 2013, i think there's no that china has been able expand its impact and the seen ase over countries periphery and also countries in the middle east, countries in countries inme africa, in europe, as well. and if we could compare the numbers and say that there are countries that are like minded china and the countries that support china's mega-infrastructure projects. there are more and more doubts. but i would say members of those have increased as a
result of b.r.i. in the past five years rather than decreased the b.r.i. has encountered problems in such as malaysia, sri lanka, pakistan. and i particularly appreciate the comment from dr. loehmann and jeff about the opposition having doubts about the economic viability and political sustainability of this infrastructure projects. however, if you look a little deeper, these opposition parties, once they're the ruling these countries, they still need to work with china on infrastructure and i think that fairly cheer in -- clear in the burmaf the government in who just established a b.r.i. tomittee with china, how better promote the development thatr.i. across burma and is also to my knowledge, to, with the case -- in the case of
malaysia where the government has come up with a project they chinese to sign. so i think this opposition party problem or political transition for china -- at least in china it's no longer a new problem and the chinese have been able to establish some of competence, even if there is opposition party and political transition, eventually when they look for partners, ofs actually financiers their projects, infrastructure projects or domestic development projects. china is still a very big player in the room. i think the chinese have developed some sense of or comfort there. were originally suspicious of b.r.i., namely japan and india on the top of but again, this year, we also know that china-japanese relations and china-india improved rather
than deteriorated and the main reason for that is not b.r.i. associatedertainty with u.s. policy and uncertainty associated with policy these countries in the context of the great power competition. of view from the point of great power competition, we into a lot has run of problems but it doesn't mean that the competitiveness or the that b.r.i. poses to the international system has decreased as significantly as was thought. if we look at this year. chinese economy has run into major problems in terms of investment into b.r.i. seeing investment slowing down. half of thisrst year, the total investment china has put into b.r.i. countries $7.7 billion, 15% decrease compared to the same last year.
if we compare the whole investmentchina's into b.r.i. countries is only f.d.i.china's global we compare the context of this which is a key component of for china's logic b.r.i., to create jobs, to absorb the over-capacity in chinese domestic market, we also see that the total amount of the contracts signed during the first half of this year decreased by 33% compared to the period in 2017. of this slow down of input and outpit out of b.r.i. this year, of course, is a cumulative effect of what happened during the past four years but i would also argue key reason for this lies in defect in thel
design of the b.r.i. from the very beginning. internallso an conflict of this logic that went into b.r.i. so when china first contemplated thought about b.r.i., thought that, well, these overseas berastructure market could opportunity for china's overcapacity and china, since a larges accumulated amount of foreign reserve, at trillionit was $4 investnd china needs to reserves somewhere, opening the overseas market would create business opportunities for china's domestic market and at the same time it will also create the china has aspired for the chinese border so from the very beginning the economic viability from the the b.r.i. was not a top consideration for china. they were eager to use a p.r. and to portray b.r.i. a benevolent effort, a benign
public good china was providing but the economic viability at the very beginning was not at the top consideration. the financing,at the sources of financing for b.r.i., public financing, policylly financing from banks such as china development c.b.d., definitely occupation the largest majority. so for a lot of these projects along c.b.b. the support from or china axom yearly is higher 80%. the east rail link malaysia, axom providing originally 85% of 15%financing and the other was going to be raised through financial capital market by malaysia. the internalem,
logical problem of this model is it firstink china when considered these markets and these opportunities, it failed into consideration the essential problem, why the been there butys the capital is not there. in other words, the chinese were having their eyes on the markets opportunity and the contracts the b.r.i. countries to askfford but failed questions why international bankers and financiers had not opportunitiesse as good ones. so that's really the essential problem. china saw the market and was use its public financing to support chinese companies going into those markets but once they're there, and after a couple of years, that many of these countries have sovereign risks extremely high sovereign risks and that's the fundamental they cannot raise funding
of the international market to support infrastructure markets came in with this very large pot of money telling them we're willing to support your country but that's where the chinese wake up which next step problem sustainable.lly when the countries like pakistan received the money from the it also creates questions inside pakistan, that started to ask, why is china willing to throw in this our country.to and they started to making demands. that, for example, basically up 2017, i wouldo say when you talk about cpac, china pakistan economic many pakistanis see that as a chinese free aid notect, not investment and loans and the chinese policy community spent a lot of efforts to correct that
misunderstanding, telling the pakistanis that this is not free money. we also need returns at the end of the day. creates problems politically because pakistanis differentg a expectation about benevolence of the chinese financing. then in countries like burma, in countries like sri lanka, i think the chinese generosity, so-called asevolence, is interpreted having ulterior motive, why is so generous with financing when no one else is willing to help us out. in some african countries, leaders have a different interpretation, which is at the end of the day we will not be able to repay the loans but we weren't repaying them anyway so the chinese have established a forgiveness in africa so i would say some were very muchca relying on the hope that china in the future would just forgive
debts and if you ask the chinese their reaction to that, track recordave a of forgiving debt for african ghenged --nd depending on the significance of the country, with the military base already there, depending on the significance of the country, the chinese believe they will butive some of the debt definitely not all and those debt forgiveness will come with political concessions and strategic concessions. how china seest b.r.i. today, i would say that the introspection and soul searching about the problems, why this has generated so much negativity, is very much at the top of the agenda these days. of these lessons or these problems, obstacles, i don't the chinese expected them when they first came up with and these five years have offered the chinese the theseunity to go into
obstacles and go into these difficulties and understand where the problems really are. and then the question is, if they understand what the problems are, are they going to an effective judgment or correction of those problems. agree with jack. i think a fundamental policy rebranding change or is going to be extremely difficult because b.r.i. has shaped, hasbeen as jinping xi's signature foreign strategy, his signature project. if we -- if the chinese are orng to rebrand it fundamentally restructure the b.r.i., it's going to lead to a waslusion that jinping xi wrong and i don't think the chinese politics today will of development. but more likely, we're going to adjustments and modification of how b.r.i. projects are being out and i'll mentioned
are mostthem that popularly discussed in china. that the one is chinese trying to figure out ofs to broaden sources financing for the b.r.i. projects. the chinese have been very eager talk about p.p.p., foric-private partnership quite a while. so now the idea is that for the be proposedct to and to be approved, they need to additionalh at least sources of financing that does policypletely rely on banks china to provide the financing and that's yet, of course, a.i.b. does not completely serve b.r.i. but an exampled serve as supported byee supported byintly
world bank. to introduce other sources of key area thea chinese are looking into it. however, the problem, coming viabilitye economic i of these projects, that until china can prove the projects investing in are economically sustainability and it'stable in the future, very difficult to draw international financiers into the scheme. and the reason, of course, china could argue, we're there for not only economic reasons but also marketna's domestic reasons, for china's domestic political reasons but those or those reasoning do to othersarily apply so i think the chinese will have to look hard and if they want to sell to financiers,l they'll have to do a much better job. the second area where i see a soul searching in china is how to change the relationship between the andastructure projects
local economic activities. logic is that if you build the road, they will come. come, investors will come, jobs will follow and economic activities will follow. china model. but this model so far has not apparent or evident in the b.r.i. projects and when the why,se look at the reason a key essential reason they've identified is that b.r.i. are mostly signed theeen the chinese side and receiving governments, the theral government, not local government. when china build the railway in they signed the deal with the ethiopian central but local governments were not involved in the process, economic planning or job creation and the economic activities are not really included in the scheme so far. local to include
governments in the b.r.i. projects is a key area. that i hear most is this distinction between g2g and b2b. that's another, i would say the internalproblem, defect with the b.r.i. design. g2g means government to government. b2b means business to business. when the chinese talk about they want to to tell the receiving government that these thatconomic activities might be carried out by state owned enterprises but state enterprises essentially by day, they'ree still economic and commercial players. they're not political players. i think that's a message the chinese try very hard to send. therefore, when a contract or an areement is signed with the chinese want thiseceiver to understand this
is a commercial activity and they want the receiving government to respect the logic of the project signed. that on oneity is hand, chinese companies' activities are perceived as activities, which ands that s.o.e.'s companies have to take into consideration the political need of the chinese central thesement when they sign projects and one example that i can -- that came to mind is that and thailand was negotiating about the terms for terms for the thai railway project, a thai government told the chinese that the friendship between our two countries, you conditions,us these these preferential conditions. that's where the company's activities are perceived as government activities. hand, when chinese companies think about their viability and
profitability of these projects, they're also being perceived as the government players. so therefore creates this conflict between economic viability and political friendship with the the recipient countries so that's the example that comes to mind, chinesetan, whether the financing is regarded as freetment or as loans or aid. so the worst -- what has made worse is that irresponsible behaviors by chinese companies have also been to irresponsible activities by chinese government. so that's where we see a lot of research, a lot of projects being done about whether the really companies are doing -- playing a positive role in the b.r.i. projects or a role in china's thetegic design, that when chinese companies behave irresponsibly in the local community, they're perceived as
of china. behaviors ofte the the chinese companies is another issue that china is thinking pretty hard about. so all in all, i would say that viewsna there are two about belt and road initiative. is that that b.r.i. is wasteful, is squandering away china's hard earned foreign reserves and generating the repercussion and push-back from the western world, the developed world. also the conclusion or part of the assessment is that the trade wars we are seeing today u.s. and china is also a result of china prematurely challenging the hodgeim me of the united states and b.r.i. is of that. the more positive assessment is there's no free lunch. thee's no free lunch for
recipient countries and no free lunch for china so china is this steepgh learning curve and china will have to learn and modify its way.ior along the where does the truth really stand? probably somewhere in between, both the negative and the positive. thank you. walter: that was terrific, thank you. i'm so glad you focused on all economic parts of this especially the viability of the projects they're investing in because much of the response from the u.s. side is that we ought to essentially be competing with the chinese for what are bad investments. somebody somewhere will be on the hook for those investments if the u.s. makes them. either the company or the bank the investment or the u.s. taxpayer, if it's guaranteed by u.s. government or agency so i'm really glad you got into that. i hope we can talk about that a the q&a.t more in let me turn to dan. that's a good segue to his
comments on policy reaction in the united states. dan: excellent. and jeff forlter hosting me here at heritage and thanks to all of you for turning out. impressed by your dedication this late in december here to hear about belt and road. i'll focus my remarks on the american perception and response to start with the big picture which is that we're here to talk about the belt and road at five years because the united states and china are engaged in a competition to shape the 21st century and in this contest, at stake is whether the prevailing international order that has back-stopped, peace, prosperity, will endure, or whether china's emerging vision, a world defined by great power spheres of influence, economic interactions and ascendant authoritarianism will prevail. the belt and road is the china's ambitions in this competition and is reshaping the world to its outlined.in ways jeff
that's the big picture. turnsthe belt and road five, i would argue that america's response is maybe at year two. reflects, in some ways a failure of imagination, as we saw with chinese land reclamation in the south china sea, i think american lawmakers didn't appreciate the scope and speed of belt and road initiative and how it would gain dip limittic leverage. u.s.said, even if the response lags the inception of thatand road,i would argue given growing disillusionment with chinese investment, there much an opportunity for the united states to formulate not only a response to the belt to road but more importantly offer a compelling alternative development,onomic digital and physical connectivity. the -- turning to the
has response thus far, how it evolved and where is it going. i'll close with my idea of how it's worked and what hasn't and how to proceed. under the current administration in the last two years, the taken i wouldhas argue a relatively strategic perspective on the belt and it asvery much viewing part of the larger competition with china for global power, wealth and influence. looking at the kind of public government line on belt and road, we've seen kind of an of rhetoric. i would argue even more so than jeff said, that a year and a ago roughly you had senior u.s. officials talking about that there were many belts and roads, or president trump in 2017ast apex summit calling for alternatives to state directed initiatives that many strings attached so u.s. officials were critical waselt and road but it often veiled. fast forward a year to this fall and the rhetoric is much
sharper. so, for example, vice president pence in november going to apec 2018, quoting directly, saying, we don't drown our partners in a sea of debt, we compromisee or independence. we do not offer a one-way road. week, national security adviser bolton unveiling the new u.s. africa strategy framed belt and road as a plan to develop a series of and fromtes leading to china with the ultimate goal of advancing chinese global dominance. much ave seen very hardening of u.s. rhetoric from a thinly veiled critique to one says this is a power play by china for global domination. ofond the escalation rhetoric, the administration has put together a series of initiatives and policies, often closely with congress, that begin to look like an competitive and comprehensive approach to belt and road. i won't try to identify every
program and initiative but hitting highlights. a key part is resourcing, one of critiques of america's response is that china deploys dollars, where the u.s. has very few new resources to throw at the challenge. changed recently. for example, in october, with bipartisan support in congress thethe support of administration, the better of investment and development act was passed and signed by president trump and essentially doubles america's development finance billion, creating new resources to try to get the u.s. private sector off the sidelines into markets where china is investigate. we can talk about, is it smart? but it's probably the most significant change in u.s. development finance in the last generation. the new u.s. international development finance corporation that will result from this also have awill much more flexible and expansive tool kit than the current
investmentivate corporation. also on resourcing, just last and senateouse passed the asia reassurance initiative act which will than $1.5 billion over the next five years for the u.s. agencyment, for international development, and the pentagon, to support a activities in the indopacific aimed at strengthening and extending a international order so while the u.s. will never hash china's resources, it far more to put in than it did six months ago. theve seen a major push by united states to cooperate with allies and partners to advance chinese-backed infrastructure. the united states over the past signed bilateral agreements with australia and japan and most recently trilateral new infrastructure partnership. it's easy to say these are great areing points, they concrete projects. president pence
aneiled a plan to build electricity grid in papua, new guinea. there are areas where the united states is cooperating to offerners alternatives to chinese backed investment. a key part of the approach is to constrain chinese opportunities to invest in countries. for example, the u.s., this unveiled a new transaction advisory fund, essentially to help countries evaluate potential chinese deals and not be taken advantage of in the way that happened in sri lanka. and then at apec, vice president indopacificed a new transparency initiative. the details are unclear at this but from what i can discern, looks like the u.s. will support investigative in country where is china is investing, making it cut theor beijing to .ype of backroom deals
specific initiatives. there's a lot of activity on the argue it'snd i would more coherent and comprehensive than what we've seen in the past trending in a positive direction. that being the u.s.'s response remains a work in progress. the administration deserves credit, as do both political parties in congress, but there is more work to be done. what are the next steps in my view? one is to advance a positive alternative vision. enhance u.s. investment and bilateral trade deals are necessary and insufficient. the united states needs to advance and pursue multilateral , high-quality trade and investment agreements. drawing a sharp distinction between trade with china, which has caused massive jobs and
location, here at home, the overwhelming benefit derived from economic engagement. i know that is potentially controversial at this point. if there is not a multilateral trade and investment agreement on the table, the response might be inherently incomplete. at the same time, the u.s. needs to do more to develop an effective counter narrative to china. at this point, from the other panelists, a narrative, the chinese have advance, very much on its heels given the setbacks that have occurred. at the same time, the u.s. today lacks a robust public diplomacy capability. it could really play out with what the united states is already doing, for example being the largest source of fti in the indo pacific today. there have been positive steps by the administration, for example, a growing global engagement center on china, the single office will not be able to lead a comprehensive approach. there is a need for creative thinking in this area.
at the same time, a narrative without facts on the ground is not very compelling. in my view, beyond having more effective public diplomacy toolkit, the administration in the government needs to take things seriously. are there a handful of high-profile, but also commercially viable projects that the u.s. could back in the indo pacific, middle east, africa and latin america? the core of the belt and road that the u.s. is supporting. at the same time, the passage of the build act is a potential game changer in terms of u.s. resourcing. the legislation that set this all in motion leaves a lot to be determined in the administration and congress. corporation will realize this or not, it remains in question. there are a few areas i would argue the administration and congress come together to ensure this new corporation lives up to its potential. for example, one would be creating a new office for strategic investment,
essentially baking and a focus on long-term competition with china. the legislation did not specify the development finance corporation with bgp directly. at the same time, the past, the u.s. development finance has been graded on return on investment, which makes sense. it was not defined by great power competition. we might have a discussion on this. u.s. is going to compete with china. a lot more risk. congress and the american people may have to take a different perspective on what is the appropriate level of risk and whatever the returns if we are going to compete with china had on. leslie for this new development plan corporation, i would argue, it needs to have the ability for certain financing, legislation that created it does not create expedited funding. with countries increasingly rethinking chinese investment, there are real opportunities for the u.s. to offer an alternative to nato. i would argue congress should
think of creating a new authority for resource financing. there are definitely some untapped opportunities. one of them is the on coordinating national effort. this trilateral partnership with japan and australia. u.s. and its allies work together in international financial institutions to draft significant resources toward projects that matter most from an economic and security perspective. europe is also an increasingly influential player in this space. the european union recently unveiled a new conductivity strategy. although if you ask people in brussels, i would say it is not road.ing with belt and in reality, it is an alternative. there are opportunities for the u.s. to engage with europe on joint infrastructure projects. lastly, i want to turn to the digital, emerging as a key area for u.s.-china competition. there has been a lot of focus on bridges, roads, ports. all the hard infrastructure associated with chinese
belt and road strategy. but the digital piece i would argue is potentially most consequential. ultimately, whether it is undersea cables, fiber-optic networks, telecommunications, online platforms, whatever china is advancing in the digital space, it ultimately touches on not only american security interests, but prosperity. and even values. for example, china is exporting elements of its surveillance complex to their countries -- third countries through the export of what they call smart cities. the u.s. on the digital side could up its game. for example, working with europe and japan to establish a digital development fund that would support information connectivity products in developing countries. only companies that adhere to globally recognized norms and online privacy. the u.s. also could for example expand the digital attache program. in about 12tly only countries, but it is part of the department of commerce and
essentially a way for u.s. companies to engage with developing countries around .igital trade i would finish by saying the u.s. response to belt and road is much more coherent than it has been in the past. it still has a decent amount to move forward. with countries around the developing world increasingly concerned about the negative implication of chinese investment, the u.s. has a window of opportunity, and in my view, now is the time to seize it. thank you. >> thank you. we could have a whole program on the build act and its effectiveness and how it is likely to work. maybe you can respond to the is. we will have a brief expert -- exchange on this. two points you made about it actually contradict the two main points that were used to sell it. one, it is about china. it is not specifically about china, in fact it is just a doubling of opec.
who knows how the money will be spent once companies star accessing it and applying for the funding? i'm not convinced it's going to go to strategically important areas vis-a-vis the chinese. the other thing is the risk. the other selling point for th'm was, don't worry, because it does not cost anything. it does not cost the american taxpayer a dime. now you are saying we might have to invest in things that are risky. in other words, things that will come back to the american taxpayer. how do you respond to those issues? >> absolutely. i think there was some contention even in congress with how the build act was framed. you had often the right-wing side of the political spectrum, support for the build act as a tool and instrument to compete with china. on the left-wing, more seeing it as an opportunity for development and u.s. engagement in the world. i would argue that it is both. it is appropriate that the legislation, initially, did not explicitly color china, although when you look at the final
language it called for competing with state backed investment initiatives. there is a selfie reference to china, if you will. i think very much what is needed is, i would not call it to the counter china office. but having a part of the new development finance corporation looking at strategic investments to understand and work with the defense department with the intelligence community and look at the handful of projects or locations that actually matter. i agree. we should not be throwing money at bad chinese projects that don't have a lot of consequence for american security. but we should take a hard look at the world and say these are where we should make investments, even if the return may not be as good. i would not want to serve counter china office. i would frame it as strategic investments. too. a concern i have, without something like that baked in, that the new development finance corporation, i think many who sign onto it will not have the focus on strategic competition with china, even if it is more enclosed in internal.
on the risk, think it's an area ripe for debate. overall, the new development finance corporation has to be for american resources but if it is seen for an instrument in advancing u.s. influence in competing with china, some of projects that may matter most from a military and national security perspective, in countries where there is more risk, the portfolio would be balanced in a way where you have more investments in areas that are likely to give a return. for me, it is better to preemptively socialize congress and the american people that some of these investments are going to be more politically motivated and ideally they will have a positive return, but it is a different metric and we have had in the past. and if there's any room for disagreement on how much of the portfolio should be more geopolitically oriented versus where the u.s. private sector would go. >> thank you. i want to turn it over to questions. sometimes, there's a little bit of thinking time in the transition between the panel and questions. please give it some thought. in the meantime, i do want to
ask a question. of the possible ways where the current debate is in beijing in terms of adjustments. is there any opportunity for institutions outside of beijing to play a role in shaping whatever those changes are, whether it's on bilateral basis with the europeans, japanese-americans, whether it's financial institutions like adv b and world bank that may get involved? aibaw that is the way that got involved. is the bri open to international influence on its standards in a way that money is governed? >> that's a great question. there have been questions about whether the international community can actually play a role. i think it depends on where those systems come from. i think for example, china reach
ed out very enthusiastically to japan to cooperate and collaborate on the bri projects. atan has been quite cautious the beginning, but starting from i would say mid 2017, the abe administration has been sending signals that we are willing to work together with china, and most recently they reached an agreement about china-japan cooperation in third countries. a lot of those cooperations will have a direct impact over the bri projects. i think there is that possibility. for the multilateral development banks, the chinese have been quite eager to get them involved in some of the bri projects. not the most strategically important ones, because they may not make total sense economically, but in management -- investment projects and commercial projects, the chinese are very eager to involve them. i think one question is that whether the chinese will be open to collaboration where the united states issues related to
bri. on that, i think the official narrative from beijing is that of course we are open. we would love to cooperate with the u.s., if the u.s. has such an intention. i think the internal judgment is much u.s.-china relations have soured and how much problem there is and how much power competition is currently involved, i think the space for that dialogue is very small. having said that, i think one group of actors that have been particularly active in the bri from the united states are the private sector players. you see for some of the bri projects, because they are major infrastructure projects, american companies like ge, honeywell and caterpillar see bri is a great opportunity for to increase their sales in china
, and not only in china, but also in for example, africa. and there are american companies that are specialized for example in security that are providing advice and human services to chinese companies operating in those logically follow -- politically volatile countries. i think those are primarily private sector engagements with china based on economic logic on projects. not really political cooperation. >> and go right here first. >> thank you. my question is about chinese telecom firms. how does this bri initiative advance the interests of hawaii zte, especially with the 5g infrastructure?
>> anyone particular well-positioned to address this? >> i am happy to, and others can chime in. the newer element of bilson road -- belt and road is this new digital the chinese are making a , big push for their domestic information technology-based to go abroad and part of the umbrella of belt and road. i believe portugal i should just -- actually just signed a deal awei on 5g, so there is a 5g components of this. for example, while way is trying to export their sort of urban surveillance program where you have public security cloud linked to maybe surveillance cameras and exporting this to east africa, the middle east, indonesia as well. the digital part is the major urban development of belt and
road, for sure. right here. comment, the cynic would interpret the shrillness of western criticism of the bri as a sign that the bri is actually succeeding. my question is, how to the participating countries feel about china's promise not to meddle in their affairs versus our belief that we have not only a right but a duty to meddle in other countries' affairs? >> jeff, that's a good one for you. thatmight buy that idea western criticism is a sign of the bri's success if there weren't many signs that those in beijing believe the bri has run into real trouble as well.
it's not just western criticism, is chinese state-owned enterprises, it's organs of the party, it is parts of the chinese state that recognize there are only major financial problems but also narrative problems. it's not only in the west, it's in the developing world. is it arguably china's closest ally on the planet, pakistan. there's discontent and criticism. i don't think we can simply say, well, the bri is succeeding and the west is unhappy about it. it is much more complex and deep about the opposition. the second part of your question about the non-interference in domestic affairs, that has been a key tenet of china's way of doing business for a long time. it's propaganda about the way it does business. in practice, that has very much not been the case over the last few years. and that trend has been moving in the wrong direction. and that is china has been interfering more and more in the
domestic affairs of others, whether it is in the legal system, whether it's in terms of academic freedom, other it's in terms of suppressing dissent in other countries, essentially, enforcing alignments with chinese foreign-policy. any criticism or dissent against chinese foreign-policy is being met with sharper sticks and greater efforts to punish those who are disobeying beijing. and again, we can go back to 2010, the nobel peace prize in norway, we can look at singapore after the south china sea ruling, we can look at south korea when it agreed to deploy the sad missile system, we can look at unprecedented level of interference in australian politics, and we see a trend over the past six or seven or eight years of china growing more brazen in the degree to which it interfered with the
politics and economics of host countries. there is a great deal of evidence to support that contention. and evidence that is spread across the globe in the west and in developing countries. we can talk more about that, but this is part of the component of sharp power that i discussed in my presentation, intolerance for dissent. and dissent is met with retribution and that has been a steady and clear trend. >> thank you. i am steve, i am a journalist here. i have a question for yun sun. you were talking about burma. you mentioned that burma had set up a bri committee or a body of some sort to help the cooperate. -- it cooperate. my question is, is that action typical of what other countries
have done, or is it more engagement than surrounding countries have done, and if it's more, did the united states take any action to try and convince them not to take it? >> thank you for the question. is it more than what china has done? it depends on what -- >> [inaudible] other countries have done in terms of embracing the chinese bri. countries, at asean i think burma is the one that has actually established the specific committee dedicated to choose advanced on a bri in the country. i don't see that another mainland southeast asia and countries. and i don't see that in maritime southeast asian countries. but if you talk about pakistan and compare burma to pakistan, pakistan does have dedicated government courted nation mechanisms to support the cpac process, the china pakistan
economic order. burma's embracement, the embracing of bri, has come relatively from the chinese standard, and they were hoping that the governments, they were understanding that with political traditions that happened in 2015, the government could have a different attitude towards the chinese in their country. at the beginning, the government was quite concerned about the implication of the mega chinese infrastructure projects in the country, particularly associated with the deep-sea port. what happens was the rohingya pretty much puttin put myanmar back into the pariah state or status in the international community. there are sanctions and isolations of me on more again. i think for now government to that, it is a political issue domestically.
what that also created inadvertently or as a consequence is that china again turned out to be almost the only one supporter of burma internationally. and i think that international context has laid the foundation for myanmar to establish the belt and road committee. >> [inaudible] >> i have not seen anything from the u.s. side, but i think the u.s. policy toward me on mark currently -- me an myanmar currently is dominated by the rohingya crisis and the human rights agenda. burma is strategically
important, therefore it deserves additional consideration from the united states. but in light of the revenge of crisis, not see that happening. >> and think what takes me more practical than some others out there looking at this problem and really looking at the practical impact is that i come to it from more of a southeast asia background. that is mostly what i have focused on over the years, and i just know that all the countries in southeast asia will take the money. you will not eventually motivate them not to take the money or to take worse terms than someone else. in the burma example is a good that something's happened after the rohingya crisis, but one of the first things she did was reach out to the chinese after she was elected and the chinese reached out to her. the chinese were building connections for she won the election. the chinese are flexible and practical and i know everyone in the region is, and that is why i tend to want to look at this in a way that acknowledges the chinese are going to be a major economic influence in southeast asia and many other places that we're talking about for decades.
we have got to find a way to deal with this that is not sort of great power, geopolitics, 19 centuryor quasi-cold way of dealing with that, because it is not going to work. >> right here in the center. i am with the pakistani spectator. you mentioned something about giving training to people in those countries to evaluate these projects. are those trainings on the basis of when -- came to afghanistan, we had a lot of pakistani students here of usaid projects get newlly designed to generation, give them more american orientation and help them for the future to protect american interests in that part of the world. so the training that you just mentioned, is that modeled on
usaid from 30 or 40 years ago or a very limited project that would train some pakistani how to evaluate those projects on a financial basis. my question to jeff, i know you have hard feelings that china is bandwagon with china. in terms of education and india areakistan and very close on the map. they would love to learn english and english is the official language. in some ways, isn't that kind of shortsighted on the american part that when we have this kind wife has a jewish background and he has two kids from there. instead of supporting him, we are being very reactionary and shortsighted.
we need to offer more programs like this in order to give the american side of the picture that they don't try to take over the country like the chinese are. chineseeginning, the were saying we should have chinese currency there. it is a very open question that if they want to take over the country. my question is basically about education and for the u.s. to education thatof is already strengthened in part -- that part of the world. >> ok. thank you. the first question seems directed to you, how we can use to evaluate and expand missions. >> the treasury has lots of technical assistance that supports training for foreign
officials to understand and manage these types of projects and evaluate the financing. with this sort of new financial transaction for consulting advisory service, think it will be on much more case-by-case basis. i haven't seen a lot of detail in terms of how it will function, but i think it will probably be much more targeted and trying to help countries understand when you have a chinese offer, what does it mean in terms of the long-term payment ability? terms?e the actual and then build more capacity to manage projects the reality is often sometimes the chinese , products are not even the most cost competitive. there are cases where the port was given to a chinese company , even though it was more expensive, and it came to light after there was a transition. i don't think it will be exactly modeled on the past. there are some interesting multilateral models to look at like regional centers of
excellence. singapore has an infrastructure center of excellence. you could leverage that to train more officials around the region to manage and educate -- adjudicate these contracts. >> the other thing i have had a hard time on this topic reconciling, from a southeast asian perspective, and working with the business community for many years, is i have met so many brilliant economists and financers in asia and malaysia and elsewhere. so i'm skeptical sometimes that is really training that is necessary. i think maybe in the maldives, even in sri lanka, you'll have brilliant people, educated in europe and the u.s. and major institutions and economics. the people who built the indonesian economy were all berkeley educated economists and now suddenly these people don't have the capacity to try to understand the complexities of their interaction with china and
the legal instruments to do that? i don't know. is there something i have not been able to reconcile myself. i want to respond to the thing about the u.s. -- >> i think it was a good question, but i think it cuts to more the heart of the bilateral u.s.-pakistan relationship. that's a subject that i'm very interested in and very passionate about, but one a bit divorced from the discussion centered on the bri we are today. that is something maybe we could follow up on a sidebar with after the presentation. thank you. >> my name is demetri. thank you very much for that interesting discussion. my question is about the role of russia in bri. i know that there was some talk before linking the eurasian economic union with the bri that has kind of died off. the main part is, would you say the relationship between china and russia and central asia related to bri is competitive
or cooperative for both? -- or both? it is a really good question, and frankly, russia is not a component of the narrative and discussion here on the bri very often. may that is a mistake. it's not an issue i've looked at very much except that i can say that the level of chinese economic presence and influence in central asia just in the past decade or so has been transformative. russia was the dominant player there for a long, long time. and just in the last 15 years or so, the position with china has flipped to the degree where china is now in many cases the largest trading partner or source of investment for most of the central asian stans.
today under the moniker of this , technical partnership the two countries have formed, russia has seemed relatively comfortable with this significant increase in chinese influence and presence there. i have not seen any public signs yet that it has generated real tensions in the relationship. i believe russia has formally supported and endorsed the bri and encouraged others like india to be more supportive of the initiatives themselves. but i have been -- haven't studied the issue from a russian perspective enough to offer a granular level of analysis on that. >> i think there are basically two aspects you look at in terms to the russian relations with the bri, one is bilateral and the other is regional. when you look at bilateral, of course the relationship has been described as a partnership that
is higher than opera partnership which means china and russia coordinate on their positions coming to international matters . and we do see certain russian support in the south china sea, not about the chinese claim but china's position on the international ruling on the south china sea. and they joined with them in exercises on the south china sea and sometimes coordinated or uncoordinated activities in the east china sea vis-a-vis japan. on the issue of central asia, when bri was first proposed in october ofuld say and all the policy discourse and 2012, discussion in china about bri, two ferocious criticisms on the bri, one is that if china's going to central asia, it's
going into russia's backyard and the other criticism is that middle east, china, really, are you sure you want to go there? in terms of central asia, with the ukraine crisis, they really limited russia's capability to not work with china or to oppose china or stop china from advancing into central asia. for my research i have not seen too much russian opposition or efforts to undercut or undermine china's effort in central asia stans in terms of their infrastructure project. but another component of this is the policy road. it's one of the angles that goes to europe. on that, i would say that you see the most successful commercial projects between china and russia ever. it has been built and has been producing starting from 2017. this project, when the chinese wanted to invest in that port, the russians decline
d the chinese financing because of the strategic location. and then what we also see is russia trying almost every single way to invite china to invest in the northern sea route because russia needs to update infrastructure and it doesn't have the financing. on that, the chinese have been very reluctant. there is much more talking than actions in reality, because the chinese see russia portraying a concept of dividends in the future about the northern sea route without a willingness to make any compromise to the chinese about the commercial profitability. and basically china's own free , navigation along the northern sea route. i see more talking and over all my impression of bri is china is afraid of russia would be an obstacle and now russia's not an obstacle.
so that is good enough for china. >> right here in the front. hi, my name is craig. i'm a journalist from australia, studying in the asia-pacific at the moment. i will note that the a string -- the australian government just last week or the week before passed legislation to prevent foreign interference our politics. without mentioning any country specific. do you really think that the financial people in beijing are so unsophisticated that they cannot see that these third world countries can pay the big loans back? countries like the solomon islands all strategic areas for , ports and airfields in world war ii. example, there was a huge
wall built in a place were only -- where only one container movement happens a week in trade. it's a big enough wharf for an aircraft carrier. do we really think that they'll see that these things are not going to work? , it issecond part is interesting to note, does the united front work department operate within the united states like it does in australia, interfering and pressuring chinese students? i know this happens in australia, having studied it. thank you. >> that is a very good question. he gets to some of the motivations that were addressed. thank you, so bri is not fundamentally economic
undertaking that is part of the problem. >> it's never just either/or. , any foreignower policy or strategy cannot just serve through one purpose. it just doesn't happen with any great power. in terms of which country they are allocating more strategic consideration and more economic consideration, i think it depends on the country. remember back in 2016 or 17, csi had a report about the belton river initiative basically saying the chinese are categorizing them -- the countries into three categories, countries with utmost strategic significance for china to exploit, china is willing to basically lose 70% of the investment they are making into the country. and for some other countries, 50%, and in other countries is 30%. i think it would be incorrect to say that china has only one goal
coming to belton road. it has to be a comprehensive calculation on different things. but i would argue that from a fragmented point of view, from -- that the actual policy implementation is not as smooth as the policy designed look like from the very beginning. >> anyone else? especially the second bit about strategic nature. some of these investments. i think we talked about it to some degree and it will talk but -- talk about it afterwards to get into the details. so let's take two final questions and then we'll use that for everyone to wrap up. >> economic slowdown in china, serious debt overhang. is this having any impact on bri? is there any indication here that there is any rethinking of perhaps china has overextended
itself? >> great. right here also. >> my name is john and. i am a student from george washington. i have only one question. sri lanka is an example of debt to china. how can countries like sri lanka come out of debt? that is my question. >> we will start with jeff and answer those questions as you see fit. and any other closing thoughts you might have. >> i think that you would be best positioned to answer on the economic slowdown and how it may be impacting chinese assessment of the bri. with sri lanka, i think they presented an interesting case where in the 2015 elections you had a party very much campaigning against the type of
deals that were signed with china, pledging to revisit these deals when they came into power, renegotiate them and cancel them. and what happened was the government came into power and finally got a look at the actual numbers, which had been secretive for a long time. they didn't have any idea how much debt had been accrued to china, said they immediately put a hold on the port projects and asked to see the terms of the deals. found that objectionable provisions inside of those deals, including freehold basis, land being granted to the chinese, they were effectively having sovereign control over. so they attempted to renegotiate the deals or cancel them, but found that they were a centrally too in debt to do so. that they were due millions of dollars every month in interest
payments and the chinese said to them, you can put a hold on these programs, but you are still racking up debt. and racking of interest payments. and we will take you to court to meet your contractual obligations. and so they ultimately found they had, in their opinion, no other choice than to remove the most objectionable provisions, but then to renegotiate the debt. that is how they got control of the port. it was meant to be controlled by sri lanka. and when they realized they did not have enough money to pay the debt off, they said they would give them a 99 year lease to the chinese for the port. that on the surface, there is nothing inherently problematic about that, but what concerns me is when you dig into the details of how the new arrangement is going to be, the 99 year lease -- i mentioned this before --
from my reading it seems on the surface as if sri lankan companies will maintain a 51% stake in security and operations of the sport. you dig a little bit -- you dig deeper into looks like the chinese have done some creative mathematics, so that the sri port authority actually has a majority stake by chinese investors on the backside. so through several layers and moving around, the chinese have been able to retain control over the port's security and operations. and we were in sri lanka, and i asked senior-level officials, i said this is based off of information i have seen. i may be wrong, but i am asking, have you looked over the details? they said, no. we share the same concerns you do. we are not exactly sure what
arrangements have been made and what china is or is not controlling. so it is this secretive nature, there is this underlying level of suspicion that is accompanying these deals for good reason. it is not just fabricated, it is not because we hate the chinese, it is because there is evidence to suggest that there are these tactics being deployed and there is reason for concern. how these countries get out of the debt is a question that is much more difficult. if they are unwilling to live with the financial and sort of regulatory burden offered by western lenders -- i mean, that has been the appeal of china, that there are no strings attached the way there are with western lenders. we go to the u.s., if you go to the world bank, yes we can get loans, but they will be accompanied by economic reforms. they will have to be accompanied
by government reforms in human rights reforms, but with china we get a free pass. we can just take the money. but what i think they are learning over the last few years is that there are some strings attached. they are different strings, sometimes nonmonetary, but real strings. that is one of the key points, that moving forward the countries have to evaluate these deals and terms not just on the economic merits, but on these sort of strategic components as well. and then they have to be willing to take more of a hit on the economic side, whether it is debt forgiveness or for new loans, if they want to avoid some of the baggage that accompanies the bri. >> on the question of the economic slowdown, there are many reasons for the slowdown. bri may be top of the list. there is a reason for the economic slowdown, that is the
need for restructuring of the economy. the government has not been able to do that because of political obstacles. laster, economic growth was 6.7% and this year was expected to be lower, because of trade wars, and there are questions as to whether next year they will be able to maintain 6.7% of growth. and there is the question of outflow. there has been a problem with bri, because companies were using it to smuggle money out of china. so i think that bri will have an impact on the economy, but maybe not immediately. look at the investment china is making, bri countries only received about 12% or 15% of the total investment they are making, but at the same time they are having to make more in the contract service that they can get out of bri countries. well, there are questions in
china, but the more difficult country -- the question is on bri and where china is going. there is a debate going on about that. is china going to advocate for more reform, more opening up? the government thinks so, but people do not have confidence. or is china going to be more closed off? reformistsast, have argued, why do you want to make this yourself? ,ut now the argument is, see because you do not want to subject vulnerability to the control of the united states. i think that these are the hard questions going on about restructuring of the economy and which way china will be going. but looking at bri, i will say that it has had an affect the
supply. chinese companies especially with the business contracts, because they need to digest overcapacity. and i see that will continue. >> it is up to you. >> i will be fast. on china and bri and the u.s. response. there was a study by citi that given the trade tensions between china and the u.s., we will see china, despite economic challenges, putting more into diversifying its relationships away from the market market. the other thing you will see more of, which was alluded to, was china trying to bring in western financial resources into built-in road to kind of supplement the funds it can put into the endeavor. in terms of u.s. response, i want to make one final point that comes down to this geopolitical versus return of investment. most of the panelists here today
think, we would all say -- i do not to put words in anybody's mouth -- but belton road is more focused on political return on investment and i think the u.s. is grappling with the fact we have always thought about our economic state practices as commercial. now the challenge is, where do we draw the line, where is the division between the commercial peace and geopolitical base? piece? thank you. thank you very much and thanks to the panel for a terrific discussion. it is just what i was hoping for. thank you. [applause] announcer: join us later when the french embassy hosts a discussion on international organizations and the role in peace talks, fair trade, climate change and security. liv coverage at 6:00 p.m.
easterne here on c-span. you can watch online at c-span.org or use the free c-span radio app. money running out for federal agencies at midnight on friday night, unless congress passes legislation. negotiations continue. among the issues, whether the southern border wall will get funding. the housemates next on wednesday with votes scheduled in the evening. the senate is in session today working on criminal justice reform and changing sentencing laws. watch the house live on c-span and the senate live on c-span2. sunday, wall street journal columnist holman jenkins talks about his work and politics during the trump era. >> i think his politics are he wants to be the center of attention. his -- i do not think he is a racist, i think the way that he works and looks at people is either you are a friend or
enemy. he holds no grudges. but i think that his ideas about, his idea, the american first thing is something i think he holds dear. that our country has been shortchanged by the rest of the world and it reflects in trade policy and immigration policy. in the minds of many of his supporters in the middle of asrica, he looks at that sincere on his part. announcer: home and jenkins -- &a.man jenkins on c-span's q announcer: next, sarah sanders answering questions on whether or not there will be a government shutdown ahead of the holidays. and reaction to news of a delayed sentencing for michael flynn. ms. sanders: my