To what extent should Britain get on board with China’s new Silk Road project?
The unglamorously (and misleadingly) named ‘One Belt, One Road Initiative’ is one of the largest ever commercial endeavours.
Misleading because there actually more than five ‘roads’ that are part of the project (in fact it’s more like a web of supply routes, with China at the middle.) The routes directly touch nineteen south and south-east Asian countries and connect a further 69 countries.
More than $900 billion worth of projects are in the offing (that’s bigger than the GDP of most countries) and the consultancy PwC reckons over the next decade around $1 trillion of outbound state financing will mobilised to support the initiative, largely from the Chinese government and administered through various special purpose vehicles.
In other words, a lot of concrete is about to go in the ground. Roads, railways, ports, bridges, IT and telecom infrastructure, not to mention a huge movement of labour across regions.
And yet. The Financial Times has run a punchy editorial saying that Theresa May is right to be cautious about the initiative. On her recent trip to China, the PM's spokesman would only say the One Belt, One Road Initiative would contribute to global growth if it was ‘well implemented.’
A lack of financial transparency, proper governance and consideration for social and environmental issues, as well as a propensity to use its money to influence local politics, are thought to be behind the Prime Minister’s refusal to give a blanket endorsement of the initiative.
She is not alone. Even the Asian Infrastructure Investment Bank, of which China is the largest shareholder, has said it will only back projects that adhere to its own governance standards.
The British government it keen to send clear and confident messages about its ability to do business with the world as it negotiates its departure from the European Union. But as this episode shows, Number Ten still seems to rank good governance and transparency - two great British exports - above short-term commercial interests.
While it is entirely understandable that many countries in the region are welcoming the initiative with open arms, as the FT correctly asserts, ‘there is no need for the UK to play the supplicant.’