In pluralistic societies, different interest groups have different priorities. It is hard to imagine successful public-private partnerships for the latter.įinally, while China’s going out strategy, in particular its OBOR initiative of connecting countries through infrastructure, is welcomed by some countries, others have not been as enthusiastic. While some projects (such as telecommunication networks and ports in strategic locations) may have no problem making enough revenue to pay back the investments, the same cannot be expected of other projects (such as roads going through poor rural areas, or water treatment plants). Chinese officials have talked about leveraging government funding for private investments, but that will be difficult because of the shortage of bankable infrastructure projects that will likely generate sufficient returns to make the investment profitable and sustainable. The global infrastructure gap approaches US$1 trillion a year, dwarfing the US$40 billion of the Silk Road Fund and the US$100 billion of the Asian Infrastructure Investment Bank, both of which are designed to serve the OBOR initiative. ![]() Participants discussed a number of issues around two broad themes: the impact of domestic political economy on China’s foreign economic policy and the challenges for China’s external financial strategy - in particular, its OBOR initiative.įirst, the estimated gap is much larger than the funding provided by China either unilaterally or through China-led multilateral banks. The complexity of China’s going out policy was the topic for a recent round table discussion hosted by the Centre for International Governance Innovation and the Foreign Policy Institute at the School of Advanced International Studies of Johns Hopkins University in Washington, DC. Moreover, it is unclear how successful the going out policy is. An equally important but often less understood issue is the role of China’s domestic politics and political economy in shaping its new activism in foreign financial policy. ![]() Many view it as an expression of China’s international ambition and a strategy that threatens the existing international order however, that is not the whole story. There has been a great deal of anxiety about the motivations behind China’s going out policy and its possible international consequences.
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