OSCE Network of Think Tanks and Academic Institutions China’s Belt and Road Initiative: Implications for the OSCE OSCE Network of Think Tanks and Academic Institutions Stefan Wolff | Institute for Conflict, Cooperation and Security | University of Birmingham Copyright © Stefan Wolff 2021. All rights are reserved, whether the whole or part of the material is concerned, specifically those of translation, reprinting, re-use of illustrations, broadcasting, reproduction by photocopying machine or similar means, and storage in data banks. Under § 54 of the German Copyright Law where copies are made for other than private use a fee is payable to »Verwertungsgesellschaft Wort«, Munich. Design and typesetting | red hot 'n' cool, Vienna Cover Photo © 123rf.com / Vitalij Sova China’s Belt and Road Initiative: Implications for the OSCE Contents Executive Summary 2 What drives the BRI in the subregion? 34 Background Papers 4 What has been accomplished so far? 35 Acknowledgements 5 What are the critical risks of BRI implementation in the subregion? 37 List of Illustrations 6 How have local actors reacted? 39 List of Abbreviations 7 How do the other main players view the BRI? 39 How has China responded to local and PART 1 8 other actors’ perceptions? 40 Introduction 8 The Western Balkans 41 The Belt and Road Initiative: What drives the BRI in the subregion? 41 A Brief Backgrounder 9 What has been accomplished so far? 41 The OSCE and China 12 What are the critical risks of BRI implementation in the subregion? 43 A Framework for Analysis 15 How have local actors reacted? 46 Asking the relevant questions 15 How do the other main players view the BRI? 47 Considering the implications 16 How has China responded to local and What the Report does (and does not) cover 17 other actors’ perceptions? 48 Sources and data 17 PART 3 49 PART 2 20 Policy Implications 49 Changing Geopolitical and Geo-Economic Opportunities and challenges in the politico-military Dynamics Across Three OSCE Subregions 20 dimension of the OSCE 50 Opportunities and challenges in the economic Central Asia 26 and environmental dimension of the OSCE 52 What drives the BRI in the subregion? 26 Opportunities and challenges in the human dimension of the OSCE 53 What has been accomplished so far? 27 What are the critical risks of Policy Recommendations 54 BRI implementation in the subregion? 28 Forming consensus within the OSCE on How have local actors reacted? 30 engagement with China 55 How do the other main players view the BRI? 31 Prioritising issue areas for engagement 55 How has China responded to local and Identifying formats for engagement 57 other actors’ perceptions? 33 Engagement with China: from pragmatism The South Caucasus and the OSCE’s Eastern to strategy? 57 European Participating States 34 References 59 1 Executive Summary Since its inception in late 2013, China’s Belt and Road Initiative With China increasingly viewed in Washington as the United (hereinafter the BRI, or ‘the Initiative’) has grown into a vast States’ main rival, and in light of growing scepticism toward global development project with increasing geopolitical and geo- China in EU and NATO capitals, involvement in the BRI has economic implications. By 2019, Belt and Road co-operation become increasingly difficult for those countries in the OSCE involved 137 countries and 30 international organisations, with region, like Georgia, Moldova, and Ukraine, that take a generally concrete projects in over 70 countries. These include 27, or pro-Western geopolitical stance in their foreign policy and almost half, of the OSCE’s 57 participating States. harbour aspirations for closer integration into Euro-Atlantic security and economic institutions. The new connectivities that the Initiative has created along the Silk Road Economic Belt and two of its economic corridors, the The BRI, and China’s presence and activities in the OSCE’s New Eurasian Land Bridge and the China–Central Asia–West contested subregions more generally, thus adds an additional Asia Corridor, in some ways complement the OSCE region’s two complication to already frayed relations within the Organisation other economic (and political) integration projects, the European that have negatively affected its ability to fulfil its comprehensive Union and the Eurasian Economic Union, but in other ways also security mandate. represent rival alternatives. An increased Chinese presence thus also competes with Russia and the West for influence across BRI The potentially increasing challenge that China therefore partner countries, particularly in the already contested OSCE presents to security and stability in the OSCE area in general, subregions of Central Asia, the South Caucasus and Eastern and in the three contested subregions in particular, cannot be Europe, and the Western Balkans. ignored by the Organisation and its participating States. From the OSCE’s perspective, there is a need to engage with China. Regardless of how much China may emphasise the economic However, such engagement faces three main hurdles. focus of the BRI and its win–win approach, a project as grand and ambitious as the BRI is bound to have geopolitical consequences, First, it is not clear that participating States would benefit from yet there is uncertainty about what these are, when and how they OSCE engagement with China, as this may limit the gains they will materialise, and whether they are inevitable but unintended can obtain from direct bilateral engagement or through different consequences or part of a yet unarticulated Chinese grand formats, such as the EU, the EAEU, and the SCO. strategy. Second, taking on the challenge of engaging with China may China’s presence and activities across the OSCE subregions simply be a ‘bridge too far’ for the OSCE, further undermining predate the launch of the BRI but have been systematically its capacity to deliver on its existing mandate and to preserve framed as part of an increasingly coherent and ambitious Chinese its established norm consensus in the context of the already strategy driven by multiple separate domestic and foreign policy fractious relations between its participating States. imperatives. Associated with concepts such as the ‘Chinese dream’ and the ‘new era’, the BRI first and foremost serves Third, it is far from clear that the OSCE is the kind of forum with Chinese domestic national interests. That the implementation which China would want to engage, and under what conditions. of the BRI is meant to generate gains for China first does not, however, prevent it from benefitting partner countries. 2 China’s Belt and Road Initiative: Implications for the OSCE These hurdles neither diminish the need for engagement nor If and when this initial pragmatism is transformed into a make engagement impossible. Rather, they set the parameters more strategic approach and eventually combined with the within which a strategy for engagement could be developed and development of a more formalised bilateral relationship between implemented. the OSCE and China, this would not replace existing bilateral relationships between China and OSCE participating States but Opportunities for constructive engagement with China are most rather complement them. It would potentially also strengthen obvious in the OSCE’s economic and environmental dimension. a set of rules for engagement with China that is more firmly However, while this second dimension can offer a starting point, anchored in existing OSCE commitments. As such, it would engagement in this dimension alone will not be enough to serve as a testing ground for China’s willingness to engage with address the much broader range of implications of the BRI for the OSCE as an equal and would respect the existing norm the OSCE as a comprehensive security organisation and for each consensus within the Organisation and across all three of its and every one of its participating States. dimensions. Hence, the OSCE should initially approach engagement with The success of a hybrid approach to engagement that is China from a position of pragmatism that recognises China’s simultaneously pragmatic and strategic would require careful co- significance as an actor within the OSCE region, takes account of ordination within the OSCE. Implementing this hybrid approach the existing capacity and capabilities of the OSCE, and carefully would in turn contribute to the gradual evolution of an OSCE considers the likelihood of a constructive response by China. China strategy that would set the parameters for engagement through different channels and across multiple issue areas. Such pragmatism is a necessary starting point, but it would not preclude a gradual shift to a more strategic approach. The Engagement with China undoubtedly represents one of the foundations for a more strategic approach to engagement main internal and external challenges that the OSCE will face with China could then be built by prioritising multi-channel in the years ahead. Whether and how the Organisation and engagement with China that creates and embraces opportunities its participating States will rise to this challenge will have a to enter into dialogue with China directly and indirectly through profound impact on its future as the only truly Euro-Atlantic and existing inter-organisational mechanisms, including in co- Eurasian comprehensive security organisation. China and its BRI operation with United Nations Specialised Agencies. are therefore a challenge the OSCE must face, not ignore. Emphasis should also be placed on identifying issues where China and the OSCE and its participating States have manifestly articulated common interests, such as in relation to combating corruption and transnational organised crime, as well as environmental protection, including climate change. 3 Background Papers Bayok, Anastasiya. 2020a. “China’s Responses to EU, US, and Malyarenko, Tatyana. 2020b. “China’s Belt and Road Initiative Russian Perceptions of the BRI in Kyrgyzstan, Tajikistan, in Ukraine.” Hamburg: OSCE Network of Think Tanks and Turkmenistan, and Uzbekistan and to Their Respective Academic Institutions.