Greg Shaffer and Henry Gao have a new paper called "A New Chinese Economic Law Order?" Here is the abstract:
China is incrementally developing a new, decentralized model of trade governance through a web of finance, trade, and investment initiatives involving memorandum of understandings, contracts, and trade and investment treaties. In this way, China could create a vast, Sino-centric, regional order in which the Chinese state plays a nodal role. This model mirrors China’s internal development strategy. But now Chinese state-owned and private enterprises are internationalized and integrated within Sino-centric global production chains. It is a hub and spokes model, with China at the hub. In this paper, we first examine China’s export of its infrastructure-based development model (Part A) before turning to its creation of a complementary web of free trade and investment agreements (Part B), and an indigenous innovation policy (Part C). The paper theorizes and empirically traces how this forms part of the broader evolving ecology of transnational trade legal orders.
And here is an excerpt:
First proposed by President Xi Jinping in 2013, the Belt and Road Initiative (BRI) is an ambitious Chinese program to develop new markets, enhance the security of China’s access to resources, and facilitate the internationalization of the Renminbi, China’s currency, while building new institutions and governance mechanisms. Formally, the BRI’s objectives are to build five types of links among countries lying along BRI industrial corridors: (1) To enhance “policy coordination”; (2) To improve infrastructure “connectivity”; (3) To reinforce “unimpeded trade; (4) To move forward with “financial integration”; and (5) To create “people-to people bonds.” In the process, the BRI serves to promote greater economic reliance on China through regional and global economic integration and thus enhance Chinese influence and leverage. Some of these projects facilitate China’s projection of military strength, such as through providing the Chinese navy with access to deep water ports. More generally, China aims to project soft power through such financing, which is not subject to the conditionalities imposed by the West. Many countries view its exercise of power as more subtle than that of the United States, even notwithstanding the Trump administration.
The BRI comprises the land-based Silk Road Economic Belt, which links China with Europe through Central and Western Asia, and the sea-based 21st Century Maritime Silk Road, which connects China with Southeast Asian countries, Africa and Europe. The initiative covers around sixty-five countries in three continents, 14 with a total population of around 4.4 billion, or sixty-three percent of the world population. These countries account for 29% of global GDP and 23.4% of global merchandise and services exports. The project has often been compared with the post-WWII Marshall Plan by the United States, adopted as a response to a growing Cold War with the Soviet Union, but the BRI dwarfs it in size. The Marshall Plan provided only U.S. $13 billion to six European countries, which is equal to U.S. $150 billion today. In contrast, the estimated price tag for the BRI is between one to eight trillion U.S. dollars, which is between six to fifty times larger.
China is building the BRI through packages of bilateral arrangements and agreements. They involve customs clearance, investment promotion and facilitation, trade and investment treaties, dispute settlement mechanisms, visa agreements, memorandums on standardization, special economic zones, special tax regimes, academic and student exchanges, and so forth. Each economic corridor in the BRI adopts a different package, subject to local negotiations and adaptation to different geoeconomic conditions, but the modalities are similar.
And this is from the conclusion:
Over time, China appears to be creating a hub-and-spokes system of trade and investment agreements, with the ability to possibly combine them, formally or in practice, into a giant, regional, Sino-centric economic order. If this happens, the Chinese state-led finance-trade-investment model will rival the liberal, multilateral legal order that the United States long led, but of which it has since grown wary. This could split the world into competing trade blocs and a new geoeconomic variant of the Cold War. Such a scenario could make an empty shell of the multilateral trading system that the United States erected following the end of the (first) Cold War.
Your view of the BRI is probably affected by your view of infrastructure spending more generally. Many people see it as desperately needed spending on important public goods. But the free market libertarian in me thinks that, in practice, it will mostly be a waste of money. As a result, when I hear about the BRI, my first thought is that it will be a mistake for China to spend so much of its money this way, as a lot of these investments will go badly and create resentments on both sides. In contrast, other people worry about growing Chinese influence around the world. And in contrast to that, Greg and Henry are not expressing a worry, but simply describing a possible separate Chinese sphere of economic influence.
I thought this passage was particularly interesting:
China’s is not a completely new model. It has its forebearers with those of former colonial empires that built ports, railroads, roads, and bridges around the world to extract natural resources and create new markets for their manufactured products. Westerners made their fortunes in the process, as will many Chinese today
I'm not sure the analogy to colonialism is a perfect one, but nevertheless, to me it suggests a possible bad ending for all of this. But in time we will find out what it all means.
