The Stanford Center at Peking University (SCPKU), the Center on Democracy, Development and the Rule of Law (CDDRL), and the APARC China Program jointly hosted a workshop on China’s Belt and Road Initiative (BRI) in early March. The workshop, held on March 2 and 3, welcomed researchers from around the world with expertise in the Initiative. Unfortunately, because of the rapidly developing health emergency related to the coronavirus, participants from not only China, but also Japan, were prevented from attending. As described by Professor Jean Oi, founding director of SCPKU and the China Program, and Professor Francis Fukuyama, director of CDDRL and the Ford Dorsey Master's in International Policy, who co-chaired the workshop, the meeting aimed to provide a global perspective on the BRI, consolidate knowledge on this opaque topic, and determine the best method and resources for future research.  

The workshop began with presentations from several of the invited guests. Dr. Atif Ansar from the University of Oxford’s Saïd Business School kicked off the first day by describing not only the tremendous opportunity that the BRI presents to developing economies, but also the serious pitfalls that often accompany colossal infrastructure projects. Pointing out the poor returns on investment of mega infrastructure projects, Ansar examined the frequest cost and schedule overruns, random disasters, and environmental degradation that outweigh the minimal benefits that they generally yield. China’s own track record from domestic infrastructure projects does little to mitigate fear of these risks, Ansar claimed. In response, he urged professional management of BRI investments, institutional reforms, and intensified deployment of technology in BRI projects. Dr. Ansar was followed by Dr. Xue Gong of the S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore. Dr. Gong’s analysis centered on the extent to which China’s geopolitical motivations influenced its outward foreign direct investments (OFDI). Although her research was still in the early stages, her empirical analysis of China’s OFDI inflows into fifty BRI recipient countries from 2007-2018 nevertheless revealed that geopolitical factors often outweigh economic factors when it comes to China’s OFDI destinations.

Participants then heard presentations from Amit Bhandari of Gateway House: Indian Council on Global Relations and Professor Cheng-Chwee Kuik of the National University of Malaysia. Mr. Bhandari’s talk focused on Chinese investments in India’s six neighboring countries, which tend to center more on energy rather than connectivity projects. He first found that the investments are generally not economical for the host countries because they come with high costs and high interest rates. Secondly, he argued that these projects often lacked a clear economic rationale, appearing instead to embed a geopolitical logic not always friendly to India. Professor Kuik, by contrast, provided a counterexample in his analysis of BRI projects in Southeast Asia. He described how, in Southeast Asia, host countries’ reception of the BRI has varied substantially; and how various stakeholders, including states, sub-states and other entities, have used their leverage to shape outcomes more or less favorable to themselves. Kuik’s analysis injected complexity into the often black-and-white characterizations of the BRI. He highlighted the multidimensional dynamics that play out among local and state-level players in pursuit of their goals, and in the process of BRI implementation.

Professor Curtis J. Milhaupt and Scholar-in-Residence Jeffrey Ball, both at Stanford Law School, followed with individual presentations on the role of State-Owned Enterprises (SOEs) in the BRI and the emissions impact of the BRI on climate change, respectively. Professor Milhaupt  characterized Chinese SOEs as both geopolitical and commercial actors, simultaneously charged with implementing Party policies and attaining corporate profits. Chinese SOEs are major undertakers of significant overseas BRI projects, acting not only as builders but also as investors, partners, and operators. This situation, Milhaupt asserted, carries significant risks for SOEs because these megaprojects often provide dismal returns, have high default rates, and can trigger political backlash in their localities. Milhaupt highlighted the importance of gathering firm-level data on businesses actually engaged in BRI projects to better infer geostrategic, financial, or other motivations. Jeffrey Ball turned the discussion to carbon emissions from BRI projects and presented preliminary findings from his four-country case studies. He concluded that, on aggregate, the emissions impact of the BRI is still “more brown than green.” Twenty-eight percent of global carbon emissions may be accounted for by BRI projects, Ball asserted, underscoring the importance of the BRI to the future of global climate change.

The day concluded with presentations by  Michael Bennon, Managing Director at the Stanford Global Projects Center, and Professor David M. Lampton, Oksenberg-Rohlen Fellow at the Freeman Spogli Institute for International Studies. Bennon first presented findings from two empirical case studies of BRI projects and then went on to describe how the BRI is now practically the “only game in town” for infrastructure funding for developing countries. Lengthy environmental review processes at Western multilateral banks have turned the World Bank, for example, from a lending bank into a “knowledge bank,” he argued. He also highlighted that, in general, economic returns on BRI projects for China are very poor, even though recipient countries may accrue macroeconomic benefits from these projects. Finally, Professor Lampton turned the discussion back to Southeast Asia, where China is currently undertaking massive cross-border high-speed rail projects through eight ASEAN countries. He described how each host country had varying capacity to negotiate against its giant neighbor, and how the sequential implementation of these cross-border rail projects also had varying impacts on the negotiating positions of these host countries. BRI played out differently in each country, in other words, eliciting different reactions, push-backs and negotiated terms.

The second day of the workshop was dedicated to working toward a collaborative approach to future BRI research. The group discussed the key gaps in the existing research, including how to know what China’s true intentions are, how to measure those intentions, who the main players and their interests in both China and the host countries are, and even what the BRI is, exactly. Some cautioned that high-profile projects may not be representative of the whole. Participants brainstormed about existing and future sources of data, and stressed the importance of diversifying studies and seeking empirical evidence.

“I learned long ago to never predict anything about North Korea.”

So began the keynote address by Anna Fifield, veteran journalist and winner of the 2018 Shorenstein Journalism Award. Speaking at the Award’s seventeenth annual panel discussion “How North Korea Is, and Isn’t, Changing under Kim Jong Un,” Fifield, the Beijing bureau chief for The Washington Post , shared some of the many observations she has made since she first began covering North Korea in 2004.

Two other North Korea experts joined Fifield at the panel: Barbara Demick, New York correspondent of the Los Angeles Times, formerly head of the bureaus in Beijing and Seoul, and the 2012 Shorenstein award winner; and Andray Abrahamian, the 2018-2019 Koret Fellow, whose previous role as executive director of Choson Exchange and other projects took him to the DPRK nearly 30 times. Yong Suk Lee, deputy director of the Korea Program at Shorenstein APARC, chaired the panel.

The presence of another person—the Dear Respected Comrade himself—was also very much felt in the room, if only in spirit.

Barbara Demick (center) speaks at 2018 Shorenstein Journalism Award.

Survival at any cost

At various points throughout its 70-year history, experts have predicted the demise of the "Hermit Kingdom." Fifield herself admitted to occasionally thinking along such terms.

And yet the country continues to prove them wrong.

“[D]uring my first stint covering North Korea, [I] just couldn’t envisage any way that this regime could survive the death of the second-generation leader and the transition to a third generation,” she said. “Kim Il Sung had created a myth of revolutionary heroism around himself, and a myth of divine selection around his son, Kim Jong Il. How could the North Korean people, who no longer live in a Hermit Kingdom, tolerate a third leader called Kim, let alone one who had no highly exaggerated or plain fictional back story?”

“Yet," Fifield continued, "here we are. Next month, Kim Jong Un will celebrate seven years in charge of North Korea.”

One prominent reason for the nation's recent survival, and an idea put forward by Fifield and supported by her co-panelists, was the development of markets in the communist state.

For decades, North Korea operated under the centrally-planned communist model. Even as China pursued reform and as the Soviet Union collapsed, the North Korean state maintained its central position in the economy.

However, following the famines of the 1990s, the state had no choice but to allow market activity to develop. Under the third Kim markets have continued to grow.

“There are now more than 400 established, state-sanctioned markets in North Korea,” said Fifield. “That’s more than double the number that existed when Kim Jong Un took over at the end of 2011.”

A side effect of this nascent market economy has been the emergence of new elites in the purported “classless” society. Fifield described the development of a capital within the capital—“Pyonghattan”—where newfound elites purchase clothes from western retailers and undergo plastic surgery for their eyelids.

Abrahamian concurred, noting that Kim Jong Un made sure to coddle this upper middle and upper class in Pyongyang. "The old way of doing that under Kim Jong Il and his father, Kim Il Sung, was very much through a loyalty and gift economy," Abrahamian said. "Money was not necessary in the old North Korea. Now it is. You do need it to get your daily necessities, and if you’re lucky enough, the products [from the “outside world”] help you to have a more pleasurable life through the market.”

At the other end of the spectrum, North Koreans turn to the markets not out of entrepreneurial zeal, but out of a need to survive. As an example, Fifield described meeting a mother and daughter living near the border with China. The mother took her daughter out of school in order to raise pigs and make tofu. Before dawn, they trekked into the mountains to tend crops of corn. It was a back-breaking existence. "If they were lucky, they made enough money each day to buy food for themselves," Fifield said. "Many days, they did all this to break even."

Andray Abrahamian responds to a question from the audience.

A smart tyrant not to be underestimated

The panel continued to focus on the man currently at the helm in North Korea.

“When I returned for my second go at covering the Koreas, I wanted to figure out how he’d done it," said Fifield. "How had this podgy young upstart with no qualifications other than being born into this family managed to take control of this regime…? How had he managed to keep intact this anachronistic system that should have died years, even decades, before?”

Fifield emphasized that her comments did not equate to admiration for Kim Jong Un. “He’s a tyrant,” she reminded the room. “But he’s a smart tyrant who’s been operating in a calculating way. To treat him as a joke or a madman is to underestimate the threat of him.”

“Kim Jong Un has not allowed these markets to flourish because he cares about the people and their wellbeing,” Fifield continued. “He has demonstrated time and time again that he doesn’t care at all about the people.”

“There’s only one thing he cares about and that is staying in power.” 

Demick cautioned further against over-estimating the positive impact of market development on life in North Korea. “The people Anna interviewed for her groundbreaking series in 2017 in The Washington Post were disgusted with the system,” said Demick. “With the income inequality, with the corruption, with the controls.”

“For them, what’s the worst thing about North Korea? Simply being born there.”

The panelists participated in a lively audience Q & A.

A celebration of journalism

The Shorenstein Journalism Award, which carries a cash prize of $10,000, recognizes accomplished journalists committed to critical reporting on and exploring the complexities of Asia through their writing. It alternates between honoring recipients from the West, who mainly address American audiences, and recipients from Asia, who pave the way for freedom of the press in their countries. Established in 2002, the award honors the legacy of APARC benefactor Mr. Walter H. Shorenstein. A visionary businessman, philanthropist, and champion of Asian-American relations, Shorenstein was dedicated to promoting excellence in journalism and a deeper understanding of Asia.

While the reporting of each year's recipient focuses on different regions and areas of interest, the award consistently recognizes quality journalism. In his welcome remarks, panel chair Yong Suk Lee stated, “In the face of current attacks on journalists and on the truth in the United States and the world, [Shorenstein APARC is] even more committed to excellence in journalism, and to defending independent and free media."

Fifield’s co-panelists spoke at length about how deserving she was of the award. Before their first meeting in Seoul, Abrahamian confessed to harboring skepticism about Fifield. “I had read some of her work before and knew she had analytical chops, but thought to myself that journalists are always fighting for the next scoop.” However, after talking to Fifield for only a few minutes, Abrahamian readily dropped his guard. “I told myself, 'This is a special journalist; she's got something.’"

A previous recipient of the Shorenstein Journalism Award herself, Demick was equally enthusiastic in her praise of Fifield. “For the last four years, [Anna] had owned the North Korea story like no other journalist I’ve met, including myself.”

Fifield was presented with the Shorenstein award and prize at a private evening ceremony.

Watch Fifield’s keynote speech below. An audio version is availalbe on our SoundCloud channel.