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.

Image

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.

Does the current trade-talk stalemate between the U.S. and China portend a larger confrontation? Oksenberg-Rohlen Fellow David Lampton says yes, and shared with VOA Asia reasons for why the two countries find themselves so much at odds. Listen below (first 8 minutes):

Widespread cultivation of oil palm trees has been both an economic boon and an environmental disaster for tropical developing-world countries. New research points to a more sustainable path forward through engagement with small-scale producers.

Nearly ubiquitous in products ranging from cookies to cosmetics, palm oil represents a bedeviling double-edged sword. Widespread cultivation of oil palm trees has been both an economic boon and an environmental disaster for tropical developing-world countries, contributing to large-scale habitat loss, among other impacts. New Stanford-led research points the way to a middle ground of sustainable development through engagement with an often overlooked segment of the supply chain (read related overview and research brief).

"The oil palm sector is working to achieve zero-deforestation supply chains in response to consumer-driven and regulatory pressures, but they won’t be successful until we find effective ways to include small-scale producers in sustainability strategies,” said Elsa Ordway, lead author of a Jan. 10 Nature Communications paper that examines the role of proliferating informal oil palm mills in African deforestation. Ordway, a postdoctoral fellow at The Harvard University Center for the Environment, did the research while a graduate student in Stanford’s School of Earth, Energy & Environmental Sciences.

Image

An oil palm plantation in Cameroon (Image credit: Elsa Ordway)

Using remote sensing tools, Ordway and her colleagues mapped deforestation due to oil palm expansion in Southwest Cameroon, a top producing region in Africa’s third largest palm oil producing country (read about related Stanford research). Contrary to a widely publicized narrative of deforestation driven by industrial-scale expansion, the researchers found most oil palm expansion and associated deforestation occurred outside large, company-owned concessions, and that expansion and forest clearing by small-scale, non-industrial producers was more likely near low-yielding informal mills, scattered throughout the region. This is strong evidence that oil palm production gains in Cameroon are coming from extensification instead of intensification.

Possible solutions for reversing the extensification trend include improving crop and processing yields by using more high-yielding seed types, replanting old plantations, and upgrading and mechanizing milling technologies, among other approaches. To prevent intensification efforts from inciting further deforestation, they will need to be accompanied by complementary natural resource policies that include sustainability incentives for smallholders.

In Indonesia, where a large percentage of the world’s oil palm-related forest clearing has occurred, a similar focus on independent, smallholder producers could yield major benefits for both poverty alleviation and environmental conservation, according to a Jan. 4 Ambio study led by Rosamond Naylor, the William Wrigley Professor in the School of Earth, Energy & Environmental Sciences and a senior fellow at the Stanford Woods Institute for the Environment and the Freeman Spogli Institute for International Studies(Naylor coauthored the Cameroon study led by Ordway).

Using field surveys and government data, Naylor and her colleagues analyzed the role of small producers in economic development and environmental damage through land clearing. Their research focused on how changes in legal instruments and government policies during the past two decades, including the abandonment of revenue-sharing agreements between district and central governments and conflicting land title authority among local, regional and central authorities, have fueled rapid oil palm growth and forest clearing in Indonesia.

They found that Indonesia’s shift toward decentralized governance since the end of the Suharto dictatorship in 1998 has simultaneously encouraged economic development through the expansion of smallholder oil palm producers (by far the fastest growing subsector of the industry since decentralization began), reduced rural poverty, and driven ecologically destructive practices such as oil palm encroachment into more than 80 percent of the country’s Tesso Nilo National Park.

A worker in East Kalimantan, Indonesia, loads palm fruit for transport to a factory that will process it into palm oil (Image credit: Joann de Zegher)