In Beijing this weekend the big happening is China’s second “Belt and Road Forum.” A host of global luminaries—37 heads of state, International Monetary Fund managing director Christine Lagarde, United Nations Secretary General Antonio Gutierrez, and delegates from more than 150 countries—descended upon the capital to discuss president Xi Jinping’s signature initiative to expand transit, telecommunications, and trade links between China and countries in Asia, Europe, East Africa, and Oceania.
The tone of this year’s meeting is far less triumphant than that of the first forum, held in 2017. While visiting Beijing last week, I was struck by the conciliatory language of slogans on propaganda banners and billboards touting the gathering: “Peace and Cooperation; Openness and Inclusiveness; Mutual Learning and Mutual Benefit.”
In a speech to the confab Friday, Xi sought to allay concerns that the initiative will saddle cooperating countries with unmanageable debts, create a one-way street for Chinese exports, and damage the environment. “We must adhere to the concept of openness, greenness and cleanliness,” he declared. “Operate in the sun and fight corruption together with zero tolerance.”
Global press reports have portrayed Xi’s new rhetoric as part of a “repositioning” or “retooling” of the belt and road initiative. Some have called it an exercise in “damage control.” If nothing else, it offers a fascinating case study in the ability of Chinese leaders to change course without actually acknowledging they were headed in the wrong direction.
Xi unveiled the belt and road project in a speech in Kazakhstan in 2013. The initiative envisioned more than a trillion dollars of investment strewn across more than 60 countries, with the “belt” following the ancient Silk Road route from China to Europe, and the maritime “road” stretching from China to Southeast Asia and East Africa. The idea was to export China’s infrastructure-driven development model with Chinese finance and developers partnering with local and international enterprises on transport and energy projects at vast scale.
And yet, in one market after another, the belt and road project has run into trouble. In Malaysia and Pakistan, newly elected governments have sought to renegotiate terms of Chinese loan packages. Myanmar and Nepal are balking at proposals for China to build dams, ports and power plants. In 2017 Sri Lanka, struggling to meet debt payments, ceded China control the port of Hambantota. Trump officials have charged the belt and road program is part of a broader Chinese effort to create “debt traps” to control smaller economies.
At this year’s forum, Chinese and non-Chinese speakers alike affirmed the importance of making sure belt and road projects are “sustainable”—not just financially but also in their impact on the environment. Lagarde warned explicitly that belt and road projects must be green.
The environmental impact of belt and road projects is among the issues we’ll be discussing at the Fortune Global Sustainability Forum in Yunnan province this September. I’ll join Fortune colleagues and senior business executives to debate China’s role in tackling the world’s many environmental challenges at dinners in New York (May 7) and San Francisco (May 9). These affairs are invitation-only, but we have a few places left at the dinners and welcome CEO Daily readers.
| Clay Chandler | |
| @claychandler | |
| clay.chandler@fortune.com |
Innovation and Tech
Who owns Huawei? A report published by two academics has called into question Huawei’s ownership structure. Huawei claims the company is 100% employee-owned but the report says the company is actually 1% owned by Ren Zhengfei and 99% owned by a holding group that manages the employees shares. That’s not revelatory, Huawei reveals as much in its annual reports, but who controls the holding group is less clear. The report concludes that, at any rate, it is not the employees who are in control. The murkiness of Huawei’s corporate structure has fuelled suspicion that the company is state-owned. Journalists have previously suggested the company go public to assuage such fears but Huawei has no plans to do so. New York Times
What a way to make a living. Debate has swirled for the last couple of weeks regarding China’s “996” work culture – 9am to 9pm, 6 days a week – after an anonymous user started a protest against the working hours on GitHub. The 996 schedule contravenes China’s labor laws. Now a group of 996 opponents are scheming to send Alibaba chairman Jack Ma printed hard copies of China’s labor law after he publicly advocated the 996 ethic and criticized those who refuse to comply. Besides this prank, it’s not clear if the anti-996 movement will lead to much. State media have criticized companies that encourage 996 schedules, but the economy can ill-afford to have people working less. TechNode
Still ticking. TikTok is no longer banned in India. The short video app was blocked earlier this month after a ruling was issued by the Madras High Court, condemning the app for allowing the spread of pornography. The court has reversed the ruling after Beijing Bytedance, TikTok’s owner, agreed to implement measures addressing the court’s concerns. Back in China, Bytedance and Baidu are both suing each other for stealing content. Financial Times
Economy and Trade
Saving China’s bacon. China’s African swine fever epidemic can no longer be ignored. The disease has been spreading across China’s pig farms since last August and is devastating stocks. Some estimates say China could lose 200 million pigs to the disease, or consequent culling – almost triple the total U.S. pig stock. Pork prices jumped 36% in the first week of April and as the meat grows scarce, prices of alternative meats will rise too. China’s poor handling of the epidemic, which it first tried to cover up, and the country’s lax safety measures are stoking fears the epidemic could spread abroad. One upside: the outbreak is spurring vaccine research. By the way, the disease isn’t harmful to humans. Bloomberg
In Case You Missed It
‘Avengers: Endgame’ Sets Opening-Day Record in China Bloomberg
Britain strikes an artful compromise on Huawei and 5G The Economist
Is job loyalty on the wane in Chinese workplaces? Week in China
How the U.S. Can Prepare to Live in China’s 5G World IEEE
In College Admissions Scandal, Families From China Paid the Most WSJ
Politics and Policy
Game on. The State Administration of Press and Publication (SAPP) – a freshly minted regulatory body that was born of a complex reshuffle of previous admin bureaus last year – released a new set of regulations for computer games. Game approvals were on hold for nine months last year while the reshuffle was underway, stripping Tencent and other game distributors of their main source of income. Under the new rules, games will not be allowed to display dead bodies or pools of blood, poker and mahjong games are banned, and so are games focusing on political intrigue in dynastic courts. TechCrunch
Occupy over. Seven key leaders of Hong Kong’s Umbrella Movement, a three-month long protest that occupied the city’s central throughways in 2014 while campaigners demanded universal suffrage, were sentenced to prison this week, found guilty of “public nuisance” charges. Three of the seven were given suspended sentences and so likely won’t see prison time, while two will serve eight months and another two will serve 16 months. An eighth protest leader was sentenced to community service. South China Morning Post
