 Thank you. Let me welcome you back to another of our seminar webinar. This is obviously a webinar format that we have and I'm delighted that today we have a, I hope the speaker will forgive me for what I'm going to say next, a bright young emerging scholar with excellent scholarship to speak on an interesting and important subject, which is about me inventing the bell and roll. Now, before I introduce the speaker, just let me remind you that you will be able to raise questions or make comments via the Q&A box. And the Q&A box is the only function that you should use to raise your questions. It would be helpful to me if you could provide some information about yourself so that I will be able to choose and pick questions more effectively. But if you would like to stay anonymous, if you say so at the start of the Q&A, I will respect your wish to stay anonymous. And I will not without either your name or other information that will reveal your identity. But obviously, if you are comfortable to reveal your identity, please do so. For this webinar, our speaker is Eid Friedman, a postdoctoral research fellow at the Columbia, Harvard, China, and the World Programme, as well as at the Harvard Belford Centre Arctic Initiative. He is also a non-resident research fellow at the China Maritime Studies Institute at the United States Naval War College. Eid was educated at Harvard, Cambridge, and Oxford where he earned his degree. I think fairly recently within the last 12 months or so. He is already the author of an interesting book called One Belt, One Road, Chinese Power Miss the World, which was published by Harvard University Press in 2020. He has also published essays in the foreign affairs, the Atlantic, the Economist, the Wall Street Journal, and some other publications. Now with that, let me hand over to the speaker. And I will come back and obviously invite your questions and comments after Eid has a chance to make and complete his presentation. Over to you, Eid. Well, thank you very much, Steve, for that kind introduction and to the SOAS team for hosting me and to all of the audience members here for zooming in. I'm here to speak to you today about the reinvention of the Belt and Road Initiative, Xi Jinping's legacy project, and one of the most discussed but also, dare I say, misunderstood policy questions in contemporary China. I'm going to show you probably two ambitious number of slides in the hour or so allotted to me. So, Steve, please prompt me with a message if I'm dawdling. And I hope that we can run through the more fun part of the material first. I'm going to show you a bit about the conceptualization of the Belt and Road concept, as I think it was packaged for domestic consumption in the 2013 to 2017 period. And then we'll talk a little bit in the second part about what happened when the rubber met the road, when China's narratives about achieving a national rejuvenation by reinventing the Silk Road confronted the hard realities of debt finance in frontier markets. And then we'll conclude by asking whether the Belt and Road is alive or dead or on life support or something else. If you've zoomed into this talk, it means you probably have a fair sense of what the Belt and Road is. So I needn't waste too much time reminding you. Xi Jinping announced it on a trip to Kazakhstan just months after taking power in 2013. In 2017, four years later, it was written into the National Party Constitution at the 19th Party Congress alongside Xi Jinping thought. Pretty clearly Xi Jinping has tied his own name to this masthead and his own reputation is to some degree at stake in the progress of the Belt and Road overseas. But over the last few years, as particularly since the pandemic, if we could allow ourselves to be a bit cheeky, many people have said that the Belt and Road is dead. Chinese flows of new credit outwards to developing countries have slowed to a trickle. In fact, in 2019, China switched to becoming a net exporter to a net importer of debt payments, receiving more back in interest rate and interest payments than they were issuing in new loans. The propaganda apparatus has cooled in terms of its how vocally it is pitching the Belt and Road overseas. Xi Jinping mentioned it by name only twice in his address at the Party Congress this month, as opposed to five times in the same speech five years ago. And so I would begin by framing the question this way. If you've ever seen the Monty Python sketch in which John Cleese goes into a pet store and tries to return a parrot and he says, it's not dead. Please believe me, it's only sleeping. So the question I'll ask for to frame this discussion today is, is the Belt and Road dead or is it only sleeping? The way I would answer is that we need to decompose what the Belt and Road was in the first place before we can make diagnosis and write the coroner's report. And that's because the Belt and Road was always about much more than just building infrastructure. It's a historical narrative or rather a loosely collected set of narratives about what the ancient Silk Road was, what it meant to China, what role Chinese political leadership had in developing it. And it has also a present day ideological function in terms of how it frames Xi Jinping's role and his agency in the rejuvenation of Chinese glory and power on the world stage. It's also about more than ideas because it's about, it's a uniquely Chinese, dare I say a Maoist style of implementation, one which is administered not so much by top down micromanagement, but by the catalyzation of a broad based domestic political mobilization from the grassroots up in which individual companies, universities, think tanks, municipal officials, provinces, state-owned enterprises, and so forth have been encouraged to think about how they themselves could contribute to the Belt and Road concept. And I think we need to keep this in mind because if we imagine that the Belt and Road is just a top down initiative for building projects overseas, we're going to miss what was so salient about it in the first place and why Xi Jinping believed it was necessary for consolidating control in his first years in power. I'm going to push through this section relatively quickly. This is drawn from the book, but I think it's a point that bears hammering home, the extent to which the Belt and Road in its early years was used by propagandists to extend Xi Jinping's hero cult. So briefly, the historiography of the Belt and Road inside China, excuse me, of the ancient Silk Road inside China has not credited its formation to a specific ruler. In fact, if you go back and you look at textbooks, Chinese students used to learn for decades that the Belt and, excuse me, that the Silk Road, the ancient Silk Road, was something that emerged organically over hundreds of years after the death of Han Udi, one of the glorious emperors of the Han dynasty who began the process of expanding Chinese power westwards. Han Udi's achievements included fighting Korea, taking territory that belonged to Vietnam, and which is now a Fujian province and Guangdong and Guangxi provinces, and also beginning the process of conquering the Husi corridor through Gansu that would lead his successors to establish Chinese garrisons or imperial garrisons in modern day Xinjiang. The notion that the ancient Silk Road was Han Udi's idea, that it was actually a political initiative that was the brainchild of the leader, didn't emerge until the 20th century. When it was conceived by this man, a Nazi sympathizing and highly eccentric Swede named Sven Hedden who tried to popularize a fake alternative history of the origins of the Silk Road to arrange for a political commercial partnership between Chiang Kai-shek's nationalists and the Nazi government in Germany. This failed, but I go into more detail about this. It's in the book. This narrative that the ancient Silk Road was actually a political invention of Han Udi was appropriated in Chinese historiography, although at first Chinese historians were hostile to it because it had no basis in fact. It wasn't until the early years of Xi Jinping's rule, I believe it was in 2015, when the National Ministry of Education revised the history textbooks and they changed some of the fundamental facts about what the origins of the ancient Silk Road supposedly were to bring them into closer alignment with what Sven Hedden had suggested and made Han Udi seem like the mastermind, the strategic mastermind. This was developed in textbooks, so rather than showing you a chart before and after and going through a number of passages, I'm going to show you selections from a documentary produced by CCTV in 2016 that goes through the same fundamental story. This documentary, I argue in the book, is the most authoritative explication of what the Belt and Road is supposed to be. I think the way you know this is that it clearly had high level support from the foreign ministry because they have foreign VIPs. They have Henry Kissinger, Kevin Rudd, even Vladimir Putin, former leaders of several European countries, other heads of state. This was done with an incredibly high budget, six episodes an hour each. They go all over the world, but the first episode, which is called Common Fate, goes into the history of the ancient Silk Road and ties it to Xi Jinping. In the next six or seven minutes, let me quickly walk through what this historiographical narrative is. For those of you who may have grown up in China and studied the history of the ancient Silk Road in textbooks, I'd be very interested to hear your reactions, whether this jibes with what you learned in school. The argument is essentially, as we've discussed, that Han Udi has this idea. He deputizes his subject, the loyal Zhang Xian, to go as an explorer into the Western regions and see what can be found there, but really to punch away through Central Asia and reach Europe. We're told that together, the master strategist, the leader, and the loyal practitioner, the loyal subject, they're able to bring about a period of unparalleled power and wealth and unity in China. So we're told that Zhang Xian can punch through Central Asia. All of a sudden, Chinese products, especially silk, reach Europe, and we're shown these Westerners and Togus who think this is the greatest thing since sliced bread. They just want to get access to Chinese products. And so for a thousand years, Eurasia is kept peaceful and harmonious because there's Silk Road trade, and the trope here is camel trains through the desert. But then we're told around the year 1500, world history takes a wrong turn because the Westerners get greedy, they want a faster way to China, and they accidentally in the process discover the new world, figure out how to extract its resources, and the world history takes a dark turn because this concept of oriental wisdom that China has brought to the world, an idea of win-win cooperation through trade is replaced by a Western European model of colonialism and we win, you lose. We're told that this leads to contradictions in chaos, destruction, war, climate change, and we're shown pictures of the United States in chaos. It's a mess. So finally, we're told the lesson of the story, which is that Dongfang Zhihui is better than flawed Western scientifically based ways of doing things. So in 1949, so the story goes, world history takes another turn because the Chinese people stand up and begin to offer an alternative by restoring a political system that is based on oriental wisdom. So the third world at Bandung in 1955 looks to China for leadership and China is committed to following through, and first it just has to develop itself. So we skip over the rest of the Maoist period, no mention of the Great Leap Forward or the Cultural Revolution, and all of a sudden it's 1978. Reform and opening up has begun, China is scaling up technologically, and this is the part of the movie that's like the montage where the exciting music is playing, and in 30 seconds all the hard work gets done, and they've gone from trying to build a car with wooden mallets to building it with robots and eventually airplanes, outer space. China has caught up technologically. So we're back to the rest of the world, the developing world, asking China to share its wisdom and experience, and the series draws on tropes, they like little girls who were cute and talk about how they have no opportunity where they come from, but if China can come and build a railway, they can take the fast train and see what's out there. So China can bring connectivity to places that are not connected, and can bring Chinese technology, Chinese infrastructure, access to the Chinese market to enable these people wherever they live to achieve their dreams. And of course, if this little girl named Karina in Kyrgyzstan wants a railway, China can do that. So this is what China can offer, but what is China getting in return? Well, remember that this series is pitched to a Chinese domestic audience. I'm showing you clips with screenshots taken from a dubbed version by CGTN, but the text of the narration is the same. So this is a Mongolian herdsman named Maktel. We're told he lives a, quote, primitive existence on the grassland. His village has intermittent electricity because the electrical transformers don't work, and he makes friends with engineer Wang, a Chinese Belt and Road construction worker who is always willing to drive across the border even on a Sunday to fix the electrical transformer when it goes out and plunges the village into darkness. So Wang is invited to festivals and gatherings in the village and people toast him and say, thank you for bringing light to us. Thank you for bringing us electricity. So that really is the pitch to the domestic Chinese audience. It's not just that the great glorious achievement of Hanu Di needs to be resurrected it's that the rest of the world is asking for it. And in the process of returning to its rightful place, China is going to learn to win friends and influence people all around the world and those individual Chinese workers who help in the rejuvenation of the Silk Road concept are going to enter the history books just as Jiang Chen did. They're going to be celebrated, memorialized for their indispensable role in building the nation. So that is the narrative. There's another aspect of Belt and Road narrative that we need to dispense with quickly, which is that it consists of two roots. So the initial Belt and Road materials that came out this is a map from Tsinghua that I've redone to be in English. Supposedly consisted of the one Belt, the Silk Road Economic Belt, which connects China to Europe through Central Asia and then the Maritime Silk Road, which connects China to Europe via the Indian Ocean and then through the Straits of so through the South China Sea, the Straits of Malacca, the Indian Ocean, the Suez Canal, and the Mediterranean. In reality, and this was established very quickly by people who studied the Belt and Road, that was never really accurate. The Belt and Road is a global constellation of assets, mostly coastal, that are arranged in a loose network and they extend far beyond Eurasia. This was immediately clear when Latin American countries began to sign up. We've now seen brand extensions of the Belt and Road to outer space to the South Pacific. So this has no regional limits and the purpose is about connectivity in a network sense. It's not to do with roots. When this was pitched, I think it's easy to underestimate how attractive partner countries found it. Because from the perspective of a country, take Sri Lanka, which had its own domestic problems, its own regional positionality, its own regional threats. Sri Lanka is right off the coast of India. India has been interfering with Sri Lankan domestic politics since time immemorial. This offered an opportunity to make friends with China by striking some deals, to get relatively easy and favorable financing, to break ground quickly, to get economic rewards by the time of the next election, and then in theory, a down payment on a broader political economic partnership in which both parties could get rich. But the problem was that China, from the beginning, in order to go into these places, had to take on massive financial exposure to some of the riskiest economies in the world. Don't be afraid of this chart. The Y-axis is credit ratings, as done by S&P or Fitch. Essentially, the higher is good, lower is worse. If you get down to the sea level, your junk grade. So the blue line here is essentially the average credit rating of the whole basket of emerging market developing countries. And the red line is the average credit rating of China's portfolio of loans. What you can see is that through around 2010, the two were pretty much the same. China's lending was essentially roughly no more or less risky than the average debt that any old developing country would have. But this changed around, say, 2012, 2013, when Xi Jinping announced the Belt and Road, when the lending binge began. So the point of this chart is that China was actually lending not only to developing countries, but to among the riskiest of the developing countries. And that meant that it was putting a lot of skin in the game and exposing itself to broader macroeconomic conditions that it couldn't control on top of all of the risks that came with these individual projects. And this is going to be the theme of the second part of the talk. The big decisions that China made in the early days of the Belt and Road, which are only right now beginning to show their effects. This is one of my favorite charts. I think if you take away one chart from this talk, it would probably be this. This is the number of multi-billion dollar Belt and Road loans that were issued by Chinese banks. As you can see, there was a massive run-up in the first couple of years to 2015. And then for the last seven years now, China's mega loan projects have actually been declining. Now, all of these projects that were initially constituted and initiated have to be brought to completion. So there is all kinds of problems that have yet to reveal themselves. But a decision was clearly made around 2016 that more care has to be put into doing due diligence on these projects before money goes out, because China was taking on a huge amount of risk. And while China wanted to rebuild the ancient Silk Road and get all the benefits that I described in the first part of the talk, it had to balance that with some basic financial prudence. The problem is that, as you can see, with the projects that were initiated between 2012 and 2015, as those made their way through the pipeline and more and more failed to pay for themselves, the seeds of a debt crisis had already been planted. This is data from Horn, Reinhardt, and Trebesh, who have done some fantastic data collection on this issue, specifically about the share of Chinese loans that are in distress. It's not always easy to calculate this because a large share of Chinese loans are hidden. They're off-balance sheet. They're not reported. Sometimes they're not even fully understood by the finance ministers of these countries, because they were taken out by predecessors, hidden on the balance sheets of state-owned enterprises or other things. But as you can see, between, say, 2014 and 2018, the share of Chinese loans that were two borrowers in distress quadrupled. And by 2018-2019, when Xi Jinping was really beginning to put the screws on and began to use the phrase high-quality development when talking about Belt and Road projects, it was already clear that a large number of these historical loans in the portfolio were not going to be repaid. We're going to have to be restructured. And then came COVID. The combination of COVID, Russia, Ukraine, the commodity price spike, inflation, all of these issues have turned what was a relatively small and contained problem into a general one across emerging markets. And the question now is what can China do? And what can the West do, or Western institutions, the Paris Club, the IMF, in light of the fact that basically every emerging market out there has debts, which at some point are going to have to be restructured? We don't have good data, unfortunately, up-to-date data on who are the most indebted countries to China post-pandemic. But we do have these amazing data from Carmen Reinhart from 2017. And even these will give you a sense that you had a number of countries, particularly in sub-Saharan Africa, the South Pacific, and to a lesser extent Latin America and the Caribbean, which owed in excess of 20% of their GDP to China. And I would also add that in the months and years following the pandemic, China's responses have been unhelpful because China has been put in a position where it has to prioritize domestic concerns. The most obvious has been the zero COVID policy, which has caused travel across China's external border to tank. That has made it very difficult for Chinese business people to go out and vet new projects. It's made it difficult for them to go to assess progress on existing projects. It's made it difficult for foreign countries to come to China and pitch new deals. It's created huge macroeconomic problems for countries, especially in the Pacific, in Southeast Asia, for example, that are very dependent on Chinese tourism. And it's caused a broader economic slowdown in China, which has suppressed Chinese demand. And that too has hurt many of China's trade partners. It's very hard to disentangle all of these effects, but suffice it to say that they're compounding, they're layered on top of each other, and they're making this preexisting debt problem even worse. Then there's geopolitics. So China has been trying to slowly divest itself of some of its holdings of U.S. dollars. This is a bit of a technical point, so I won't linger too long on it, but I think it's significant. Ten years ago, we thought that China was holding on to U.S. treasuries because it wanted leverage over the United States to maybe dump them in a time of crisis. And in a sense, the whole Belt and Road scheme, from a financial point of view, was a hedge because China lent this money in U.S. dollars, and it expected that it was going to get in return a cash flow in U.S. dollars. But what we've seen is it's become clear that that cash flow will be much smaller than China had initially anticipated. And at the same time, China has been winding down its holdings of treasuries to diversify its foreign exchange reserves across other currencies. And that's to make China less exposed to the United States financial risk, not the other way around. And all of this indicates, I think, a turning of Beijing's attention and focus and priorities away from being a big player in the dollar financial system, which is what the Belt and Road was ultimately supposed to be. And towards a new model in which either loans are denominated in RMB, though we haven't seen much of any of that yet, or in which China is no longer as big of a major lender to the world as it used to be. And I think that is probably the better explanation. Just a couple of more considerations that matter. One is the real estate slowdown. This is a chart of annualized home price growth in China. And you can see that over the past five years, the pace at which prices go up and down has shifted. But broadly, prices move up. This is something that we long expected to be the case about the Chinese real estate market. And Chinese banks took on enormous exposure to the Chinese real estate market, as well as to the debt of developers, like Evergrande. In the past year or so, though as you can see, the process of a slowdown in housing prices began before then. But particularly in the past year, when prices have turned negative and the three red lines have made it very difficult for developers to build, Chinese banks have been put in a precarious financial situation because many of the assets on their balance sheet, if they were to mark them to market, would be worth not very much of anything. And it's not clear whether the government plans to bail out these developers or to recapitalize the banks. So that has had a chilling effect on lending. It has meant that the entire banking system is much more stressed than it used to be. It's already aware that it's going to recoup much less on the dollar from its overseas loans than it expected. And the result has been a deep, deep disinclination to fund big, ambitious new projects overseas. And then the final consideration, which is affecting China as well as everyone else, is this epic, not unprecedented, but unprecedented in the last four decades, surge in the US dollar that has resulted from inflation and the Federal Reserve tightening, as well as the Russia-Ukraine War. And this has had a devastating impact on many emerging market economies, because it means their debt financing costs go up. Many developing countries borrow in dollars. They borrowed belt and road loans in dollars. They have to pay them back in dollars. And if their currency is weakening against the dollar, it can push them over the edge. China, too, is watching the R&B weaken against the dollar. They've broken past this psychologically significant seven-to-the-dollar band. And this has just made it undesirable for anyone to be lending out dollars when they would rather be holding onto them. So there is this argument, right, which the United States government, the Trump administration, tried to propagate as loudly as it could, that the debt trap was part of the point of the Belt and Road. China surely should have known that most of these loans wouldn't pay for themselves. And it was using these as a geopolitical tool to get poorer small countries hooked on debt and then to let them go bust and seize the collateralized assets underneath, especially land. Now I go into this in a lot more detail in the book. If you're interested, I don't actually think that was the plan because I think China is strategic to some degree, but they would rather make money than lose it. But at this point, the argument is moot because it's unfalsifiable. You can't separate the poor decisions that were made, especially in the early days of the Belt and Road, from all of the impacts that have followed from COVID, the dollar, the Chinese domestic slowdown and so forth. What we face is just a new reality where we're going to learn what kind of creditor China really is. This is a number of national restructurings that have happened by year for the last 40 years or so. And as you can see, we are in a very unusual moment where DSSI is countries that are going through debt service restructuring. This has no precedent in modern history and most of these restructuring negotiations are going to have to be held with China. So we have dozens of countries, Pakistan, Ghana, Egypt, Argentina, which are in the process of figuring out how they're going to pay their longer-term obligations. They're talking to China, they're talking to the IMF. Some of these countries are talking to the Paris Club, which is a group of 22 Western lenders. But China has lent out more than the Paris Club for many of the last several years. And so this is the question, what kind of creditor is China going to be? Will it take a haircut on its debts, its loans? In other words, will it say you can pay us back a certain number of cents on the dollar? Or will it insist on rescheduling only? Will it say you have a longer time to pay back some of these debts, but over time you have to pay them all back? As you can see from this chart, if you look at this 1975 to 1999 period, the Paris Club and private bondholders generally preferred to do rescheduling only. They didn't want to allow haircuts because of the principle. They wanted to get all of their principle back. They thought it was good to draw the line even if it forced their debtors into an untenable position. And over time, over the past two decades, they have become more tolerant of haircuts with face value reductions. And that's not necessarily because they've found religion and started being really, really nice guys. It's because they found it to be a more sustainable way to do their lending, not to push their debtors into the gutter and kick them when they're down, but to try to get them back on their feet so they can grow and eventually repay as much of the debt as possible. And this is a question that China will have to deal with now. It will have to deal with this both on a political level because if it takes big haircuts in some debt negotiations, all of its other debtors will expect the same. And China also has to ask what is its vision for the economic future of these debtor countries? To what extent does it care about getting them back on their feet? And to what extent is its domestic financial situation supercarious that it just needs to extract dollars? And so it doesn't care. It will liquidate assets. It will do whatever it has to do to get money in hand from these debtor countries. This is a process that is playing out as we speak. It's not clear how things will go, but it looks like partly because of some clever contract provisions that China got to the paperwork for these loans that China has a better negotiating position than the Paris Club. So China is likely to get paid back most of the principle of what it loaned out, and the Paris Club countries and the IMF will have to take haircuts. That's my sense of the reading from looking at some of these contracts. The details get technical, but I'd be happy to talk about them in the Q&A if you like. To zoom out, the political picture is not friendly for China. In Sri Lanka, a country that is famously very indebted, there was a massive protest that forced the president of the country. Protesters took over the presidential palace. They played volleyball and polo in the pool. They cooked up curries in the kitchen. They're furious because of the dire macroeconomic situation that their country is in, not only because of the debts that previous governments incurred to China, but partly. And I think China understands that it's reached a limit of how much it can push the Belt and Road as a propaganda initiative, simply because so much of the world now associates it with debt distress. And then as we all know, Belt and Road forums are famously banging parties. They're not as fun on Zoom. It's hard to get the propaganda value from them that China used to get. And so from a public relations perspective, much of this is on hold while they go through this broader debt restructuring process. Yet Xi Jinping himself hasn't given up on the Belt and Road. And this is the final point that I'd make before concluding. I think it's very interesting how China was given an opportunity by COVID, which blurred the lines and made it impossible to disentangle what was poor planning, what was nefarious predatory lending, and what was just act of God. It made it very, very easy for a Chinese leader who had less ego wrapped up in the initiative to pull back or to kill it all together. But even though Xi Jinping is talking about the Belt and Road less, even though he now likes to affix the phrase high quality to Belt and Road, high quality Belt and Road cooperation and so forth, he still talks about it. And he's also pushing new initiatives, which would seem to layer on top of the Belt and Road, most prominently his new global security initiative. This suggests, and there was other communications from elite Chinese sources that suggest the same, that the Belt and Road continues to expand conceptually. And that even though it might have reached its limit in terms of geographic spread, there was definitely a number of core countries, Pakistan, Iran, some of the Southeast Asian countries, some sub-Saharan African countries being probably at the top of the list, which are in the process of being tied yet closer to China by doing high tech cooperation, security cooperation, a new deal with the Solomon Islands, which allows China to deploy a policing presence and use the country's ports for naval purposes, but also ties the Solomon's to the Belt and Road. It would have been easy for China to tie off this initiative, yet she's been clearly still thinks he has enough personal skin in the game that he's keeping it alive, at least rhetorically. So to get back to this question of Monty Python, is the Belt and Road dead, or is it only sleeping? I think there's good arguments to be made on all sides. But I think there, let me give you three possible answers to this question. Let's, what's the argument for it being dead? I think the argument for it being dead is that the Belt and Road model of loans to fund multi-billion dollar infrastructure mega projects, ply in the sky schemes like a cloud city in the middle of the forest. If we build it, they will come mentality that led China into White Elephant projects in Sri Lanka, for example, is that's probably not coming back. But I think we knew that. And you could see that direction of travel even before the pandemic. COVID has just provided an excuse, and it's made it practically unfeasible for Chinese engineers to go out and find these projects, and it's made it unaffordable for Chinese banks to fund them. But there's also an argument that Belt and Road is not dead, it's only sleeping. Because as we can see from the first part of the talk, this was always about more than building infrastructure. It was about narrative. It was about mobilization. It was about communicating to China and to the world something really profound about China's proper place in an international order. China's view of what international cooperation ought to mean was a vision for bringing together Chinese economic and technological power to solve problems for other countries in a way that elevated China's status. And whatever the outcome of the zero COVID policy is, whatever the outcome of the real estate slowdown is, something will come next. China is not going to stop wanting to cooperate with other countries. China is not going to stop being a massive economic power that is relatively speaking of less politically and geopolitically influential than it is wealthy. And so it will continue to look for ways to link its economic and its political activities overseas in ways that increase its status and bring discrete political benefits. And so I think it's too early to tell whether the Belt and Road is dead or only sleeping. But I think if we declare it dead, we're in for a rude surprise because this has been so clearly tied to Xi Jinping's name that there is a sense in which, rhetorically at least, it cannot be allowed to fail and it will keep being redefined until it succeeds. I will stop there. Thank you so much for your attention and I look forward to taking your questions. Well, thank you very much. That was a fantastic presentation. I think you have put a lot of very interesting ideas on the table that people would probably want to raise with you. I think there would be a whole lot of questions in terms of the narrative of Han Wudi and whether that's what Xi Jinping himself was happy about and all that. But I'll leave other people to raise those those sorts of questions and about the sustainability of the Chinese projects. But you start off effectively by saying that the Belt and Road initiative essentially was about the China Dream as well. Now that's a really important point that I think you have raised. And so I want to push you there, given where we are with the BLI. However, one can spin the narrative about this tremendous success of the BLI. It is in not very good state. What then does it tell us about Xi Jinping's China Dream? If he is still keeping up with the narrative that the BLI is about the China Dream, over to you. Well, thank you, Steve. That's a great question and probably a good place to get started. I think it's definitely true that the propaganda for domestic audiences have downgraded their enthusiasm. There was a peak of hype that happened around 2016, 2015 to 2017. And regardless of how you want to measure it, word frequency, airtime on CCTV, the amount of attention and emphasis that's being placed on this has been reduced. And I think there's a couple of ways to spin that. Obviously, the domestic Chinese information environment is very different from the one that we inhabit here. People aren't on Zoom in China showing pictures of dead parrots and joking about the Belt and Road being dead or sleeping. Chinese residents are surely aware that not all of these projects have been as successful as others. But insofar as the government or the party has decided to pay less emphasis to these things, I think people probably have a sense that it's not going all according to plan or they would be seeing more about successful, completed projects. I think part of it is the Chinese people were always, as far as I could tell, slightly dubious about what this initiative was because it seemed premature, premature for China to be claiming such a proud and prominent position in the world stage, given its level of development, which is uneven. I mean, this is a country that is still very much at the middle income level with a lot of poverty and inequality. The notion that in 2013-14-15 that China should be deploying its foreign exchange reserves to build infrastructure abroad as opposed to helping people inside China was, I think, an argument that demanded a lot of justification. That's why they had to lean so heavily into this historical narrative. I think Xi Jinping's common prosperity agenda, we're probably going to get more detail on that very soon, is inevitably going to be about leveling inequalities within China. And I wouldn't be surprised if the Belt and Road is redefined or reappropriated to be more about domestic development, developing the West, developing poorer parts of China, helping them build interconnections to the rest of China and the world. It has already served this function, but if you look, there's been some excellent data work done on this. Most of the Belt and Road investments inside China have gone to Zhejiang, Jiangsu, some of the wealthiest coastal provinces. So there's still work to be done. If you could find a way to pivot this initiative to be more of a domestic development tool, more of an instrument of common prosperity, I think it would have a much brighter future. And I suspect, though this is pure conjecture, that that is where we're going. Okay, we have quite a few questions in the Q&A box already. The first question I picked actually is going to be a very factual one because I think it's about your presentation quite specifically at the end. And this comes from Jan Strausberg. You promised to provide three answers about debt or a life in your conclusion. Options, debt and sleeping were given. What was the third? I would say the third is redefined until it succeeds. Okay. Or to put it another way, it's the wrong question because it's connected to season pings, so it cannot be allowed to fail. And it will be, even if it's dead, it will be reincarnated in another form. So it is inaccurate or an unhelpful question to posit a binary. To choose to interpret it how you like, I think these answers are all three ways of saying the same thing. Which was what you said in your original presentation that was too early to tell. The next question I pick up is, in a sense, follow up on this. And this comes from one of my colleagues, Olivia Jones. And she would like to ask you, is the global development initiative, the new name or a new version of the BLI, or if not, what would be the relationship between the two? And she would also like to ask you about how should the West respond to what you've just been saying? Well, maybe we can save that second question for the end. Because I think we have a few more diagnostic questions that I'm seeing in the Q&A that are yet to tackle. So let's put a pin in that, if you don't mind, Olivia, and we'll return to that towards the end. In terms of the global development initiative, I think this is an interesting question. Why does China need another one of these slogans? I don't know what the relationship will be. But based on what we know about what the Belt and Road has been before, this is not an exclusive thing. You can have a project be Belt and Road project and be something else. So I think it's going to become an alphabet soup of initiatives. But I don't think China announcing a new global development program means anything tangible for the progress of renegotiation of these existing loans or implementation of new projects. I mean, ultimately the constraint right now is financial. China doesn't know how much money it's going to recoup on these real estate debts and on these Belt and Road debts. And until that uncertainty is resolved, they don't want to loan more. And they also feel like it would be not apropos to be too boisterous about the success of the Belt and Road when their debt or countries are hurting. And so I think they'll continue to talk a big game about helping their developing country partners. But we're in a holding pattern that will last us probably another 12 to 24 months as these debt restructurings work their way through the pipeline. Then when we come out the other end, depending on the state of the Chinese economy, it's possible that the GDI turns into something new and that it is spun off and becomes the new flashier term for Belt and Road. But I think more likely you'll see it and Belt and Road used indiscriminately in the same sentence because even in the China context, as far as I can tell, most officials don't really understand the relationship between the two. Okay, interesting. Next question I pick comes from Danny Solomon, again from SOAS. BOI played an important part in China's relational with policy across the global South, woven into its South-South cooperation narrative. Debt problems, however, shine a light on the binary nature of this relationship, vendor versus debtor. How do you think this will affect China's relationship across the global South? And what effects do you expect for China in the general assembly at the UN or the Human Rights Council, etc.? Well, that's a very interesting question. It's not one that I can answer comprehensively because obviously the global South is a diverse place with many different types of regimes, many different levels of development, many different regions. The argument that I made in my book and which I still believe is that despite the Western world turning against the Belt and Road, deciding that it's predatory, that it's maligned, that it's set to fail, we've heard all manner of excuses about this. And people who predicted the demise of the Belt and Road are now already declaring victory. One of the arguments I made in the book is that it's a big, big analytical mistake to assume that developing countries, which have been the primary beneficiaries of the Belt and Road, see the project in the same way. From the perspective of Belt and Road partner countries, no one is forcing them to take out loans from China or engage in partnerships with China. They do it because it's in their interest, because China is offering them something that no one else is. I think it is the height of hubris for Western countries, which have not provided basic public goods to many of these countries in the global south and who have offered loans only with political strings attached. It's hubristic for us to assume that developing countries would say no to Chinese loans out of principle when China is coming and offering to help them develop their countries. So I think this has staying power if China can ever find the capital to get the machine going again. I think even if the model has gone belly up and China no longer has the capital to do this debt financing, they will find other ways of collaborating with developing countries, which are win-win and which advance China's own commercial geopolitical goals while satisfying the needs of their partners. They will do this in Africa, in the Pacific, they'll do it in Southeast Asia, they'll do it in the Middle East, they'll do it in Latin America. What I predicted in my book, and here we'll get to this question of what should the West do, is that the West, specifically the United States, was ultimately going to have to make a choice, acquiesce to the Belt and Road or confront it. Because while there is a possibility that it could flame out of its own accord, and that seems more likely now than it did three years ago when I sent the manuscript to press, I'm still not persuaded that it's dead. And if it is not dead, it will continue to have a value proposition for Chinese partners. And maybe that takes the form of high-tech cooperation, I don't know what it would look like. But sooner or later, Washington is going to realize that this is a long-term challenge and it demands some sort of response beyond complaining and lecturing. I hope that answers the question. Okay, I'll pick up a little bit on this with the question from David Lewis, who would like you to elaborate on the concerns of Western lenders that bailing out the poor countries would simply means bailing out Chinese loans. Do you have views on how the West might have approached this very important issue? Well, I think it was Western financial institutions which failed to provide their developing country partners with the requisite tools they needed to assess these Chinese loans back in the early 2000s and 2010s. And now the Western development agencies, especially the IMF and the Paris Club, are going to have to take losses on these loans to subsidize payments to the Chinese because they were outfoxed, because they were outmaneuvered. And there's been some excellent work done by some of my colleagues who looked at, we don't have a great corpus of this because most built-in road contracts are secret. But from the contacts that we do have, and we have a few dozen of them from various countries, China has inserted anti-Paris Club clauses which says, essentially, you can't negotiate with the Paris Club while you are negotiating with us and use them to sort of get a source of financing that will then give you enough security that you can tell us we're not going to pay back your loans. So you have to essentially figure out your arrangement with us before you talk to the Paris Club. And China has also very cleverly gotten all manner of very, very technical legal terms in that allow them to seize assets. In many cases, they demanded that their debtor countries place liquid assets like essentially cash in escrow accounts offshore that Chinese banks can seize. So it's relatively straightforward for China to take collateral from many of these countries. It's not like they have to go in, like how would you go in and take an airport in Uganda if Uganda can't pay? Well, China doesn't have to do that. Uganda has a great deal of money in offshore accounts in escrow that China could just seize. And then China has all kinds of ways to punish many of these countries macroeconomically because China is their largest import partner, is the largest export partner. And unlike a market economy, China can just dial up the exports up and down. So China has all of this leverage. And the Paris Club and the IMF have very little leverage because if you just look at the contract, they do not hold the senior debt. And they have to ask themselves the question. Specifically, Washington has to ask the question, what is to be gained by making the point and holding out as interest rates remain unbearably high and watching the pain and distress grow across the developing world and wait until these debtor countries are even weaker because eventually something is going to give and someone is going to have to take the debt haircut and it's going to be the Paris Club and the IMF is going to have to come out and bail these countries out. So there's actually not that much to be gained from waiting. There's a lot on the other hand to be gained from removing the uncertainty, allowing many of these countries to come back into fiscal balance and then working with them to make sure that they can audit their books and see what they actually owe the Chinese. This has to be done in a more systematic way than it is currently being done. And the US government does not have the in-house analytical capabilities to fan out experts across the world to 80 countries and go through everyone's old contracts and figure out what they owe the Chinese. That is a task which will take years to do, but it is something that must be done. And I think the best that we can hope for as the West is that some sunlight can be shown on these lands so that the world can process what happened and not make the same mistake in this decade. But I think to answer the question in terms of what can the West do or what should the West do, the answer is not very much because China, even though it lent irresponsibly, did it in a smart enough way that it's not going to be the main party holding the bag? Okay, I think you've already answered the first questions that Susie Burresco would like to ask you, but there's another question there which I think is a very useful follow-up, which is what are therefore the implications of China's position to the political independence and financial standing of the borrowing countries? Because you address the Western side of it, but you have not yet quite addressed what it means for the African Central Asians and other countries that are borrowing from China. So this is the million dollar question, right? Now China finally has the leverage, right? This is the supposed debt trap. Intentional or not, we're here. So what is China going to do with this power? I think if you look at their past behavior, they're not out to go Soviet style flipping governments to autocracy. They're not really out to make dramatic transformative changes to the internal structure of countries that they partner with. Say what you want about Beijing, that's not really how they operate. What they do is strike deals with elites, to make sure that their own interests are protected, and that they can have more confidence in regime stability. So they're happy to talk to elites in democratic countries, but they would rather those elites stay in power by fair means or foul. So in some cases that can look like manipulating the internal politics of the debtor country to be less democratic. The Solomon Islands are a good example. I'm by no means an expert on the domestic politics of the Solomon Islands, but Sogavari, the prime minister, is considered to be by the opposition an illiberal guy. He's definitely tried to postpone elections for sort of dubious pretenses. And we know that shortly before he did that, he signed a bunch of documents to associate himself with the Belt and Road, and he signed a security deal with the Chinese to essentially tell the Americans and others to back off. And then once he had done that, he felt comfortable substantially degrading his country's democratic institutions. And we also have examples. There's a number of good ones in the Pacific and Kiribati, small little archipelago country in the Pacific. The leader, Tenetima Mao, who reversed recognition from Taiwan to the PRC. Xi Jinping invited him to Beijing. They had a party. They signed documents to join the Belt and Road, and he went home and the Chinese embassy distributed millions of dollars in cash, which in that very small country is significant and bought sports equipment and all kinds of refrigerators, appliances, all kinds of stuff, goodies for voters, which made sure he won that election. So there is, I think, an extent to which, especially in these micro countries, the Chinese foreign ministry or whatever nature of China's presence is in these places will feel more comfortable dialing up pressure on local elites. But I don't think they're out to force these countries to flip their allegiance except to Taiwan, obviously. They're not trying to make an anti-U.S. coalition yet. But as I argue in the book, it is very easy to see a world in which the Belt and Road evolves in that direction. China almost, they have the luxury of not wielding this leverage because they know they're going to keep this leverage. So they have it almost in their back pocket as a card to play if, in the future, they wanted to secure basing rights for their navy in a number of Pacific Island states. They would probably be able to do that relatively quickly by using the debt card. So it's possible that you don't see any movement, and it seems like this is a non-issue. And then a lot of things change very quickly. This is at least how Washington is thinking about it. This is a matter of grave concern. But there's no solution other than for Washington to be in the development finance game offering more as a counteroffer. There's no other way to play it. Okay. Kind of follow up on this from Steve Tintant. Can you see China prioritizing Belt and Road initiative in particular partner countries in order to meet China's own political priorities? I connect to that strategic priorities too at the end of your last answer. So the answer is yes. But the answer is not that the Belt and Road is a tool for achieving that. And I didn't get much into this in the talk because this is not the core to what we're talking about today, which is reinventing the initiative for this new era of debt distress. But one of the big themes in the book is that the Belt and Road is a really fuzzy concept. It's a really fuzzy. It's the club that does not have clear membership cards. All you have to do is sign a piece of paper that says you agree with the principles of win-win cooperation. And I mean, who doesn't believe in that? And they can join. And Xinhua will put out stories that say, oh, you accepted the Belt and Road and you'll get counted on a list. But that doesn't mean you have any meaningful participation. It's not really a club so much as a slogan that China and its partner countries can use as a sort of a dog whistle or a euphemism as they negotiate a de facto patron-client relationship. That's the argument of the book, which I developed through a number of case studies. And you can see the same dynamic, the same Chinese commercial diplomacy playbook, like actually blow-by-blow strategy of who you meet within the government, when you propose the deal, how you finance the deal, all of that. Exact same in countries that are Belt and Road and countries that have never signed paperwork to join the Belt and Road. I mean, I did my PhD dissertation about Greenland, which is not an independent country so cannot properly join the Belt and Road. But China has been very interested in speeding along Greenland's pathway to independence via its commercial diplomacy by building stuff in Greenland, developing the economy in Greenland, diversifying the economy so Greenland is comfortable getting independence. And then the theory goes, in the longer term, they can join the Belt and Road. After they've been de facto members of it, after Belt and Road participation has enabled them to become independent, they can sign the paperwork later. And yes, there has been a long-standing Chinese geostrategic interest in turning Greenland into a strategic strong point, what they call the General Jordan, strategic pivot point or strategic strong point, sort of a friendly base of operation, something short of an outright military facility in the Arctic. And I think it's hard to argue if you look at the fact pattern of what China has done in Greenland over the last decade that this was the strategy. But the point is it doesn't have to be just in Belt and Road countries. It's all over the world and China is acting this way opportunistically, as any smart power with China's capabilities would do, because China does want geopolitical influence around the world. And why shouldn't it have some, given how wealthy and powerful they've become at home? Next question I picked comes from Elaine Tang. What is the purpose of China about the idea consisting from OBO out to the GSI, the Global Security Initiative? Will it be right to see the Global Security Initiative as the next step of Belt and Road initiative? Or will it be allowed? They're related, but we don't know how. What's significant is that well, there's two things that are significant. The first thing is that in the early days of the Belt and Road, there was this I found not very credible, not very persuasive Chinese official line that what are you talking about? This has nothing to do with security. This is a development issue. We're lending money. They're borrowing money. It's a commercial transaction. We're building some stuff for them. They're going to develop. Everyone wins. And over time it became clear, well, obviously you're sending millions of workers abroad. You're building all of these assets that you're going to have to protect. Some of them are in complex, hard places, like Baluchistan and Pakistan, ballast places, stuff in Somalia and the Horn of Africa. This has to be defended. And as China learned in Libya, evacuating Chinese nationals from a disaster zone requires a global presence, not necessarily a navy, but a global maritime presence that can deploy to a crisis point in a relatively short period of time and deliver emergency services. I mean, that's what a strong country ought to be able to do. And if you look at the trajectory of Chinese popular culture about the Belt and Road, for example, the Wolf Warrior movies, you see a growing level of comfort with talking about contingency scenarios where Chinese workers get in trouble, usually in Africa, and then Chinese peacekeepers, special forces, badass fighters, have to come and save the day. There's been work that's been done in the last couple of years that has shown a great volume that Nadezhra Lund at the National Bureau of Asian Research edited showing that actually China has private security contractors involved in a lot of these projects, especially in Central Asia. So clearly there has been an emerging security component, but for political correctness reasons, China has denied that the Belt and Road and security have anything to do with each other, even though they're increasingly seeing it in securitized terms. It's the same thing with climate change, actually. The Chinese line was it was a development issue. It's a development issue. It's not a security issue. What could climate change possibly have to do with security until there was a switch, and then it became incredibly securitized? This is clearly the direction that Xi Jinping's China is moving in. So it makes sense that the Belt and Road would require some ancillary initiative to make sure that Chinese workers overseas are safe, to make sure that Chinese facilities are protected. But I don't think it's going to become the primary focus of the Belt and Road. I don't really see where the money is going to come from. And if you match it up with what the PLA is trying to do, the Chinese military, the PLA is really focused on Taiwan and they're focused on what they call the near seas. And it's just going to take decades of additional investment, not to mention training and access rights like basing rights for them to be able to be a global military power the way the United States is. And so I don't think in the short term that's really a priority, but you'll see deployments of peacekeepers and private security groups to many more Belt and Road countries. And this is probably going to become an issue in the next five years. Okay, I'm changing text completely. This next question comes from somebody who prefers to stay anonymous. In the German debate, the Chinese acquisition of assets in the port of Hamburg is often likened to Germany's dependence on Russian gas. Do you think the experience of Russian aggression and subsequent deprivation for European countries will play a role in the future narrative on the Belt and Road? Well, there's an explicit question there and an implicit question. The explicit question is, is China going to bear reputational costs for having quietly supported Russia through this Ukraine atrocity? And the answer is yes. And they should because Xi Jinping and Putin met and Xi Jinping presumably gave Putin permission days before he launched his assault on Ukraine. So I think the soft power ramifications of China's decisions to support Russia over the last year have yet to play out. And I would be very surprised, for example, if German voters feel more positively about China and Xi Jinping in five years than they do today. It seems to me things from a soft power perspective are moving in one direction. And this has had massive implications because as recently as three years ago, when I published my book, it seemed that China had its foot in the door in Europe. All of the major parties in Greece were pro-China. There was the 16 plus one initiative where all of the central and eastern Europeans wanted investments. The Poles were pro-China, they had a were issuing pandabons, RMB denominated pandabons, right? The Belt and Road was expanding to Spain and to Portugal. And then all of a sudden, the combination of COVID and Ukraine flipped European public opinion and Europeans became aware, wow, history didn't end, Guhiyama was wrong. Geopolitics is real and we need to tighten our belts and the Chinese are probably not all that different from the Russians. So I think this is a big problem in terms of China facing a united West. But that's a sort of an abstract long-term trend. In the shorter term, I guess the implicit question you're asking is, is it actually equally problematic for Germany to buy Russian gas and to let China into a port project? To which the answer is no, I think pretty clearly. I mean, Russia can and did weaponize gas. How exactly would Costco or another Chinese shipping company be able to weaponize a minority ownership stake in a German port? What could they actually do with it? They're not a majority owner, they don't control the project. So like they're going to get access to classified information, like they're not going to be subject to customs rules. Chinese ships sell all over the world. China is the number one shipbuilder in the world. I don't really understand why that's so big of a problem. I think it's symbolically significant. I mean, Olaf Scholz is clearly trying to show that he has options and he's going to China and is trying to change the subject from his incoherent response to Russia and Ukraine. But I don't think that it's actually that big of a security problem. And I think Washington is going to overplay it. It doesn't mean that much. In the end of the day, China has lost Europe. Okay. Next question comes from somebody at the LSE. You said that China will not allow itself to be less politically and economically powerful as it is wealthy. Can you elaborate on this, please? To me, China's soft power is impressive in the context of its middle income level. I don't believe that China's soft power is impressive. I would debate the point. I think in the developed world where we have better data, the Pew numbers are pretty bad. Not quite Russia level bad, but pretty bad. In the developing world, it's a more diverse story. And we lack the data to make any kind of comprehensive judgments. I would be interested to see more data. But Pew has pulled some lower and middle income countries and they don't show wildly positive views of China. And they certainly don't show a positive trend over the last few years. I think the wolf warrior diplomacy is backfiring everywhere, not just the Anglophone world. I think China has achieved a certain amount of soft power just by its unbelievable internal economic success over the last few decades that countries look to China as a model for how to do development right. If China's economy continues to tank and we have another 12 months going forward, like the last 12 months, I think their star power is going to dim. That's in terms of soft power. What I was really talking about was political and military power. And simply to make the point that relative to its GDP, China can't feel much of any naval power beyond the first island chain in Asia. It doesn't have any international naval bases with significant ability to field big ships. It doesn't have the aircraft to protect its aircraft carriers if they go into the Indian Ocean, beyond very, very close to the Straits of Malacca, which is why they don't. It doesn't have any formal allies, which the United States does. From that perspective, China is weak geopolitically relative to the fact that they're the largest trading partner of more than half the countries in the world. I think part of the purpose of the Belt and Road was to cash in some of these chips, if you will, to translate some of this economic influence into political and geopolitical influence. And the question is almost, what is the most effective way to do that? It turns out building gigantic, super risky projects in the middle of nowhere is not a formula for cashing in those chips effectively. But maybe there's a much more cost effective way that China can make friends and learn to influence people. For example, in the Middle East, China has always tread very lightly. They haven't made many of these white elephant projects. And yet the Middle East has arguably been the region where Belt and Road has been most successful. And what they figured out a way to do is to turn themselves into essentially an arms dealer and a technology provider. And they sell drones and weapons and other stuff to the Saudis and the Iranians and the Emiratis and they hate each other, but they all buy Chinese gear. This might be a way to do it. You sell high tech and defense security related products. And that way you lubricate your political relationships. But you don't actually have to put that much financial skin in the game. And if it evolves in this direction, I think there's a lot more gains that China could get. Because there's a lot of authoritarian countries that would like some of the surveillance capabilities that China has and some of the high tech weaponry and robotics that China has developed and the 5G that China has developed and so forth. So I think there's many ways in which the Belt and Road could develop in ways that are not necessarily soft power popular, but which substantially increase China's global geopolitical presence. And I think that is what we should be looking towards very closely in the years ahead. The next question is about CPAC. I'm aware that we have about five minutes from when we have to conclude and it comes around Ashraf. While data has shown a drop in BLI investments as early as 2016 to 2017, wasn't it a case of Chinese companies going over low hanging routes which more or less have declined in numbers by then? Of course COVID didn't help, but companies are interested in profits and if they found they are not forthcoming, they slow down the investments and then cite an example I think within CPAC. Your response? I don't have a sophisticated take on the on the metro line. You're mentioning in the question. CPAC is a bizarre case study of Belt and Road. Pakistan and China have an unusually historically close relationship and I think Chinese development banks used Pakistan as sort of a sandbox for some of these projects early in the initiative because they were confident that the political relationships were there. I don't think it worked. I think it had the effect of juicing Pakistani economic growth for the first few years and then when that investment slowed and all of the exchange of capital equipment basically slowed down. Pakistan had a sharp economic downturn followed by a current account crisis. I think it was the overplaying of China's hand that generated the economic crisis in Pakistan that then made the initiative less successful, but I think it was also just that they scrambled for a lot of projects that were exceptionally poorly thought out. I had a conversation with an investment banker about this in 2015. I asked him about CPAC. He said, I love Pakistan, but anyone who can find me $60 billion of bankable projects in Pakistan is a better investment banker than I have ever been or I will ever be where I have ever met. I think China went out looking for things to invest in as opposed to looking for things that were worthy of investment and Pakistan had the bad fortune of being first and I don't think it's that much more complicated than that, but you may know more than I do. Okay, with two minutes to go, perhaps we will return to the questions you had asked to put to the end and that's the question from Olivia. How should the West respond? I think the answer is very simple. The West and by that I mean especially the United States, speaking as you can probably tell as an American, has to be in the game. We've been out of the game for too long. We have denied many of these developing countries in the alternative and we have, meaning the foolish American policy has pushed many countries into the arms of China unnecessarily. I think this was strategically short-sighted and I think we have failed to live up to our responsibilities as a global citizen. I think especially with respect to the climate challenge, developing countries infrastructure needs, financing needs are enormous and if the United States doesn't fill that role, capital from less friendly countries will and we will find ourselves eventually in the place where we feel we have to push back. So the most cost-effective, the most responsible thing to do is to get back in the game, to communicate a coherent response to what the Belt and Road is, to help countries untangle their existing debts if necessary to bail some of them out and then to listen more carefully to what these partner countries need and give them what they are asking for, not what we think they ought to be asking for. Okay, that's very clear. Thank you very much. I think I was hoping that somebody will ask you some of the historical context questions but that didn't occur but I will leave it there. Let me just thank you and thank all the people who have raised questions and I apologize to some of you whose questions I have not been able to squeeze in within the time frame that we have but please be reassured that your questions will be put to the speaker subsequently so he will know what you have raised in terms of questions or your interest and I look forward to seeing some of you in our next event whether it is on site, on campus or whether it is a webinar. Thank you. Goodbye and good night.