“China’s Belt and Road: Progress on ‘Open, Green and Clean?’”, 29 April 2020

… China now faces a range of new challenges to the BRI [Belt and Road Initiative] as the COVID-19 pandemic first took a toll on the Chinese economy and now has brought the global economy to a crushing standstill…

Clearly, it remains to be seen how the pandemic will affect the BRI. It’s not too soon, however, to ask how Beijing’s commitment to making the initiative “open, green, and clean” has worked out. The preliminary answer is that, on the ground, little to no change has occurred…      

… Beijing introduced the Beijing Initiative for Clean Silk Road as a symbol of its commitment to transparency... Despite the promised reforms, however, transparency, governance, and oversight remain limited.

In practice, Chinese government think tanks publicly recognize that China continues to struggle with transparency. Since 2015, scholars from the Chinese Academy of Social Sciences have published the Annual Report on China’s Companies Public Transparency. The most recent report, released in November 2019, also found that Chinese companies on the whole “failed to meet standards” with respect to transparency… The report also found that Chinese companies tend to disclose information only in annual reports and “rarely respond to specific requests for information from the public.”…

Progress toward greening the BRI has been somewhat more meaningful. One major outcome of the 2019 BRI Forum was the adoption by roughly a dozen countries of the Green Investment Principles for Belt and Road Development (GIP). While the principles… are broad and nonbinding, they do require that financial institutions publicly commit to conducting environmental impact assessments for their investments. A significant number of Chinese and international banks, including the Bank of China, Standard Charter, and Deutsche Bank have signed on to the principles…

Promotion of the principles has also been ineffective in most developing countries. Other than Singaporean banks, no other financial institutions from Southeast Asia have signed on to the principles.

… The BRIGC [BRI International Green Development Coalition]… has churned out draft guidelines and held a number of meetings, yet it struggles to engage with implementers on the ground or to get traction from Chinese companies and commercial associations…

The Beijing Initiative for the Clean Silk Road announced last April not only promoted transparency, but also encouraged BRI partner countries to bolster their ability to fight corruption and bribery through stronger legal systems…

While these efforts represent a welcome step forward, most BRI partner countries lack the regulatory capacity to counter corruption, particularly on large projects where money is flowing freely—and sometimes back to China…

China’s efforts toward “open, green, and clean” cooperation have failed to yield much progress, but the global health pandemic offers China an opportunity for another reset…

If China wants to see real progress toward its stated BRI goals, measures must go far beyond voluntary guidance and trainings of host country officials. For a green BRI, Beijing could introduce binding standards that prohibit projects causing significant environmental damage and severely penalize corrupt practices of its nationals overseas. If China wants to increase transparency and combat corruption, it could simply begin divulging details of BRI agreements and projects to the public—or better yet, consulting with public audiences before signing these deals…

[Also referred to Export-Import Bank of China and the China Development Bank]