CSR Volume 7: Interview with Taylor Loeb

By Jacob Larsen

Taylor Loeb’s article, “The Belt and Road, With or Without Xi: The Policy Entrepreneurs Behind the BRI,” is featured in Volume 7 of the SAIS China Studies Review. Below he talks with online editor Jacob Larsen about his background, his piece in the CSR, and the past, present, and future of the BRI.

Questions about the Author

JL: Taylor, thank you for joining me for this interview! I really appreciate the chance to get to hear more about you, and to hear more about your piece that’s going to be published soon in the China studies Review. So, with that, let’s get started.

Before we dive into your piece, the first question is: When you’re not taking classes and writing papers, how do you prefer to spend your free time?

TL: I kind of forget. Honestly, pandemic free time obviously is a little bit different. I’ve been reading a lot of fiction, over the last year, also writing a fair amount. Since I graduated, it’s been nice to write and read non-academic stuff, stuff that isn’t about the Chinese political economy. During normal times, having lived in China for so long, lived abroad for so long, I did a lot, a lot of traveling. And that’s very important to me. Something I’ve missed a lot. In DC I live in a house with 10 roommates, so there’s always ample socializing.

JL: What sort of fiction Have you been reading?

TL:  Right now, I’m reading the book Thus Spoke Zarathustra, which is pretty heavy – and has nothing to do with China. But I’m usually pretty interested in like 1900 to 1975, kind of the classics of that era, that’s my wheelhouse. It was a pretty, pretty heavy year for fiction, which was nice.

JL: Moving towards the professional side of things, what are your primary research interests? Both, what you find most interesting and what you do the most work on.

TL: I did the Tsinghua-SAIS dual degree program. At Tsinghua we write a thesis, and I wrote my thesis on RMB internationalization. So, that’s a lot of time spent looking at the Chinese financial system, the Chinese economy, and how they interact with the rest of the world. Particularly how the Chinese financial system interacts with the rest of the world and how China’s building out its international financial system, which is relatively nascent.

And now, I work for a company called Trivium China, which does all kinds of China research, but I’m primarily focused on US policy towards China and Chinese financial markets.

Questions about the Piece

JL: Now moving into talking about the piece itself. Tell me about how you decided to write on this particular topic. What drew you to this topic? Were you writing this piece just purely for your own interest or was it for a class?

TL: Yeah, I definitely have a good answer to this question. I wrote it for Professor Ho-Fung Hung’s Social Origins of Democracy and Authoritarianism in Greater China. Still trying to find the appropriate nickname for that class… We had read Andrew Mertha’s piece called ‘Fragmented Authoritarianism 2.0’ and he’s kind of the inventor of this idea of fragmented authoritarianism. That’s where I got interested in this idea of policy entrepreneurship in China.

I think in the US, most Americans who are studying political science have a decent idea of how policy is made in the US. I was really interested in how that works in China. Because I definitely think there’s a perception, certainly outside of China, that basically Xi Jinping is just sitting in a room and deciding what’s going to happen for the next five years.

Professor Mertha’s piece was written in like the early 2000s, and I wanted to update it. That was what I was interested in doing. When I talked to Professor Hung about it, he said to focus on a particular area. So I ended up focusing on policy entrepreneurship in the BRI. This was an area that was very ripe for, digging into and disrupting that idea of very top-down policymaking. When you read about the BRI in foreign publications, it is very much presented as a kind of grand plan.

JL: That’s something that we all need to hear as scholars of international relations and China specifically, but also just as observers of the International World. That thing’s not always quite as planned as they are presented.

For the people who have not read your essay, could you please summarize the main argument?

TL: The main argument, the primary thesis, is that the Belt and Road is not a primarily top-down project. Not only is it not a top-down project, it predates Xi Jinping. Throughout the paper. I basically focused on the four different actors within Chinese society that pushed for the BRI as it was announced and afterwards. Those four actors are the private sector, large companies and SOE’s in particular, were big lobbyists for the BRI and continue to benefit enormously from the projects; domestic agencies within China who had their own political benefits from the BRI; think tanks; and local governments. Provinces, and municipalities benefited from attaching their own programs that were already in place under the umbrella of the BRI.

JL: Alright, the next question is a little more specific. In your article, you mentioned that one of the intended goals of the Belt and Road Initiative was to centralize various overseas investment projects to enable greater oversight and avoid damaging episodes like Myitsone Dam. Could you summarize that incident in your own words, and give your opinion as to how effective oversight of BRI projects has been?

TL: Yep. So, a big Chinese SOE was contracted to build a dam in Myanmar that would generate electricity and bring it back to China. The dam ended up with a lot of cost overruns and very little of the energy ended up in Myanmar. There were a lot of exploitative labor practices as well so it was a huge, huge issue. It also took place in some of the areas of Myanmar that are held by ethnic armies. It was a very explosive situation, and China ended up abandoning the project. It caused a lot of issues between China and, particularly, public opinion in Myanmar, as opposed to the government of Myanmar. Incidents like Myitsone have made it more difficult for China to operate in Myanmar, as we have seen with the recent coup and attacks on Chinese-owned businesses.

To answer the second part of that question, oversight really varies from project to project. Overall, the perception of the BRI being this program that is very centralized and has a lot of oversight from the top is not totally accurate. There are a lot of examples where you have SOEs that kind of go rogue, like what happened to Myitsone.

However, I think that had the BRI not been pushed by Xi Jinping as this grand Chinese plan, and things had just continued as they were with a lot of Chinese companies going out all over the world, you may have had even more of these incidents. It’s really hard to say for sure because we don’t have the counterfactual.

JL: So, do you think that there’s a real oversight function being done, or is it more the rhetoric of attaching a name to all these projects?

TL: I think it’s, it’s definitely the latter, the rhetoric of attaching names to the projects. And once that happens, when you do something like what happened to Myitsone or have any sort of negative impact in a second country, that’s going to now reflect poorly on China, on the Chinese government, and on Xi Jinping in a way that, were the BRI not this massive, government blessed project, would not be the case.

Follow-up Questions

JL: Interesting, thank you for those comments. I’m moving on to some more follow-up questions. In the concluding section of your essay, you described the challenges facing the Belt and Road Initiative today, and predict a future Belt and Road Initiative that is more multilateral, more considerate of host country interests, and more focused on China’s domestic economy. What do you base those predictions on?

TL: I think that, in terms of the first two, saying more multilateral and more considerate of host countries, those are somewhat connected. The BRI has legitimately in some cases, not so legitimately in others, received a lot of bad press around the world. Even when it has received good press from host governments, the local population is usually not super cool with what’s happening vis-à-vis the BRI. China, I think, absolutely needs to change that image. Realistically, you can talk about Win-Win, but what’s happening on the ground is what’s happening on the ground. In my research, the BRI fundamentally is a project that originates from Chinese actors, within China, for China, and considering Chinese needs. And that’s fine, but if you’re trying to position it as this ‘China connecting the world’ thing, that’s not going to work long-term. Other countries are going to realize what’s going on.

So, if they want to continue selling the BRI, it has to be something that’s done multilaterally. Also, if you want to create some sort of alternate development paradigm that’s removed from the West, it might become a necessity to have very willing partners in that it can’t be a one-way street.

In terms of it being more connected to China’s domestic economy, that’s just a reaction to the dual circulation strategy. The Chinese market is going to be really central to the next phase of Chinese development. When you look at the BRI, it’s pretty much been ‘China out’, as opposed to ‘China out and other country in’. Right. The second option is more attractive for other countries, and I think that that actually is a win-win for both the other countries and for China. They’ll be able to get cheap goods and reap the benefits of trade in a more balanced way.

JL: Clearly, the COVID-19 pandemic has disrupted things, but before then, what are some examples you can point to about that show that the BRI is moving towards a more genuinely Win-Win framework?

TL: Not many. There aren’t many examples. Coming to that conclusion for me is primarily based on the fact that the BRI is definitely contracting, the ambition is scaling down. If you couple that trend with the rhetoric that that was coming out of China on dual circulation and on of centralizing the Chinese market as part of the new development paradigm, then I think that we’re heading towards a situation where there is more Market to Market bilateral trade. And frankly, it has probably gotten worse post-pandemic in terms of non-win-win scenarios. But, I just feel like the previous paradigm is not sustainable. There’s nothing you can point to that says this aspect of BRI is going to change. And that’s an answer in itself that brings on all sorts of interesting questions.

JL: Speaking of interesting questions, we have one more: How has the COVID-19 pandemic affected the outlook for the BRI?

TL: Like many things in the world, the COVID pandemic has accelerated a lot of trends that were already underway, and this is also true for the BRI. The BRI was already kind of slowing down, and I think that the last year has been a time when countries are really looking inward domestically. So, it has sort of accelerated the contraction of the BRI. But going forward, I think the nature of the project, as I said before, will change. Also, something that has a big bearing on that is the relationship between China and the West, which has become much worse during the pandemic. In the types of countries that are going to be involved in the BRI going forward, I think it’s going to look like the countries that were involved in the early part of the BRI: for example, Central Asia, and certain African countries that have long been neglected by the West where China can make inroads, etc.

The West will probably really double down on countering China in areas that it feels like it will be able to, and developing countries are oftentimes going to have to choose between one or the other.

JL: So would you characterize that as a narrowing of the scope of the BRI?

TL: Definitely, yeah, I think that was going to happen by economic necessity.

Taylor Loeb graduated from the SAIS-Tsinghua dual-degree program in January 2021, with a concentration in China Studies. He is currently an analyst at Trivium China, where he focuses on Chinese financial markets and US China policy. At SAIS, he interned at the Stimson Center and the US International Trade Administration and worked for Chinese EdTech firm TAL. His research interests include RMB internationalization and China’s financial relationship with the rest of the world. Prior to SAIS, he lived and worked across China for five years. You can read more of his writing at tloebthinks.com. Taylor can be reached at taylorwoodsloeb@gmail.com.

Jacob Larsen is a first-year M.A. student at SAIS and is concentrating in China Studies. His primary interests are U.S. relations with China as well as China’s relations with other nations. Besides these subjects, he is an enthusiastic follower of renewable energy, electrified transportation, and climate policy. Jacob plans on working to develop nuanced and effective U.S. policy towards China to achieve goals in national security, climate policy, and other areas. In his free time, Jacob enjoys playing strategy board games and reading science fiction. Jacob can be reached at jlarsen9@jhu.edu.

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