research / Research reports

Connecting the Asia-Pacific: Australian participation in China's regional infrastructure initiatives

July 17 2018

Executive summary

Major ‘infrastructure gaps’ plague the Asia-Pacific region, constraining economic integration and undermining development efforts.

- In 2013, China launched two new projects – the Belt and Road Initiative (BRI) and the Asian Infrastructure Investment Bank (AIIB) – to lead regional efforts to plug these infrastructure gaps.

- These projects pose a dilemma for Australian policymakers: How to actively participate in these important efforts, while managing a range of potential governance, institutional and geopolitical risks?

- Australia should develop a coherent policy regarding engagement with Chinese-led infrastructure projects, which leverages its membership of the AIIB to manage this dilemma.

- Importantly, China’s infrastructure initiatives are qualitatively differentiated. The BRI is a semi-formal set of guidelines for developing infrastructure bilaterally; whereas the AIIB is a multilateral institution that has adopted international best practices for project governance.

- The AIIB provides a mechanism for Australia to actively participate in China’s infrastructure initiatives. The involvement of the AIIB in a project offers important ‘governance guarantees’ and can help manage perceived geopolitical risks.

- Australia should also seek to lead the institutional development of the AIIB, by offering technical and financial support to its project preparation efforts. This will have the added benefit of improving economic ties with key partners in the region, including Indonesia, India and Vietnam.


Related links

'Australian participation in Asia-Pacific infrastructure initiatives - with Jeffrey Wilson', The ACRI Podcast, July 19 2018. Subscribe to the ACRI Podcast on iTunes.


Author: Dr Jeffrey Wilson is an academic, policy analyst and consultant with expertise in the international economic relations of the Asia-Pacific. He has consulted for government and businesses in Australia on trade policy issues, and has contributed to a range of national and international policy dialogues involving the US, China, Korea, Indonesia, India and Australia. He is the author of two books, over two dozen scholarly articles and chapters, and a wide range of policy analyses and reports for both Australian and international audiences. Jeffrey is currently the Head of Research for the Perth USAsia Centre, an independent think-tank dedicated to fostering stronger relations between Australia, the US and the wider Indo-Pacific. He is also a faculty member of the Asia Research Centre at Murdoch University: one of Australia’s longest standing and internationally recognised academic research centres on contemporary Asia.

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Jeff Wilson

Head of Research, Perth USAsia Centre

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