The Contradictions of Xi’s Belt and Road Initiative

At The Washington Post, Center for Strategic and International Studies fellow Jonathan E. Hillman looks at the contradictions between Xi Jinping’s domestic drive to reinforce government control, and his international ambition to broaden China’s global clout while simultaneously making China a stalwart of globalization for a new era. A central pillar of this plan is his grand Belt and Road Initiative, a trillion dollar-plus, 65-nation trade and development initiative that has attracted both international excitement and concern:

This fundamental tension — between maintaining control and promoting connectivity — extends into the Belt and Road’s very core.

The initiative aims to fuel trade, but Beijing’s measures constrain commerce. Intrusive personnel and ubiquitous checkpoints make it difficult to send and receive packages. Local laws require citizens to participate in “anti-terror” drills, flag-raising ceremonies and other activities that distract from running a business. Last month, Xinjiang’s governor endorsed building a “Great Wall” to block foreign militants.

[…] Hardest to reconcile may be the Belt and Road’s promise to speed the flow of information and ideas. As Xi said at the Belt and Road Forum in Beijing last year, “The ancient silk routes were not for trade only, they boosted flow of knowledge as well. … Today, a multi-dimensional network is taking shape … featuring land-sea-air transportation routes and an information expressway.” But Chinese censorship and cyber security laws have become more intrusive. China is also offering to help other countries learn from its “Great Firewall” — in effect sharing knowledge to limit knowledge-sharing.

Of course, global flows create disruptions. Trade can increase productivity while displacing workers. Data flows can boost scientific innovation while fostering debates about other aspects of society.

[…] History provides a guide. The ancient represented an improvement in connectivity, which is why that period is popularly remembered with images of movement: camels, caravans and merchants. If the new is symbolized by images of stasis — police checkpoints, long lines of trucks and barbed wire — there won’t be much to remember. [Source]

The Belt and Road Initiative—a massively ambitious trade and infrastructure plan first announced in 2013 under the name “New Silk Road,” later renamed “One Belt, One Road,” and finally in 2015 officially dubbed its current moniker—is comprised of two main routes, each with various tendrils of resource infrastructure, and several interconnecting corridors. (For a visual tour of the planned routes, see a recent interactive map from CNBC.) In recent years, the initiative has hit financial and political speed-bumps, most notably in South Asia. While India has been the loudest opponent to the BRI, the former (and currently exiled) president of the Maldives recently warned that BRI-related investments in the island nation were China’s attempt at “buying up our lands, buying up our key infrastructure and effectively buying up our sovereignty.” There have also been security concerns regarding the section that would link the land and sea routes in an especially troubled region of Pakistan, and worry that Beijing may have colonial ambitions or may use the project to legitimize its autocratic approach to governance. At Foreign Affairs, Andrew Small describes early bilateral optimism from Beijing and South Asian partners, before outlining the growing backlash to the BRI/OBOR in the region as an example of potential future barriers along the massive route:

South Asia […] appeared to have all the right ingredients for the Chinese economic model: large populations, fast-growing economies, GDP per capita comparable to China’s a decade earlier, weak connectivity, and major infrastructure deficiencies. When Chinese Premier Li Keqiang undertook his first overseas visit in 2013, South Asia was the location he picked to tout two new economic corridors, a version of OBOR avant la lettre.

But five years on, such hopes have proved unfounded. The region has instead become the main battleground for OBOR’s future—with India as its chief opponent, Pakistan as its chief enthusiast, and, in between, countries from Nepal to the Maldives facing economic choices that have become highly politicized. While the hope may have been that Chinese investment schemes would help mitigate competition in the region, the result so far has been precisely the opposite: OBOR has fused with and reinforced existing divisions. If China wants the economics of the initiative to achieve its intended strategic effects, it will need to square the politics first. South Asia illustrates the obstacles Beijing will face when it fails to do so.

[…] So far, OBOR’s rollout in South Asia demonstrates the barriers Beijing will face unless it makes adjustments. Beijing pushed the narrative that growing Chinese trade and investment would spur development, stability, and a more integrated region. But the project’s early promise has been soured by China’s failure to reach a consensus with the region’s major power and to answer serious questions about whether its handling of Sri Lanka is sui generis or symptomatic of its general approach. Even in sympathetic Pakistan, similar concerns are quietly expressed, and the Maldives is shaping up to be the regional test case for 2018. There is still an opportunity for Beijing to push forward a version of OBOR that is likely to command broader support and consent, including from competitors and rivals that can still see benefits in certain Chinese investments. But token efforts, such as recent offers to rename CPEC, are not enough. If Beijing wants a clearer run to advance the economic and strategic goals that underpin OBOR, it needs to do its political homework first. [Source]

At Asia Sentinel, Salman Rafi Sheikh describes the difficulty that the BRI has been facing in Europe:

Instead of the warm welcome issued by Asian leaders, Europe is in the middle of restricting China’s advances. Germany, France and Italy have set in motion new ways to prevent a proverbial ‘Chinese takeover’ of Europe, raising fears that could thus break up the EU.  There is ample reason to be concerned, if the experience in Southeast Asia is any example, where and aid have resulted in neutering the Association of Southeast Asian Nations. Cambodia and the Philippines, the beneficiaries of major amounts of funds, have chosen to thwart western attempts led by the United States to keep the South China Sea from turning into a Chinese lake.

China has long tried to assuage European Union fears of Beijing’s economic domination. One of the reasons behind changing the project’s name from ‘One Belt, One Road’ to ‘Belt & Road Initiative’ was to indicate that the trillion-dollar project isn’t a one-way initiative but rather involves a ‘win-win’ situation for all. That has done little in terms of converting the skeptics into supporters, evident from French President Emmanuel Macron’s statement that the new Silk Roads can’t be one way.

There are mounting concerns in European capitals, for instance, that considerable ambiguity and secrecy continue to surround Chinese projects and that a number of Chinese initiatives elsewhere in Asia have failed to bring the claimed ‘win-win’ for the recipient countries, leaving them deep in debt to Chinese bankers.

Skepticism in Europe is therefore high. According to Germany’s State Secretary for Economic Affairs Matthias Machnig, the purpose of new legislation is to counteract takeover fantasies, as well as preventing the draining of technology and know-how effectively.” […] [Source]

For more on China’s troubled economic diplomacy with Europe, see a recent column by Project Sinopsis’ Martin Hála for CDT.

Despite the fair supply of skepticism and criticism, the BRI has also attracted support. For a positive outlook on how the BRI could serve to economically reinvigorate Europe, see a recent essay in The Diplomat by Fuad Shahbazov, or another by Maximilian Römer on how the project could help “pave the path to peace” on the Korean Peninsula. See  also a series of audio reports focusing on the BRI from WBUR’s Here & Now, including stories on East Africa’s embrace of BRI investment, optimism about the project in ethnic conflict-prone Myanmar, and how a related dry port in Khorgos, Kazakhstan has remade “the middle of nowhere” into a scene of rapid development.