It was an audacious move.
In 2013, Chinese President Xi Jinping announced plans to resurrect the old Silk Road – 21st century style.
In the six years since, he has opened his country’s wallet – loaning vast amounts of money to countries across the Eurasian continent and beyond in an ostensible quest to develop infrastructure, trade, new markets, and probably military assets.
The scope of the project – referred to today as the Belt & Road Initiative, or BRI for short – has raised eyebrows around the globe. It’s also raised eyebrows at home. Indeed, even though China is the second largest economy in the world after the United States, it only ranks 71st in the world in terms of per capita GDP.
At a time when hundreds of millions of Chinese do not have piped running water in their homes, the Chinese Communist Party and its government are lavishing loans on countries far away. Dry statistics hardly capture the course that Xi Jinping has set for himself and his country. In many respects, the Belt & Road Initiative is a land grab – one that rivals in scope the ambitions of Cyrus, Genghis Khan, and Alexander the Great rolled into one.
But Genghis Khan only got to Vienna. By contrast, one of the Belt & Road train routes already goes all the way from eastern China to Madrid. Another one goes to Rotterdam. And just last month, in a first for a G7 member, the government of Italy endorsed and embraced the Chinese project.
The Glory & the Dream
Using the historical notion of the Silk Road as a romanticized hook for countries today, the grand plan of Belt & Road envisions bringing much, if not all, of the Eurasian continent, the island nations of the Pacific, Africa, and even Latin America and the Caribbean, into a Beijing-directed relationship of economic cooperation and collaboration.
China estimates the project thus far has created $1 trillion in trade. But the trade that the Chinese tout as the motivation behind Belt & Road can only occur on the back of massive investments in infrastructure.
China estimates the project thus far has created $1 trillion in trade, and has reached not only four major intercontinental trade routes, but, perhaps more crucially, one maritime route dotted with ports. China’s target for trade with BRI countries is $2.5 trillion by 2025, just six years from now. The Chinese want to develop new markets, much in the way that the West and its partners helped to develop China.
But the trade that the Chinese tout as the motivation behind Belt & Road can only occur on the back of massive investments in infrastructure. Roads, railways, airports, energy pipelines, and maritime ports are all required to support the interconnectivity that is ostensibly BRI’s goal. And that investment is being made by China, galling as it may be, largely from the profits of the investments and trade which America and her allies have been engaging in with China since the late 1980s.
There are estimates that suggest that China may spend $1 trillion in developing infrastructure with target countries.
The Reaction at Home
In the face of these grand ambitions, ordinary Chinese and many in the Chinese Communist Party itself (which comprises about 6% of the population) are unhappy with Xi Jinping. There are several reasons for this.
First, Xi Jinping has become something of a killjoy. He has cut off the money and the good times that national, provincial, and local Party leaders have been enjoying to excess over the last 25 years. Huge budgets, lavish banquets, and the accompanying lifestyle have all been slashed and banned, as probably they should have been.
There are estimates that suggest that China may spend $1 trillion in developing infrastructure with target countries.
There is a deep resentment among the Party faithful over this return to an austere, straight-laced life. Added to that is a growing feeling that Xi Jinping is “getting above himself.” Some of the Old Red Army families who have the same revolutionary pedigree that Xi has – and some with even greater status – see Xi’s international exploits as evidence of hubris, and something that runs against the tide of Chinese history.
Finally, many everyday Chinese are quietly seething over BRI investments in other countries. Despite the fact that China is decidedly not a democracy, it is crucial for social consent to exist. Anyone who witnessed the events of 1989 in Beijing knows that the Chinese people do, indeed, have a boiling point.
The Backlash Abroad
At the same time, an international chorus is rising that says BRI is about nothing less than luring target countries into loan and infrastructure deals – deals which ultimately will put these counties at risk of default, bankruptcy, receivership, and having to transfer their assets to Chinese state control.
Importantly, the charge of debt-trap creation is rising from the very countries being targeted for BRI investments. These voices include savvy commentators and politicians from Malaysia to Zambia. In Zambia, which is rich in copper, the Lusaka Times said in July 2018 that, “It is apparent that there is…subtle and informal colonization of the Zambian economy taking place.” Such comments are being echoed across the continent, and in Europe and Asia, as well.
What America Can Do
The United States needs a cohesive and comprehensive set of policies to counter the negative consequences of China’s geo-political BRI strategy. These policies should include:
1) Interrupting connectivity – China’s BRI routes depend on complete connectivity and control along those routes. The US should be in the business of interrupting that connectivity at critical nodes along both land and sea routes. Our methods should be commercially viable and diplomatically underwritten.
2) Rescuing where possible – Some BRI projects are going to go into receivership; some already have, such as in Sri Lanka. Such occurrences provide a terrific opportunity for the United States and her partners to rescue the project, if worthwhile to our interests.
3) Acting, not reacting – The United States should avoid the temptation of trying to counter BRI projects head on. Many BRI projects are specious from the beginning. A fair share exists because officials in the target country have been financially compromised by the Chinese. Work with countries to expose projects which are infeasible, loan offers that are usurious, and debt-levels that are disastrous.
The United States should avoid the temptation of trying to counter BRI projects head on. Work with countries to expose projects which are infeasible, loan offers that are usurious, and debt-levels that are disastrous.
4) Operating from the top down – The United States should take a top-down approach to its understanding and response to Chinese maneuvering through BRI. Our intelligence on Chinese BRI investments globally should be comprehensive, and in one set of hands that reports directly to the President.
5) Being realistic about the potential for failure, or success – It is not inconceivable that the entire venture is going to collapse under its own weight. China may be over-extending itself in loan commitments, particularly as its own growth is slowing. It may run into backlash at home and abroad that causes it to pull back. But don’t count on failure in determining policy toward it.
6) Going bilateral – The US should work to srengthen bilateral relationships with BRI target countries that are supposed to be firmly in China’s camp, but aren’t necessarily. Malaysia is an excellent example. Prime Minister Mahathir Mohamed, back in office after a 15-year hiatus, visited Beijing in August of last year. In front of the press, while standing next to China’s premier, Le Keqiang, Mahathir effectively called China guilty of “a new version of colonialism”.
7) Accessing expertise – Today in Washington, there is an appalling lack of policy professionals who have in-depth, long-term, real-world expertise and experience dealing with China. That said, there is a population of Americans who have lived, worked, and developed savvy field knowledge in the test tube that is modern China. Their expertise should be tapped.
8) Supporting the opposition – Where there is opposition to BRI investments in the media and among politicians of any BRI country, the US should support their call in real and moral terms, if justified.
In conclusion, China’s Belt & Road Initiative is a grand plan to co-opt tangible and intangible resources for itself, away from the sphere of Western influence. It is in the long-term interest of the United States to counter abuses arising out of BRI with all of the tools we have.
The belt should not become a noose.
Bonnie Girard is in her 32nd year of a China-focused career, having spent over 20 years in-country. She is the founder of consultancy China Channel Ltd, and can be reached at chinachannel@hotmail.com, and on Twitter @BonnieGirard.