Belt and Road Initiative: A Chinese Trojan Horse
by Sitendu De
Image Source: Indian Express
China’s Han Dynasty (206 BCE-220 CE) started their westward expansion etching out several trade routes spanning over eight thousand kilometers through the Central Asian countries of Afghanistan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, India, and Pakistan, it was known as the “Silk Route”.
Central Asia was the epicenter of one of the first waves of globalization, connecting eastern and western markets, spurring immense wealth, ideas, people, culture, and religion. Valuable Chinese silk, spices, jade, and other goods moved west while China received gold and other precious metals, ivory, and glass products. The use of this route peaked during Tang Dynasty (618–907 CE) in China but the Crusades, as well as advances by the Mongols in Central Asia, dampened trade, and today Central Asian countries are economically isolated from each other.
In 2013, President Xi Jinping of China wanted to revive the Silk Route. He called it “YI DAI YI LU “or “One Belt, One Road initiative”. It is a strategy initiated by China that seeks to connect Asia, Africa, and Europe via land and maritime networks to improve regional integration, increasing trade, and stimulating economic growth. The plan was two-pronged: the overland Silk Road Economic Belt and the Maritime Silk Road or “BRI (Belt Road Initiative). This grandiose plan accounts for 40% of the world’s GDP; 60% of the world’s population and 75% of the world’s known energy reserves. It is the most ambitious, expensive, and extensive project in the world. It spreads around to 72 countries in the world and includes creating massive infrastructure projects in the following areas:
Roads
Railway lines
Shipping routes
Sea Ports
Oil Refineries
Industrial Parks
Power Plants
Image Source: Medium
China’s overall ambition for the BRI is staggering. China is spending almost $1 trillion to revive and renew the overland and maritime trade links between China, Europe, West Asia, and East Africa through the construction of modern ports linked to high-speed road and rail corridors. Some of the projects include:
Highway in Pakistan
Port City of Colombo, Sri Lanka
Forest City, Johar. Indonesia
Karuma Hydropower project, Uganda
Motorway in Serbia
China wants unification of global markets through 6 different land corridors and also by maritime routes. They are:
China-Mongolia-Russia
New Eurasia land bridge
China-Central Asia- West Asia
China- Bangladesh- Myanmar
China-Indo China Peninsula
China-Pakistan Economic Corridor
As the “Economic Belt” meets the “Maritime Corridor” it's a win-win situation for China.
What does China hope to achieve through this BRI?
· Build a regional alternative to the American hegemony
· Solving the domestic challenges from western provinces economically through BRI.
· Lessen the development disparity between the rich, eastern coastal province to poorer western, inland ones in China
· Develop new investment opportunities & boost Chinese exports
· Sidestepping the “Middle-Income trap” by exporting industrial overcapacity
· Providing continued growth to ensure CCP’s legitimacy
· Breaking away of Soviet Union is haunting China always so BRI becomes a showcase of major economic achievement of CCP
· Portraying BRI as purely “Economic Ventures”
· Plan for economic integration
· Taking advantage of geopolitical opportunities & advertising itself as a good economic partner
Hidden Agenda of China includes:
· Targeting countries where democracy is weak and crumbling; and those countries who easily compromise on their sovereignty
· Tool to secure strategic goals and build up Military Posts
· Luring developing nations to borrow beyond their means and make them fall into the “Debt trap”.
· Seizing strategic assets as collateral security in case of default
· Tool to secure strategically located contingents far from home
· Stationing of warships
· Dictate trade rules
· Control shipping routes
· Plans to dominate the world
Who finances the BRI?
5 out of the top 20 richest banks in the world are from China. They finance projects. The two main banks are:
(1) China Development Bank is presently involved in financing 400 projects in 37 countries, spending around $ 110 Billion.
(2) Industrial and Commercial Bank of China is involved in 212 projects in 12 countries, spending around $ 67 Billion.
Image Source: CGTN
What are the potential roadblocks?
The BRI or “Belt and Road Initiative” is like a Trojan horse to many countries, not knowing what is inside the gift box. The ‘debt trap diplomacy’ of China refers to offering projects/loans on terms that end up being too difficult for countries to repay, eventually compelling them to accept political or economic concessions. China’s role can be compared to Shylock the Jew and Antonio’s role being played by the debt-ridden countries who wanted to show to their people a sparkling new infrastructure (often misconstrued by people as development) for their country. China’s BRI has resulted in several such unsustainable debt-for-infrastructure deals, which helps Beijing’s geostrategic interests by increasing its global presence and influence. Some of them are already in their hands.
Gwadar Sea Port (Pakistan) - leased for 40 years
Obock Military base (Djibouti) - leased for 10 years
National Electric Grid (Laos) - defaulter of loan, now owned by China
Hambantota Port (Sri Lanka) - leased for 99 years
Malacca gateway (Malaysia) - leased for 99 years
China has approached its investments strategically. While engaging in projects, it has factored in the host countries’ abilities to repay loans. It also has wider strategic objectives of making China a global power and BRI is one of the tools to achieve this objective. China has already set up 9 strategic seaports ---popularly known as “String of Pearls”. These are:
Hong Kong
Myanmar
Cambodia
Bangladesh
Sri Lanka
Maldives
Pakistan
Djibouti
Sudan
Most of these projects have now run into trouble. Many countries have either cancelled or put on hold these projects due to mass protests against the construction of Chinese factories driven by concerns about costs and repaying the loan. A total of 586 Chinese Banks are at high risk because of defaulting by several countries. The Covid 19 virus emanating from Wuhan has also taken a beating.
When India was asked to join and be a part of the grand BRI plan in 2017, India repeatedly declined to state that it does not offer a level playing ground to the country’s businesses. It also opposed BRI because a key component –the China – Pakistan Economic Corridor (CPEC) passes through Indian territory currently occupied by Pakistan (POK). The repercussions were immediate as China claimed Doklam as their part of the country leading to a long 73 days standoff between the two countries. Tense bilateral relations with China, deep mistrusts and India’s growing concerns over Chinese hegemonic intentions in South Asia and the Indo-Pacific region make it practically unlikely that India will ever consider joining this project.
It has always been China’s policy of arm twisting the neighbouring countries to fall in line with them. The fact that the Chinese have begun to deploy 30,000 security personnel to protect the projects along the CPEC route makes it an active player in the politics of the Indian sub-continent. China’s motive behind the BRI is something else as India sees Chinese footprints in every neighbouring country of hers.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of Ytharth.
About the Author
Sitendu De got his education from St.George's Grammar School, Hyderabad and Post graduated from Osmania University, Hyderabad. He joined Cabinet Secretariat, New Delhi as an officer and was posted at different places in India. After serving for 20 years he joined the corporate world as a business strategist and recruiting new talents. He did Strategic Management Course from IIM (Calcutta). He is a prolific writer, specializes in geopolitical and human interactions. He lives in Kolkata with his wife and a son.