Belt and Road Read online

  BRUNO MAÇÃES

  Belt and Road

  A Chinese World Order

  HURST & COMPANY, LONDON

  CONTENTS

  Introduction

  1. What is the Belt and Road?

  2. Nuts and Bolts

  3. The Belt and Road and the World Economy

  4. The Belt and Road and World Politics

  5. The World After the Belt and Road

  Notes

  Index

  INTRODUCTION

  THE GREAT MAP OF MANKIND

  When J.R.R. Tolkien was asked by a reader how he had approached the composition of The Lord of the Rings, a book that took twelve years to write and spans more than a thousand pages, he answered: “I wisely started with a map and made the story fit.” So it is. When imagining new worlds we often start with a map.

  For seventy years, our map of world politics was organized in a certain way. The center of global political and economic power came to be located in the United States, from where it radiated to the maritime edges of the large Eurasian supercontinent—a kind of forward deployment against the dangers emanating from its inner core. Western Europe and parts of East Asia were seen as natural extensions of American power, aligned with Washington in values and goals and enjoying significant autonomy from their senior partner. Inevitably, the large landmass of Eurasia remained divided into two areas, according to the path of historical development they had embarked upon: the Western path, to be replicated in countries such as Japan and South Korea, and an alternative path and ideal, defined in different measures and in different ways by Moscow and Beijing, about which there was much less clarity and unity and which sometimes meant little more than the negation of the former.

  What took observers by surprise was not that the Eurasian supercontinent emerged from the Cold War as an increasingly integrated space, but that it became so not according to a Western model, but rather as the stage for many different and conflicting political ideas.

  The new map of world politics is radically different from the previous one. The United States has seemingly abandoned any pretension to shape the world in its image. American power is still a force to be reckoned with, but from now on it will be exercised at a distance. Just as the United Kingdom in the nineteenth century lived in a precarious relation of distance and proximity to the continent across the Channel, so does the United States appear today as both a part of Eurasian politics and a separate unit enjoying considerable autonomy and independence.

  At the same time, new powers have been emerging in Asia that can no longer be seen as pale or imperfect copies of Western society. With the disappearance of the old ideological battle lines and the establishment of new economic links, a new geographic entity started to emerge: Eurasia, the supercontinent extending from Lisbon to Shanghai or even Jakarta. One could argue if this is a return to an older time or the dawn of a new age. The latter would be more exact: romantic images of the Silk Road or Marco Polo’s adventures cannot hide the fact that trade along those routes was insignificant and almost no one made the whole journey from sea to sea. As for Genghis Khan, practically limitless as his empire was to become, it quickly broke apart into separate units, prefigurations of future states or empires.

  As we list the main centers of influence bringing Eurasia together, pride of place must be given to China and its major geopolitical project, the Belt and Road. In our map it should appear as nine arrows crisscrossing Eurasia in all directions: six economic corridors on land and three sea routes whose final goal is to create a new global economy and place China at its center. Eurasian trade in goods is now close to $2 trillion each year, consistently more than double the volume of Transatlantic trade and significantly more than Transpacific trade. This is all the more remarkable as this is the axis of the world economy where physical and legal restrictions are most significant and therefore where the potential for growth is the highest. After trade, financial flows will inevitably follow and then cultural and political influence. Whoever is able to build and control the infrastructure linking the two ends of Eurasia will rule the world.

  But the Belt and Road is only part of the story. If you want to draw an accurate map of Eurasia you need to add the gradual expansion of Indian power from the Suez Canal to Malacca. Both the Portuguese and the British thought that India encompassed the whole of the Indian Ocean region and this is increasingly how decision-makers in Delhi see the question of India’s place in the world. In the next few years we shall see them focused on building a powerful navy and opening military bases in the Horn of Africa and Sumatra, while attempting to integrate the densely populated Indian littoral into its own economic value chains. Raja Mohan, a prominent Indian foreign policy analyst, has argued that “the Indian political and policy establishment, long brought up on the notion that Europe and Asia are different, must adapt to their slow but certain integration into a single geopolitical theatre.”

  As for Russia, it now looks in four directions at once, a marked improvement upon the double-headed eagle of its state emblem. Traditionally, Russian elites tended to see their task as that of bringing about a gradual but complete integration with a more advanced Europe. That vision is now being replaced by a new self-image: as the center and core of the Eurasian supercontinent, Russia can reach in all directions and provide a bridge between Europe and China on both ends. Vladislav Surkov, a trusted advisor to President Putin, recently argued that Russia is a “Western-Eastern half-breed nation, with its double-headed statehood, hybrid mentality, intercontinental territory and bipolar history.” In fact Moscow is also looking south to the Middle East, hoping to acquire control over all the main regions of energy production, and to the north, as global warming transforms the Arctic into an important trade route linking Europe and Asia.

  Eurasia is becoming smaller, more integrated, the stage for intense rivalry and competition between different poles, each of them projecting influence outwards and creating new connections. Japan is financing and building infrastructure across the Indian Ocean, all the way to Djibouti, an initiative to which it has dedicated $250 billion. Iran will not rest until it is able to carve a land corridor to the Mediterranean, something it has been deprived of since the Sassanian Shahs 1,400 years ago. Turkey now acts independently of its Western partners and has started to relish the status of a Middle Eastern country, in the process bringing that troubled region to the very borders of the European Union.

  Europe has its own strategy too, although it is far from a conscious one. It consists of creating “little Europes” all over the supercontinent: small classes of people in all major metropoles who mimic the European way of life, individualistic and cosmopolitan, connected in tight networks and sharing a similar ethos and common economic and cultural projects. Our map needs to include this spider web of cosmopolitan neighborhoods in Istanbul, Moscow, Mumbai, Shanghai and many other places.

  A new world map is being built before our eyes. The new Eurasian century is not one where different regions of the world converge towards a single model. For the first time in many centuries, we are forced to live with cultural contradiction without immediately explaining it away as a result of societies existing at different stages of historical development. But neither is this a world of clear borders and separations. For all their differences, the main political and economic blocs are increasingly integrated. The vast supercontinent stretching from Lisbon to Jakarta is increasingly connected and interdependent, concentrating about two thirds of the world’s population and global economic output. Certain regions of the supercontinent are dense areas of technological innovation. Others are enormously rich in natural resources. More importantly, perhaps, it is here that the United States finds the only state actors rivalling it in power and wealth: China, Rus
sia, the European Union, perhaps India in the future, as well as smaller states it nonetheless regards as security threats. Even in the limit case of a world war, it is highly unlikely, if not absurd, that a generalized conflict between, for example, China and the United States could take place in the Pacific. It would be conducted where important allies and enemies can be regimented, where natural resources and large populations exist and where industry is concentrated.

  * * *

  The Belt and Road is the Chinese plan to build a new world order replacing the US-led international system. If it succeeds, it is very likely that we shall use the name to refer to the new arrangements, much as we use “West” as a shorthand for the existing order. And thus the map of the Belt and Road is already in its fundamental traits the map of the world to come—as China imagines it. What do we see in this map? China is the only country that can genuinely be said to be universal, to overstep its boundaries, extending its presence to distant geographies. This is the clearest marker of a superpower and therefore it is still today a distinctive trait of American power.

  The map of the Belt and Road changes that familiar pattern. The United States disappears, having been moved from the obverse to the reverse. Japan, Australia and parts of Western Europe may want to preserve a privileged relationship with America, but China hopes that it will have enough leverage over them to ensure that those ties are weakened. As for Southeast Asia, the Middle East and Central and Eastern Europe, plans are more ambitious, as China intends to include them in its own orbit. In the new world order, Beijing can project power over two thirds of the world. Other poles of power may retain their sovereignty, but they will be much more regional or even parochial. They will struggle to influence events outside their borders or immediate region. And since China will control a qualified majority of the world economy and global public opinion, any direct confrontation with these other poles—even if they are able to combine—will have a predetermined winner.

  The map tells a simple story of power and influence. More than a project or an initiative, the Belt and Road is a movement, representing the slow but ineluctable expansion of Chinese influence. Wherever it finds a vacuum or an area of little resistance, it moves in. Where it finds opposition, it stops, if only momentarily. A colour map is a good representation: check back a few months later and some countries or regions may have changed from their original grey as they join the Belt and Road. The core of the old order—in North America and Western Europe—may one day join as well, but in their case only the symbolic recognition that China is the new global superpower will be in order.

  Start with the map and the story will follow. In formal terms it has much in common with a thriller. There is a plan or a plot to take over the world, but everything else is radically uncertain. Chinese leaders muse about their intimation that we have arrived at a critical turn in world history, but the way they approach it is much closer to Lenin than to Marx. Nothing is predetermined, everything is to be decided by the virtue of the participants, their ability to grasp a unique and possibly fleeting opportunity. They would agree with at least the second half of the dictum—common in Europe during the Renaissance—that fortune is a woman whose hair falls over her face so she is hard to recognize and bald at the back so she is hard to grab once she has passed. The United States may yet preserve its dominium for a long time. The existing order may survive if China makes some of the same mistakes it has made in the past.

  It is a very human story, full of doubts and hesitations, dreams and fears. Sometimes, as the head of the China Foreign Policy Center of the Central Party School, Luo Jianbo, has said, the feeling is “that everyone is drunk and we are alone, that all nations are in decline and we are rising.” But other times, deep doubts seep in. Perhaps China will never overcome its limitations, perhaps the opportunity has already passed. Will Chinese leaders and the Chinese people rise to the occasion? Will they know how to avoid past mistakes and, more importantly, will they recognize the moment of truth, the moment when the fate of the world hangs in the balance? China is approaching the center of the world stage to an extent that is unprecedented, it is approaching the realization of the great rejuvenation of the Chinese people to an extent that is unprecedented, and it has the capacity and confidence to reach this goal to a degree that is unprecedented. How should it act?

  Some among the leadership are already dissatisfied with an incremental approach and want to push more forcefully. Others want to keep a cool head and push for a clear understanding of China’s development and its place in the world as a necessary precondition for action. To me the debate seems to be an instance of the classical opposition between prudence and courage, the intellectual and the martial virtues.

  Graham Allison has made the point that China’s rise is a story affecting our individual fates because in the end the question of whether a new world order will be born or the status quo preserved is less important than the question of whether the outcome will be determined peacefully or whether China and America are destined for war. As a rapidly ascending China challenges America’s predominance, the two nations risk falling into a deadly trap first identified by the ancient Greek historian Thucydides when he argued that it was the rise of Athens and the fear that this instilled in Sparta that made war inevitable. His history provides a factual record of the choices Pericles and his fellow Athenians made of their own free will. Different choices would have produced different results, a lesson worth keeping in mind as we face a similar danger.

  Finally, the story in this book is a universal story in the sense that all dimensions of human life play their part in the course of events. The Belt and Road might even be said to resemble one of those Western classical novels where all the disciplines, all the sciences and all corners of human activity are deliberately included. There will be room in this book for economics and cinema, history and philosophy, high politics and criminal intrigue. There will be short sections on shipping, on the steel industry, on digital technology, on mining and on textiles. The action takes place in different geographies, from Africa to Kazakhstan, from the Indian Ocean to the Mekong Delta, from the Balkans to Mongolia.

  This is no accident. The Belt and Road is by design a project meant to encompass the whole world and the totality of human life. No other organized project or idea can rival it in this respect. As Jonathan Hillman has put it, the “Belt and Road is so big it is almost impossible for one person to have mastery of it. Sometimes I wonder if China grasps the whole thing.”

  Writing this book quickly became a lot more difficult than I expected at first. I hope it has become concurrently more interesting to the reader, who may hope to find in the Belt and Road a comprehensive and coherent view of life in the new century.

  1

  WHAT IS THE BELT AND ROAD?

  In 2015, word started to reach Europe’s capital cities that the People’s Republic of China had launched an ambitious new initiative, a national project, perhaps in the mould of NASA’s Apollo Space Mission. Dubbed ‘a new Silk Road’, it consisted of a number of railway routes criss-crossing the Central Asian steppes, linking China and Europe. Camels were being replaced by trains, but many quickly pointed out that rail had already been superseded by gigantic container ships as the main means of moving goods around the globe.

  If China were seeking to expand and revamp port facilities in the Pacific and Indian Oceans that would make economic sense but would hardly be revolutionary. Conversely, if the real core of the initiative were its land component, and its goal were to replace sea cargo transportation with a new network of roads and railroads across the Central Asian steppes, deserts, and mountains, such a project would indeed be a revolution—but one with no economic viability whatsoever. Rail transportation, even if faster than shipping, will always be significantly more expensive, and few economists believe that transportation bottlenecks are a significant obstacle to the expansion of global trade anyway. As the Financial Times put it in 2016, “despite the lofty aspirations, the e
conomic viability of the new Silk Road remains unproven. Industry experts say that all rail transport heading west from China is heavily subsidized by local and regional governments, eager to do their part for the new Silk Road.”1

  Received beyond China through the distorting prism of Silk Road romanticism, what we have come to know as the Belt and Road quickly acquired a considerable mystique. China-watchers wondered what the huge new project might be for, what the official statements were hiding, and why Beijing was launching a giant political initiative whose economic rationale remained at best doubtful. Was it designed as a marketing ploy? Was it about tourism, replacing the Trans-Siberian railway and opening up the cities visited by Marco Polo to the contemporary traveller? Or was it perhaps to be explained according to the arcane tenets of that old discipline, geopolitics? Despite the puzzlement, reactions were predominantly positive. The European Union in particular saw in the initiative something rather similar to its own ideas on connectivity and the beneficial spillover effects of transport infrastructure.

  Visiting Beijing that year, I was hearing a different story. At home the initiative was not called the “New Silk Road,” but “One Belt, One Road.” Its scope was so large that the timeline for its realization had been fixed at more than thirty years, with the first phase of the project to be concluded in 2021 and the project as a whole realized by 2049. No one was that interested in those transcontinental trains, except as marketing opportunities—as the first strategy document for the initiative starkly put it, “we should cultivate the brand of China-Europe freight trains.” The measure of its early achievements were rather the industrial parks being launched and the massive ports whose construction or renovation would draw billions in investment. An interconnected system of transport, energy and digital infrastructure would gradually develop into industrial clusters and free trade zones and then an economic corridor spanning construction, logistics, energy, manufacturing, agriculture and tourism, culminating in the birth of a large Eurasian common market. Trade, not trains.