Belt and Road Page 13
The Indo-Pacific is the central stage where the new system is being rehearsed. As Raja Mohan put it, the Indo-Pacific forms the great connecting arc delimiting Eurasia in all directions and Eurasia might best be seen as the hinterland of the Indo-Pacific.3 That, in the final analysis, explains why China sees a strategic threat in the very concept of the Indo-Pacific. Understood as a geographic concept it merely repeats ideas conceptualized by Beijing in the context of the Belt and Road, but the same underlying reality carries different—opposed—political meanings. The term “Indo-Pacific” is less the acknowledgment of an ineluctable political geography than an initial, inchoate move to create a political initiative, one intended to rival China’s Belt and Road.
Australia, the United States, India and Japan are discussing the creation of a joint regional infrastructure scheme as an alternative to the Belt and Road. The four countries have recently revived their informal arrangement to deepen security cooperation, a decade after the Quadrilateral Security Dialogue—also known as the Quad—first met. The next step would be to grant it an economic dimension. Offering a contrast to the Belt and Road, a readout of the meeting of the Quad held on the margins of the ASEAN summit in Manila in November 2017 noted that officials discussed “increasing connectivity consistent with international law and standards, based on prudent lending,” and would enhance coordination on this and other issues “to further strengthen the rules-based order in the Indo-Pacific region.”
Many remain skeptical. As the former Australian foreign minister Bob Carr put it, a working definition of the Belt and Road is that China is exporting a surplus in infrastructure to its neighbors. Now, India has no such surplus capacity and its 800 million voters might want to sweep from power any government that tipped funds to build infrastructure abroad. As for the US, it cannot boast a single kilometer of high-speed railway to rival China’s 25,000 km.4 According to Josh Rogin, a Washington Post columnist, the Chinese believe America and its partners have no economic and financial capacity to compete with Beijing’s multi-trillion-dollar Belt and Road, so they are little concerned with US complaints about it.5
On July 30, 2018, speaking at the newly created Indo-Pacific Business Forum, Secretary of State Pompeo announced that US business engagement would be at the center of the Trump administration’s strategy for advancing a free and open Indo-Pacific. He continued: “So just as the United States made foundational contributions in the past, today I am announcing $113 million in new US initiatives to support foundational areas of the future: digital economy, energy, and infrastructure. These funds represent just a down payment on a new era in US economic commitment to peace and prosperity in the Indo-Pacific region.” The announcement might be seen as a turning point—from an exclusive focus on security to economic development—but the funds committed to the effort were paltry, especially when compared to the trillion-dollar Belt and Road. The infrastructure pillar of the initiative is seeded with a mere $30 million.
Pompeo quickly explained that values are more important than money: “With American companies, citizens around the world know that what you see is what you get: honest contracts, honest terms, and no need for off-the-books mischief.” In response, Chinese Foreign Minister Wang Yi commented: “The US is the sole superpower in today’s world, with a GDP totaling $16 trillion. So when I first heard this figure of $113 million I thought I heard wrong. At least it should be 10 times higher, for a superpower with $16 trillion of GDP.”
In a meeting at the State Department in Washington in September 2018 the official in charge of coordinating the US’s response to the Belt and Road was dismissive of Wang’s humor. The new funds, he told me, consisted merely of added money to development assistance in one fiscal year. They would swiftly be followed by parallel initiatives, such as a new bill that would boost the US’s role in international development. It would combine several little-known government agencies into a new body, with authority to do $60 billion in development financing—more than double the cap of the current agency that performs that function—while lifting the current prohibition on owning equity in projects. The latter change was meant to allow the United States to work more closely with investment agencies in countries such as Japan.
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Speaking at the Center for Strategic and International Studies before his first visit to India in October 2017, then Secretary of State Rex Tillerson argued that “we need to collaborate with India to ensure that the Indo-Pacific is increasingly a place of peace, stability and growing prosperity so that it does not become a region of disorder, conflict, and predatory economics.” Asked to elaborate on that comment during the questions period, he added: “We have watched the activities and actions of others in the region, in particular China, and the financing mechanisms it brings to many of these countries, which result in saddling them with enormous levels of debt. They don’t often create the jobs, which infrastructure projects should be tremendous job creators in these economies, but too often foreign workers are brought in to execute these infrastructure projects. Financing is structured in a way that makes it very difficult for them to obtain future financing and oftentimes has very subtle triggers in the financing that results in financing default and the conversion of debt to equity. So this is not a structure that supports the future growth of these countries.”
One of his final acts before leaving the State Department was to warn his hosts during a visit to several African nations that “China offers the appearance of an attractive path to development, but in reality” participants in the Belt and Road are “trading short-term gains for long-term dependency.” Further revealing comments on the initiative came from Secretary of Defense James Mattis during a hearing before the Senate Armed Services Committee in October 2017: “Regarding ‘One Belt, One Road,’ I think in a globalized world, there are many belts and many roads, and no one nation should put itself into a position of dictating ‘One Belt, One Road.’ That said, the ‘One Belt, One Road’ also goes through disputed territory, and I think that in itself shows the vulnerability of trying to establish that sort of a dictate.” And in August 2018, we finally found out what President Donald Trump personally thinks of the Belt and Road. According to one person sitting in the room, he told a group of business executives gathered at his Bedminster golf club that Chinese President Xi Jinping’s “One Belt One Road Initiative,” was “insulting” and that he did not want it. Trump said he had told Xi as much to his face.6
A pivotal consequence of the Belt and Road has been to force the United States to adopt a similar concept of geographic space. Hence the adoption of the Indo-Pacific concept, but as Tillerson made clear in the last six months of his tenure, the geographic concept needed to acquire a normative meaning before being put to use. The Indo-Pacific became “the concept of the Free and Open Indo-Pacific Strategy.” By introducing those two modifiers, Washington wanted to push back against the notion that Western values are doomed to lose influence in the core regions of the Belt and Road. It also wanted to engage India more directly in its reaffirmation of liberal values. India is invested in a free and open order. It is a democracy. It is a nation that can boost and anchor the “free and open order” in the Indo-Pacific region, and American power will increasingly try to ensure that India plays that role and becomes over time a more influential player in the region.
After several years during which the Belt and Road was perceived in Washington as a relatively modest project of economic diplomacy, the initiative has steadily grown in status and is now regarded as a major strategic threat to American power. Two areas of analysis have been developed in parallel. On the one hand, the ways in which the Belt and Road directly targets a US-led global order have been articulated. On the other, a strategy to contain and disrupt the initiative is slowly being implemented. Washington has started to appeal to countries it deems of strategic importance in order to establish how they can become less vulnerable to Chinese influence. Many of these countries are deeply divided in their views on the
Belt and Road. Predictably, China and the United States will have their own privileged audiences. The two countries will be supporting different elements within the elites and political class, attempting to help them prevail in the domestic competition for power. There is much here to remind us of the Cold War, including the presence of an increasingly visible military element.
In his Senate confirmation hearing in April 2018, the new commander of the US Pacific Command, Admiral Phil Davidson, was asked about his assessment of the military and strategic implications of the Belt and Road. Davidson was surprisingly outspoken, expressing no doubts or reservations about a military reading of the initiative. “The predatory nature of many of the loans and initiatives associated with the Belt and Road Initiative,” he explained, “lead me to believe that Beijing is using the Belt and Road as a mechanism to coerce states into greater access and influence for China.” When participant countries are unable to pay back these loans, Beijing offers to swap debt for equity. As a result the Chinese military could gain access to air and military port facilities, perhaps even pressuring nations into denying American forces basing, transit and operational and logistic support. China claims that “the Belt and Road Initiative will not be used for military means, but their words do not match their actions.” After Davidson’s appointment, the Pentagon announced a new name for the Pacific Command, with a change to Indo-Pacific Command meant to “better encapsulate the responsibilities the command currently has.”
It was no coincidence that Davidson’s comments were made when General Wei Fenghe, Chinese state councilor and defense minister, met with the visiting Pakistani Naval Chief of Staff Admiral Zafar Mahmood Abbasi in Beijing. According to reports in the Chinese media, Wei told his guest that China will work with Pakistan to focus on building a community of shared future for mankind, consolidate all-weather friendship, deepen pragmatic cooperation in various fields between the two armed forces, and provide strong security guarantees for the joint building of the “Belt and Road Initiative.” For the first time the intention to provide the Belt and Road with “security guarantees” was publicly voiced. Abbasi, in turn, expressed his congratulations on the world-renowned achievements made by the Chinese armed forces. He said that Pakistan highly cherishes the traditional friendship with China and is willing to continuously deepen exchanges and cooperation between the two militaries in high-level exchanges, military training and technology, to promote the continuous and in-depth development of relations between the two countries and the two militaries.
Along the land corridors included in the Belt, security concerns have always been paramount. Many of the countries in Central Asia present more or less latent threats from Islamist terrorism and militancy. In fact, to the extent that it promotes new connections, the Belt and Road may turn out to exacerbate these threats. As Chinese economic interests penetrate more deeply into the local economies, feelings of Sinophobia may be expected to grow. Direct security risks to China became visible when a car bomb exploded after ramming the gates of the Chinese Embassy in Bishkek in August 2016. Uncertain political transitions and persistent territorial disputes create another set of concerns. The role played by both Kyrgyzstan and Tajikistan as transit states for the narcotics trade from Afghanistan is problematic for China, which is an end market for such drugs. In Pakistan many of the connectivity projects pass through troubled areas, including Balochistan, where an armed insurgency remains active. In September 2016 reports suggested that two Chinese engineers had been killed by militants while working on the Dudher Zinc project in Hub district, Balochistan. In December 2017 the Chinese Embassy in Islamabad said on its website that it had information about a “series of terror attacks” planned against Chinese organizations and personnel, without giving details. A Chinese man working with a shipping company in Pakistan was shot dead in February 2018 in what police described as a targeted attack in Karachi.
In some cases we have been able to find out more about these personal stories. They reveal surprising patterns of cultural contact and expansion, with all the attendant risks, a new world of connections being shaped by the Belt and Road. In June 2017, for example, a pair of young Chinese nationals was executed by the Islamic State in Pakistan after being kidnapped from Jinnah Town. They had been living in Quetta since their arrival in the country on a multiple entry business visa towards the end of 2016, part of a group of Chinese men and women brought to Pakistan by a Korean, ostensibly to learn Urdu and then teach the language to the other Chinese expected to arrive in the future. At first, it was thought that the motives might be commercial, as large numbers of Chinese workers and businessmen arrive in Pakistan each day and are greatly in need of translation services. During the investigation, the Pakistani police concluded that the Korean and the group of Chinese, including the victims, had violated the terms of their visas because they were involved in preaching Christianity.
Beijing is clearly worried that Islamic militants from the Middle East—or West Asia as the region is known in China—could cross Central Asia and enter Xinjiang province. In early 2018, several reports surfaced of a new Chinese military base in the Wakhan corridor in Afghanistan. According to Afghan officials, China and Kabul started discussing building a base in Badakhshan and China will send an expert delegation to Kabul to determine the exact site. China has denied these reports, but witnesses reported seeing Chinese and Afghan troops on joint patrols. There is a long record of signs of a growing Chinese military interest in Central Asia and the discussion about the potential establishment of permanent military bases can only become more intense.
One example that seems highly illustrative of the importance of the security dimension in the Belt and Road is that of Frontier Services Group, the security services firm founded by Erik Prince, former Blackwater chief, which is actively working with China on Belt and Road projects. The fact that the firm has been allowed to set up a forward operating base in Xinjiang and Yunnan provinces shows it enjoys strong support from the highest levels of the Chinese security apparatus. Frontier says its trainers in China are unarmed and are not engaged in operations, only in passing along security skills. Prince told China’s Global Times that Frontier will operate in the main “corridors of the One Belt and One Road initiative”: “The Northwest corridor includes the countries of Kazakhstan, Uzbekistan, Pakistan, Afghanistan and the Southwest corridor includes Myanmar, Thailand, Laos and Cambodia.” Following in Prince’s footsteps, a Chinese soldier who served in the French Foreign Legion recently launched a recruitment drive to create an all-Chinese crew to serve as security for overseas Chinese companies, according to the Chengdu Economic Daily. Among his assignments in the Foreign Legion was a 4-month tour of Mali after the military coup destabilized the western African country in 2013. Wrapping up his service with the French Foreign Legion, Fu Chen has now registered a security company in his native Tianjin.
Faced with a growing number of threats to Belt and Road investments and projects, China may feel the need to increase its military presence in the region. The more assets, investments and citizens China has abroad, the more time it will have to spend on thinking strategically about their security, but any movement in this direction would dramatically change the nature of the Belt and Road, increasing different forms of resistance and opposition to the initiative, while risking a conflict with Russia, the dominant security agent in large parts of Central Asia, the Caucasus and the Middle East.
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China may insist that the Belt and Road is a strictly economic project, but that is a claim bellied by its own efforts to promote the initiative. It ebbs and flows with the rhythm of political strategy, political thinking and political action. It does not follow the pattern of individual decisions by economic agents promoting their own interests, but obeys a national vision and relies on the tools of national power for its success. From the start, China made that success a measure of its political influence and made sure that all the power of the Chinese state was placed behind the initiative
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This, for better or worse, was how the rules of the game were defined. The first three years of the Belt and Road were still a period of reflection and exposition. Since then, power has become the organizing principle. Beijing pushes ahead, sometimes subtly, other times much more aggressively. Other countries have been forced to respond, either by joining the initiative or by devising a method to oppose it. Geopolitics has triumphed.
Blowback against the Belt and Road followed almost immediately upon its initial successes. As we saw above, opposition from the United States and India—with the two countries encouraging each other down that path—grew consistently throughout 2017. In 2018 the surprising winner in Malaysia’s general election, Mahathir Mohamad, criticized Chinese projects for raising the country’s debt without delivering significant benefits and promised to renegotiate the terms and do away with mega projects, in the process managing to destroy the image of Malaysia as the poster-child for the Belt and Road. He combined the message with an appeal to new infrastructure investments, but those did not seem to include the prized high-speed rail linking Kuala Lumpur to Singapore, the logic of which he questioned. Intriguingly, the claim that Malaysia gains nothing strategic from the high-speed rail connection could be interpreted to mean that Malaysia should not assist Singapore by funding infrastructure that assists a competitor in preserving and expanding its role as Eurasian trade hub, connecting to inland Chinese industrial and logistics centers.
Soon after the election, Mahathir said he had written a personal letter to Chinese President Xi Jinping suggesting an overland Silk Route. “As you know, when the demand for oil grew, ships were built bigger and bigger until they were almost half a million tonne, but trains have remained small, and not long enough. So I suggested to Xi Jinping in a personal letter to him, that we should have big trains, and China has the technology to build big trains, which can carry goods from China to Europe.” The problem with the maritime section of the initiative became clearer when he added: “As far as the Belt and Road problem is concerned, we have no problem with that, except of course, we would not like to see too many warships in this area, because warships attract other warships, and this place may become tense because of the presence of warships.” The plan, it seems, is to push the Belt and Road as far away from Malaysia as possible.