China’s Tril­lion-Dol­lar For­eign Pol­icy

Vayu Aerospace and Defence - - Commentary -

To hear the world lead­ers who gath­ered in Bei­jing boast about China’s am­bi­tious plans to spend more than $1 tril­lion on roads, ports, en­ergy and other ma­jor projects in 60 coun­tries, link­ing Asia, Europe and Africa, is to be re­minded how Amer­ica’s vi­sion and in­flu­ence have shrunk un­der Pres­i­dent Trump. While Don­ald Trump pushes an Amer­ica First agenda of iso­la­tion­ism and pro­tec­tion­ism and em­broils him­self in con­tro­ver­sies that raise doubts about his com­pe­tence, Pres­i­dent Xi Jin­ping of China ex­udes pur­pose and con­fi­dence as he tries to re­make the global eco­nomic and po­lit­i­cal or­der and lure na­tions into Bei­jing’s or­bit.

Mr Xi held the Bei­jing fo­rum to show­case his One Belt, One Road ini­tia­tive, which is aimed at cre­at­ing a mod­ern ver­sion of the Silk Road, a net­work of trad­ing routes from China to Africa and Europe. Dozens of world lead­ers, in­clud­ing Pres­i­dent Vladimir Putin of Rus­sia, at­tended. Many of them praised Mr. Xi’s vi­sion, which he first voiced in 2013, and were en­thu­si­as­tic about lo­cat­ing projects in their coun­tries, fi­nanc­ing them, build­ing them or man­ag­ing them. The plan of­fers many ways coun­tries can par­tic­i­pate; Bri­tain and Sin­ga­pore, for in­stance, seem ea­ger to han­dle pri­vate fi­nanc­ing.

China’s leader has ad­van­tages in pro­mot­ing his agenda. He’s in con­trol. His gov­ern­ment has lots of money to in­vest. His pro­pa­ganda ma­chine is dis­ci­plined and re­lent­less. And Mr Xi him­self is a Bar­num-like sales­man. “De­vel­op­ment holds the master key to solv­ing all prob­lems,” he said at the fo­rum, as if One Belt, One Road were the ul­ti­mate cure-all. No less im­por­tant, many coun­tries are des­per­ate for in­fras­truc­ture in­vest­ment and jobs. China it­self is ea­ger to open new mar­kets to nour­ish its own growth and to ab­sorb an over­pro­duc­tion of steel, ce­ment and ma­chin­ery. Com­plet­ing just a small frac­tion of the projects could help lift mil­lions of peo­ple out of poverty and sta­bilise poor na­tions.

Still, there are rea­sons to won­der how much of this grand plan can be achieved. There will be se­cu­rity risks in re­gions torn by sec­tar­ian and po­lit­i­cal war­fare; le­gal ob­sta­cles in na­tions with dif­fer­ent laws; and bureau­cratic hur­dles in coun­tries with in­ept gov­ern­ments and cor­rupt of­fi­cials. The big­gest chal­lenge of all may be fi­nanc­ing. So far, in­vest­ments have been fo­cused on Pak­istan, Afghanistan, Kaza­khstan, Uzbek­istan and other coun­tries that are geopo­lit­i­cal pri­or­i­ties for China but have weak economies. Con­fer­ence del­e­gates ex­pressed con­cern that such coun­tries would find it hard to pay back loans from Chi­nese com­pa­nies and banks and em­pha­sised that more projects must be “high qual­ity” and com­mer­cially vi­able.

There is also the issue of how lo­cal peo­ple feel about a project. What­ever the eco­nomic ben­e­fits, a project can­not be al­lowed to run roughshod over in­di­vid­u­als or tram­ple on the en­vi­ron­ment. Mr Xi stressed that con­sul­ta­tion, trans­parency and peo­ple’s “well-be­ing” are vi­tal, but China’s track record is not en­cour­ag­ing. One ex­am­ple: Kyauk­phyu, Myanmar, where a Chi­nese-Myanmar oil and gas pipe­line was pur­sued in se­cret, stomped on farm­ers’ prop­erty rights and did sig­nif­i­cant en­vi­ron­men­tal dam­age. China clearly aims to dom­i­nate the in­ter­na­tional sys­tem. If it suc­ceeds—shap­ing how vast sums are spent and where, and which laws are fol­lowed or not—it could up­end a sys­tem es­tab­lished by Wash­ing­ton and its al­lies af­ter World War II. And there are mil­i­tary con­cerns: For in­stance, many Burmese and for­eign ex­perts worry that China could use the Kyauk­phyu ports for mil­i­tary pur­poses.

Mr Trump has al­ready ceded ground to Bei­jing by with­draw­ing from the Trans-Pa­cific Part­ner­ship that Pres­i­dent Barack Obama ne­go­ti­ated to en­sure that the United States and its al­lies set the rules for Asian trade. This has led many Asian coun­tries to ques­tion Amer­ica’s com­mit­ment to the re­gion and to look more se­ri­ously to China. Like most of its Western al­lies, the United States has been wary of Mr Xi’s ini­tia­tive. While Mr Putin sent him­self, it was only at the last minute that the Trump ad­min­is­tra­tion up­graded its del­e­gate to the fo­rum from a Com­merce Depart­ment func­tionary to Matthew Pot­tinger, Mr Trump’s se­nior Asia ad­viser. Amer­i­can com­pa­nies ea­ger for a share of the One Belt, One Road business hope for greater en­thu­si­asm go­ing for­ward so their in­ter­ests will be pro­tected. What­ever ob­sta­cles lie ahead for One Belt, One Road, it is no ex­ag­ger­a­tion to say that if the United States and its Western al­lies turn in­ward, Mr Xi could pre­vail by de­fault.

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