China’s Belt & Road needs to listen more
In the aftermath of a tense Asean-led summit season, it is clear now that the United States and China are engaged in a great-power competition not seen since the Cold War. The US-China trade war, irrespective of negotiated talks in Buenos Aires between President Donald Trump and President Xi Jinping, is set to deteriorate over the next two years and probably longer. The two superpowers may have fundamental and structural differences that cannot be resolved without a sweeping deal that realigns their geopolitical status and geoeconomic interests in a way that is acceptable to both, an unlikely prospect. So the confrontation will likely intensify.
For China, its superpower role and reception in international affairs will hinge on its Belt and Road Initiative (BRI), a colossal infrastructure and connectivity project formally known as the Silk Road Economic Belt (SREB) and 21st Century Maritime Silk Road (MSR). The BRI is huge in size and scope, straddling the Eurasian landmass and waterways from the South China Sea through the Indian Ocean to eastern Africa, with estimated long-term funding to the tune of US$900 billion or more. Yet China’s monumental geostrategic developmental project across oceans and continents has been around for just five years. Any assessment of the BRI at such an early stage can only be preliminary and tentative as the grand project evolves.
So far, China’s BRI has not gone down all that well with partner countries. Like its other ventures, such as the Lancang Mekong Cooperation initiative and weaponised artificial islands in the South China Sea, China has a tendency to make and shape outcomes on the ground as a fait accompli, and then expect others to adjust to them. This is a mistake, and it will put China on problematic roads ahead. What China needs to do is to be more bottom-up and consultative, listening to others and incorporating what they think and say in the decision-making processes. Ramming infrastructure projects down the BRI pipes is likely to prove counterproductive, and may undermine China’s global standing as it tries to stand its ground vis-à-vis the US.
Thailand in mainland Southeast Asia space is a good illustration. On the BRI map, Thailand and the overall mainland Southeast Asia region are conspicuously uncovered by both the SREB and the MSR passageways. Instead, this space is one of six corridors linking the overland belt and the maritime road. Thailand is part of the China-Indochina corridor, which stands next to New Eurasian Land Bridge and economic corridors of China-Mongolia-Russia, China-Central Asia-West Asia, China-Pakistan, and Bangladesh-China-India-Myanmar.
Comprising CLMTV (Cambodia, Laos, Myanmar, Thailand and Vietnam), the mainland Southeast Asia portion touches on two corridors, both centred in Kunming, the capital of Yunnan province in southern China. The Myanmar path is based on a rail link between Kunming and a port in Kyaukpyu in Myanmar’s southwest region of Rakhine state. Owing to Myanmar’s mountainous terrain that crosses areas of internal conflicts between the Myanmar army and ethnic minorities, the Kunming-Kyaukpyu corridor has not made much progress.
Yet the China-Indochina connection has begun from the ongoing Kunming-Vientiane rail project, which is nearly half completed. It is designed to cross the Mekong River at Vientiane and connect with Nong Khai province in Thailand’s northeast region. From Nong Khai, the railway would continue all the way through Nakhon Ratchasima province to Bangkok and the Gulf of Thailand as well as through southern Thailand into Malaysia and Singapore, which is the final destination of this corridor.
Land-locked Laos has taken out a $5.9 billion loan from China’s Export-Import Bank for the railway’s construction over five years until 2021, when construction is to be completed. There are local concerns in Laos that the country will be so saddled with debt from this rail project, which amounts to almost one third of Laos’ GDP of $16 billion, as to undermine future economic development. And the Lao government only holds a 30% stake in the project, while China owns the remainder. Beijing sees the Lao rail connection as a pilot project but, if the Laotians end up with a raw deal with a lot of debt and little benefit, other BRI partners will likely be wary of China.
Yet the Lao rail route from Kunming puts the onus on Thailand to connect to it. But the Thai portion has faced delays because of domestic politics, bureaucratic inertia, and cost-benefit reservations. The military government of Prime Minister Prayut Chan-o-cha initially went head over heels for Chinese support after seizing power in a military coup in May 2014. But after China’s tough conditions for the rail project, including rights over land use and imports of Chinese workers as well as a relatively high interest rate, the Prayut government dithered.
What began as a plan to construct 607 kilometres of railway from Bangkok through Nakhon Ratchasima to Nong Khai was scaled down to 258km as a start from Bangkok to Nakhon Ratchasima. This shorter route ended up with just 3.5km within Nakhon Ratchasima itself. After more than four years in power, the Prayut government has made no visible progress on the Kunming-Singapore railway as part of the China-Indochina corridor.
It is worth recalling that the entire BRI thrust coincided with Thailand’s military coup in May 2014 and its consequent military government. Such a concurrence reflects the BRI’s relatively short lifespan thus far and the Prayut government’s initial embrace of China for superpower succour that led to the rail development talks. While China was keen to move the project forward, that the Thailand-China rail plan was beset by inertia owes more to the Thai government’s lack of policy thrust, bureaucratic inefficiency, and geopolitical winds, particularly the roles of Japan in the initial post-coup stage and the US after Donald Trump came to power and reengaged with the Prayut government.
The north-south train project in mainland Southeast Asia has thus moved at a glacial pace. However, time is on its side. China will not lose interest but it may need to revise terms and be more consultative. Thailand’s post-election government is likely to revisit Chinese rail possibilities because it would not want to miss out on the BRI’s potential.
For the same reason, the Eastern Economic Corridor (EEC) is likely to be continued irrespective of which cliques and clans, parties and factions, come to power after the poll. The EEC is tantamount to Thailand’s rice bowl for the next decade and longer, much like the Eastern Seaboard helped deliver solid, steady growth throughout the 1980s and early 1990s. Progress may not be dramatic but the EEC already has built-in momentum from an earlier generation of industrial policy.
For the BRI to succeed, China needs to be more receptive to partner views and to heed domestic voices within the countries involved, such as Thailand. It should not be construed as interference, but rather accommodation, in domestic affairs of BRI partners. Being too much in a hurry with BRI will lead to haste and more global pushback. If Beijing wants to flourish in international affairs, it needs to listen to others a lot more.
So far, China’s BRI has not gone down all that well with partner countries.