These include initiatives that seek to use artificial intelligence, nanotechnology and quantum computing to help create smart cities, part of an effort to find solutions to the challenges presented by the high densities of urban populations in Asia; using big data and satellite imagery to measure air pollutants and gases multiple times daily; and work on disaster-risk reduction across the centre of Asia, which is prone to regular earthquakes and natural disasters. This has led to the establishment of a Chinese-led digital belt and road science programme which will use earth observation science and technology and big earth data to assist with “infrastructure improvement, environmental protection, disaster risk reduction, water resource management, urban development, food security, coastal zone management, and the conservation and management of natural and cultural heritage site management.” Its aim, in other words, is to use data to improve connections, improve sustainability and respond better to crises as and when they arise along the Silk Roads.106
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Many are unconvinced by the Belt and Road Initiative, its declared aims and its proposed outcomes—while some also note that it is important to differentiate between the near $1tr that has been promised to projects and the amounts that have actually been committed and paid out, while conceding that even these are to be counted in the hundreds of billions of dollars.107 To start with, there are the environmental concerns that go hand in hand with major construction projects, the extraction of minerals and the intensification of transportation networks—which are poorly understood and little studied yet likely to be of major significance.108 Then there is the alarm that local elites have used the opportunity to line their own pockets, while burdening the wider population with debts that they cannot hope to pay back.109
It is also difficult to get a sense of exactly what the Belt and Road Initiative even is. It is “breathtakingly ambiguous,” notes Jonathan Hillman, a leading scholar on the subject, who also stresses mismatches between official plans and announcements and the project activities on the ground. “There is always a risk of imposing order where, by design, it does not exist,” notes Hillman, who also draws attention to duplications and inefficiencies, and to the scattergun funding of projects that have little overlap, let alone forming part of a coherent master-plan.110
The ambition and ubiquity of the Belt and Road Initiative, on the one hand, and the apparent contradictions involved in assessing its purpose and aims, has perplexed many commentators, who have noted the lack of commercial logic behind many individual projects and have questioned the feasibility of the initiative as a whole. Is the scheme “more public relations smoke than investment fire,” Harvard’s Joseph Nye wondered, before suggesting that Chinese motivations revolve less around helping raise standards of living in China or in neighbouring countries and more around the desire to find investments that produce better returns than low-yield US government bonds—of which Beijing owns more than $1tr.111
And yet, Chinese officials themselves recognise that 80 per cent of the money ploughed into Pakistan, half that invested into Myanmar and a full third that is expended in Central Asia will probably be lost.112 Not surprisingly, this has led to discussions about what China’s long-term aims are with the Belt and Road Initiative and how most usefully to understand decisions to invest in schemes that are either commercially unviable, overoptimistic, one-sided—or all three.
Others have criticised the fact that, rather than being a “win-win” scenario, the initiative enables Chinese companies to do well, not alongside others, but at their expense. As some have pointed out, 89 per cent of Chinese-funded Belt and Road projects have Chinese contractors.113 “It’s about selling their stuff,” said a European Union official, who asked to remain anonymous, during the Beijing Forum of 2017—when the French embassy issued a statement complaining about the lack of transparency and about the lack of attention paid to “open, rules-based public tenders” for construction projects along the Silk Roads.114
There are also concerns about the fact that many of the countries that have received large loans are notorious for their bad business practices—as well as for their treatment of those who oppose the government or stand in the way of influential decision-makers. The US approach in Africa of “incentivising good governance to meet long-term security and development goals,” said Rex Tillerson, at the time secretary of state, “stands in direct contrast to China’s approach, which encourages dependency using opaque contracts, predatory loan practices, and corrupt deals that mire nations in debt.” There is no question, he added, that “Chinese investment does have the potential to address Africa’s infrastructure gap, but its approach has led to mounting debt and few, if any, jobs in most countries.”115
Criticisms like this have brought stinging responses. An article published in Zimbabwe’s independent Newsday newspaper about Beijing’s willingness to turn a blind eye to excessive debt levels, poor business practice and government corruption led to the Chinese embassy in Harare issuing a statement that attacked the “slander” of the article and noted that “China and Zimbabwe are good friends, good partners and good brothers who have stood together through thick and thin.” The Chinese government simply wanted to support the Zanu-PF government that was “elected by the Zimbabwean people and recognised by countries across Africa and the world.” Surely, the fact that China “conducts friendly exchanges and win-win cooperation with the Zimbabwean counterpart [should be] beyond criticism”?116 Comments such as these show how China frames its international engagement in public not by emphasising its own interests, but by presenting itself as a defender of democracy—and of local populations.
As it happens, when Robert Mugabe was finally removed from power after thirty-seven years of dictatorship, during which time he accumulated a fortune that US diplomats estimated to be worth more than $1bn, to say nothing of a swathe of human rights abuses that scarred Zimbabwe, or of the doctorate awarded to his wife just two months after enrolment in a Ph.D. course, many specialists thought that the key role had been played by Beijing.117
But China has been careful to court friendships in a more progressive way too, pledging to support agricultural development projects, committing funds to emergency food-aid programmes and providing money to help establish an African Standby Force to assuage crises in the region.118 The creation of a scheme to award 30,000 scholarships to African students has naturally been both popular and taken as a sign of China’s long-term commitment to building ties. In less than fifteen years, the number of African students studying in China has grown twenty-six times—with the result that more anglophone students from across Africa now take courses in China than they do in either the UK or the US.119
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Such steps have convinced some that it is time to look beyond “aid” from the US, which, rather than being an expression of “altruistic charity,” is a mask for the exploitation of the local populations—and a way of passing subsidies to US corporations.120 The release of documents that show how the US urged Belgium to withdraw its United Nations peace-keeping force from Rwanda in the 1990s to stop the United States being drawn into violence hardly casts the West’s behaviour in even the recent past in a good light, to say nothing of the age of empire of a century ago, when European states controlled 90 per cent of Africa. According to one leading commentator, the US decision “all but guaranteed the crisis in Rwanda would spin out of control.”121 The resulting loss of 800,000 lives and the displacement of some 4 million people shows how hard it is to retain credibility while talking of providing leadership—and why criticisms of the US role in Africa, as elsewhere, are not just based on hyperbole but also on fact.122
This sits alongside rising criticisms of the rules-based international order, considered in the West as the cornerstone of global stability. In other parts of the world, it is now increasingly referred to as a Western “club” whose benefits “such as market access, aid
and investment, and the provision of a security umbrella [are] offered selectively and conditionally” by developed nations, while keeping China, India and others outside or connected only at the margins. Some developing countries were summarily excluded in a system that locks in advantages for the rich, at the expense of the poor—while enabling the former to pontificate to the latter.123 Such voices are extreme and relatively rare; but they are growing in number and volume, and result from the perception, real or otherwise, that China is opening its doors at a time when those elsewhere are being closed.
Nevertheless, it is also true to say that many are all too aware that with the golden rays of Chinese attention can come a shadow. Beneficiaries of loans also note, for example, that opportunities do not cut both ways. It is important, said President Kenyatta of Kenya, to see how to enable “Kenyan goods to penetrate the Chinese market.” With a new $3.6bn railway line to pay for, it is not surprising that leaders like Kenyatta are pushing to get access to markets that can help fuel domestic growth. If Beijing’s “win-win strategy is going to work,” said the Kenyan president in an interview with the Financial Times, “it must mean that, just as Africa opens up to China, China must also open up to Africa.”124
Such concerns go hand in hand with worries about the indebtedness incurred by the governments of many countries whose capacity to meet their obligations and manage repayments is often questionable. Kenya is a case in point, where the cost of the new railway and a proposed inner-city expressway threatens to raise the country’s debt from 40 to nearly 60 per cent of GDP.125 Cases like this, such as a single agreement made between the government of Congo and a Chinese consortium regarding mines in the Kolwezi region of the country, which was worth more than the entire annual budget of the Congo in the year it was signed, have not surprisingly caught the attention of specialists.126 The fact that things in this particular project in Congo have not gone to plan has led some to warn that “the Belt and Road bubble is starting to burst.”127
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Levels of debt are so acute, meanwhile, in eight countries (including Pakistan, Kyrgyzstan, Tajikistan, Laos and Mongolia) that some observers have warned about the consequences if, as and when debt repayments cannot be met.128 Christine Lagarde, managing director of the IMF, noted the potential benefits of large-scale projects, but also gave a diplomatically worded warning while in Beijing in the spring of 2018: “Ventures can also lead to a problematic increase in debt, potentially limiting other spending as debt service rises and creating balance of payments challenges.”129 She meant that countries could end with a sovereign default—and be at the mercy of their creditors.
The fiscal pressures that can exacerbate the anxieties of already weak economies can be a serious concern in terms of major infrastructure developments. While there clearly can be long-term benefits in improving local and regional connections, upgrading transport networks and energy supplies, the pain of getting these wrong can be serious. In 2011 Tajikistan’s government ceded several hundred square kilometres of land to China in exchange for forgiveness of debts that it could not service.130 Many have seen this as part of a sign of Beijing’s ability and willingness to use its muscle to engineer outcomes that are heavily skewed in its own favour.131
Examples of future opportunities to do so are abundant elsewhere. The $7bn cost of the railway line being built to link Kunming with Vientiane represents more than 60 per cent of the GDP of Laos, leading to warnings that the level of debt is so heavy as to be all but unserviceable.132 What this means in practice was set out in a front-page newspaper story in Angola, a country that has seen almost 4,000 km of new railway track laid down and dozens of stations built or rebuilt by Chinese contractors. As of 31 December 2017, said an editorial in Expansāo, if the debt was averaged out between the whole population, Angolans effectively owed China $754 each—a considerable sum in a country where annual per capita income is only $6,200.133 It is an even starker story in Kyrgyzstan, where the state debt is the equivalent of $703 per citizen (as against barely $1,000 annual per capita income).134
The same country provides a useful example of what happens when things go wrong with the case of the $386m upgrade to the Bishkek thermal power plants in Kyrgyzstan. In January 2018, the plant broke down following a major investment, leaving some 200,000 homes without heating for five days at a time when temperatures in the Central Asian republic had dropped to almost −30°C. This has created a national scandal in the country, centring on how the contract was awarded, who was responsible for the failings and questions about whether loans from China might create more problems than they solve.135
Another case comes with the deep-water port at Hambantota, in Sri Lanka, built at a cost of $1.3bn, but whose usage proved to be far lower than the projections to justify the investment. In the summer of 2017, a ninety-nine-year lease was granted to a Chinese company in lieu of debt—a solution that created a political storm in the country, provoked concern in India at China’s strategic, commercial and military expansion into the Indian Ocean, and sent an obvious signal to others about the consequences of a project failing to deliver its projected results.136 Borrowing money from a lender who may have an interest in utilising the asset on which the loan is secured inevitably brings risks that need to be assessed carefully.
In the case of Sri Lanka, the fallout over Hambantota extended to the major new international airport at Mattala that was built in tandem—where bright projections about passenger use failed to materialise. Sri Lankan Airlines, the country’s own national carrier, stopped flying to the airport less than two years after it opened for commercial flights due to lack of demand; the only other airline that operated scheduled flights, Dubai’s flydubai, suspended operations in the early summer of 2018, raising questions about the future of the airport—and about the repayment of debts estimated to run to over $200m.137 Discussions between the Indian and Sri Lankan governments to form a joint venture have been primarily motivated by the former’s concern about the airport falling into China’s hands.138
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India’s anxieties are in part based on long-term rivalry with China, and on the legacy of the war that broke out between the two countries in 1962. These have long made for a tetchy relationship, which has become more complicated in recent years. The Indian government pointedly did not send a delegation to the Beijing Forum in May 2017 and has regularly stressed “serious reservations” about the Belt and Road Initiative.139
“No country can accept a project that ignores its core concerns on sovereignty and territorial integrity,” said a statement released by the Indian Ministry of External Affairs timed to coincide with a major Belt and Road Forum in Beijing in 2017. Driving concerns were plans to upgrade transport links in Kashmir, which India sees as a challenge to its sovereignty and a threat to its national security. But these were not the only criticism of China’s plans. “Connectivity initiatives must be based on universally recognised international norms,” continued the statement, namely “good governance, rule of law, openness, transparency and equality.”140 China’s plans are “little more than a colonial enterprise,” opined a columnist in one leading Indian newspaper.141 Nonsense, replied a commentator in the Chinese press. China had never been a colonial power. “If it hasn’t been in the past, why should it be now?”142
Underpinning Indian concerns is the amount of investment into Pakistan, with whom India’s relations are even more strained than with China. The fact that one spur of the proposed upgrade to transportation links runs through the disputed region of Kashmir has caused considerable alarm in New Delhi. “The CPEC [China-Pakistan Economic Corridor] passes through Indian-claimed territory,” said India’s ambassador Gautam Bambawale in an interview with China’s Global Times, “and hence violates our territorial integrity. This is a major problem for us.”143
That is one source of concern, but so too is the fact that Pakistan’s close ti
es with Beijing pose a threat in themselves, given India’s fractious history with both neighbours over the last seventy years; that Pakistan’s economy may grow substantially as a result of major investment from China presents challenges of its own, not least the prospect of an intensification of an already highly competitive political, military and economic rivalry. Indeed, some believe the impact of the China-Pakistan Economic Corridor may be worth an uplift of as much as 8 per cent annually to Pakistan’s GDP—billions of dollars, in other words.144
Matters with China’s plans came to a head in 2017 and threatened to escalate into something very serious indeed. India reacted quickly to Chinese contractors building a new road up to the Doklam Plateau in the Himalayas, at the meeting point between the north-eastern Indian state of Sikkim with Bhutan and China. The plateau lies close to the Siliguri Corridor, known as the “Chicken’s Neck,” that connects the north-eastern states to the rest of India. As such it is part of what some call a “terrifyingly vulnerable artery in India’s geography.”145
In the summer of 2017, as most of the world focused on the Twitter account of the US president and the circus surrounding Brexit, the threat of the two most populous countries on earth going to war was not just a possibility, it looked like becoming a fact: a stand-off between soldiers sent to the front line eventually spilled over and led to both sides engaging directly in hand-to-hand combat by the Line of Actual Control (LAC). Some expected the worst. “We could be in a full-scale war with China within a month,” said the Indian-born British economist Lord Desai.146
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