The Case for a More Measured Assessment of China’s “New Silk Road”
Alison O’Neil and Andrew C. Jarocki
Massive. Weaponized. Even a “stalking horse to advance security concerns.” These are just some of the dramatic terms high-ranking officials, including top American military brass and defense secretaries, have used to describe China’s Belt and Road Initiative.
In 2013, President Xi Jinping announced an ambitious slate of infrastructure projects across the Eurasian landmass while on a visit to Kazakhstan. The undertaking was nicknamed “The New Silk Road” in a nod to China’s history. New railways, pipelines and ports constructed with partners throughout the world would empower China both economically and geopolitically.
The BRI encompasses overland transport routes and pipelines as well as a “maritime silk road” of ports and ocean routes throughout the Indian Ocean littorals. Proposed and completed BRI projects include railroads in Southeast Asia, power plants across Africa and the Middle East, and ports everywhere from Sri Lanka to Greece.
Since Xi announced plans for the BRI, analysts have questioned the project’s implications for China’s international standing as well as for geopolitics writ large. The proposed scope of the BRI certainly raises eyebrows: 138 countries currently have some sort of understanding with China about BRI, according to the Council on Foreign Relations. BRI’s ever-shifting nature renders it difficult to study and classify, as new projects and initiatives take form and others stall out.
Is BRI a brilliant and effective plot by the Communist Party of China to rule the world? Or is it a collection of disparate infrastructure projects, some with strategic “strings attached” but others neutral or even beneficial towards American interests?
Current alarmism and hyperbole overlook the realities that China’s ambitions must face. It’s high time for American policymakers to separate what is overblown about BRI from the few aspects that are worth American attention.
Perhaps no episode is cited more frequently in current discussions of BRI than the “debt trap” or “white elephant” of Hambantota Port, a Sri Lankan port constructed under the leadership of Prime Minister Mahinda Rajapaksa.
In 2017, the state-controlled China Merchants Port Holdings Company signed a deal with the Sri Lanka Ports Authority to control a 70 percent stake in the Hambantota port for 99 years. The agreement came after the government in Colombo struggled to service the debt for the hundreds of millions of dollars loaned to it by China for construction of the very same port. In spite of the port’s exorbitant costs, Hambantota sees little commercial traffic compared with Sri Lanka’s much busier port at Colombo.
Many still breathlessly predict that “debt-trap diplomacy” elsewhere will allow China to scoop up all types of strategic assets in a similar way, but proof of this remains elusive.
“The evidence for this type of economic exploitation…is limited. Indeed, as of this writing, of all the reports in the Factiva database that refer to Chinese debt equity swap arrangements and that give concrete examples, more than 90 percent refer to only one case of an actual debt swap—Hambantota Port in Sri Lanka. According to AIDData.org, China is involved in about 4,300 aid projects in about 140 countries. The ratio of actual cases to potential cases is therefore miniscule. It is hard to determine a trend on the basis of 1/4300 or 1/140 examples.”Alastair Iain Johnston, Harvard Professor
China is also quickly discovering that the “trap” can work both ways in projects elsewhere, as grandiose projects falter amidst financial and logistical challenges.
Perhaps of greatest concern to American strategic planners, as well as Chinese investors struggling to bring ambitious proposals to fruition, is China’s investment in ports throughout the Indian Ocean. This includes not just Hambantota in Sri Lanka, but also Gwadar Port in Pakistan and Kyaukphyu in Myanmar.
A small fishing town in Pakistan’s restive province of Balochistan, Gwadar has been touted as the “next Dubai” but has yet to see such commercial growth. It would appear that Gwadar’s significance lies not in its commercial prowess, but rather in its geographical placement near the Strait of Hormuz and key sea lines of communication.
Gwadar is positioned, as many analysts believe, to instead become China’s “next Djibouti”—the location of a new PLA naval base. As CSIS finds, “Chinese maritime strategy draws heavily from Mahan’s theory of sea dominance… The PLA Navy is expanding rapidly and clearly aims to dominate the Indo-Pacific. If Gwadar port is converted into a naval base sometime in the future, it will enable the PLA Navy to maintain a permanent presence in the Arabian Sea and the Gulf of Oman.”
Whether or not Gwadar takes hold as a PLA naval base, the port’s potential to link China to a crucial overland energy transport chain cannot be overlooked. A proposed oil pipeline from Gwadar to Kashgar in China would give China the ability to skirt the so-called “Malacca dilemma,” or reliance on oil transiting the Strait of Malacca chokepoint.
China’s reliance on this oil stands out as a major strategic weakness, and one that competing powers such as the United States or India could exploit in the event of a naval confrontation. An oil pipeline from Pakistan to China would reduce China’s dependency on the Strait of Malacca, much as the oil and gas pipelines stretching from Myanmar’s Kyaukphyu into China’s Yunnan Province already do.
However, the many costs of developing a strategic port and pipeline in Pakistan seem to outweigh the advantages these developments could confer on China. The proposed China-Pakistan oil pipeline, for instance, would need to run over thousands of feet of mountains in order to reach China, presenting builders with an expensive technical challenge that could take years to complete.
The pipeline would also remain vulnerable to attack from the ground or from the air along its length. Pakistan is replete with anti-government (and potentially anti-China) insurgents and, as Erickson and Collins point out in one Naval War College Review study, overland oil pipelines “offer a wealth of targeting options to nonstate actors and opposing militaries.”
“In what circumstances would using that pipeline add enough value to the cost of building it? [In] a situation in which the Malacca Strait is closed…it’s probably because there was some sort of military conflict. If that conflict is serious enough to have closed the strait, you have to also consider the possibility of countries that are part of that conflict deciding that they’re going to target other things. And unless you’re going to spend magnitudes more money fortifying the pipeline, [a country hostile to China could] take it out pretty easily with air power.”Jon Hillman, Center for Strategic and International Studies
Moreover, as Erickson and Collins also note, Gwadar’s link to China is perhaps not as strategically relevant as it would appear. After all, a pipeline running from Gwadar to western China is only one of many means by which China could skirt the Malacca Dilemma. Erickson and Collins argue that “pipeline plans predicated on the idea that bypassing the Strait of Malacca increases oil security are fundamentally flawed. Even if Malacca were completely sealed off by blockade or accident, tankers could be diverted through the Sunda, Lombok, or other passages with some disruption in deliveries and at an additional cost of as little as one or two dollars per barrel.”
In brief, it is highly unlikely that any power will ever attempt to blockade the Strait of Malacca outside of the event of total war, meaning that the very real logistical and financial costs of China’s proposed Pakistani oil pipeline far outweigh any potential benefits. China and Pakistan’s relationship exemplifies a trend visible across BRI partner countries: China may hold grand geostrategic ambitions, but financial and geopolitical realities constrain BRI’s growth and scope.
Recent developments in Gwadar signal other states’ growing awareness of the port’s challenges. As Nikkei Asia reports, Saudi Arabia has decided to shift a planned $10 billion oil refinery from Gwadar to the busier port of Karachi, which enjoys a great deal more ship traffic, stronger infrastructure, and fewer security concerns than beleaguered Gwadar.
Gwadar’s struggles illustrate the challenges that many large-scale traditional infrastructure projects, not only those within the BRI sphere, face: while projects often garner a great deal of investment and publicity, economic and logistical constraints can restrict expansion.
Although much of the BRI remains aspirational, two elements of it should cause American policymakers to sit up and take note: increasing Chinese economic soft power over American allies and the less publicized digital elements of the BRI projects.
Beijing is not a limitless purchaser of influence, not even in its own neighborhood. Japan still outranks China both on outward investment generally ($122.4 billion per year vs 109.5 billion) and as a foreign investor in Southeast Asia. However, there are unmistakable signs that Chinese economic expansion, partly through BRI projects like rail links, is creating inroads both literal and figurative with other powers. China’s efforts to build railroads around the world, from Southeast Asia to Western Europe, have been nothing short of monumental. China has made multiple forays into Africa, where it seeks not only to build railroads but also to source iron ore for its railroad tracks (and, some might argue, its rapidly expanding navy).
But American policymakers should pay special heed to China’s “rail diplomacy” in Europe, which has made advances with key American allies on the continent. The Chinese ambassador to Germany, for instance, recently bragged that “the number of trains between Duisburg and different parts of China each week has increased from more than 30 before the pandemic to about 50 now, marking a new high.”
“In Germany, one in three cars are sold in China, and the German auto industry has a pretty strong pull on German foreign policy,” explains Jon Hillman from CSIS, “and you see some of that economic influence now.” Hillman also cites Hungary weakening EU statements against China as another example of Chinese BRI economic influence.
As the Houston Rockets can attest, China’s economic leverage has made it a partner difficult to disagree with on policy matters. States beholden to Chinese investment, BRI-related or otherwise, risk forfeiting some autonomy in exchange for financial backing. That Chinese preferences and values come with Chinese commerce is particularly concerning when considering the long term implications of the Digital Silk Road. Announced in 2017, the strategy has so far resulted in massive Chinese investments in Information and Communication Technologies (ICT) throughout the world.
For example, the Infrastructure Consortium for Africa report in 2018 observed that Chinese investments in ICT projects on the continent vastly outweigh any other national or international financier.
Credible concerns about Hikvision cameras and Huawei networks as potential security vulnerabilities should lead policymakers to seriously contemplate China’s ICT spending spree.
Unlike a physical pipeline or port, shaping digital infrastructure could allow China intelligence advantages that have global implications for countries not even involved. Chinese firms’ use of Zimbabwe as a testing ground for facial recognition programming could provide Beijing with the tools needed to deploy elsewhere with dangerous consequences for the US.
Reaching a More Careful Conclusion about BRI
Washington must take a measured skepticism towards the BRI hype. Not every project works out in reality like Chinese propaganda lays it out on paper, nor do all BRI projects offer the strategic advantages they may seem to. Just because China builds (or simply plans to build) something somewhere doesn’t automatically require a proportionate American response.
As RAND has found, there may actually even be some benefit for American interest in BRI projects in the form of improved world trade. Better infrastructure links can assist the trade of all partners of a nation that hosts a BRI project, not exclusively Chinese commercial interests.
However, there are real security implications of the BRI with certain allies, especially the EU, that could cause them to sit out a dispute between the US and China. Additionally, the information war capabilities of the Digital Silk Road should not be ignored.
Time will tell whether China’s engagement with the world around it, from the South China Sea to the Indian Ocean littorals to Central Asia and Western Europe, revolves primarily around security concerns, economic concerns, or a combination of both.
Fortunately for the United States, G7’s recent meeting indicates that European allies are cognizant of Beijing’s growing influence and willing to take steps to counter it. G7’s “Build Back Better World (B3W)” Initiative offers a developmental alternative to BRI, proposing a $40 trillion infrastructure package aiming to reach countries from the Indo-Pacific to Latin America.
Discerning Chinese intentions with each BRI undertaking, placed in a larger context, will enable the US to respond appropriately if necessary.
“China’s intentions are the question of the 21st century,” said Rosemary Kelanic, Assistant Professor of Political Science at the University of Notre Dame. “China isn’t a greedy state like WW2 Germany bent on expansion.”
American policymakers must keep in mind that the Belt and Road Initiative comprises what Hillman has termed China’s “education as a rising power.” States across Asia, Africa, and Europe may engage with the Belt and Road Initiative to varying extents, but China’s efforts— whether or not the international community views them as “expansionist”—are not bound to succeed everywhere.
As Joseph M. Parent has written in The National Interest, China’s Belt and Road commitments may saddle it with reputational as well as financial costs. China’s actions in Xinjiang and Tibet have drawn opprobrium from a number of countries, and mistrust of China’s economic intentions has slowed BRI’s progress even in countries not particularly concerned with China’s internal politics. China’s connectivity could prove a liability as well as a strength, as BRI’s exorbitant costs could generate domestic resentment capable of weakening China from within.
BRI alarmism benefits no one, especially not the United States. For China, BRI could pose just as many liabilities as it does opportunities. As Parent puts it, “Connectivity is politically neutral … [the] same roads Rome built to conquer the world allowed the world to sack Rome.”
Alison O’Neil is a regular contributor for the Realist Review and a freelance writer on international affairs. She is a recent graduate of the University of Notre Dame. Follow her on Twitter: @Alison_Does_IR
Andrew C. Jarocki is the Editor-in-Chief of the Realist Review.
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