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China’s One Belt, One Road Scheme Faces Obstacles in 2019

Commentary by Dan Southerland
2019-01-16
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Sri Lankan security personnel and Buddhist monks clash during a protest in the southern port city of Hambantota over the creation of an industrial zone for Chinese investments on the island, on Jan. 7, 2017.
Sri Lankan security personnel and Buddhist monks clash during a protest in the southern port city of Hambantota over the creation of an industrial zone for Chinese investments on the island, on Jan. 7, 2017.
AFP

China is confronting multiple setbacks, flaws, and failures in President Xi Jinping’s ambitious overseas infrastructure project – the One Belt, One Road (OBOR) initiative.

Experts note that more than five years after its launch, three of the six economic corridors planned for the massive initiative lack any Chinese-funded major projects.

And it appears that the OBOR isn’t as well organized as some believe it to be.

Some nations worry about debts that they owe to China for project loans. Critics describe these as part of a kind of Chinese “debt-trap diplomacy.”

Others fear that Chinese-built infrastructure projects, such as ports, dams, and railways, will result in an increase in Chinese political and strategic influence.

According to Jonathan E. Hillman, senior fellow of the Washington-based Center for Strategic and International Studies, OBOR’s “sheer scale demands attention.”

“Spanning roughly 80 countries, it can claim to cover more than two-thirds of the world’s population,” says Hillman.

“It could include Chinese investments approaching $1 trillion, seven times what the United States spent during the Marshall Plan.”

It will also carry exports, people, and data across the Eurasian supercontinent.

So in many ways, says Hillman, “when much of the West is looking inward, China is connecting with the world.”

A poll shows concerns about China’s ambitions

But a recent survey conducted by a Singapore-based think-tank shows that many Southeast Asian nations are wary of China’s One Belt, One Road scheme.

The ISEAS-Yusof Ishak Institute polled 1,008 respondents from all 10 member states of the Association of Southeast Asian Nations (ASEAN).

The respondents included government officials, scholars, business people, and members of civil society and the media.

Some 73 percent of the respondents believe that China has more political and strategic influence in the region than the United States.

But the respondents to the poll, which was released on Jan. 6, expressed concerns about China’s geostrategic ambitions.

Fewer than one in 10 saw China as “a benign and benevolent power,” with nearly half saying that Beijing possesses “an intent to turn Southeast Asia into a sphere of influence.”

Some 70 percent said that their governments “should be cautious in negotiating [OBOR] projects to avoid getting into unsustainable financial debts to China,” a view described as strongly held in Malaysia, the Philippines, and Thailand.

Meanwhile, Matt Schrader of the U.S.-based Jamestown Foundation says that inside China itself, some experts have even dared to question President Xi’s “excessive ‘foreign aid’ to countries in Africa and elsewhere.”

According to Schrader, such criticism is “an obvious reference to Xi Jinping’s globe-spanning Belt and Road Initiative.”

This is remarkable, because criticism inside China of the all-powerful Chinese leader has been rare – at least until recently.

As Schrader describes it, OBOR is “a hallmark of Xi Jinping’s foreign policy.”

But he also says that OBOR lending “has already begun to shrink, decreasing dramatically since 2015.”

A project that ‘can’t be allowed to fail’

China is expected to continue to expand its outreach to new countries through the initiative, partly because it has been written into the Chinese Communist Party’s constitution.

At the Party’s 19th National Congress held in late October of 2017, the Party’s amended charter pledged to pursue One Belt, One Road.

Reuters reporter Jason Lee said this was evidence that President Xi’s ambitious project would endure beyond his tenure.

He cited analysts as saying that it also “underscored how the Communist Party has increased its attention to foreign policy and reflects Xi’s growing desire for China to take a leadership role.”

And as some analysts describe it, the scheme has now become “too important to fail.”

This has contributed to a perception that China is now moving methodically and successfully to create client states that will help advance its military and geopolitical ambitions.

But Hillman at the Center for Strategic and International Studies disagrees with this perception.

More chaos than conspiracy

In an analysis published on Sept. 4, 2018, by CSIS, Hillman wrote that since OBOR was launched in 2013, it had “yet to materialize on the ground as promised.”

The scheme includes six economic corridors, but Hillman says that a statistical analysis of 173 infrastructure projects finds that “Chinese investment is just as likely to go outside these corridors than in them.

In his analysis, Hillman argued that much of OBOR activity looked more “scattered and opportunistic” than part of a well-implemented grand design.

David Fickling, a Bloomberg Opinion columnist covering commodities as well as industrial and consumer companies, agrees with Hillman’s view.

In an article published by Bloomberg recently under the title “Belt and Road Is More Chaos Than Conspiracy,” Fickling argued that “…the initiative isn’t ultimately a connected master plan for Chinese global ascendancy.”

Instead, he says, “it’s better looked at as a somewhat chaotic branding and franchising exercise.”

Alternatively, he says, it’s “a way for the country’s numerous provincial officials and state-owned companies to slip a presidential seal of approval on whatever project they’re seeking to pursue.”

Fickling adds that the prestige of OBOR “may even end up being used to sell projects that are not just illogical but corrupt.”

And as he describes it, “the massive web of private contracts, public funds and gate-keeping officials that support major infrastructure projects in emerging countries” offer many opportunities for graft.

Pushback against OBOR

Some countries are pushing back against proposed Chinese infrastructure plans while others are sounding the alarm about already completed but flawed projects.

Some planned projects are simply going nowhere.

As Fickling notes, when it comes to failures in implementation, oil and gas pipelines linking a planned $9.6 billion dollar port in Myanmar to China’s Yunnan Province are barely used five years after being launched.

In Indonesia, a high-speed train project to connect the capital of Jakarta to the West Java capital of Bandung is running more than two years behind schedule and has “barely started construction.”

In March of 2016, Liu Zhen reported in the South China Morning Post that provincial representatives in Indonesia had criticized the planned project for being “too costly, unfair to less developed regions, and unhelpful to the poor.”

In an article published on Sept.6 last year by the Hong Kong-based website Asia Times, Indian scholar Gunjan Singh wrote that the number of countries expressing concern over Chinese investments adding to their debt was on the rise.

Officials in South and Southeast Asian countries worry that China will eventually use countries’ inability to pay back debt as an excuse to gain control of vital transportation links, such as ports and railways.

As Singh notes, the first prominent victim of Chinese infrastructure investments has been the South Asian nation of Sri Lanka.

Last December, a heavily indebted Sri Lanka was forced to lease out its Hambantota Port and land around it to a Chinese shipping country for 99 years.

Malaysia announced last August that it wouldn’t be going ahead with three major Chinese projects that would have cost some $20 billion.

On Jan. 12, the Washington Post summed up in an editorial what it described as “jaw dropping corruption” driving Chinese investment in Malaysia.

Thanks to reporters of the Wall Street Journal, we know that Chinese officials allegedly offered in 2016 to help then-Prime Minister Najib Razak avoid a financial scandal.

In exchange, they asked that Najib agree to railway and pipeline projects to be built at inflated prices by Chinese state companies.

Previously, the Journal had helped to expose how Najib had illegally acquired hundreds of millions of dollars from a Malaysian state investment fund.

Malaysia’s anti-corruption agency has meanwhile charged Najib with three counts of money laundering. Najib denies any wrongdoing.

Meanwhile, as David Fickling reports, three of the six trans-Asia economic corridors around which OBOR was originally designed are “devoid of major projects, while countries well outside its original scope such as Nigeria and Argentina are being brought under the Belt and Road umbrella.”

And as if corruption or the backlash against faulty and failed projects were not enough, there’s the issue of environmental damage caused by the scheme that could threaten global climate progress.

A report published on Jan. 3 of this year by the Yale School of Forestry and Environmental Studies says that the BRI has the potential to transform economies in China’s partner countries.

But the report, authored by Isabel Hilton, a London-based writer, broadcaster, and commentator, also concludes that with its focus on building coal-fired power plants along the way, OBOR “could also tip the world into catastrophic climate change.”

The report says that building the land-based Silk Road Economic Belt and the 21st Century Maritime Silk Road will absorb massive amounts of concrete, steel, and chemicals, creating power stations, mines, and container ports, many in countries with poor environmental oversight.

“While China has imposed a cap on coal consumption at home,” the report says, “its coal and energy companies are on a building spree overseas.”

Only scattered popular protests against One Belt, One Road have been documented.

But a few have gained international media attention.

In 2018, protesters in a number of cities in Vietnam opposed plans to build new special economic zones (SEZs) where Chinese factories were expected to be opened.

The protesters clashed with the police, and Vietnam’s National Assembly was forced to delay a vote on the zones that would have allowed them to be leased for up to 99 years.

Dan Southerland is the founding executive editor of Radio Free Asia (RFA), a sister entity of BenarNews.

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